ASSET PURCHASE AGREEMENT
AMONG
PERSPECTIVES HEALTH MANAGEMENT CORPORATION,
LEGAL ACCESS TECHNOLOGIES, INC.
AND
HORIZON MENTAL HEALTH MANAGEMENT, INC.,
dated October 5, 2001
TABLE OF CONTENTS
PAGE
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ARTICLE I PURCHASE AND SALE ..................................... 1
1.1 Purchase and Sale .......................................... 1
1.2 Asset Transaction .......................................... 1
1.3 Purchase Price ............................................. 2
1.4 Assignment and Assumption of the Management Contracts ...... 2
1.5 Transaction Taxes .......................................... 2
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER AND LAT ..... 3
2.1 Title to Management Contracts .............................. 3
2.2 Due Organization ........................................... 3
2.3 Subsidiaries/Investments ................................... 3
2.4 Due Authorization/Consents ................................. 3
2.5 Ownership of Seller ........................................ 4
2.6 Licenses/Compliance with Law ............................... 4
2.7 Financial Statements ....................................... 4
2.8 No Adverse Change .......................................... 5
2.9 No Undisclosed Liabilities ................................. 5
2.10 Litigation ................................................. 5
2.11 Management Contracts ....................................... 6
2.12 Medical Directors .......................................... 7
2.13 Employees .................................................. 7
2.14 Employee Benefit Plans ..................................... 7
2.15 Broker's and Finder's Fees ................................. 8
2.16 Labor Practices ............................................ 8
2.17 Insurance .................................................. 9
2.18 Environmental Matters ...................................... 9
2.19 Taxes ...................................................... 9
2.20 Transactions With Affiliates ...............................10
2.21 Improper Payments ..........................................10
2.22 Receivables ................................................10
2.23 Payables ...................................................10
2.24 Disclosure .................................................10
ARTICLE III REPRESENTATIONS AND WARRANTIES OF PURCHASER .........11
3.1 Due Organization of Purchaser ..............................11
3.2 Due Authorization ..........................................11
3.3 Execution/Enforceability ...................................11
3.4 Broker's and Finder's Fees .................................11
ARTICLE IV CLOSING ..............................................12
4.1 Closing ....................................................12
4.2 Actions by the Seller ......................................12
4.3 Actions by Purchaser .......................................12
ARTICLE V SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNITYPOST-CLOSING AGREEMENTS ................................12
5.1 Representations and Warranties to Survive ..................12
5.2 Indemnity ..................................................13
5.3 Indemnity Procedures .......................................14
5.4 Seller Employees ...........................................14
5.5 Tax Filings ................................................15
5.6 COBRA Obligations ..........................................15
5.7 Public Communications ......................................15
ARTICLE VI NON-COMPETITION ......................................15
6.1 Covenant Not to Compete; Non-Solicitation ..................15
6.2 Non-Disclosure .............................................16
6.3 Nondisparagement ...........................................16
6.4 Reasonableness; Reformation ................................16
ARTICLE VII ARBITRATION .........................................17
7.1 Arbitration Procedure ......................................17
7.2 Self-Execution .............................................18
7.3 Arbitrator's Fees ..........................................18
7.4 Rules Governing Arbitration ................................19
7.5 Entry of Award .............................................19
7.6 Injunctive Relief ..........................................19
ARTICLE VIII MISCELLANEOUS ......................................19
8.1 Waiver and Amendment .......................................19
8.2 Entire Agreement ...........................................19
8.3 Schedules ..................................................19
8.4 Descriptive Headings .......................................20
8.5 Defined Terms ..............................................20
8.6 Notices ....................................................20
8.7 Expenses ...................................................21
8.8 Assignment .................................................21
8.9 Choice of Law ..............................................21
8.10 Invalid Provisions .........................................21
8.11 Number and Gender of Words .................................21
8.12 Attorney's Fees and Costs ..................................21
8.13 Counterparts ...............................................22
LIST OF EXHIBITS
EXHIBIT A - Management Contracts
EXHIBIT B - Assignment and Assumption Agreement
LIST OF SCHEDULES
Schedule 2.6 - Licenses
Schedule 2.7 - Financial Statements.
Schedule 2.11 - Management Contracts.
Schedule 2.12 - Medical Directors
Schedule 2.13 - Employees/Benefit Plans
Schedule 2.17 - Insurance
Schedule 2.22 - Receivables
Schedule 2.23 - Payables
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") is made as of
October 5, 2001 by and among Perspectives Health Management
Corporation, a Nevada corporation (Seller), Legal Access
Technologies, Inc. a Nevada corporation (LAT), and Horizon Mental
Health Management, Inc., a Texas corporation ("Purchaser").
WHEREAS, Seller is engaged in the business of providing
management services for the operation of behavioral health care
programs pursuant to contracts with third party acute care
hospitals; and
WHEREAS, Seller desires to sell to Purchaser, and Purchaser
desires to purchase from Seller, all of the management contracts
owned by Seller; and
WHEREAS, LAT is the parent corporation of Seller and is
willing to join as a party to this Agreement in order to be jointly
and severally liable for the performance by Seller of its
obligations under this Agreement and to enter into certain other
agreements with the Purchaser under this Agreement;
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements herein
contained, the parties hereby agree as follows:
ARTICLE I
PURCHASE AND SALE
1.1 Purchase and Sale. Subject to the terms and conditions
of this Agreement and on the basis of the representations,
warranties, covenants and agreements herein contained, at the
Closing, the Seller agrees to sell, assign and convey to the
Purchaser, and the Purchaser agrees to purchase, acquire and accept
from the Seller, all right, title and interest of the Seller under,
in and to those certain management contracts described in Exhibit A
attached hereto (the Management Contracts); provided, however, that
Seller shall not assign to Purchase the right to receive certain
payments under certain of the Management Contracts that represent
the repayment of certain indebtedness owed by the respective
hospital client to Seller (the Excluded Payments). All of the
Excluded Payments are specifically itemized on Exhibit A and noted
as an Excluded Payment.
1.2 Asset Transaction. The transaction contemplated by this
Agreement constitutes only the purchase and sale of certain assets
of the Seller. Purchaser shall not acquire any assets of the
Seller pursuant to this Agreement other than the Management
Contracts. Purchaser shall not assume, or in any way be liable or
responsible for, any liabilities or obligations of Seller or LAT of
any kind whatsoever, whether direct or indirect, now existing or
hereinafter incurred, absolute, accrued, contingent or otherwise
under or by virtue of this Agreement or otherwise, except solely
for the contractual obligations and liabilities of the Seller under
the Management Contracts arising on or after the Closing Date which
Purchaser expressly assumes under the terms of this Agreement.
Without limiting the generality of the foregoing, and subject to
the assumption by Purchaser of the
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contractual obligations and liabilities of the Seller under the Management
Contracts arising on or after the Closing Date, Purchaser shall not assume
the following: (a) any obligations, liabilities and commitments (fixed
or contingent) of Seller or LAT; (b) any liability or obligation of
Seller or LAT arising out of or in connection with the negotiation
and preparation of this Agreement and the consummation and
performance of the transactions contemplated hereby, including,
without limitation, any liabilities with respect to Taxes (as
hereinafter defined) or obligations of Seller or LAT to fund any
employee benefit plans; (c) any liability or obligation under
contracts and other agreements to which Seller or LAT is a party or
by which it or its assets, properties or rights are bound or
subject; (d) any liability or obligation of Seller or LAT to any of
its stockholders or its affiliates; (e) any liability or obligation
of Seller or LAT arising out of or relating to any breach of a
representation, warranty, covenant or agreement of Seller or LAT
contained herein; and (f) any liability or obligation relating to
any compensation, bonus, severance payment, change of control
payment or other payment or obligation to which any employee of
Seller is entitled.
1.3 Purchase Price. The aggregate purchase price for the
Management Contracts shall be Two Million Nine Hundred Thousand
Dollars ($2,900,000) (the Purchase Price). The Purchase Price
shall be paid by the Purchaser to the Seller at the Closing by bank
wire transfer of immediately available funds to an account designed
by the Seller.
1.4 Assignment and Assumption of the Management Contracts.
At the Closing, Seller and Purchaser shall execute and deliver an
Assignment and Assumption Agreement in the form of Exhibit B
attached hereto pursuant to which Seller will assign the Management
Contracts to Purchaser and Purchaser shall assume the obligations
of the Seller under the Management Contracts arising on or after
the Closing Date; provided, however, that Purchaser shall not
assume or be obligated for any liabilities or obligations of Seller
under the Management Contracts which accrued or result from or
arise out of any transactions or any state of facts existing prior
to the Closing Date or relate to any matter or thing required to
have been performed by Seller under the Management Contracts prior
to the Closing Date including, without limitation, any
indemnification obligations of the manager under the Management
Contracts that relate to any claim or matter which occurred or
arise out of any transactions or any set of facts existing prior to
the Closing Date, even if such indemnification claims arises after
the Closing Date.
1.5 Transaction Taxes. All sales and transfer taxes, fee and
duties of any kind, if any, under applicable law incurred in
connection with the sale and transfer of the Management Contracts
pursuant to this Agreement will be the responsibility of and paid
by Seller, and Seller shall indemnify and promptly upon request
reimburse Purchaser for any such tax, fee or duty which Purchaser
may be required to pay under applicable law.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER AND LAT
Seller and LAT, jointly and severally, represent and warrant
to Purchaser that, as of the Closing Date:
2.1 Title to Management Contracts. Seller is the unconditional
sole legal, beneficial, record and equitable owner of
its rights, title and interests under, in and to the
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Management Contracts, free and clear of any and all liens, claims,
options, charges, pledges, security interests, assignments, trusts,
encumbrances or other restrictions or interests of any kind or
nature whatsoever (collectively, "Claims"), except solely for
obligations under the Management Contracts performable on or after
the Closing Date. Seller has not assigned all or any portion of
its rights or duties under the Management Contracts to any other
party. At the Closing, Seller will assign and convey to Purchaser
all its rights, title and interests under, in and to the Management
Contracts, save and except the Excluded Payments, free and clear of
any and all Claims.
2.2 Due Organization. Each of Seller and LAT is a corporation
duly organized, validly existing and in good standing
under the laws of the state of its respective incorporation with
all requisite corporate power and authority to conduct its business
operations as being conducted on the Closing Date. Seller is duly
qualified and in good standing as a foreign corporation authorized
to do business in each jurisdiction where the failure to be so
authorized would have a material adverse effect on the business
(financial or otherwise) or operations of Seller.
2.3 Subsidiaries/Investments. Seller has no subsidiaries,
whether direct or indirect. Seller has no equity interest or
investment in, and does not possesses any other right or obligation
to purchase any equity or other investment in, and is not a partner
of or joint venturer with, any other person or entity.
2.4 Due Authorization/Consents. Other than consents and
approvals that have already been obtained and provided to
Purchaser, the execution and delivery of this Agreement and the
performance of the transactions contemplated by this Agreement and
all other instruments, agreements, certificates and documents
contemplated hereby to which the Seller or LAT is or will be a
party does not on the Closing Date, (i) violate any decree or
judgment of any court or governmental authority which may be
applicable to the Seller or LAT; (ii) to the knowledge of Seller
and LAT, violate any law, rule or regulation binding on Seller or
LAT; (iii) violate or conflict with, or result in a breach of, or
constitute a default (or an event which, with or without notice or
lapse of time or both, would constitute a default) under any of the
terms, conditions, or provisions of, any contract, lease,
indenture, mortgage, note, bond, instrument, license or other
agreement to which the Seller or LAT is a party, or by which the
Seller or LAT is bound; or (iv) violate or conflict with any
provision of the articles of incorporation or bylaws of the Seller
or LAT. Other than consents and approvals that have already been
obtained and provided to Purchaser, no consents, approvals, or
authorizations of any person, entity or governmental agency are
required under the Management Contracts or otherwise in connection
the consummation of the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by the
Seller and LAT and the performance of this Agreement by the Seller
and LAT have been duly authorized by all requisite corporate action
of the Seller and LAT. This Agreement has been duly and validly
executed and delivered by the Seller and LAT and constitutes a
valid and binding agreement of the Seller and LAT, respectively,
enforceable in accordance with its terms. The Assignment and
Assumption Agreement when executed and delivered pursuant to this
Agreement will have been duly executed and delivered by Seller and
will constitute a valid and binding agreement of Seller enforceable
in accordance with its terms.
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2.5 Ownership of Seller. LAT owns of record and beneficially
all the issued and outstanding capital stock of Seller and is the
sole stockholder of Seller. In such capacity, LAT has approved the
sale of the Management Contracts by Seller to Purchaser pursuant to
this Agreement.
2.6 Licenses/Compliance with Law. Seller has the lawful
authority and all federal, state or local governmental
authorizations, certificates of authority, licenses or permits
necessary for or required to conduct its business operations as
such are presently being conducted and the absence of which would
have a material adverse effect on Seller. Schedule 2.6 lists all
such licenses and authorizations held by Seller on the Closing
Date. There are no pending or, to the knowledge of the Seller and
LAT, threatened legal, administrative, arbitration or other
actions, notices, or proceedings nor any pending or, to the
knowledge of the Seller and LAT, threatened governmental
investigations by any federal, state or local government or any
subdivision thereof or by any public or private group which assert
or allege any violation of or non-compliance with any governmental
requirements or which would have the effect of limiting,
prohibiting or changing the business operations of Seller as
presently conducted. Seller has made all filings with governmental
agencies required for the conduct of its business operations.
There are no judgments, consent decrees or injunctions of any
court, governmental department, commission, agency or
instrumentality by which Seller is bound or to which Seller is
subject. Seller is not subject to and has not received any
subpoena, request for information, notice, demand letter,
administrative inquiry or formal or informal complaint or claim
from any governmental department, commission, agency or
instrumentality. To the knowledge of Seller and LAT, no hospital
client that is a party to a Management Contract is subject to and
has not received any subpoena, request for information, notice,
demand letter, administrative inquiry, or formal or informal
complaint or claim from any governmental department, commission,
agency or instrumentality relating to the program managed pursuant
to the Management Contract in any respect.
2.7 Financial Statements. Seller has delivered to Purchaser
a copy of (i) audited financial statements of Seller as of
December 31, 2000 consisting of a balance sheet of such date and
the related statements of income and cash flows for the twelve (12)
month period then ended, and (ii) unaudited financial statements of
Seller as of August 31, 2001 (the "Seller Balance Sheet Date")
consisting of a balance sheet of Seller at such date (the "Seller
Balance Sheet") and the related consolidated statement of income
for the applicable year-to-date period then ended. Complete and
accurate copies of all such financial statements are included as
Schedule 2.7 (the "Seller Financial Statements"). The Seller
Financial Statements present fairly in all material respects the
financial position of Seller and the results of the operations as
of the respective dates thereof and for the respective periods
covered thereby, in conformity with generally accepted accounting
principles ("GAAP"). Except as set forth in the Seller Balance
Sheet included in the Seller Financial Statements, as of the Seller
Balance Sheet Date, there were no liabilities, debts, claims or
obligations, whether accrued, absolute, contingent or otherwise,
whether due or to become due, which are required by GAAP to be set
forth in a balance sheet of Seller which have not been so set forth
in the Seller Balance Sheet. The Seller Financial Statements were
prepared from the books and records of Seller.
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2.8 No Adverse Change. Since the Seller Balance Sheet Date,
the business of Seller has been conducted only in the ordinary and
usual course and there has not been (i) any material adverse change
in the financial condition, business, properties, assets, or
results of operations of Seller (financial or otherwise) exclusive
of any general economic factors affecting the health care industry
in general; (ii) the occurrence any event or condition of any
character which has materially and adversely affected the business
or operations of Seller; (iii) the attaching, placing or granting
of, or the agreement to attach, place or grant, any encumbrance on
any of the assets of Seller; (iv) any material changes in the terms
of, or defaults under, any material contract of Seller; (v) any
material change in the accounting systems, policies or practices of
Seller; (vi) any waiver by or on behalf of Seller of any rights
which have any material value; (vii) any entry into or termination
of any management contract or any other material commitment,
contract, agreement, or transaction (including, without limitation,
any material borrowing or capital expenditure or sale or other
disposition of any material assets) by Seller; (viii) any transfer
or right granted by Seller of or under any material lease, license,
agreement, patent, trademark, trade name, service ▇▇▇▇ or
copyright; or (ix) any default or breach by Seller in any material
respect under any material contract, license, or permit. Since the
Seller Balance Sheet Date, no changes have been made in (i) Seller
employee compensation levels, (ii) the manner in which employees of
Seller are compensated or (iii) supplemental benefits provided to
any employees of Seller. There has been no material default under,
or violation or breach of, any material contract or agreement of
Seller in effect on the Closing Date which has been waived, either
permanently or temporarily, by the other party to such contract.
2.9 No Undisclosed Liabilities. Seller has no material
indebtedness or other liabilities which are not adequately
disclosed and reflected or reserved against on the Seller Balance
Sheet, except liabilities incurred since the Seller Balance Sheet
Date in the ordinary course of business consistent with past
practice which, in the aggregate, would not have a material adverse
effect on the business (financial or otherwise), assets or
operations of Seller.
2.10 Litigation. There is no action, suit, or administrative,
condemnation, arbitration or other proceeding (including
proceedings concerning labor disputes or grievances or union
recognition) pending or, to the knowledge of the Seller and LAT,
threatened against or affecting Seller, at law or in equity, before
any federal, state, or municipal court or other governmental
department, commission, board, bureau, agency, or instrumentality.
Seller is not now, and has not been, a party to any injunction,
order or decree restricting the method or geographic area under
which Seller may conduct business operations or the marketing of
any of its services or the services it may sell. No inquiry by any
governmental agency or instrumentality has been made which would or
could, and no action or proceeding has been asserted, threatened or
instituted to, restrain or prohibit the carrying out of the
transactions or any part thereof, or which, if such transactions
are consummated, would materially and adversely affect the
business, properties or assets of Seller or Purchaser or seek to
recover any fines, penalties or damages from Seller or Purchaser.
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2.11 Management Contracts.
(a) Management Contracts. A true, accurate and complete
copy of each Management Contract and all amendments thereto, as
amended to the Closing Date, is attached as Schedule 2.11. With
respect to each Management Contract, Exhibit A lists (i) the date
thereof and the date of each amendment thereto, (ii) the name of
hospital client that is the other party thereto, (iii) the
expiration date thereto, (iv) any renewal terms hereunder and
(v) the type of program or programs managed pursuant thereto.
(b) Status of Management Contracts. All of the
Management Contracts are in full force and effect. Seller has not
received any notice of cancellation with respect to any Management
Contract or been advised that the other party thereto intends to
cancel or terminate or non-renew any Management Contract. There
are no material outstanding disputes under any of Management
Contracts. Each Contract is with an unrelated third party entered
into on an arms-length basis in the ordinary course of business.
There are no defaults under any of Management Contracts or the
occurrence of any act or omission under any of Management Contract
which with the passage of time or the giving of notice would
constitute a default thereunder. There has been no material breach
or violation of, or default under, any of Management Contract which
has been waived, either permanently or temporarily, by the other
party to such contract. There is no verbal amendment, modification
or other understanding relating to any Management Contract which is
legally binding on the parties thereto. The Seller has no
contractual obligation under any Management Contract, whether
existing on the Closing Date or which may exist in the future under
any circumstance, to refund all or any portion of the fees that
have been paid or will be paid under any Management Contract. None
of the Management Contracts contain a restriction that limits or
restricts Seller in any respect, either geographical or otherwise,
in the conduct of its business operations.
(c) Status of Programs. Except as noted on the cover
page to Schedule 2.11, (i) each program managed under each
Management Contract is open for the admission of patients and has
received all required government and regulatory approvals or
authorizations necessary to lawfully admit patients, (ii) each
inpatient program has been certified by all governmental agencies
required to give such certification as a distinct part psychiatric
unit of the respective acute care hospital in which the program is
located, (iii) each program has been determined by all governmental
agencies required to give such determination as a provider-based
program of the acute care hospital in which the program is located
and (iv) the acute care hospital in which the program is located
holds a contract as a Medicare provider.
2.1 Medical Directors. Schedule 2.12 lists the medical
director or medical directors of each program managed under each
Management Contract. True, accurate and complete copies of each
agreement or contract between Seller and each such Medical Director
have been provided to Purchaser for its review. All payments by
Seller to any such Medical Director has been for administrative
services actually rendered by such Medical Director and no payments
have been made to any such Medical Director to induce such Medical
Director to refer patients to any program managed under any
Management Contract or to compensate such Medical Director for any
referral or admission of patients to the program. None of such
Medical Directors have been convicted of a violation of any
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Medicare or Medicaid laws or regulations or any state licensing
laws or been barred from participation under either of the Medicare
or Medicaid programs.
2.2 Employees. Schedule 2.13 hereto lists in accurate and
complete detail all employees of Seller as of the Closing Date,
their job titles, annual rates of compensation; other fringe
benefits, if any; a description of any severance pay arrangements,
if any; and the amount payable with respect to accrued vacation,
holiday and sick leave as of the most recent payroll date of Seller
immediately preceding the Closing Date and the rate at which such
vacation, holiday and sick leave will accrue after the Closing
Date. Except as shown on Schedule 2.13, Seller is not bound by any
written contract of employment with any of its employees and all
oral employment contracts are terminable at will, subject to
applicable law, and Seller is not bound by any written or oral
consulting or similar agreements. Except as set forth in Schedule
2.13, Seller is not a party to any employment or other agreement,
whether written or oral, pursuant to which Seller has agreed to
make a loan to, or guarantee any loan of, any employee or relating
to any bonus, deferred compensation, severance pay or similar plan,
agreement, arrangement or understanding. Except as listed on
Schedule 2.13, Seller has no Welfare Plan (as defined in Section
3(1) of The Employee Retirement Income Security Act of 1974, as
amended ("ERISA")), no Pension Plan (as defined in Section 3(2) of
ERISA), nor any other type of pension, profit sharing, deferred
compensation, retirement, stock option, bonus, severance, medical,
dental, life insurance, accident, or other employee benefit or
compensation plan, agreement, arrangement, practice or policy with
respect to employees. Seller has complied with all requirements of
Sections 6001 through 6008 of ERISA and Section 4980B of the
Internal Revenue Code of 1986, as amended (the "Code") with respect
to itself and its employees. No employee of Seller has been
convicted of any violation of any Medicare or Medicaid laws or
regulations and has not been barred from participating under either
of such programs.
23 Employee Benefit Plans. Except as disclosed in Schedule 2.13:
(a) Seller does not maintain or contribute to, and has
not in the past maintained or contributed to, any Pension Plan or
Welfare Plan, nor is Seller presently, or has it ever been, a
participating employer in any Multi-employer Plan (as defined in
ERISA Section 3(37) or Section 414(f) of the Code).
(b) With respect to each Pension Plan and each Welfare
Plan listed on Schedule 2.13, (i) there is no fact, including,
without limitation, any reportable event, that exists that would
constitute grounds for termination of such plan by The Pension
Benefit Guaranty Corporation ("PBGC") or for the appointment by the
appropriate United States District Court of a trustee to administer
such plan, in each case as contemplated by ERISA; (ii) neither
Seller nor any fiduciary, trustee, or administrator of any such
Pension Plan or Welfare Plan, has engaged in a prohibited
transaction that would subject Seller to any material tax or any
material penalty imposed by ERISA or the Code; (iii) Seller has not
incurred any material liability to the PBGC (other than for payment
of premiums); (iv) Seller has contributed all amounts thereto it is
required to contribute under the terms of the plan in question and
applicable law, and there is no accumulated funding deficiency with
respect to any such Pension Plan, whether or not waived, other than
routine, non-contested claims for benefits. There is not pending
or, to the knowledge of the Seller or LAT, threatened any claim by
or on behalf of or against any Pension Plan or Welfare Plan, by any
employee or
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former employee covered or previously covered under any
Pension Plan or Welfare Plan, or otherwise involving any Pension
Plan or Welfare Plan.
(c) There has been no termination of any Pension Plan or
Welfare Plan by Seller during the five-year period prior to the
Closing Date.
(d) Except as disclosed on Schedule 2.13, no bonus,
severance pay, or any other employee benefit under any Welfare
Plan, Pension Plan, or any other type of pension, profit sharing,
deferred compensation, retirement, stock option, bonus, severance,
or other employee benefit or compensation plan, agreement,
arrangement, practice, or policy with respect to employees
maintained by or contributed to by Seller is payable or exercisable
as a result of the transaction contemplated by this Agreement, and
the payment, exercise, or vesting of any such bonus, severance pay,
or employee benefit will not be accelerated or otherwise enhanced
by such transaction.
True, correct and complete copies of each Pension Plan and
Welfare Plan listed on Schedule 2.13 as amended to and in effect on
the date hereof; any agreements entered into in connection with
each such Pension Plan and Welfare Plan; the most recent annual
report filed with the Service for each such Pension Plan and
Welfare Plan; the most recent actuarial report, if any, for each
such Pension Plan and Welfare Plan; the most recent summary plan
description, together with each summary of material modifications;
and any other communication generally disseminated to employees or
former employees of Seller and describing benefits provided under
each such Pension Plan and Welfare Plan, have been delivered or
made available to Purchaser.
2.4 Broker's and Finder's Fees. Any agent, broker, employee,
officer, stockholder or other person or entity acting for, on
behalf of, or under the authority of, Seller or LAT that is
entitled to any commission or broker's or finder's fee as a result
of the consummation of the transactions contemplated by this
Agreement shall be paid by Seller or LAT and Purchaser shall have
no liability therefor.
2.5 Labor Practices. Seller has no collective bargaining or
other labor union agreements. There is no unfair labor practice
complaint against Seller pending before the National Labor
Relations Board, there is no pending or, to the knowledge of the
Seller or LAT, threatened labor dispute, strike or work stoppage
affecting Seller's business, nor has there been any of the same or
any labor union organizing activity relating to Seller within the
last three (3) years.
2.6 Insurance. Schedule 2.17 lists all insurance policies
and coverages maintained by or for Seller including but not limited
to real and personal property insurance, comprehensive liability
insurance, automobile liability insurance, workers' compensation
insurance, medical malpractice insurance and professional liability
insurance.
2.7 Environmental Matters. Seller has not received any
notice from any governmental authority or private person or entity
advising that the operation of Seller's business or the operation
of any mental health or rehabilitation or chemical dependency
treatment units or programs managed by Seller is or has been in
violation of any environmental law or any applicable environmental
permit or that Seller is responsible (or
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potentially responsible) for the cleanup of any pollutants,
contaminants, hazardous or toxic wastes, substances or materials at,
on or beneath any property. Seller is not the subject of federal,
state, local or private litigation or proceedings involving a demand
for damages or other potential liability with respect to violations of
environmental laws.
2.8 Taxes. All reports, estimates, declarations of estimated
tax, information statements and returns relating to, or required to
be filed in connection with, any Taxes, including information
returns or reports with respect to backup withholding and other
payments to third parties ("Returns") of Seller required by law to
be filed on or prior to the Closing Date have been prepared and
properly filed or valid extensions obtained, and all Taxes imposed
upon Seller or any of its properties, assets or income which are
due and payable or claimed by any federal, territorial, state,
local or foreign government or any agency or political subdivision
of any such government ("Taxing Authority"), to be due and payable
have been paid. The term "Taxes" shall mean all taxes, however,
denominated, including any interest, penalties or other additions
to tax that may become payable in respect thereof, imposed by any
Taxing Authority which taxes shall include, without limiting the
generality of the foregoing, all income or profits taxes
(including, but not limited to, federal income taxes and state
income taxes), real property gains taxes, payroll and employee
withholding taxes, unemployment insurance taxes, social security
taxes, sales and use taxes, ad valorem taxes, excise taxes,
franchise taxes, gross receipts taxes, business license taxes,
occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, workers' compensation, Pension
Benefit Guaranty Corporation premiums and other governmental
charges, and other obligations of the same or of a similar nature
to any of the foregoing, which (i) Seller and (ii) any individual,
trust, corporation, partnership or any other entity as to which
Seller is liable for Taxes incurred by such individual or entity
either as a transferee, or pursuant to Treasury Regulations Section
1.1502-6, or pursuant to any other provision of federal,
territorial, state, local or foreign law or regulations is required
to pay, withhold or collect. The liability for accrued taxes as
shown in Seller Balance Sheet (net of amounts reserved for deferred
taxes) is sufficient for the payment of all unpaid Taxes of Seller
accrued for or applicable to the periods prior to the Seller
Balance Sheet Date and all years and periods prior thereto and for
which Seller may at that date have been liable in its own right or
by reason of its being a member of any group of corporations filing
consolidated tax returns (including any such amounts payable as a
result of an audit of any tax return for any such period). Seller
utilizes the accrual method of accounting for tax purposes.
There are no claims for Taxes pending against Seller nor any
liens (other than for current Taxes not yet due and payable) upon
the assets of Seller, and Seller does not know of any threatened
claim for tax deficiencies or any basis for such claims, and there
are not now in force any waivers or agreements by Seller for the
extension of time for the assessment of any tax, nor has any such
waiver or agreement been requested by the Internal Revenue Service
or any other Taxing Authority.
Seller has paid or is withholding and has or will pay when due
to the proper Taxing Authorities all withholding amounts and Taxes
required to be withheld or paid for all income, unemployment,
social security, Medicare or other similar taxes, programs or
benefits with respect to wages, salary and other compensation of
directors, officers and employees of Seller.
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2.9 Transactions With Affiliates. There are no loans,
leases, agreements, contracts or other transactions between Seller
and any present or former stockholder, director or officer of
Seller, or any member of such stockholder's, director's or
officer's immediate family. No Shareholder, director or officer of
Seller nor any of their respective spouses or family members owns
directly or indirectly on an individual or joint basis any material
interest in, or serves as an officer or director of, or in any
similar capacity for, any competitor, customer, provider or
supplier of Seller or any organization which has a material
contract or arrangement with Seller including, without limitation,
the Management Contracts.
2.10 Improper Payments. Neither Seller, nor any shareholder,
director, officer, employee or agent of Seller has made any
improper bribes, kickbacks or other payments on behalf of Seller
to, or received any such improper payments from, customers,
vendors, suppliers or other persons contracting with Seller and has
not proposed or offered to make or receive any such payments.
2.11 Receivables. Schedule 2.22 lists all accounts
receivable, notes receivable and any other receivables due to the
Seller under or pursuant to the Management Contracts, whether or
not reflected in the Seller Balance Sheet, or otherwise due to the
Seller by any of the hospital clients that are a party to the
Management Contracts.
2.12 Payables. Schedule 2.23 lists all account payables and
accrued expenses owed by the Seller to the hospital client that are
a party to the Management Contracts, whether or not arising under
the Management Contract and whether or not reflected on the Seller
Balance Sheet.
2.13 Disclosure. No representation or warranty of the Seller
or LAT in this Agreement contains an untrue statement of material
fact or omits a material fact necessary to make any such
representation or warranty not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Seller and LAT that,
as of the Closing Date:
3.1 Due Organization of Purchaser. Purchaser is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Texas with all requisite corporate
power and authority to conduct its business operations as being
conducted on the Closing Date and to perform the obligations under
the Management Contracts that it will be assuming upon consummation
of this Agreement. Purchaser is duly qualified and in good
standing as a foreign corporation authorized to do business in each
jurisdiction where the failure to be so authorized would have a
material adverse effect on the business (financial or otherwise) or
operations of Purchaser.
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3.2 Due Authorization. The execution and delivery of this
Agreement and the performance of the transactions contemplated by
this Agreement and all other instruments, agreements, certificates
and documents contemplated hereby to which Purchaser is or will be
a party does not, on the date hereof, and will not, on the date of
Closing, (i) violate any decree or judgment of any court or
governmental authority which may be applicable to Purchaser;
(ii) to the knowledge of Purchaser, violate any law, rule or
regulation binding on Purchaser; (iii) violate or conflict with, or
result in a breach of, or constitute a default (or an event which,
with or without notice or lapse of time or both, would constitute a
default) under, any of the terms, conditions, or provisions of any
contract, lease, indenture, mortgage, note, bond, instrument,
license or other agreement to which Purchaser is a party, or by
which Purchaser or its assets are bound; (iv) violate or conflict
with any provision of the certificate of incorporation or bylaws of
Purchaser, and (v) has been duly authorized by all requisite
corporate action of Purchaser.
3.3 Execution/Enforceability. This Agreement has been duly
and validly executed and delivered by Purchaser and constitutes a
valid and binding agreement of Purchaser enforceable in accordance
with its terms. The Assignment and Assumption Agreement when
executed and delivered pursuant to this Agreement will have been
duly and validly executed and delivered by Purchaser and will
constitute a valid and binding agreement of Purchaser enforceable
in accordance with its terms.
3.4 Broker's and Finder's Fees. No agent, broker, employee,
officer, stockholder or other person or entity acting on behalf of,
or under the authority of, Purchaser or Purchaser is or will be
entitled to any commission or broker's or finder's fee from any of
the parties hereto in connection with this Agreement or the
consummation of any of the transactions contemplated hereby.
ARTICLE IV
CLOSING
4.1 Closing. The closing of the transactions contemplated by
this Agreement (the Closing) shall occur simultaneously with the
execution and delivery of this Agreement but effective as of 11:59
p.m. on the day immediately preceding the day on which the Closing
occurs ("Closing Date").
4.2 Actions by the Seller. At the Closing, the Seller shall
execute and deliver to Purchaser the Assignment and Assumption
Agreement assigning all the Management Contracts to Purchaser.
4.3 Actions by Purchaser. At the Closing, Purchaser shall:
(a) Pay the Purchase Price to Seller; and
(b) Execute and deliver to Seller the Assignment and
Assumption of Agreement.
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ARTICLE V
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITY
POST-CLOSING AGREEMENTS
5.1 Representations and Warranties to Survive. All
statements contained in any agreement, certificate, instrument,
schedule, or document delivered by or on behalf of any of the
parties pursuant to this Agreement and the transactions
contemplated hereby shall be deemed representations and warranties
by the delivering party hereunder. All representations and
warranties made by the parties in this Agreement shall be true at
the Closing and shall survive the consummation of this Agreement
and the Closing hereunder for a period of two years, ending at
midnight on the second anniversary of the Closing Date; provided,
however, that if, prior to the expiration of such two year period,
a state of facts shall have become known which threatens to give
rise to a liability against which any party hereto would be
entitled to indemnification hereunder and the indemnified party
shall have given notice of such facts to the indemnifying party,
then the rights of the indemnified party to indemnification with
respect to such liability shall continue until such liability shall
have been finally determined and disposed of (including disposition
by the expiration of the applicable statute of limitations with
respect to such liability); provided further, however, that if a
claim for indemnification is made pursuant to this Article V, then
such claim for indemnification or any claim arising out of the
wrongful failure to comply with the provisions of this Article V
shall survive until the expiration of the applicable period of
limitations with respect to such claim for indemnification. With
respect to the representations and warranties of the parties,
nothing contained herein shall be deemed to require or imply that
the accuracy of such representations and warranties shall apply on
a continuing basis as to facts existing after the date of the
Closing. No investigation or examination made by any party hereto
shall constitute a waiver of any representation or warranty and no
representation or warranty shall be merged into the Closing
hereunder.
5.2 Indemnity.
(a) Seller and LAT. Seller and LAT, jointly and
severally, shall indemnify and hold harmless Purchaser and the
subsidiaries, shareholders, partners, directors, officers,
employees and agents of Purchaser, from, against, and in respect
of, any loss, liability, claim, demand, or expense, including but
not limited to reasonable attorney, investigation and consultant
fees and costs, of any other kind whatsoever arising out of or
resulting from any of the following:
(i) Any misrepresentation, breach of warranty, or failure to
fulfill any agreement or covenant of the Seller and LAT under
this Agreement or under any other agreement or document delivered
by the Seller at Closing hereunder; and
(ii) Any obligation or liability of Seller under the Management
Contracts which accrued or results from or arises out of any
transaction or state of facts existing prior to the Closing Date
or relates to any matter or thing required to have been performed by
Seller under the Management Contracts prior to the Closing Date,
including, without limitation, claims that may arise on or after
the Closing Date but arise out of facts or matters that were first
in existence or occurred prior to the Closing date and any
indemnification obligation of the manager under any
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Management Contract with respect to any such claim (even if such
indemnification claim is asserted after the Closing Date);
(iii) Any Taxes arising out of the sale and transfer of the
Management Contracts pursuant to this Agreement;
(iv) Any claim for a commission or brokers or finders fee as a result
of the consummation of the transaction contemplated by this Agreement by
any party purportedly acting for, on behalf of or under the authority of
Seller or LAT; and
(v) Any and all actions, suits, proceedings, demands, assessments,
judgments, costs and legal and other expenses incident to any of the
foregoing.
(b) Purchaser. Purchaser shall indemnify and hold harmless Seller
and LAT from, against, and in respect of, any loss, liability, claim,
demand, or expense, including but not limited to reasonable attorney,
investigation and consultant fees and costs, of any kind whatsoever,
arising out of or resulting from any of the following:
(i) Any misrepresentations, breach of warranty, or failure to
fulfill any agreement or covenant of Purchaser under this Agreement
or under any other agreement or document delivered by Purchaser to
the Seller at Closing hereunder;
(ii) Any obligation or liability of Seller under the Management
Contract which accrues or results from or arises out of any transaction
or state of facts existing on or after the Closing Date or relate to
any matter or thing required to be performed by Seller on or after
the Closing Date under the Management Contracts, including, without
limitation, claims arising on or after the Closing Date that arise
out of facts or matters that were first in existence or occurred on
or after the Closing Date; excluding, however, any matter as to
which Seller and LAT are obligated to indemnify Purchaser under
Section 5.2(a) above;
(iii) Any claim for commissions or brokers or finders fee as a
result of the consummation of the transaction contemplated by this
Agreement by any party purportedly acting for or on behalf of or
under the authority of Purchaser; and
(iv) Any and all actions, suits, proceedings, demands, assessments,
judgments, costs, and legal and other expenses incident to any of the
foregoing.
5.3 Indemnity Procedures. In case any claim, demand or
action shall be brought by any third party including, without
limitation, any governmental authority, against a party entitled to
indemnity under Section 5.2(a) or 5.2(b) above, such party shall
promptly notify the other party or parties, as the case may be,
from whom indemnity is or may validly be sought in writing and the
indemnifying party or parties shall assume the defense thereof,
including the employment of counsel. In addition, in case a party
hereto shall become aware of any facts which might result in any
such claim, demand or action, such party shall promptly notify the
other party or parties who would be obligated to provide indemnity
hereunder with respect to such claim, demand or action, and such
other party or parties shall have the right to take such action as
it or they may deem appropriate to resolve such
13
matter. The indemnified party or parties shall have the right to
employ separate counsel in any such action and to participate in the
defense thereof, but the fees and expenses of such counsel shall be
at the expense of such indemnified party or parties, unless the
employment of such counsel has been specifically authorized by the
indemnifying party or parties. Any settlement of any action
subject to indemnity hereunder shall require the consent of the
indemnified and the indemnifying party which consent shall not be
unreasonably withheld and shall be given within five (5) days
following the giving of notice thereof. The indemnifying party or
parties shall not be liable for any settlement of any action
effected without its or their consent, but if settled with the
consent of the indemnifying party or parties or if there be a final
judgment for the plaintiff in any such action, the indemnifying
party or parties shall indemnify and hold harmless the indemnified
party from and against any loss or liability by reason of such
settlement or judgment. If requested by the indemnifying party,
the indemnified party shall cooperate with the indemnifying party
and its counsel and use its best efforts in contesting any such
claim or, if appropriate, in making any counter-claim or cross-
complaint against the party asserting the claim, provided that the
indemnifying party will reimburse the indemnified party for
reasonable expenses incurred in so cooperating upon presentation of
receipts or other evidence of such expense. The indemnifying party
and its representatives shall have full and complete access during
reasonable hours to all books, records and files of the indemnified
party expressly related to the defense of any claim for
indemnification undertaken by the indemnifying party pursuant to
this Article VII, or for any other purpose in connection therewith;
provided that the indemnifying party shall safeguard and maintain
the confidentiality of all such books, records and files.
5.4 Seller Employees. Nothing contained herein shall be
deemed or construed to obligate Purchaser to employ any employee of
Seller or to make any severance, termination, or other payment of
any kind to any employees of Seller that may arise out of the
consummation of the transactions contemplated by this Agreement or
otherwise. However, Purchaser may interview and offer employment
to any of Sellers employees as it may determine in its sole
discretion and may employ any of such employees at such
compensation and on such other terms as Purchaser may determine in
its sole discretion.
5.5 Tax Filings. The allocation of the Purchase Price among
the Management Contracts shall be made in accordance with Section
1060 of the Internal Revenue Code and any comparable provisions of
state or local law as appropriate. Unless it would be unreasonable
to do so, Seller shall accept Purchasers determination of such
allocation of the Purchase Price and shall report on IRS Form 8594
and otherwise act and make all filings in all respects consistent
with such allocation determination of Purchaser.
5.6 COBRA Obligations. LAT as the parent corporation or
Seller will maintain an employee medical benefits ERISA Welfare
Plan after the Closing. Seller or LAT shall be responsible for any
obligations owed to employees of the Seller arising under
Sections 4980B of the Internal Revenue Code and Sections 601
through 609, inclusive, of ERISA relating to COBRA coverage for
such employees after consummation of the transactions contemplated
by this Agreement.
5.7 Public Communications. All press releases or other
public communications of any sort relating to this Agreement, and
the method of the release for publication
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thereof, shall be subject to the prior approval of both Purchaser and
Seller, which approval shall not be unreasonably withheld by either of
such parties, except to the extent that disclosure is otherwise required
by law or judicial process.
ARTICLE VI
NON-COMPETITION
6.1 Covenant Not to Compete; Non-Solicitation. For and in
consideration of the acquisition of the Management Contracts by
Purchaser pursuant to this Agreement and for other good and
valuable consideration, each of Seller and LAT, jointly and
severally, covenant and agree that, for a period of three (3) years
after the Closing Date, it shall not, directly or indirectly, as an
employer, employee, director, officer, consultant, creditor,
investor, owner, agent, principal, partner, shareholder, or through
any other kind of ownership (other than ownership of securities of
Purchaser or of any other publicly held entity in which such
person, directly or indirectly, in the aggregate beneficially owns
less than two percent (2%) of any class of outstanding securities),
or in any other representative or individual capacity, do any of
the following:
(a) engage in the operation or management of a behavioral
health, mental health or rehabilitation treatment unit
or program operated in or in association with an acute care
hospital (the "Business") in the continental United States (the
"Restricted Area");
(b) engage in any business which calls upon, solicits,
diverts or takes away any customer or customers of Purchaser in the
Restricted Area for the purpose of selling or attempting to sell to
any of said customers any services similar to any services
heretofore sold or provided to any of such customers by Seller; and
(c) engage in any business which solicits any present or
future employee of Purchaser or its subsidiaries or initiate
discussions with any such employee regarding his or her termination
or resignation from employment with the Purchaser or its
subsidiaries, so that such employee may accept employment with, or
engagement (as a partner, investor, shareholder, employee, agent,
consultant, or otherwise directly or indirectly, with any party
engaged in any of the activities proscribed as specified above.
6.2 Non-Disclosure. Each of Seller and LAT, jointly and
severally, further covenants and agrees that all information
concerning the Management Contracts constitute trade secrets and
confidential, proprietary business information which is the
property of Purchaser and that, unless otherwise required by law,
from and after the Closing Date:
(a) it shall use its best efforts and exercise utmost
diligence to protect and safeguard all of such trade secrets and
confidential, proprietary information;
(b) it shall not, directly or indirectly, use, sell,
license, publish, disclose or otherwise transfer or make available
to others any of such trade secrets or confidential, proprietary
information;
(c) without the prior written consent of Purchaser, it
shall not, directly or indirectly, disclose any of such trade
secrets or confidential, proprietary information; and
15
(d) it shall not, directly or indirectly, use for its
own benefit or for the benefit of another, any of such trade
secrets or confidential, proprietary information.
It is expressly understood, however, that the foregoing shall not
apply to any information that was generally available to the public
on a non-confidential basis prior to the date of this Agreement or
was or becomes generally available to the public on a non-
confidential basis from a third party who is not bound to keep such
information confidential.
6.3 Non-disparagement. Each of Seller and LAT agrees and
covenants that, for a period of three (3) years after the Closing
Date, (1) it shall not make or publish any statement, written or
oral, disparaging the reputation of Purchaser or any of its
subsidiaries, the executive officers of Purchaser or any of its
subsidiaries, or any of the services of Purchaser or any of its
subsidiaries and (2) it shall not solicit or encourage any hospital
having a management contract with Purchaser or any of its
subsidiaries to terminate such management contract. Horizon
agrees and covenants that, for a period of three (3) years after
the Closing Date, it shall not make or publish any statement,
written or oral, disparaging either the reputation of PHM or LAT or
any of their respective officers or any of the contract management
services provided by PHM under the Management Contracts.
6.4 Reasonableness; Reformation. Seller and LAT each
severally acknowledge and agree that (i) the provisions of this
Article VIII are ancillary to the transaction pursuant to which
Seller sold and Purchaser acquired the Management Contracts, (ii)
the provisions of this Agreement contain reasonable limitations as
to time, geographical area and scope of activities to be restrained
and do not impose a greater restraint than is necessary to protect
goodwill and other business interests of Purchaser and its
subsidiaries, (iii) if any portion of the covenants and agreements
set forth in this Agreement are held to be invalid, unreasonable,
arbitrary or against public policy, then such portion of such
covenants shall be considered divisible as to time, scope of
activities covered, and geographical area, and (iv) if any court of
competent jurisdiction determines the specified time period, scope
of activities covered, or the specified geographical area
applicable to any provision of this Agreement to be invalid,
unreasonable, arbitrary or against public policy, a lesser time
period, scope of activities covered, and/or geographical area which
is determined to be reasonable, non-arbitrary and not against
public policy may be enforced against it.
ARTICLE VII
ARBITRATION
7.1 Arbitration Procedure. In the event of a dispute
regarding any matters arising out of or relating to this Agreement
(including, but not limited to, actions for injunctive or
declaratory relief) (hereinafter collectively arbitrable issues)
that cannot be settled by agreement between the parties, such
controversy or dispute shall be submitted for arbitration in
Dallas, Texas, and for this purpose each party hereby expressly
consents to such arbitration in such forum. The arbitration
process shall proceed as follows:
(a) Step One. In the event of a dispute, the disputing
party (herein so called) may at any time notify the other party
(answering party) in writing that the disputing party demands to
pursue arbitration as provided in Step Two below, setting forth in
specific
16
terms the disputing party's proposed statement of the
matters in dispute to be submitted to arbitration and the name and
address of the arbitrator selected by the disputing party. Within
ten (10) business days following receipt of the disputing party's
written arbitration demand complying with the requirements of this
Step One, the answering party shall notify the disputing party in
writing, setting forth in specific terms the answering party's
proposed statement of the matter in dispute and identifying the
name and address of the arbitrator selected by such answering
party.
(b) Step Two. The two (2) arbitrators so selected shall
meet and confer within twenty (20) business days after receipt by
the disputing party of the answering party's written notice as
called for under Step One above, and if they are unable within said
twenty (20) day period to reach a decision on the matters in
dispute, they shall, at the expiration of said twenty (20) day
period, jointly select a neutral third arbitrator. If said
arbitrators are unable to choose a neutral third arbitrator, any
party may request the American Arbitration Association (AAA) to
appoint an additional arbitrator from its National Panel of
Commercial Arbitrators. Any party to this Agreement may advise the
AAA that time is of the essence and that the parties to this
Agreement would like such selection as soon as is reasonably
possible, it being expressly understood that in such AAA selection
process the selection is in the sole discretion of the AAA, and
that the AAA shall not be required by reason of this Agreement to
consult with the parties to this Agreement in said selection
process; provided that all arbitrators, including the additional
arbitrator selected by the AAA, shall be disinterested individuals
knowledgeable in commercial transactions. Upon selection of the
additional arbitrator, all arbitrators shall within ten (10)
business days thereafter convene an arbitration proceeding at a
date, time and place (in metropolitan Dallas, Texas) designated by
said arbitrators by a majority vote, written notice of which shall
be given to the parties not later than seven (7) calendar days
prior to said hearing date. At the hearing, each party may be
represented by counsel and present testimony and evidence. If at
the commencement of the hearing the parties cannot agree on a joint
statement of the matters in dispute to be submitted to the
arbitrators, the arbitrators shall be empowered to frame the
submission issue(s). A Certified Court Reporter's transcript may
be demanded by any party or by the arbitrators and said official
transcript shall be prepared, completed, and delivered to the
arbitrators with copies to each party within ten (10) business days
following the conclusion of the hearing. Arbitration sessions
following the initial session, if necessary, shall be scheduled by
the arbitrators so that the arbitration proceedings (i.e.,
presentation of evidence and/or oral arguments) are completed
within twenty (20) days of the initial session. Each party shall
be given the opportunity to file with the arbitrators simultaneous
written briefs five (5) business days following receipt by the
arbitrators of the official transcript but, if no transcript is
demanded as provided in this Agreement, said briefs shall be filed
simultaneously five (5) business days following conclusion of the
hearing. Copies of any such briefs shall be provided to the other
party concurrently upon filing with the arbitrators.
(c) Step Three. Within ten (10) business days following
the receipt by the arbitrators of the brief(s) (or within ten (10)
business days following conclusion of the hearing if all parties
waive briefs), the arbitrators shall make and deliver to the
parties their decision and award in writing. The arbitrators shall
have the authority to enter any award or to grant any relief which
could be obtained in a court of competent jurisdiction and
reasonable attorneys', arbitrators' and experts' fees and expenses
of arbitration may be
17
awarded as the arbitrators see fit, consistent with the provisions
of this Agreement. The arbitrators shall have no authority to modify,
amend or alter the provisions of this Agreement and shall base their
decision and award on applicable law, the language contained in this
Agreement and the facts giving rise to the dispute as presented on
the record at the hearing. The arbitrators shall issue a written
opinion explaining the basis for their findings.
7.2 Self-Execution. It is expressly understood between the
parties that this Article VII is a self-executing arbitration
provision and that any party may unilaterally select an arbitrator
if the other party refuses to arbitrate. It is further expressly
agreed that said unilaterally-selected arbitrator may proceed to
arbitrate the issue(s) and the arbitration and decision shall be
self-executing and therefore shall not require the order of any
Court to proceed. The parties may, however, mutually stipulate in
writing to extend or to shorten the prescribed time periods
(including a stipulation to expedite the referral and submission to
arbitration). All provisions of this Agreement not in dispute
shall be observed and performed without interruption during the
pendency of any proceeding called for under this Article VII.
7.3 Arbitrator's Fees. If an additional arbitrator is
required pursuant to Step Two under Section 7.1 above, each party
shall pay its pro rata share of any required retainer or other
payments required by such arbitrator upon such arbitrator's demand,
with the ultimate responsibility for the arbitrators' fees to be
determined by the arbitrators in the final arbitration award
pursuant to Step Three of Section 7.1 above; otherwise, each party
shall bear its own costs and expenses in connection with any
proceedings under this Article VII and, in any event, each party
shall pay the fees of the arbitrator it selects.
7.4 Rules Governing Arbitration. In all other respects, the
arbitration shall be conducted pursuant to the then-existing
Commercial Rules of the AAA to the extent such rules are not
inconsistent with any provision of this Agreement. Subject to the
foregoing, the arbitrators shall determine the scope and extent of
permissible discovery, if any.
7.5 Entry of Award. The award of the arbitrators may be
entered as a final judgment by any court of competent jurisdiction.
7.6 Injunctive Relief. Notwithstanding the provisions of
this Article VII to the contrary, each party shall be entitled to
seek temporary or preliminary injunctive relief from a court of
competent jurisdiction if the failure to immediately obtain
injunctive relief will result in irreparable harm to that party.
The jurisdiction of the court shall extend only to such relief and
any request for permanent injunctive relief shall remain subject to
the arbitration provisions of this Agreement.
ARTICLE VIII
MISCELLANEOUS
8.1 Waiver and Amendment. Any term or provision of this
Agreement may be waived in writing at any time by the party which
is entitled to the benefits thereof, and any term or provision of
this Agreement may be amended or supplemented at any time by a
writing signed by the parties.
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8.2 Entire Agreement. This Agreement, together with the
Exhibits and Schedules hereto, constitute the entire and complete
agreement among the parties, and supersedes all prior agreements or
understandings, whether written or oral, with respect to the
subject matter of this Agreement.
8.3 Schedules. References to a Schedule shall include any
applicable disclosure expressly set forth on the face of any other
Schedule even if not specifically cross-referenced to such other
Schedule; provided, however, that the representations and
warranties of a party set forth in this Agreement shall not be
affected or deemed modified, waived or limited in any respect by
the information contained in any agreement or document listed or
referenced in the Schedules unless the reference on the face of the
Schedule expressly by its terms indicates that it limits the scope
of a representation or warranty. The Schedules delivered pursuant
to this Agreement shall not be attached hereto but shall be
delivered separately accompanied by a certificate of an executive
office of each party to the effect that such constitutes the
Schedules to this Agreement and constitute a part hereof.
8.4 Descriptive Headings. The descriptive headings are for
convenience of reference only and shall not control or affect the
meaning or construction of any provision of this Agreement.
8.5 Defined Terms. As used in this Agreement, capitalized
terms shall have the meanings expressly set forth herein for such
terms, and variants and derivatives of such defined terms shall
have correlative meanings. To the extent that certain of the
defined terms set forth herein express agreements between or among
parties to this Agreement, the parties agree to the same by
execution of this Agreement.
8.6 Notices. Any notices, claims or demands which any party
is required or may desire to give to another under or in
conjunction with this Agreement shall be in writing, and shall be
given by addressing the same to such other party(ies) at the
address set forth below, and by (i) depositing the same so
addressed, postage prepaid, first class, certified or registered,
in the United States mail (herein referred to as "Mailing"), (ii)
overnight delivery by a nationally recognized overnight courier
service (e.g. UPS, Federal Express), (iii) delivering the same
personally to such other party(ies), or (iv) transmitting by
facsimile and Mailing the original. Any notice shall be deemed to
have been given five (5) U.S. Post Office delivery days following
the date of Mailing; one business day after timely delivery to an
overnight courier; if by personal delivery, upon such delivery; or
if by facsimile, the day of transmission if made within customary
business hours, or if not transmitted within customary business
hours, the following business day.
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If to Purchaser:
Horizon Mental Health Management, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, President
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
▇▇▇▇▇▇▇▇▇▇▇ & Price, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Seller or LAT:
Legal Access Technologies, Inc.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇, President
Facsimile Number: (▇▇▇) ▇▇▇-▇▇▇▇
Any party may change the address or facsimile telephone number for
notices to be sent to it by written notice delivered pursuant to
the terms of this Section 8.6.
8.7 Expenses. Each party to this Agreement will pay its
respective expenses of any kind incurred in connection with the
negotiation, preparation and performance of this Agreement.
8.8 Assignment. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors and assigns, but shall not be assigned by any party
without the prior written consent of the other parties hereto.
8.9 Choice of Law. This Agreement shall be governed by the
laws of the State of Texas, other than its conflicts of laws
provisions, and the laws of such state and of the United States of
America shall govern the rights, duties and obligations of the
parties and the validity, construction, enforcement, and
interpretation of this Agreement.
8.10 Invalid Provisions. If any provision of this Agreement
is deemed or held to be illegal, invalid, or unenforceable, this
Agreement shall be considered divisible and inoperative as to such
provision to the extent it is deemed to be illegal, invalid or
unenforceable, and in all other respects this Agreement shall
remain in full force and effect; provided, however, that if any
provision of this Agreement is deemed or held to be illegal,
invalid or unenforceable there shall be added hereto automatically
a provision as similar as possible to such illegal, invalid or
unenforceable provision and be legal, valid and
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enforceable. Further, should any provision contained in this Agreement
ever be reformed or rewritten by any judicial body of competent
jurisdiction, such provision as so reformed or rewritten shall be
binding upon all parties hereto.
8.11 Number and Gender of Words. Whenever in this Agreement,
the singular number is used, the same shall include the plural
where appropriate, and vice versa, and words of any gender shall
include each other gender where appropriate.
8.12 Attorney's Fees and Costs. In the event of a breach by
any party to this Agreement and commencement of a subsequent legal
action in a court of law or forum of arbitration, the prevailing
party in any such dispute shall be entitled to reimbursement of
reasonable attorney's fees and court costs, including, but not
limited to, the costs of expert witnesses, transportation, lodging
and meal costs of the parties and witnesses, costs of transcript
preparation and other reasonable and necessary direct and
incidental costs of such dispute.
8.13 Counterparts. This Agreement may be executed in two or
more counterparts, and each such counterpart shall be deemed to be
an original instrument, but all such counterparts together shall
constitute but one and the same agreement.
(Remainder of Page Intentionally Left Blank)
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IN WITNESS WHEREOF, the parties hereto have executed this
Asset Purchase Agreement as of the day and year first written
above.
HORIZON MENTAL HEALTH PERSPECTIVES HEALTH
MANAGEMENT, INC. MANAGEMENT CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------- -----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇▇▇▇
----------------------- ------------------------
Its: Chief Financial Officer Its: CEO
----------------------- ------------------------
LEGAL ACCESS TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
-----------------------------
Its: President & CEO
-----------------------------
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