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EXHIBIT 10.59
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STOCK PURCHASE AGREEMENT
among
RTPS Acquisition Company, L.L.C.,
a Texas Limited Liability Company
("Purchaser"),
RAYTEL MEDICAL CORPORATION,
a Delaware corporation
("Raytel"),
and
RAYTEL TEXAS PHYSICIAN SERVICES, INC. ("RTPS")
a Delaware corporation
and a wholly-owned subsidiary of
Raytel Management Holdings, Inc., ("RMH")
a Delaware corporation and a wholly-owned subsidiary of
Raytel Medical Corporation ("RMC")
Dated as of May 31, 2000
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is entered into as of
the 31st day of May, 2000, by and among RTPS Acquisition Company, L.L.C., a
Texas Limited Liability Company ("Purchaser"), Raytel Texas Physician Services,
Inc. ("RTPS"), a Delaware corporation and a wholly-owned subsidiary of Raytel
Management Holdings, Inc., ("RMH") a Delaware corporation and a wholly-owned
subsidiary of Raytel Medical Corporation, a Delaware corporation ("Raytel")
(collectively referred to herein as "Seller").
RECITALS
A. RTPS, directly and through its affiliate, Raytel Southeast
Management, L.P. (referred to herein as "RSMLP" or the "MSO"), is engaged in the
management and operation of a physician practice management business based in
Beaumont, Texas (the "Raytel Management Business");
B. Immediately prior to the transaction contemplated by this Agreement,
Raytel Southeast Management, L.P. will be merged into RTPS by the assignment of
the limited partnership interest held by RMH to RTPS, the corporate general
partner of RSMLP and the Certificate of Cancellation of Domestic Foreign Limited
Partnership shall be filed with the Texas Secretary of State; and
C. Raytel desires to sell to Purchaser, and Purchaser desires to
purchase from Raytel all of the outstanding shares of capital stock of RTPS for
the purchase price and upon the terms and conditions hereinafter set forth.
AS PROVIDED HEREIN, THIS AGREEMENT AND THE REPRESENTATIONS, WARRANTIES AND
COVENANTS SET FORTH HEREIN ARE CONTINGENT UPON RAYTEL OBTAINING A WRITTEN
CONSENT FROM BANKBOSTON/FLEET BANK AND PARIBAS (THE "LENDERS") PURSUANT TO THE
AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF AUGUST 14, 1996 (THE "CREDIT
AGREEMENT") BETWEEN BANKBOSTON/FLEET BANK AS AGENT FOR BANKBOSTON/FLEET BANK AND
PARIBAS AND RAYTEL. THIS AGREEMENT AND THE MASTER TERMINATION AND
INDEMNIFICATION AGREEMENT ARE BEING SIGNED AND THE SIGNATURE PAGES ARE BING
EXCHANGED FOR THE CONVENIENCE OF THE PARTIES. HOWEVER, IF THE LENDERS DO NOT
PROVIDE RAYTEL WITH THE WRITTEN CONSENT AS SET FORTH IN SECTION 7.3(e) HEREIN
BELOW, BY JUNE 15, 2000, THEN THIS AGREEMENT AND THE MASTER TERMINATION
AGREEMENT SHALL BECOME NULL AND VOID WITHOUT PREJUDICE TO ANY RIGHTS THE PARTIES
MAY HAVE UNDER ANY OF THE TRANSACTION DOCUMENTS DESCRIBED IN SECTIONS 1.29 AND
8.4(b).
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NOW, THEREFORE, in consideration of the mutual representations,
warranties and agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
set forth or referenced below:
1.1 "Affiliate" shall have the meaning specified in Section 3.3.
1.2 "Balance Sheet" shall mean the unaudited pro forma consolidated
balance sheet of RTPS and the Affiliate as of April 30, 2000 included in the
Financial Information.
1.3 "Balance Sheet Date" shall mean April 30, 2000.
1.4 "Best Efforts" shall mean commercially reasonable good faith efforts
but shall in no event require the commencement of litigation against any third
party or the payment of any fees or any other consideration to any third party.
1.5 "Claim Notice" shall have the meaning specified in Section 9.7(a).
1.6 "Closing" shall mean the closing of the transactions contemplated by
this Agreement.
1.7 "Closing Date" shall mean May 31, 2000 or such other date as the
parties shall mutually agree upon in writing.
1.8 "Code" shall mean the Internal Revenue Code of 1996, as amended.
1.9 "Disagreement" shall have the meaning specified in Section 10.1.
1.10 "Encumbrances" shall mean any lien, security interest, mortgage,
pledge, hypothecation, easement or conditional sale or other title retention
agreement.
1.11 "Environmental Laws" shall mean any federal, state or local law,
ordinance, regulation, order or permit pertaining to the environment, natural
resources or public health or safety, as presently in effect.
1.12 "ERISA" shall mean the Employment Retirement Income Security Act of
1974, as amended.
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1.13 "Financial Information" shall mean (i) the unaudited pro forma
consolidated balance sheet of RTPS and the Affiliate as of April 30, 2000 and
the related unaudited pro forma consolidated statements of operations of RTPS
and the Affiliate for the fiscal year then ended; (ii) the unaudited pro forma
consolidated balance sheet of RTPS and the Affiliate as of April 30, 2000 and
the related unaudited pro forma consolidated statements of operations of RTPS
and the Affiliate for the six-month period then ended, in each case as adjusted
to reallocate certain costs and expenses of Raytel attributable to the Raytel
Management Business to RTPS; and (iii) the unaudited pro forma consolidated
balance sheet of RTPS and the Affiliate as of May 31, 2000 (the Closing Balance
Sheet as defined in Section 6.8, herein) and the related unaudited pro forma
consolidated statements of operations of RTPS and the Affiliate for the
seven-month period then ended, in each case as adjusted to reallocate certain
costs and expenses of Raytel attributable to the Raytel Management Business to
RTPS
1.14 "GAAP" shall mean generally accepted accounting principles, applied
consistently with prior periods.
1.15 "Governmental Authority" shall mean any government or governmental
or regulatory body thereof, or political subdivision thereof, whether federal,
state, local or foreign, or any agency, instrumentality or authority thereof, or
any court or arbitrator (public or private).
1.16 "Hazardous Materials" shall mean hazardous wastes as presently
defined by the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section
609 et. sec., as amended, and regulations promulgated thereunder and hazardous
substances as presently defined by the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. Section 9601 et. sec., as
amended ("CERCLA" or "Superfund") and regulations promulgated thereunder.
1.17 "Indemnity Claim" shall have the meaning specified in Section
9.7(a).
1.18 "Material Adverse Effect" shall mean a material adverse effect on
the business, operations, assets or financial condition of RTPS and the
Affiliate, taken as a whole, or a material adverse effect on the ability of
Purchaser to conduct the Raytel Management Business, in substantially the manner
it is presently conducted, following the Closing.
1.19 "Material RTPS Contracts" shall have the meaning specified in
Section 3.12(a).
1.20 "NLRB" shall mean the National Labor Relation Board.
1.21 "Permitted Encumbrance" shall mean (i) Encumbrances imposed by any
Governmental Authority for Taxes not yet due and payable or which are being
contested in good faith and by appropriate proceedings if adequate reserves with
respect thereto are maintained on the books of RTPS or the Affiliate in
accordance with GAAP; (ii) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Encumbrances arising in the ordinary course of
business which are not overdue for a period of more than 30 days or which are
being contested in good faith and by appropriate proceedings, if adequate
reserves with respect thereto
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are maintained on the books of RTPS or the Affiliate in accordance with GAAP;
(iii) easements, rights-of-way, restrictions and other similar encumbrances on
real property incurred in the ordinary course of business and encroachments
(whether or not in the ordinary course of business) which, in the aggregate, are
not substantial in amount, and which do not in any case materially detract from
the value of the property subject thereto or materially interfere with the
ordinary conduct of the business thereon; and (iv) all the exceptions to title
reflected in the RTPS Disclosure Schedule.
1.22 "Physicians" shall mean ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D., ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, M. D., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M. D., and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, M.D.
(collectively the "Physicians" and individually a "Physician).
1.23 "Presiding Arbitrator" shall have the meaning specified in Section
10.2.
1.24 "Purchase Price" shall have the meaning specified in Section 2.2.
1.25 "Purchaser" shall have the meaning specified in the first paragraph
of this Agreement.
1.26 "Purchaser Group" shall have the meaning specified in Section 9.2.
1.27 "Raytel" shall have the meaning specified in the first paragraph of
this Agreement.
1.28 "Raytel Group" shall have the meaning specified in Section 9.4.
1.29 "Raytel Common Stock" shall mean the following:
Raytel Common Stock to be issued to each Physician in the
amounts set forth opposite such Physician's name pursuant to Master
Transaction Agreement dated and effective as of August 21, 1996, as
amended October 18, 1997 and December __, 1999 ("Master Transaction
Agreement"), by and among (i) RAYTEL MEDICAL CORPORATION, a Delaware
corporation ("Raytel"); (ii) RAYTEL SOUTHEAST MANAGEMENT, L.P., a Texas
limited partnership ("Raytel Management"); RAYTEL TEXAS PHYSICIAN
SERVICES, INC., a Delaware corporation (the "Corporate General Partner")
(iii) SOUTHEAST TEXAS CARDIOLOGY ASSOCIATES, P.A., a Texas professional
association ("Existing PA"); (iv) SOUTHEAST TEXAS CARDIOLOGY GROUP II,
P.A., a Texas professional association ("New PA"); and (v) ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, M.D., ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M. D., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M. D., and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, M.D. (collectively the "Physicians" and individually
a "Physician"):
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Number of Shares of Raytel Common Stock
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First Second Third Fourth Fifth
Physician Anniversary Anniversary Anniversary Anniversary Anniversary
--------- ----------- ----------- ----------- ----------- -----------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D 7,324 3,662 3,662 10,986 10,986
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D 7,324 3,662 3,662 10,986 10,986
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D 7,324 3,662 3,662 10,986 10,986
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, M.D 2,442 1,221 1,221 3,662 3,662
------ ------ ------ ------ ------
Totals 24,414 12,207 12,207 36,620 36,620
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1.30 "Raytel Management Business" shall have the meaning specified in
Recital B.
1.31 "Raytel Promissory Notes" shall mean the following:
The original principal amount set forth opposite such Physician's name
pursuant to the Master Transaction Agreement:
PRINCIPAL
AMOUNT
PHYSICIAN OF NOTE
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D. $ 686,631.00
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. $ 686,631.00
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D. $ 686,631.00
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, M.D. $ 228,876.00
-------------
$2,288,769.00
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1.32 "RTPS" shall have the meaning specified in the first paragraph of
this Agreement.
1.33 "RTPS Equipment Leases" shall have the meaning specified in Section
3.10(b).
1.34 "RTPS Real Property Leases" shall have the meaning specified in
Section 3.11.
1.35 "RTPS Retained Assets" shall mean all of the cash and cash
equivalents of RTPS and the Affiliate on hand immediately prior to the Closing,
and the General Partnership Interest in Raytel Nuclear Imaging-Orange, a Texas
limited partnership.
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1.36 "RTPS Disclosure Schedule" shall have the meaning specified in the
first paragraph of Article III.
1.37 "Shares" shall have the meaning specified in Section 2.1.
1.38 "Tax" or "Taxes" shall mean all taxes, charges, fees, imposts,
levies or other assessments, including, without limitation, all net income,
franchise, profits, gross receipts, capital, sales, use, ad valorem, value
added, transfer, transfer gains, inventory, capital stock, license, withholding,
payroll, employment, social security, unemployment, excise, severance, stamp,
occupation, real or personal property, and estimated taxes, water, rent and
sewer service charges, customs duties, fees, assessments and charges of any kind
whatsoever, together with any interest and any penalties, fines, additions to
tax or additional amounts thereon, imposed by any taxing authority (federal,
state, local or foreign) and shall include any transferee liability in respect
of Taxes.
1.39 "Tax Return" shall mean all returns, declarations, reports,
estimates, information returns and statements required to be filed in respect of
any Taxes.
ARTICLE II
SALE OF THE SHARES
2.1 Sale of the Shares. On the terms and subject to the conditions set
forth in this Agreement, at the Closing as specified in Article VIII, herein,
Raytel hereby agrees to sell, assign and transfer to Purchaser, and Purchaser
hereby agrees to purchase from RMH, on the Closing Date, 1,000 shares of Common
Stock, $ 0.001 par value per share, of RTPS, constituting all of the issued and
outstanding shares of capital stock of RTPS (the "Shares").
2.2 Purchase Price. In consideration of the sale of the Shares,
Purchaser and Raytel agree to cancel the Raytel Promissory Notes and to cancel
the issuance of the Raytel Common Stock, together with a combined value of Three
Million Five Hundred Nine Thousand, Four Hundred Forty Nine and 00/100 Dollars
($3,509,449.00) (the "Purchase Price").
2.3 Transfer, Sales and Other Taxes. Purchaser shall pay all transfer,
sales and other like taxes imposed under the laws of the State of Texas on or
collectable by Purchaser or Raytel by reason of the sale or transfer of the
Shares to Purchaser hereunder. Raytel shall pay all transfer taxes sales and
other like taxes imposed under the laws of any other state on or collectable by
Purchaser or Raytel by reason of the sale or transfer of the Shares to Purchaser
hereunder.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF RAYTEL AND RTPS
Subject to and except for the information which is set forth in a list
of exceptions identified by the specific section of this Article to which such
information pertains and contained in a schedule delivered to Purchaser prior to
the execution of this Agreement (the "RTPS Disclosure Schedule"), attached
hereto as Exhibit A, Raytel and RTPS jointly and severally represent to
Purchaser that:
3.1 Organization and Good Standing. Each of Raytel, RMH, and RTPS is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and RTPS is qualified to do business in the State of
Texas.
3.2 Capitalization. The authorized capital stock of RTPS consists of
1,000 shares of Common Stock, $ 0.001 par value per share, all of which are
issued and outstanding as of the date hereof. All of the outstanding shares of
Common Stock of RTPS have been validly issued and are fully paid and
non-assessable and are owned, of record and beneficially, by RMH, free and clear
of any Encumbrances or restrictions (other than restrictions on transfer under
applicable federal and state securities laws). No shares of capital stock are
held by RTPS as treasury stock. There is no existing option, warrant or other
agreement of any kind to which RTPS or Raytel or RMH is a party requiring, and
there are no convertible securities of RTPS outstanding which upon conversion
would require, (i) the issuance by RTPS of any additional shares of capital
stock of RTPS or other securities convertible into shares of capital stock or
any equity security of RTPS of any kind or (ii) the sale or transfer of any of
the Shares by Raytel or RMH, other than as contemplated by this Agreement.
3.3 Affiliate. RTPS does not own any equity interest, directly or
indirectly, in any corporation, partnership, joint venture or other entity
except the limited partnership identified in the RTPS Disclosure Schedule
(collectively, the "Affiliate").
3.4 Authority. Raytel, RTPS and the Affiliate have all necessary power
and authority to own or lease their respective properties and to carry on their
respective businesses as now being conducted, and possess all licenses, permits
and authorizations necessary to the conduct of such businesses where the failure
to possess any such license, permit or authorization would be reasonably likely
to have a Material Adverse Effect; provided, however, that no representation is
made with respect to the licensing or qualification of medical professionals or
professional corporations performing services under contracts or arrangements
with RTPS or a Affiliate at any of the premises. Raytel, RTPS and the Affiliate
are duly qualified to do business and in good standing in each state or
jurisdiction wherein the nature of the business conducted or the character of
the property owned or leased by such entity requires such qualification and
where the failure to be so qualified would be reasonably likely to have a
Material Adverse Effect.
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3.5 Financial Information.
(a) Seller has delivered to Purchaser true and correct copies of
all of the Financial Information with the exception of the RTPS Closing
Balance Sheet to be delivered pursuant to Section 6.8. The Financial
Information has been, and will be, prepared in accordance with GAAP and
present, and will present, fairly the consolidated financial position of
RTPS as of their respective dates and the results of operations, equity
transactions and cash flows of RTPS for the periods indicated. The RTPS
Closing Balance Sheet will be prepared using the same accounting
policies and procedures as used in previous preparing the Financial
Information in prior years.
(b) Raytel has had substantial control over RTPS and its
business affairs since its inception and is familiar with all aspects of
RTPS's accounts payable accounting and procedures. To the knowledge of
Raytel (as that term is defined in Section 13.12) RTPS does not have any
liabilities, either accrued or contingent, and whether due or to become
due, other than (i) liabilities reflected or provided for in detail on
the Balance Sheet, (ii) liabilities specifically described in this
Agreement, (iii) normal or recurring liabilities incurred since April
30, 2000 in the ordinary course of business consistent with past
practices, and (iv) liabilities not required by GAAP to be reflected on
a balance sheet. It may be possible due to the organizational structure
of RTPS and Southeast Texas Cardiology Associates II, P.A., and its
successors or assigns, ("SETCA") that neither Raytel nor RTPS have
received invoices from third-party vendors that have been received by
SETCA or its employees or agents. These invoices would not be reflected
in the Balance Sheet and the failure of RTPS to include such invoices in
the Balance Sheet or in the RTPS Disclosure Schedule shall not
constitute a breach of this representation and warranty by Raytel or
RTPS.
3.6 Authorization. Raytel and RTPS have full power and authority to
execute and deliver this Agreement and to carry out the transactions
contemplated hereby. Raytel and RTPS have taken all corporate action required by
law, their Certificates of Incorporation and Bylaws or otherwise to authorize
the execution and delivery of this Agreement and the consummation by them of the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by Raytel and RTPS and constitutes the legal, valid and binding
obligations of Raytel and RTPS, enforceable in accordance with its terms, except
as enforceability may be limited by (i) applicable bankruptcy, insolvency,
moratorium, reorganization and other similar laws affecting creditors' rights
generally, and (ii) general principles of equity, regardless of whether asserted
in a proceeding in equity or at law.
3.7 Absence of Certain Changes and Events. Since the Balance Sheet Date:
(a) To the knowledge of RTPS, there has not been any change in
the business, operations, assets or financial condition of RTPS or any
of the Affiliate which has had or, as far as Raytel or RTPS can
reasonably foresee, is reasonably likely to have a Material Adverse
Effect.
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(b) Except as contemplated by this Agreement, neither RTPS nor
the Affiliate has, other than in the ordinary course of business, (i)
entered into any material contract, license, franchise or commitment,
waived any material rights or made any amendment or termination of any
material contract, license, franchise or agreement; (ii) altered or
revised, in any material respect, its accounting principles, procedures,
methods or practices relating to the Raytel Management Business; (iii)
transferred, disposed or, or otherwise removed from any of its premises
any material assets; or (iv) incurred, discharged or satisfied any
material liability or Encumbrance relating to the Raytel Management
Business.
3.8 Title to Properties; Absence of Encumbrances. RTPS and the Affiliate
have good and marketable title to all of their respective properties and assets
shown as owned on the Balance Sheet (except for assets disposed of in the
ordinary course of business since the Balance Sheet Date), free and clear of any
and all Encumbrances except for permitted encumbrances, as set forth in the
Raytel Disclosure Schedule (the "Permitted Encumbrances").
3.9 Equipment and other Tangible Assets.
(a) The RTPS Disclosure Schedule includes complete and accurate
lists describing and specifying the location of all of the equipment and
other tangible personal property owned or used in the RTPS Business and
having an original cost in excess of $100,000. All of such equipment and
tangible personal property is in operating condition and free from
significant defects, ordinary wear and tear excepted.
(b) The RTPS Disclosure Schedule includes a complete and
accurate list of each lease under which RTPS is the lessor, sublessor,
lessee or sublessee of any personal property (including any master lease
in cases where RTPS is sublessee or sublessor) (the "RTPS Equipment
Leases"), describing such lease and the type and location of the
property which is the subject thereof.
3.10 Real Property. Neither RTPS nor the Affiliate own any real property
in fee simple. The RTPS Disclosure Schedule includes a complete and accurate
list of each lease under which RTPS or a Affiliate is the lessor, sublessor,
lessee or sublessee of any real property (including any master lease in cases
where RTPS or a Affiliate is sublessee or sublessor) (the "RTPS Real Property
Leases"), describing such lease and the location of the property which is the
subject thereof.
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3.11 Contracts, Commitments and Relationships.
(a) The RTPS Disclosure Schedule includes a complete and
accurate list, including a brief description, of: (i) all loans,
mortgages, deeds of trust, promissory notes, conditional sales
agreements or security agreements, (ii) all material agreements between
RTPS or any of the Affiliate and any consultants, employees or service
providers, (iii) all material agreements or arrangements involving the
relationship between RTPS or any wholly-owned Affiliate and any
majority-owned Affiliate or the other shareholders, co-venturers or
partners of such Affiliate, other than RTPS Equipment Leases and RTPS
Real Property Leases, (iv) all sales agency, sales representation,
licensing or distributorship agreements, and (v) any other written
agreement, contract, guaranty, indemnity, power of attorney, license,
indebtedness, liability or other obligation, including agreements with
suppliers and purchase orders involving a commitment in excess of
$50,000, to which RTPS or any Affiliate is a party or by which RTPS or
any Affiliate or any of their respective properties or assets are bound
(collectively, the "Material RTPS Contracts"). Except for the RTPS
Equipment Leases, the RTPS Real Property Leases and the Material RTPS
Contracts, neither RTPS nor the Affiliate is a party to or otherwise
bound by the terms of any contract, agreement, obligation or proposal
(whether written or oral) in any material way affecting the RTPS
Business.
(b) Neither RTPS nor the Affiliate, nor, to the best knowledge
of Raytel or RTPS, any other party is in default under any RTPS
Equipment Lease, RTPS Real Property Lease or Material RTPS Contract, and
there are no existing disputes or claims of default relating thereto, or
any facts or conditions known to Raytel or RTPS which, if continued,
will result in a default or a claim of default thereunder, except for
such disputes, defaults or claims which would not be reasonably likely
to have a Material Adverse Effect.
3.12 Compliance with Law. RTPS and the Affiliate possess all regulatory
consents, authorizations, approvals, licenses and permits required by
Governmental Authorities in connection with the conduct of the Raytel Management
Business as presently conducted, where the failure to possess any such consent,
authorization, approval, license or permit would be reasonably likely to have a
Material Adverse Effect; provided, however, that no representation is made with
respect to the licensing or qualification of medical professionals or
professional corporations performing services under contracts or arrangements
with RTPS or a Affiliate at any of the premises. Neither Raytel, RTPS nor the
Affiliate has received any: (i) notification of any asserted failure by RTPS or
any Affiliate to comply with any laws, regulations or other requirements of
Governmental Authorities, the failure to comply with which would be reasonably
likely to have a Material Adverse Effect; or (ii) complaint, inquiry or request
for information (whether written or oral) from any Governmental Authority
relating thereto.
3.13 Environmental Matters. To the best knowledge of Raytel and RTPS (i)
the operation of RTPS and the Affiliate are in compliance with applicable
Environmental Laws, except for such noncompliance which is not reasonably likely
to have a Material Adverse Effect, (ii) neither RTPS nor the Affiliate is
subject to any judicial or administrative proceeding alleging
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the violation of any Environmental Law, which proceeding is reasonably likely to
result in a Material Adverse Effect, and (iii) neither RTPS nor the Affiliate
has received any written notice from any Governmental Authority that it is a
potentially responsible party at any Superfund site.
3.14 Litigation and Claims. The RTPS Disclosure Schedule contains a
description of all claims, actions, suits, investigations or proceedings pending
or, to the best knowledge of Raytel or RTPS, threatened against or affecting
RTPS, any of the Affiliate, or any of their respective properties or business,
at law or in equity, or before or by any Governmental Authority which is
reasonably likely to have a Material Adverse Effect. There is no action, suit,
proceeding or, to the best knowledge of Raytel or RTPS, formal governmental
inquiry or investigation pending against Raytel or RTPS which seeks to restrain
or prohibit or otherwise challenges the consummation, legality or validity of
the transactions contemplated hereby.
3.15 Consents. Except as set forth in Section 6.4 and the Raytel
Disclosure Schedule, no consent, approval or authorization of any Government
Authority or other third person is required on the part of Raytel or RTPS in
connection with the execution and delivery of this Agreement or the consummation
of any of the transactions contemplated herein.
3.16 Labor Difficulties. There is no unfair labor practice complaint
pending before the NLRB or overtly threatened against or affecting RTPS or any
subsidiary which would be reasonably likely to have a Material Adverse Effect.
Neither RTPS nor the Affiliate is a party to any collective bargaining
agreement, and, to the best knowledge of Raytel and RTPS, no petition for
election has been filed with the NLRB or any Region of the NLRB, and no
organizing campaign or other effort is under way by any labor organization to
organize any non-union represented employees of the Raytel Management Business.
3.17 Fringe Benefit Plans. Except as described in the RTPS Disclosure
Schedule, neither RTPS nor the Affiliate has any bonus, deferred compensation,
pension, profit-sharing, retirement, health, equity purchase, stock option or
any other fringe benefit plan, arrangement or practice, whether formal or
informal.
3.18 Accounts Receivable. The RTPS Disclosure Schedule contains a
complete and correct list of all accounts receivable of RTPS and the Affiliate
as of the date set forth thereon. All of such accounts receivable, and such
additional accounts receivable accrued between the date thereof and the Closing
Date arose, or will arise, in the ordinary and usual course of the Raytel
Management Business, and have been recorded, or will be recorded, net of an
allowance for uncollectibles determined in a manner consistent with past
practice. To the best knowledge of Raytel and RTPS, none of such accounts
receivable are subject to setoffs or counterclaims. Notwithstanding any other
provision of this Agreement, neither Raytel nor RTPS makes any representation or
warranty, other than as contained in this Section 3.19 concerning the
collectability of such accounts receivable or the sufficiency of such reserve at
the Balance Sheet Date, the Closing Date or any other date.
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3.19 Taxes. RTPS and the Affiliate has filed, or caused to be filed, all
Tax Returns and information returns required to be filed by it, and has paid all
Taxes due or claimed to be due from it. The RTPS Balance Sheet includes adequate
provision for all such Taxes.
3.20 Insurance. The RTPS Disclosure Schedule includes a complete and
accurate list of all policies of fire, liability, business interruption,
workers' compensation and other forms of insurance covering the Raytel
Management Business and setting forth the coverage and policy limits of each
such policy. All such policies are in full force and effect, all premiums with
respect thereto covering all periods up to the Closing Date have been paid, or
will be paid in a timely manner, and no notice of cancellation or termination
has been received with respect to any such policy.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents to Raytel and RTPS that:
4.1 Organization and Good Standing. Purchaser is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Texas.
4.2 Authorization. Purchaser has full power and authority to execute and
deliver this Agreement and to carry out the transactions contemplated hereby.
Purchaser has taken all corporate action required by law, its Articles of
Organization and Regulations or otherwise to authorize the execution and
delivery of this Agreement and the consummation by it of the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Purchaser and constitutes the valid and binding obligation of Purchaser,
enforceable in accordance with its terms, except as enforceability may be
limited by (i) applicable bankruptcy, insolvency, moratorium, reorganization and
other similar laws affecting creditors' rights generally, and (ii) general
principles of equity, regardless of whether asserted in a proceeding in equity
or at law.
4.3 Litigation. There is no action, suit, proceeding or, to the best
knowledge of Purchaser, formal governmental inquiry or investigation pending
against Purchaser which seeks to restrain or prohibit or otherwise challenges
the consummation, legality or validity of the transactions contemplated hereby.
4.4 Consents. Except as set forth in Section 6.4, no consent, approval
or authorization of any Governmental Authority or other third party is required
on the part of Purchaser in connection with the execution and delivery of this
Agreement or the consummation of any of the transactions contemplated hereby.
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4.5 Investment Representations.
(a) Purchaser possesses such knowledge and experience in
financial and business matters that it is capable of evaluating the
merits and risks of its investment hereunder. Purchaser is acquiring the
Shares for its own account, for investment purposes only and not with a
view to the distribution thereof.
(b) Purchaser acknowledges that it has conducted its own
investigation of the business and affairs of RTPS and the Affiliate,
that the Shares have not been registered under the Securities Act of
1933, as amended, or any state securities or "Blue Sky" laws; and that
it has received all the information that it requested from Raytel and
RTPS concerning RTPS and the Affiliate.
4.6 Financing. Purchaser has, or has access to, and pending the Closing
will have, sufficient funds and financing to pay the Purchase Price in full on
the Closing Date.
4.7 Financial and Operational Issues Concerning RTPS. Purchaser has had
considerable control over the financial and operational activities of the RTPS
since November 10, 1999 as the result of a mutual understanding between the
parties. The financial and operational activities of RTPS which Purchaser has
controlled since November 10, 1999 include the ordering of supplies and services
from third-party vendors in the name of RTPS and the hiring of additional
personnel to be employed by RTPS, and possibly other commitments that have not
been communicated or made known to Raytel or RTPS. As set forth in Section 6.9,
Purchaser hereby represents and warrants to RTPS and Raytel that Purchaser shall
assume all responsibility for any and all invoices, purchase orders, loans,
leases, written or oral commitments, or other similar types of arrangements for
goods or services or financing for capital equipment or improvements (the
"Commitment") which have been entered into by Purchaser or Purchaser's
representatives (whether such representatives were or are employees of RTPS or
Affiliate at the time the Commitment was made) through and including the
Closing. Any such Commitment made by Purchaser or Purchaser's representative
following the Closing shall remain the obligation of Purchaser and Purchaser
shall indemnify Raytel as provided in Section 94., herein below.
4.8 Title to the Promissory Notes and Raytel Stock. Purchaser represents
that it has good and marketable title to the Promissory Notes and the Raytel
Stock, free and clear of any and all encumbrances.
ARTICLE V
CONDUCT OF BUSINESS PRIOR TO CLOSING
5.1 Conduct of Raytel Management Business. During the period from the
date of this Agreement to the Closing Date, Raytel and RTPS shall use their
respective best efforts, and shall cause the Affiliate to use their best
efforts, to maintain and preserve intact: (i) the business organization, rights
and privileges pertinent to the Raytel Management Business; and (ii) the
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relationships of RTPS and the Affiliate with their respective partners,
co-venturers, managers, licensors, suppliers, customers and others with whom
they deal, all in accordance with their ordinary and usual course of business.
5.2 Transfer of RTPS Retained Assets. Prior to the Closing, RTPS shall
take all necessary action to transfer to Raytel, or another entity designated by
Raytel, the RTPS Retained Assets.
5.3 Restrictions on Activities. Prior to the Closing Date, neither RTPS
nor the Affiliate shall, without the prior written consent of Purchaser (which
consent shall not be unreasonably withheld) or except as specifically
contemplated by this Agreement:
(a) amend its Certificate of Incorporation, Bylaws, Agreement of
Limited Partnership or Joint Venture Agreement;
(b) authorize for issuance, issue, deliver or sell any
additional capital stock, partnership or joint venture interests or
securities convertible into such interests, or issue or grant any
rights, warrants, options or other commitments for the issuance of such
interests;
(c) split, combine or reclassify any capital stock, joint
venture interests or partnership interests or declare, set aside or pay
any distribution (whether in cash or property) to its shareholders or
partners in respect of their capital interest (other than distributions
by a Affiliate in the ordinary course of business consistent with prior
practice);
(d) dispose of or acquire any material properties or assets
except in the ordinary course of business consistent with prior
practice, nor make any single capital expenditure, lease or commitment
in excess of $50,000 additions to property, plant, equipment or
intangible capital assets or make aggregate capital expenditures, leases
or commitments for such purposes in excess of $50,000.
(e) engage in any activities or transactions that are outside
the ordinary course of the Raytel Management Business in substantially
the manner as heretofore conducted;
(f) incur any indebtedness for borrowed money;
(g) waive or terminate any material right;
(h) mortgage, pledge or subject to lien or to any other
Encumbrance (other than Permitted Encumbrances) any of its assets,
tangible or intangible;
(i) discharge or satisfy any Encumbrance or pay any obligation
or liability, except current liabilities set forth on the Balance Sheet
and current liabilities incurred since the Balance Sheet Date in the
ordinary course of business;
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(j) move or relocate any of its material operations from their
present locations; or
(k) agree, whether in writing or otherwise, to do any of the
foregoing.
ARTICLE VI
ADDITIONAL AGREEMENTS
6.1 Access and Information.
(a) Raytel and RTPS have previously afforded (and will continue
to afford) to Purchaser and to its accountants, counsel and other
representatives full access during normal business hours and upon
reasonable notice throughout the period prior to the Closing Date to all
of the properties, books, contracts and records of RTPS and the
Affiliate and has furnished (and will furnish) to Purchaser all
information concerning the business, properties and personnel of RTPS
and the Affiliate as Purchaser has requested (or may reasonably
request).
(b) Neither Raytel nor RTPS shall be obligated to disclose to
Purchaser any information which is subject to an obligation of
confidentiality which would be breached by such disclosure; provided,
however, that no refusal to make disclosure under this Section shall
relieve the non-disclosing party of any obligation arising under any
other representations or warranties contained herein or obligations
hereunder.
(c) In the event that between the date hereof and the Closing
Date, any Governmental Authority shall commence any examination, review,
investigation, action, suit or proceeding against any party hereto with
respect to the transactions contemplated hereby, the party as to which
such examination, review, investigation, action, suit or proceeding is
commenced shall give prompt notice thereof to the other parties, shall
keep the other parties informed as to the status thereof, shall promptly
provide the other parties with copies of all documents related thereto
and shall permit the other parties to observe and be present at each
meeting, conference or other proceeding and have access to and be
consulted in connection with any document filed or provided to such
governmental authority in connection with such examination, review,
investigation, action, suit or proceeding.
6.2 Certain Defaults. Raytel and RTPS will give prompt notice to
Purchaser of (i) any notice of default received by them subsequent to the date
of this Agreement and prior to the Closing Date under any of the Material RTPS
Contracts, the RTPS Equipment Leases, the RTPS Real Property Leases, or any
other material instrument or material agreement to which Raytel, RTPS or any of
the Affiliate is a party or by which any of them is bound, which default would,
if not remedied, be reasonably likely have a Material Adverse Effect, or (ii)
any suit, action or proceeding instituted or, to the knowledge of Raytel or
RTPS, threatened against or
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affecting Raytel, RTPS or any of the Affiliate subsequent to the date of this
Agreement and prior to the Closing Date which, if adversely determined, would be
reasonably likely to have a Material Adverse Effect.
6.3 Communication. Between the date hereof and the Closing Date, neither
Raytel nor RTPS, on the one hand, nor Purchaser, on the other hand, will furnish
any written communication to their shareholders, or to the public generally, if
the subject matter thereof relates to the transactions contemplated by this
Agreement without the prior approval of the other as to the content thereof,
which approval shall not be unreasonably withheld; provided that the foregoing
shall not be deemed to prohibit any disclosure which, in the opinion of counsel
to the disclosing party, is required by any applicable law or by any competent
governmental authority.
6.4 Consents and Approvals. Raytel and RTPS shall use their respective
best efforts to obtain any and all consents from other parties to contracts,
leases and other instruments necessary or appropriate to allow the consummation
of the transactions contemplated by this Agreement and the continuance of the
Raytel Management Business by the Purchaser following the Closing.
6.5 Certain Information. Between the date of this Agreement and the
Closing Date, RTPS shall furnish to Purchaser copies of monthly financial
information which it customarily prepares for the internal use of Raytel
management.
6.6 Employee Matters.
(a) As of the Closing, Purchaser and/or Southeast Texas
Cardiology Associates, L.L.P. (SETCA") shall offer continued employment
to each of the current employees of RTPS and the Affiliate in such
employee's present position, or in a comparable position with the Raytel
Management Business. Every employee of RTPS and the Affiliate is deemed
to be an employee "at-will" except for the Physicians described in
Section 1.22, and the other physicians employed by Southeast Texas
Cardiology Associates, or its successors and assigns. Each such employee
(a "New Purchaser Employee") shall have salary or other compensation
arrangements substantially equivalent to those in effect immediately
prior to the Closing. For a one-year period following the Closing,
Purchaser and/or SETCA shall maintain in effect for each New Purchaser
Employee a severance policy no less favorable than Raytel's severance
policy as currently in effect.
(b) Effective as of the close of business on the Closing Date,
the New Purchaser Employees shall cease to accrue benefits under
Raytel's pension and profit-sharing plans. Benefits of such plans,
accrued as of such time, shall be payable to such new Purchaser
Employees in accordance with the terms of the applicable plan. There
shall be no transfer of any assets of any such plan to Purchaser except
to the extent a New Purchaser Employee may be permitted, under such plan
and applicable laws and regulations, to transfer his or her vested
account balance to a plan of Purchaser.
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(c) Effective as of the close of business on the Closing Date,
the New Purchaser Employees shall cease to be covered on an ongoing
basis by Raytel's plans and policies which provide medical and dental
coverage, life and accident insurance, disability coverage and vacation
and severance pay. The New Purchaser Employees will be eligible to
participate in all fringe benefit plans and policies currently offered
by Purchaser to its employees, subject to the terms and conditions of
such plans and policies, copies of which have been provided by Purchaser
to Raytel.
(d) From and after the Closing, Purchaser shall give each New
Purchase Employee full credit for all vacation time and sick leave
accrued by such employee as of the Closing.
(e) Effective as of the Closing, Purchaser shall, for all
purposes, credit New Purchaser Employees for their past service with
Raytel and/or any of its subsidiaries.
6.7 Raytel's Names and Trademarks.
(a) Effective upon the Closing Date, the corporate name of RTPS
and Affiliate shall be changed to remove the word "Raytel" therefrom.
(b) Purchaser shall not, and from and after the Closing shall
ensure that the employees and representatives of Purchaser, RTPS and the
Affiliate do not, represent itself or themselves as Raytel or as
employees or representatives of Raytel. The foregoing prohibitions shall
apply, without limitation, to the use of any stationary or identifying
signs. Notwithstanding the foregoing, for a period not to exceed 90 days
following the Closing Date, Purchaser shall not be required to remove
the name "Raytel," or any logo thereof, from existing supplies of
printed materials as of the Closing Date provided that such materials
shall be conspicuously stamped or marked with words to the effect that
RTPS, or the Affiliate, as the case may be, is no longer an affiliate of
Raytel.
6.8 Closing Balance Sheet. Within forty-five (45) days of the Closing
Date, Raytel will prepare a balance sheet for the period beginning May 1, 2000
and ending May 31, 2000 (the "Closing Balance Sheet") prepared in accordance
with GAAP on the same basis as the other Financial Information has been prepared
and, as practicable following the Closing Date, shall deliver to Purchaser a
copy of the Closing Balance Sheet.
6.9 Purchaser's Covenant Concerning Commitments made on behalf of RTPS.
Purchaser hereby covenants that Purchaser assumes all responsibility for any and
all invoices, purchase orders, loans, leases, written or oral commitments, or
other similar types of arrangements for goods or services or financing for
capital equipment or improvements (the "Commitment") which have been entered
into by Purchaser or Purchaser's representatives (whether such representatives
were or are employees of RTPS or Affiliate at the time the Commitment was made)
through and including the Closing for Commitments made without the Knowledge of
Raytel (as that term is defined in Section 13.12(d)). Any such Commitment made
by Purchaser or Purchaser's representative following the Closing shall remain
the obligation of
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Purchaser. Purchaser shall indemnify Raytel as provided in Section 9.4., herein
below, for any Commitment made without the knowledge and consent of RTPS or
Raytel prior to the Closing.
6.10 Mutual Covenant Concerning Transfer of Nuclear Imaging Facility.
The parties hereby mutually covenant to complete the transfer of specified
assets of Raytel Nuclear Imaging-Orange, L.P., to Purchaser not later than June
5, 2000. The assets consist of the medical imaging equipment and related
equipment, office furniture and office equipment, medical supplies and
consumables, premises fixtures, and nuclear license, but not including the cash
or accounts receivable of the business. Purchaser has agreed to assume the
liability associated with the equipment lease for the medical imaging equipment
(the camera) and related equipment, the office lease, and the liabilities for
accrued vacation and sick leave associated with the three employees of the
nuclear imaging facility. Attached hereto is the form of the Asset Purchase and
Conveyance Agreement ("Conveyance Agreement") which will be the basis for the
transfer of the specified assets and the specified liabilities. Purchaser agrees
to provide Raytel with an aged accounts receivable listing and to then assist
Raytel in the collection of the accounts receivable following the closing.
6.11 Termination of Obligations Arising under Management Services
Agreement. The parties hereby agree that the Financial Information and the
Closing Balance Sheet set forth the accrued amounts payable to the Physicians
pursuant to the terms of the Management Services Agreement, as amended (as
defined in Section 8.4(b), herein below), and the amount as of April 30, 1999,
as set forth in the attached Balance Sheet is Five Hundred Fifty Thousand Seven
Hundred Seventy-three and 06/100 Dollars ($550,773.06), which includes amounts
payable to the Physicians for such items as physician compensation,
Shareholders' Top-up, Medical Director's Top-up, and Medical Director Fees. This
Agreement and the Termination Agreement terminate any obligation of Raytel to
make the payments to the Physicians for the payments described herein in this
Section 6.11 have been accrued but not paid as of the Closing.
6.12 Preparation of Tax Returns. Purchaser agrees that it shall prepare
and file any and all tax returns for RTPS from and after the Closing for all
open periods for which tax returns are required to be filed, with the exception
of the tax returns due for the period ended September 30, 1999 for which Raytel
shall prepare and file all tax returns and shall pay any tax for the period
ended September 30, 1999.
6.13 Assistance with Collection of Amounts Owed by Baptist Hospital.
Purchaser, and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, M.D., in particular, agrees to use
reasonable efforts to assist Raytel in its efforts to collect amounts owed to
Raytel by The Baptist Hospital of Southeast Texas pursuant to a management
agreement.
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ARTICLE VII
CONDITIONS PRECEDENT
7.1 Conditions to Each Party's Obligation to Effect the Transactions.
The respective obligations of each party to effect the transactions contemplated
hereby shall be, at the election of such party, subject to the satisfaction at
or prior to the Closing of the following conditions:
(a) No order shall have been entered, and not vacated, by a
court or Governmental Authority of competent jurisdiction, in any action
or proceeding which enjoins, restrains or prohibits consummation of the
transactions contemplated hereby.
(b) There shall be no litigation pending or threatened by any
Governmental Authority in which (i) an injunction is or may be sought
against the transactions contemplated hereby, or (ii) relief is or may
be sought against any party hereto as a result of this Agreement and in
which, in the good faith judgment of the Board of Directors of either
Raytel or Purchaser (relying on the advice of their respective legal
counsel), such Governmental Authority has the probability of prevailing
and where such relief would have a material adverse effect upon such
party.
7.2 Conditions to Obligations of Raytel and RTPS. The obligations of
Raytel and RTPS to effect the transactions contemplated hereby are, at the
option of Raytel, subject to the satisfaction at or prior to the Closing of the
following additional conditions:
(a) All of the representations and warranties made by Purchaser
in this Agreement shall be true in all material respects as of the
Closing Date with the same force and effect as if such representations
and warranties had been made as of the Closing Date, except for changes
contemplated by this Agreement, and Purchaser shall have delivered to
Raytel a certificate to such effect dated the Closing Date and signed by
its president or any vice president.
(b) All of the terms, covenants and conditions of this Agreement
to be complied with and performed by Purchaser at or before the Closing
Date shall have been duly complied with and performed, and Purchaser
shall have delivered to Raytel a certificate to such effect dated the
Closing Date and signed by its president or any vice president.
(c) All authorizations, consents and approvals of all
Governmental Authorities required to be obtained in order to permit
consummation of the transactions contemplated by this Agreement shall
have been obtained and delivered to Raytel.
7.3 Conditions to Obligations of Purchaser. The obligations of Purchaser
to effect the transactions contemplated hereby are, at the option of Purchaser,
subject to the satisfaction at or prior to the Closing of the following
additional conditions:
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(a) All of the representations and warranties made by Raytel and
RTPS in this Agreement shall be true in all material respects as of the
Closing Date with the same force and effect as if such representations
and warranties had been made as of the Closing Date, except for changes
contemplated by this Agreement, and Raytel and RTPS shall have delivered
to Purchaser a certificate to such effect dated the Closing Date and
signed by their respective president or any vice president.
(b) All of the terms, covenants and conditions of this Agreement
to be complied with and performed by Raytel and RTPS at or before the
Closing Date shall have been duly complied with and performed, and
Raytel and RTPS shall have delivered to Purchaser a certificate to such
effect dated the Closing Date and signed by their respective president
or any vice president.
(c) All authorizations, consents and approvals of all
Governmental Authorities required to be obtained in order to permit
consummation of the transactions contemplated by this Agreement shall
have been obtained and delivered to Purchaser.
(d) There shall have been no material adverse change in the
financial condition, results of operations, or business of RTPS and the
Affiliate, taken together, from the Balance Sheet Date through the
Closing Date other than changes disclosed in the RTPS Disclosure
Schedule.
(e) Raytel shall have received the written consent and agreement
of BankBoston/Fleet Bank as agent for BankBoston/Fleet Bank and Paribas
pursuant to the Amended and Restated Credit Agreement dated as of August
14, 1996 (the "Credit Agreement") to a waiver of all applicable loan
covenants regarding the transactions contemplated by this Agreement, the
Conveyance Agreement (set forth in Section 6.10); and the Master
Termination Agreement and Indemnity Agreement dated May 31, 2000, which
consents and agreements have been requested, and which Raytel believes
it will receive.
THIS CONDITION HAS NOT BEEN WAIVED BY RAYTEL. AS STATED IN THE RECITALS TO THIS
AGREEMENT, IF THE LENDERS DO NOT PROVIDE RAYTEL WITH THE WRITTEN CONSENT AS SET
FORTH IN THIS SECTION 7.3(e) BY JUNE 15, 2000, THEN THIS AGREEMENT AND THE
MASTER TERMINATION AGREEMENT SHALL BECOME NULL AND VOID WITHOUT PREJUDICE TO ANY
RIGHTS THE PARTIES MAY HAVE UNDER ANY OF THE TRANSACTION DOCUMENTS DESCRIBED IN
SECTIONS 1.29 AND 8.4(b).
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ARTICLE VIII
THE CLOSING
8.1 The Closing. The Closing shall take place simultaneously at the
offices of Raytel Medical Corporation located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ and at the offices of ▇▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ on the Closing Date. Counter-part original
signature pages shall be executed and exchanged by facsimile and by overnight
express delivery service.
8.2 Proceedings at the Closing. All proceedings to be taken and all
documents to be executed and delivered by Raytel and RTPS in connection with the
consummation of the transactions contemplated hereby shall be reasonably
satisfactory in form and substance to Purchaser and its counsel. All proceedings
to be taken and all documents and instruments to be executed and delivered by
Purchaser in connection with the consummation of the transactions contemplated
hereby shall be reasonably satisfactory in form and substance to Raytel and its
counsel. All proceedings to be taken and all documents and instruments to be
executed and delivered by all parties at the Closing shall be deemed to have
been taken and executed simultaneously, and no proceedings shall be deemed taken
nor any documents executed or delivered until all have been taken, executed and
delivered.
8.3 Deliveries by Raytel and RTPS. At the Closing, Raytel and RTPS shall
deliver, or shall cause to be delivered, to Purchaser the following:
(a) Certificates representing the Shares, which certificates
shall be duly endorsed in blank or, in lieu thereof, shall have affixed
thereto stock powers duly executed in blank, and in proper form for
transfer;
(b) Incumbency certificates setting forth the names of officers
of Raytel and RTPS who are authorized to execute this Agreement and the
other documents executed by Raytel and RTPS pursuant hereto, together
with their respective signatures, signed by duly authorized officers of
Raytel and RTPS;
(c) Resignation of officers and directors of RTPS; and
(d) Corporate minute books and other books and records of RTPS.
8.4 Deliveries by Purchaser. At the Closing, Purchaser shall deliver to
Raytel the following:
(a) The original Raytel Promissory Notes;
(b) A copy of the Master Termination and Indemnification
Agreement dated as of May 31, 2000, which among other things, cancels
the issuance of the Raytel Common Stock, mutually releases the parties
from all causes of action arising out of or pursuant to the Master
Transaction Agreement, the Management Services Agreement
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dated as of August 21, 1996 and as amended October 18, 1997 (the
"Management Services Agreement"), and signed by a duly authorized
officer of Purchaser and by each of the Physicians, as referred to in
Section 1.22; and
(c) An incumbency certificate setting forth the names of
officers of Purchaser who are authorized to execute this Agreement and
the other documents executed by Purchaser pursuant hereto, together with
their respective signatures, signed by a duly authorized officer of
Purchaser.
ARTICLE IX
SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS; INDEMNIFICATION
9.1 Survival. The representations, warranties and covenants of the
parties contained in this Agreement or in any certificate or instrument
delivered pursuant hereto shall survive the Closing hereunder. Subsequent to the
Closing, the provisions of this Article IX shall be the sole remedy for the
breach of any representations or warranties contained in this Agreement.
9.2 Indemnification by Raytel. Subject to the provisions and limitations
herein contained, Raytel hereby agrees to indemnify, defend and hold harmless
Purchaser, its officers directors, managers, owners, employees and attorneys,
all parents, subsidiaries and affiliates of Purchaser, and the respective
officers, directors, employees and attorneys of such entities (all such persons
and entities being collectively referred to as the "Purchaser Group") from and
against any and all losses, damages, costs and expenses (including reasonable
legal fees and expenses) which any member of the Purchaser Group may at any time
sustain or incur which are occasioned by, caused by or arise out of: (i) any
inaccuracy in or breach of any of the representations, warranties or covenants
made by Raytel or RTPS in this Agreement, or any closing document, schedule or
other instrument executed in connection herewith; or (ii) any breach by Raytel
or RTPS of its obligations under this Article IX.
9.3 Limitation of Raytel's Liability. The liability of Raytel under
Section 9.2 shall be limited as follows:
(a) The maximum amount payable by Raytel in respect of all
claims for indemnification under Section 9.2 will not exceed the
Purchase Price set forth in Section 2.2, herein above.
(b) No claim shall be made for indemnification under Section 9.2
until the aggregate amount of all such claims exceeds Five Thousand
Dollars ($5,000).
(c) No member of the Purchaser Group shall be entitled to
recover under Section 9.2 with respect to:
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(i) the breach of any representation or warranty unless
such claim has been asserted by written notice, specifying the
details of such breach, delivered to Raytel on or prior to the
expiration of one year after the Closing Date;
(ii) the breach of any representation or warranty, or
any covenant to be performed prior to the Closing, if before the
Closing an executive officer of Purchaser had actual knowledge
of the fact or facts which cause such breach; or
(iii) any claim, to the extent the claim has been
satisfied by proceeds of insurance (Purchaser hereby agreeing to
use its best efforts to collect the maximum amount of insurance
proceeds to which it is entitled).
(d) The amount of any recovery to which a member of the
Purchaser Group may be entitled pursuant to Section 9.2 shall be net of
(i.e., after deducting) any federal, state and/or local income tax
benefits or insurance proceeds inuring to such person as a result of the
set of facts which entitle such person to recover from Raytel pursuant
to Section 9.2.
(e) Raytel will not be liable under the indemnification
provisions of Section 9.2 to the extent that any loss, claim, liability
or expense results from an indemnified party's bad faith or negligence.
9.4 Indemnification by Purchaser. Subject to the provisions and
limitations herein contained, Purchaser hereby agrees to indemnify, defend and
hold harmless Raytel, its officers, directors, employees and attorneys, all
parents, subsidiaries and affiliates of Raytel, and the respective officers,
directors, employees and attorneys of such entities (all such persons and
entities being collectively referred to as the "Raytel Group") from and against
any and all losses, damages, costs and expenses (including reasonable attorneys'
fees and expenses) which any member of the Raytel Group may at any time sustain
or incur which are occasioned by, caused by or arise out of: (i) any inaccuracy
in or breach of any of the representations, warranties or covenants made by
Purchaser in this Agreement; (ii) the operation of the Raytel Management
Business after the Closing; or (iii) any breach by Purchaser of its obligations
under this Article IX.
9.5 Limitation of Purchaser's Liability.
(a) The maximum amount payable by Purchaser in respect of all
claims for indemnification under Section 9.4 will not exceed the
Purchase Price set forth in Section 2.2, herein above.
(b) No claim shall be made for indemnification under Section 9.4
until the aggregate amount of all such claims exceeds Five Thousand
Dollars ($5,000).
(c) No member of the Raytel Group shall be entitled to recover
under Section 9.4 with respect to:
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(i) the breach of any representation or warranty unless
such claim has been asserted by written notice, specifying the
details of such breach, delivered to Purchaser on or prior to
the expiration of one year after the Closing Date;
(ii) the breach of any representation or warranty, or of
any covenant to be performed prior to the Closing, if before the
Closing an executive officer of Raytel had actual knowledge of
the fact or facts which caused such breach; or
(iii) any claim, to the extent the claim has been
satisfied by proceeds of insurance (Raytel hereby agreeing to
use its best efforts to collect the maximum amount of insurance
proceeds to which it is entitled).
(d) The amount of any recovery to which a member of the Raytel
Group may be entitled pursuant to Section 9.4 shall be net of (i.e.,
after deducting) any federal, state and/or local income tax benefits or
insurance proceeds inuring to such person as a result of the set of
facts which entitle such person to recover from Purchaser pursuant to
Section 9.4.
(e) Purchaser will not be liable under the indemnification
provisions of Section 9.4 to the extent that any loss, claim, liability
or expense results from an indemnified party's bad faith or gross
negligence.
9.6 Defense. In the event that a claim for indemnification hereunder is
based upon a claim by a third party asserted against the indemnified party, the
indemnifying party or parties shall be entitled to control the defense thereof
and to settle any such action on such terms as it or they shall see fit so long
as the party entitled to indemnification shall be released from any liability by
reason of such settlement; provided, however, that the party entitled to
indemnification shall have the right to approve counsel retained with respect to
such defense (which consent shall not unreasonably be withheld) and the right to
participate in the defense of such action at its own expense. The party or
parties required to provide indemnification hereunder shall receive full
cooperation and access to all relevant and non-privileged records of the party
or parties entitled to indemnification.
9.7 Procedure and Dispute Resolution.
(a) If an indemnified party shall have a claim of
indemnification pursuant to this Article IX (an "Indemnity Claim"), it
will promptly give written notice thereof (the "Claim Notice") to the
indemnifying party or parties, including therein a brief description of
the facts upon which such claim is based and the amount thereof, to the
extent that it can be ascertained.
(b) In the event that the indemnifying party or parties dispute
the validity or amount of any Indemnity Claim, prior to taking any other
action, the matter shall be referred to responsible executives of the
affected parties for consideration and resolution.
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If the parties have not otherwise resolved the dispute, they shall meet
in person within 30 days after the delivery of the Claim Notice and
exercise their best efforts to settle the matter amicably.
(c) If any such dispute is not settled within 30 days from the
delivery of the Claim Notice, such dispute shall, at the demand of
either party, be referred to and decided by litigation in accordance
with the provisions of Section __.
ARTICLE X
TERMINATION AND ABANDONMENT
10.1 Termination by Raytel. This Agreement may be terminated at any time
prior to the Closing by action of the Board of Directors of Raytel upon written
notice to Purchaser, specifying the basis for such termination, if: (i)
Purchaser shall have breached in any material respect any of its covenants or
agreements contained in this Agreement or if any representation or warranty of
Purchaser contained in this Agreement shall have been materially inaccurate; or
(ii) the Closing shall not have occurred on or before July 31, 2000.
10.2 Termination by Purchaser. This Agreement may be terminated at any
time prior to the Closing by action of the Board of Directors of Purchaser upon
written notice to Raytel, specifying the basis for such termination, if: (i)
Raytel or RTPS shall have breached in any material respect any of their
respective covenants or agreements contained in this Agreement, or if any
representation or warranty of Raytel or RTPS contained in this Agreement shall
have been materially inaccurate; or (ii) the Closing shall not have occurred on
or before July 31, 2000.
10.3 Mutual Consent. This Agreement may be terminated at any time prior
to the Closing by mutual consent of Raytel and Purchaser.
10.4 Effect of Termination. Upon any permitted termination of this
Agreement pursuant to the provisions of this Article XI, the parties shall be
relieved of all further obligations under this Agreement, except as set forth in
Section 10.5 and except for the provisions of Article XII regarding the payment
of expenses and the obligations of the parties under the Confidentiality
Agreements.
10.5 Default; Remedies and Liquidated Damages.
(a) If the sale of the Shares is not consummated in accordance
with this Agreement because of Raytel's breach hereof, Purchaser's sole
remedy shall be to terminate Purchaser's obligations under this
Agreement pursuant to Section 11.2, and recover damages equal to
Purchaser's actual, reasonable, out-of-pocket costs and expenses
incurred in connection with the transactions contemplated by this
Agreement. Purchaser shall have no other remedies, whether at law or in
equity, for any default hereunder; provided that Purchaser will be
entitled to the benefit of any obligations, covenants and indemnities
hereunder and under the Confidentiality Agreement which
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expressly survive the termination this Agreement. Purchaser may only
avail itself of the remedies in this Section 10.5(a) if, at the time of
Raytel's default, Purchaser is not in default hereunder.
(b) If the purchase of the Shares is not consummated in
accordance with this Agreement because of Purchaser's breach hereof,
Raytel's sole remedy shall be to terminate Raytel's obligations under
this Agreement pursuant to Section 10.1. Raytel shall have no other
remedies, whether at law or in equity, for any default hereunder;
provided that Raytel will be entitled to the benefit of any obligations,
covenants and indemnities hereunder and under the Confidentiality
Agreement which expressly survive the termination of this Agreement.
Raytel may only avail itself of the remedies in this Section 11.5(b) if
at the time of Purchaser's default, Raytel is not in default hereunder.
THE PARTIES EXPRESSLY AGREE AND ACKNOWLEDGE THAT RAYTEL'S ACTUAL DAMAGES IN THE
EVENT OF A DEFAULT BY PURCHASER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO
ASCERTAIN AND THAT THE LIQUIDATED DAMAGES AMOUNT SPECIFIED HEREIN REPRESENTS THE
PARTIES' REASONABLE ESTIMATE OF SUCH DAMAGES. THE PAYMENT OF THE LIQUIDATED
DAMAGES AMOUNT IS NOT INTENDED AS A FORFEITURE OR A PENALTY WITHIN THE MEANING
OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE
LIQUIDATED DAMAGES TO RAYTEL PURSUANT TO CALIFORNIA CIVIL CODE SECTION 1671,
1676 AND 1677.
ARTICLE XI
PAYMENT OF EXPENSES
11.1 Expenses. The parties shall each pay their own legal, accounting
and financial advisory fees and other out-of-pocket expenses incurred incident
to the preparation and carrying out of this Agreement and the transactions
herein contemplated, whether or not the sale of the Shares hereunder is
consummated.
11.2 Brokers. Raytel and RTPS, on the one hand, and Purchaser, on the
other hand, represent that they have dealt with no broker or finder in
connection with any of the transactions contemplated by this Agreement. Each
party represents that, insofar as it knows, no other broker, finder or other
person is entitled to any commission or fee in connection with any such
transaction. Each party agrees to indemnify and hold the other parties harmless
against any loss, liability, damage, cost or expense incurred by reason of any
commission or finder's fee alleged to be payable because of any act, omission or
statement of the indemnifying party.
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ARTICLE XII
GENERAL PROVISIONS
12.1 Notices. No notice or other communication shall be deemed given
unless sent in the manner, and to the persons, specified in this Section 12.1.
All notices and other communications hereunder will be in writing and will be
deemed given (a) upon receipt if delivered personally (unless subject to clause
(b)) or if mailed by registered or certified mail, (b) on the day after dispatch
if sent by overnight courier or (c) upon dispatch if transmitted by telex,
telecopy or other means of facsimile transmission (and confirmed by a copy
delivered in accordance with clause (a) or (b)), addressed to the parties at the
following addresses:
To Raytel Raytel Medical Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Executive Officer
To Purchaser: RTPS Acquisition Company, L.L.C.
C/o Orgain, ▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
Attention: ▇▇▇▇▇ ▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇, Esq.
The Health Care Group
Meetinghouse Business Center
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇, Esq.
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
or to such other addresses or other persons as may be designated in writing by a
party, by notice given as aforesaid.
12.2 Interpretation. When a reference is made in this Agreement to an
Article or a Section, such reference shall be to an Article or a Section of this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement they shall be
deemed to be followed by the words "without limitation." The phrase "made
available" in this Agreement shall mean that the information referred to has
been made available if requested
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by the party to whom such information is to be made available. The phrases "the
date of this Agreement," "the date hereof," and terms of similar import, unless
the context otherwise requires, shall be deemed to refer to May 31, 2000.
12.3 Assignment. Neither this Agreement nor the rights, interests or
obligations hereunder shall be assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior written consent of the other
parties. Subject to the preceding sentence, this Agreement will be binding upon,
inure to the benefit of and be enforceable by the parties and their respective
successors and assigns.
12.4 Headings. The headings of the several sections of this Agreement
are inserted for the convenience of reference only and are not intended to
affect the meaning or interpretation of this Agreement.
12.5 Counterparts. This Agreement may be executed in one or more
counterparts, and when so executed each counterpart shall be deemed to be an
original, and said counterparts together shall constitute one and the same
instrument.
12.6 Binding Nature. This Agreement shall be binding upon and inure to
the benefit of the parties hereto. No party may assign or transfer any rights or
obligations under this Agreement, without the prior written consent of the other
party, which consent shall not be unreasonably withheld or delayed.
12.7 Waiver. Raytel and RTPS, on the one hand, and Purchaser, on the
other hand, may, by written notice to the other: (i) waive any of the conditions
to its obligations hereunder or extend the time for the performance of any of
the obligations or actions of the other; (ii) waive any inaccuracies in the
representations of the other contained in this Agreement or in any documents
delivered pursuant to this Agreement; (iii) waive compliance with any of the
covenants of the other contained in this Agreement; or (iv) waive or modify
performance of any of the obligations of the other. No action taken pursuant to
this Agreement, including without limitation any investigation by or on behalf
of either party, shall be deemed to constitute a waiver by the party taking such
action of compliance with any representation, warranty, condition or agreement
contained herein. Waiver of the breach of any one or more provisions of this
Agreement shall not be deemed or construed to be a waiver of other breaches or
subsequent breaches of the same provisions.
12.8 Entire Agreement. This Agreement, the Schedules and Exhibits hereto
and the Master Termination and Indemnification Agreement of even date herewith,
the Asset Purchase and Conveyance Agreement of even date herewith and the
related closing documents constitute the entire agreement between the parties
pertaining to the subject matter contained herein and supersede all prior and
contemporaneous negotiations, agreements, representations, and understandings of
the parties. No supplement, modification, or amendment of this Agreement shall
be binding unless executed in writing by the party sought to be bound.
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12.9 Good Faith. Each of the parties hereto agrees that it shall act in
good faith in an attempt to cause all the conditions precedent to its respective
obligations to be satisfied and the Merger to be consummated.
12.10 Severability. Should any provision of this Agreement be determined
to be invalid, it shall be severed from this Agreement and the remaining
provisions of the Agreement shall remain in full force and effect.
12.11 Construction and Interpretation of Agreement.
(a) This Agreement has been negotiated by the respective parties
hereto and their attorneys and the language hereof shall not be
construed for or against any party. The table of contents and headings
herein are for reference purposes only and shall not in any manner
affect the meaning or interpretation of this Agreement.
(b) When a reference is made in this Agreement to an Article or
a Section, such reference shall be to an Article or Section of this
Agreement unless otherwise indicated. Whenever the words "include,"
"includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The phrase
"made available" in this Agreement shall mean that the information
referred to has been made available if requested by the party to whom
such information is to be made available. The phrases "the date of this
Agreement," "the date hereof," and terms of similar import, unless the
context otherwise requires, shall be deemed to refer to May 31, 2000.
(c) As used in this Agreement, any reference to any state of
facts, event, change or effect being "material" with respect to any
entity means a state of facts, event, change or effect, as the case may
be, that is material to the current or expected condition (financial or
otherwise), properties, assets, liabilities, business, operations or
prospects of such entity.
(d) As used in this Agreement, the term "Knowledge of Raytel" or
the "Knowledge of the Seller" means the actual knowledge of any of the
directors or executive officers of Raytel after inquiry of those Raytel
management employees (which shall include center managers and their
superiors) who, because of their position, could reasonably be expected
to have information relating to the subject matter of the particular
representation.
(e) Whenever the term "enforceable in accordance with its terms"
or like expression is used, it is understood that excepted therefrom are
any limitations on enforceability under applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general
application affecting the enforcement of creditor's rights.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first set forth above.
RTPS Acquisition Company, L.L.C.
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇, M.D.
---------------------------------
▇. ▇. ▇▇▇▇▇▇▇▇▇, M.D., Manager
RAYTEL MEDICAL CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Executive Officer
RAYTEL MANAGEMENT HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Executive Office
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