EXHIBIT 10.12
ASSET PURCHASE AGREEMENT
by and among
DIGIRAD IMAGING SYSTEMS, INC.
and
NUCLEAR IMAGING SYSTEMS, INC.
and
CARDIOVASCULAR CONCEPTS, P.C.
dated September 29, 2000
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS.............................................................2
1.1 Defined Terms....................................................2
1.2 Construction of Certain Terms and Phrases........................4
ARTICLE II. PURCHASE AND SALE OF ASSETS............................................4
2.1 Purchase and Sale of Certain Assets of the Companies.............4
2.2 Excluded Assets..................................................5
2.3 Assumed Liabilities/Excluded Liabilities.........................5
2.4 Purchase Price...................................................6
2.5 Maintenance Escrow...............................................6
2.6 Lease of Certain Equipment.......................................6
2.7 Allocation of Aggregate Purchase Price...........................6
2.8 Sales, Use and Other Taxes.......................................7
2.9 [Omitted]........................................................7
2.10 Real Property Leases.............................................7
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANIES.......................8
3.1 Organization of Nuclear Imaging Systems, Inc.....................8
3.2 Organization of Cardiovascular Concepts, P.C.....................8
3.3 Authority of the Companies.......................................8
3.4 No Affiliates....................................................8
3.5 No Conflicts.....................................................9
3.6 Consents and Governmental Approvals and Filings..................9
3.7 Books and Records................................................9
3.8 Financial Statements.............................................9
3.9 Notice to Creditors.............................................10
3.10 No Adverse Changes..............................................10
3.11 No Undisclosed Liabilities......................................11
3.12 Purchased Assets................................................11
3.13 Real Property...................................................12
3.14 Licenses........................................................12
3.15 Non-infringement................................................12
3.16 Confidential Information........................................13
3.17 Compliance with Law.............................................13
3.18 Contracts.......................................................13
3.19 [Omitted].......................................................13
3.20 Inventory.......................................................14
3.21 [Omitted].......................................................14
3.22 Plants, Buildings, Structures, Facilities and Equipment.........14
3.23 Customer Lists and Accounts.....................................14
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3.24 Relationships with Suppliers and Licensors......................14
3.25 Insurance.......................................................14
3.26 Labor and Employment Relations..................................15
3.27 Certain Employees...............................................15
3.28 Absence of Certain Developments.................................16
3.29 Permits.........................................................16
3.30 Brokers.........................................................17
3.31 Performance of Assumed Contracts................................17
3.32 Material Misstatements and Omissions............................17
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF Purchaser...........................17
4.1 Organization of Purchaser.......................................17
4.2 Authority of Purchaser..........................................18
ARTICLE V. COVENANTS OF THE COMPANIES.............................................18
5.1 Maintenance of Business Prior to Closing........................18
5.2 Investigation by Purchaser......................................19
5.3 Consents........................................................19
5.4 Notification of Certain Matters.................................20
5.5 Best Efforts....................................................20
5.6 Filings.........................................................20
5.7 Public Announcements............................................20
5.8 Employee Matters................................................20
ARTICLE VI. CONDITIONS TO THE OBLIGATIONS OF PURCHASER............................21
6.1 Documents.......................................................21
6.2 Bankruptcy Court Order..........................................22
6.3 Representations, Warranties and Covenants.......................23
6.4 No Actions or Proceedings.......................................23
6.5 Material Adverse Effect.........................................23
6.6 Consents........................................................23
ARTICLE VII. MISCELLANEOUS........................................................23
7.1 Notices.........................................................23
7.2 Entire Agreement................................................24
7.3 Waiver..........................................................24
7.4 Amendment.......................................................25
7.5 No Third Party Beneficiary......................................25
7.6 No Assignment; Binding Effect...................................25
7.7 Headings........................................................25
7.8 Severability....................................................25
7.9 Governing Law...................................................25
7.10 Arbitration and Venue...........................................25
7.11 Consent to Jurisdiction and Forum Selection.....................26
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7.12 Expense.........................................................26
7.13 Construction....................................................26
7.14 Counterparts....................................................26
7.15 Further Assurances..............................................26
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SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 2.1(a) Equipment, Leasehold Improvements, Hardware,
Software & Other Operating Assets
Schedule 2.1(b) Customer Lists and Accounts
Schedule 2.1(c) Assumed Contracts
Schedule 2.1(d) Permits & Radiation Materials Licenses
Schedule 2.1(g) Pre-Paid Expenses and Deposits
Schedule 2.2 Excluded Assets
Schedule 2.3 Assumed Liabilities
Schedule 2.7 Purchase Price Allocation
Schedule 5.10 List of Assets to be Used After Closing
DISCLOSURE SCHEDULE
EXHIBITS
Exhibit A Maintenance Escrow Agreement
Exhibit B Equipment Lease Agreement
Exhibit C Omitted
Exhibit D Omitted
Exhibit E Non-Competition Agreement
Exhibit F Omitted
Exhibit G Indemnity Agreement
Exhibit H Certificate of the Secretary of the Company
Exhibit I Radiation Safety Officer Services Agreement
Exhibit J MMC Services Agreement
Exhibit K Omitted
Exhibit L Consulting Agreement
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ASSET PURCHASE AGREEMENT
This
Asset Purchase Agreement ("Agreement") is made and
entered into as of September 29, 2000, by and among Digirad Imaging Systems,
Inc., a Delaware corporation ("Purchaser") on the one hand, and Nuclear Imaging
Systems, Inc., a Pennsylvania corporation and Cardiovascular Concepts, P.C.
(together, the "Companies") on the other.
RECITALS
WHEREAS, Nuclear Imaging Systems, Inc. is a debtor and debtor
in possession in chapter 11 case no. 00-19698-BIF and Cardiovascular Concepts,
P.C. is a debtor in chapter 11 case no. 00-19697-BIF, each pending in the United
States Bankruptcy Court for the Eastern District of Pennsylvania (the
"Bankruptcy Court"), and each of which bankruptcy cases are hereafter referred
to as the "Bankruptcy Case" inasmuch as the two have been consolidated for
administrative purposes, though not substantively consolidated;
WHEREAS, one or both of the Companies, as part of a larger
business, operate a service that provides mobile delivery of diagnostic cardiac
services, diagnostic imaging equipment and related technical services to
physicians providing cardiology services (the "Mobile Business");
WHEREAS, Purchaser desires to purchase all assets of the
Companies pertaining to the Mobile Business, on the terms and conditions set
forth herein;
WHEREAS, Nuclear Imaging Systems, Inc. is believed to be the
sole owner of the assets defined below as the "Purchased Assets", but in an
abundance of caution Cardiovascular Concepts, P.C. is included as one of the two
"Companies" selling all of its right, title and interest in the Purchased Assets
to Purchaser subject to the terms and conditions set forth herein such that it
is clear that Purchaser will acquire 100% of the Purchased Assets comprising the
Mobile Business;
WHEREAS, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") is the principal and sole
shareholder of Nuclear Imaging Systems, Inc. and of Cardiovascular Concepts,
P.C., and is himself a debtor in a chapter 11 case (the "▇▇▇▇▇▇▇ Case") before
the Bankruptcy Court;
WHEREAS, Medical Management Concepts, Inc. ("MMC") is a sister
corporation of Nuclear Imaging Systems, Inc. and an affiliate of Cardiovascular
Concepts, P.C.;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
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ARTICLE I.
DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following
defined terms have the meanings indicated below:
"ACTIONS OR PROCEEDINGS" means any action, suit, proceeding,
arbitration, Order (as defined below), inquiry, hearing, assessment with respect
to fines or penalties or litigation (whether civil, criminal, administrative,
investigative or informal) commenced, brought, conducted or heard by or before,
or otherwise involving, any Governmental or Regulatory Authority (as defined
below).
"ACQUISITION DOCUMENTS" means this Agreement and each of the
other documents executed pursuant hereto or concurrently herewith.
"AFFILIATE" means, with respect to any Person, another Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person.
"ASSETS AND PROPERTIES" and "ASSETS OR PROPERTIES" of any
Person each means all assets and properties of every kind, nature, character and
description (whether real, personal or mixed, whether tangible or intangible,
whether absolute, accrued, contingent, fixed or otherwise and wherever
situated), including the goodwill related thereto, operated, owned or leased by
such Person, including, without limitation, cash, cash equivalents, accounts and
notes receivable, chattel paper, documents, instruments, general intangibles,
real estate, equipment, inventory, goods and intellectual property.
"ASSUMED CONTRACTS" has the meaning set forth in SECTION
2.1(c).
"ASSUMED LIABILITIES" has the meaning set forth in SECTION
2.30.
"BANKRUPTCY COURT ORDER", means the order of the Bankruptcy
Court in form and substance satisfactory to Purchaser approving the sale of the
Purchased Assets to Purchaser and approving the other terms of this Agreement
and the other Acquisition Documents.
"BOOKS AND RECORDS" of any Person means all files, documents,
instruments, papers, books, computer files (including but not limited to files
stored on a computer's hard drive or on floppy disks), electronic files and
records in any other medium relating to the business, operations or condition of
such Person.
"BUSINESS DAY" means a day other than Saturday, Sunday or any
day on which banks located in the State of
California are authorized or
obligated to close.
"CLOSING DATE" means the date upon which all conditions
precedent to Purchaser's obligations hereunder have been satisfied or waived in
writing by Purchaser.
"COMPANIES" has the meaning set forth in the first paragraph
of this Agreement.
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"DAMAGES" has the meaning set forth in SECTION 7.2(a) below.
"DISCLOSURE SCHEDULE" means the disclosure schedule attached
hereto which sets forth the exceptions to the representations and warranties
contained in ARTICLE III hereof and certain other information called for by this
Agreement.
"ENCUMBRANCES" means any mortgage, pledge, assessment,
security interest, deed of trust, lease, lien, adverse claim, levy, charge,
right of redemption or other encumbrance of any kind, or any conditional sale or
title retention agreement or other agreement to give any of the foregoing in the
future.
"FINANCIAL STATEMENTS" means (i) the unaudited balance sheet
of Nuclear Imaging Systems, Inc. and the related unaudited statement of income
and retained earnings for the period ended on December 31, 1999, together with
the notes thereto and the related report of Nuclear Imaging Systems, Inc.'s
independent certified public accountants and (ii) the Interim Financial
Statements (as defined below) for Nuclear Imaging Systems, Inc..
"GAAP" means generally accepted accounting principles,
consistently applied with past practices.
"GOVERNMENTAL OR REGULATORY AUTHORITY" means any court,
tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of the United States or other country, any state, county, city
or other political subdivision.
"INTERIM FINANCIAL STATEMENTS" means the unaudited balance
sheet and the related unaudited statement of income and retained earnings for
Nuclear Imaging Systems, Inc., in each case for the four (4) month period ended
August 31, 2000.
"LIABILITIES" means any liability, debts, obligations of any
kind or nature (whether known or unknown, whether asserted, or unasserted,
whether absolute or contingent, whether accrued or unaccrued, whether liquidated
or unliquidated, and whether due or to become due), including but not limited to
any liability for Taxes (as defined below).
"MATERIAL ADVERSE EFFECT" means, for any Person, a material
adverse effect whether individually or in the aggregate (a) on the business,
operations, financial condition, Assets and Properties, Liabilities or prospects
of such Person, or (b) on the ability of such Person to consummate the
transactions contemplated hereby.
"NON-COMPETITION AGREEMENT" has the meaning set forth in
SECTION 6.1(k).
"ORDINARY COURSE OF BUSINESS" means the action of a Person
that is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person.
"PERMITS" means all licenses, permits, certificates of
authority, authorizations, approvals, registrations and similar consents granted
or issued by any Governmental or Regulatory Authority.
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"PERSON" means any natural person, corporation, general
partnership, limited partnership, limited liability company, proprietorship,
other business organization, trust, union, association or Governmental or
Regulatory Authority.
"PURCHASED ASSETS" has the meaning set forth in SECTION 2.1.
"CASH PURCHASE PRICE" has the meaning set forth in SECTION
2.4.
"PURCHASER" has the meaning set forth in the first paragraph
of this Agreement.
"RADIATION MATERIALS LICENSES" means the radiation materials
licenses described in SCHEDULE 2.1(d) attached hereto.
"RADIATION SAFETY OFFICERS" means ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ (for New
Jersey and Pennsylvania), ▇▇▇▇▇▇▇ ▇▇▇▇, MD (for North Carolina) and ▇▇▇▇▇▇
▇▇▇▇▇▇, M.D. (for Maryland).
"RADIATION SAFETY OFFICER SERVICES AGREEMENT has the meaning
set forth in SECTION 6.1(c) below.
"REAL PROPERTY" has the meaning set forth in SECTION 3.13.
1.2 CONSTRUCTION OF CERTAIN TERMS AND PHRASES. Unless the context
of this Agreement otherwise requires, (a) words of any gender include each other
gender; (b) words using the singular or plural number also include the plural or
singular number, respectively; (c) the terms "hereof," "herein," "hereby" and
derivative or similar words refer to this entire Agreement; (d) the terms
"Article" or "Section" refer to the specified Article or Section of this
Agreement; (e) the term "or" has, except where otherwise indicated, the
inclusive meaning represented by the phrase "and/or"; and (f) "including" means
"including without limitation." Whenever this Agreement refers to a number of
days, such number shall refer to calendar days unless Business Days are
specified. All accounting terms used herein and not expressly defined herein
shall have the meanings given to them under GAAP.
ARTICLE II.
PURCHASE AND SALE OF ASSETS
2.1 PURCHASE AND SALE OF CERTAIN ASSETS OF THE COMPANIES. Subject
to the terms and conditions of this Agreement, the Companies (and each of them)
shall sell, convey, assign, transfer and deliver to Purchaser, and Purchaser
shall purchase and acquire from the Companies, free and clear of all liens,
claims and Encumbrances, and free of all adverse claims of any kind whatsoever,
all of the Companies' right, title, and interest in and to all assets,
properties, rights, leases, fixtures, accessions, claims, contracts and
interests of the Companies of every kind, type or description, real, personal
and mixed, tangible and intangible, wherever located and whether or not
specifically referred to in this Agreement, that are used in and/or pertain to
the Mobile Business (collectively, the "Purchased Assets"), including without
limitation:
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(a) all the equipment, leasehold improvements, hardware,
software and other operating assets owned or leased by the Companies (or either
of them) and used in the Mobile Business, as set forth in SCHEDULE 2.1(a)
attached hereto;
(b) all customer lists and customer accounts (excluding
accounts receivable owing to the Companies, or either of them, arising before
the Closing Date) owned by the Companies (or either of them) relating to the
Mobile Business as set forth in SCHEDULE 2.1(b) attached hereto (the "Customer
Lists and Accounts");
(c) all of each Companies' right, title and interest in
and to the contracts and agreements related to its Mobile Business as set forth
in SCHEDULE 2.1(c) attached hereto (the "Assumed Contracts");
(d) all Permits and all Radiation Materials Licenses
issued to or held by either of the Companies necessary or incidental to the
conduct of the Mobile Business, each as more particularly set forth in SCHEDULE
2.1(d) attached hereto (the "Permits");
(e) all of the operating data, books, files, documents
and records of the Companies (or either of them) relating to the Mobile Business
(the "Mobile Business Records");
(f) [Omitted];
(g) all prepaid expenses and deposits relating to the
Mobile Business, as identified in SCHEDULE 2.1(g) attached hereto;
(h) the goodwill and going concern value of the Mobile
Business.
2.2 EXCLUDED ASSETS. Notwithstanding SECTION 2.1 hereof, the
Purchased Assets shall not include any minute books, partnership records and
other records of the Companies (or either of them) which are not Mobile Business
Records; provided however that each of the Companies shall provide Purchaser
with access to the Books and Records of each such Company upon request after the
Closing Date and, if the Companies (or either of them) shall for any reason
cease to remain in business or become acquired by persons or entities other than
Purchaser or the Companies (or either of them) such books and records shall be
made available to Purchaser for copying (at Purchaser's expense) without extra
charge prior to dissolution of the Companies (or either of them) or acquisition
of the Companies (or either of them) or their respective assets by persons other
than Purchaser. Moreover, the Purchased Assets shall not include the assets set
forth in SCHEDULE 2.2 attached hereto. With respect to the assets on SCHEDULE
2.2, the assets listed in Part I thereof are to be leased to Purchaser pursuant
to the "Equipment Lease Agreement" described below and the assets listed in Part
II of SCHEDULE 2.2 are to be made available for the use of Purchaser through
December 31, 2000 at no additional charge to Purchaser.
2.3 ASSUMED LIABILITIES/EXCLUDED LIABILITIES. As of the Closing
Date, Purchaser agrees to assume, satisfy or perform when due only those
liabilities and obligations of the Companies (or either of them) listed in
Schedule 2.3, but only to the extent such obligations (A) arise after the
Closing Date, (B) do not arise from or relate to any breach by the Companies (or
either of them) of any obligations under the Purchased Assets or any provision
of any of the
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Assumed Contracts except those to be performed after the Closing Date, and (C)
do not arise from or relate to any event, circumstance or condition occurring or
existing on or prior to the Closing Date that, with notice or lapse of time,
would constitute or result in a breach of any obligations under the Purchased
Assets or any Assumed Contract (the "Assumed Liabilities"). Other than the
Assumed Liabilities, Purchaser shall not assume, or be deemed to have assumed or
guaranteed, or otherwise be responsible for any liability, obligation or claims
of any nature of the Companies (or either of them), whether matured or
unmatured, liquidated or unliquidated, fixed or contingent, known or unknown, or
whether arising out of acts or occurrences prior to, at or after the date
hereof.
2.4 PURCHASE PRICE. At the Closing Date, as consideration for the
Purchased Assets, Purchaser agrees to pay to Nuclear Imaging Systems, Inc.,
SEVEN HUNDRED TWENTY-FIVE THOUSAND DOLLARS ($725,000) in cash (the "Cash
Purchase Price") $100,000 of which shall be deposited into the Maintenance
Escrow described in SECTION 2.5 and $25,000 of which shall be reserved by
Purchaser for application to reasonable attorneys' fees and costs incurred by
Digirad in negotiating, documenting, defending and obtaining court approval from
the Bankruptcy Court of the transactions described herein. After all reasonable
attorneys' fees and costs have been reimbursed, any balance remaining shall be
promptly delivered to Nuclear Imaging Systems, Inc.
2.5 MAINTENANCE ESCROW. Immediately on the Closing Date, $100,000
of the Cash Purchase Price shall be deposited into an escrow (the "Maintenance
Escrow") subject to an escrow agreement in the form of EXHIBIT A and otherwise
in all respects satisfactory to Purchaser. The Maintenance Escrow shall
constitute security for the obligation of Nuclear Imaging Systems, Inc. to
provide maintenance to the Leased Equipment referenced in SECTION 2.6 during the
entire term of the Equipment Lease and Purchaser shall be entitled (as provided
in the Bankruptcy Court Order) to a duly perfected first priority security
interest in the funds in the Maintenance Escrow to secure Nuclear Imaging
Systems, Inc.'s performance of said maintenance obligation. Moreover, should
Nuclear Imaging Systems, Inc. fail to keep the Leased Equipment in good repair
and fully operational at all times, Purchaser may obtain the services of a third
party to maintain and repair the Leased Equipment and shall be entitled to
surcharge the Maintenance Escrow for all costs and expenses of such third party
maintenance.
2.6 LEASE OF CERTAIN EQUIPMENT. As a material inducement to
Purchaser to acquire the Purchased Assets, Purchaser has agreed that certain
equipment of the Companies (the "Leased Equipment") shall be leased to Purchaser
pursuant to the terms of the Lease attached hereto as EXHIBIT B (the "Equipment
Lease Agreement") at a monthly rental of $2,000 per month per system, all as
more particularly described in the Equipment Lease.
2.7 ALLOCATION OF AGGREGATE PURCHASE PRICE. The allocation of the
Purchase Price shall be determined by Purchaser in its sole discretion and as
set forth on Schedule 2.7 attached hereto. Purchaser and the Companies agree (a)
to report the sale of the Purchased Assets for federal and state tax purposes in
accordance with the allocations set forth on Schedule 2.7 hereto, and (b) not to
take any position inconsistent with such allocations on any of their respective
tax returns.
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2.8 SALES, USE AND OTHER TAXES. The Companies shall be responsible
for all sales and use taxes, if any, arising out of the sale of the Purchased
Assets to Purchaser pursuant to this Agreement.
2.9 [OMITTED].
2.10 REAL PROPERTY LEASES. Also as material inducement to Purchaser
to enter into this Agreement, each Company (as may be appropriate) agrees that
it shall arrange for Purchaser to occupy the premises that are the subject of
three "Real Property Leases" in favor of Nuclear Imaging Systems, Inc. as
"lessee" for the periods indicated below, as follows:
a. PLYMOUTH MEETING, PA. Nuclear Imaging Systems, Inc.
represents and warrants to Purchaser that "Lease No. 1" relating to the
location in Plymouth Meeting, PA expires by its own terms on December
31, 2000, is not in default and the monthly rent reserved under the
lease is $1,800 per month. Lease No. 1 is to be assumed by Nuclear
Imaging Systems, Inc. and assigned to Purchaser subject to a rent pro
ration between Nuclear Imaging Systems, Inc. and Purchaser such that
Nuclear Imaging Systems, Inc. shall be responsible for paying the daily
rental for any period prior to the Closing Date, and Purchaser for any
period thereafter. The security deposit (if any) paid by Nuclear
Imaging Systems, Inc. to the lessor of Lease No. 1 shall remain on
deposit with the lessor and shall be released to the bankruptcy estate
of Nuclear Imaging Systems, Inc. upon the expiration of Lease No. 1,
net of any deductions from said deposit as permitted under Lease No. 1
and applicable law.
b. BURLINGTON, NC. Nuclear Imaging Systems, Inc.
represents and warrants to Purchaser that "Lease No. 2" relating to the
location in Burlington, NC was extended beyond the original August 31,
2000 termination date for three months until November 30, 2000, that it
is not in default and that the monthly rental reserved thereunder is
$889. Rather than assume and assign this lease to Purchaser, Nuclear
Imaging Systems, Inc. agrees to obtain the replacement of the existing
lease with a month-to-month lease on the same terms and rental rate as
the existing lease, but in favor of Purchaser and on a month-to month
bases, subject to termination on 30-days' notice. Alternatively, if the
lessor under Lease No. 2 refuses to consent to the new lease, Nuclear
Imaging Systems, Inc. shall obtain assumption and assignment to
Purchaser as was the case with Lease No. 1.
c. ROCKVILLE, MD. Nuclear Imaging Systems, Inc.
represents and warrants to Purchaser that "Lease No. 3" relating to the
location in Rockville, MD was extended for 3 years beyond its original
September 30, 1999 termination date such that it is set to expire on
September 30, 2002, that it is not in default and that the monthly
rental reserved thereunder is $5,419.70. Nuclear Imaging Systems, Inc.
is presently using the property and expects to do so after the Closing
Date. Nuclear Imaging Systems, Inc. agrees, as a material inducement to
Purchaser to enter into this Agreement, to allow Purchaser to use
approximately one-twelfth of the space free of charge for 90 days after
the Closing Date.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANIES
Each of the Companies, jointly and severally represents and
warrants to Purchaser as of the Closing Date (and ▇▇▇▇▇▇▇, by executing where
indicated below under the signatures of the parties hereto, jointly and
severally represents and warrants to Purchaser) that, except as set forth on the
Disclosure Schedule furnished to Purchaser specifically identifying the relevant
subparagraph hereof, which exceptions shall be deemed to be representations and
warranties as if made hereunder, as follows:
3.1 ORGANIZATION OF NUCLEAR IMAGING SYSTEMS, INC. Nuclear Imaging
Systems, Inc. is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Pennsylvania. Nuclear Imaging Systems,
Inc. is duly authorized to conduct business and is in good standing in each
jurisdiction where such qualification is required except for any jurisdiction
where failure so to qualify would not have a Material Adverse Effect upon
Nuclear Imaging Systems, Inc. Nuclear Imaging Systems, Inc. has full power and
authority, and holds all Permits and authorizations necessary to carry on its
Mobile Business and to own and use the Assets and Properties owned and used by
Nuclear Imaging Systems, Inc. except where the failure to have such power and
authority or to hold such Permit or authorization would not have a Material
Adverse Effect on Nuclear Imaging Systems, Inc.'s Mobile Business. Nuclear
Imaging Systems, Inc. has delivered to Purchaser correct and complete copies of
its charter documents and organizational documents, each as amended to date.
3.2 ORGANIZATION OF CARDIOVASCULAR CONCEPTS, P.C. Cardiovascular
Concepts, P.C. is a professional corporation duly organized, validly existing,
and in good standing under the laws of the State of Pensylvania. Cardiovascular
Concepts, P.C. is duly authorized to conduct business and is in good standing in
each jurisdiction where such qualification is required except for any
jurisdiction where failure so to qualify would not have a Material Adverse
Effect upon Cardiovascular Concepts, P.C. Cardiovascular Concepts, P.C. has full
power and authority, and holds all Permits and authorizations necessary to carry
on the Mobile Business and to own and use the Assets and Properties owned and
used by Cardiovascular Concepts, P.C. except where the failure to have such
power and authority or to hold such Permit or authorization would not have a
Material Adverse Effect on the Mobile Business, and/or except where the same is
owned by Nuclear Imaging Systems, Inc. prior to the sale thereof to Purchaser.
Cardiovascular Concepts, P.C. has delivered to Purchaser correct and complete
copies of its charter documents and organizational documents, each as amended to
date.
3.3 AUTHORITY OF THE COMPANIES. Each of the Companies has all
necessary power and authority and has taken all action necessary to enter into
this Agreement, to consummate the transactions contemplated hereby and to
perform its obligations hereunder and no other proceedings on the part of either
of the Companies are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by each of the Companies and constitutes a legal, valid
and binding obligation of the Companies enforceable against the Companies in
accordance with its terms.
3.4 NO AFFILIATES. The Companies do not have any Affiliates (other
than MMC) and neither of the Companies is a partner in any partnership or a
party to a joint venture.
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3.5 NO CONFLICTS. The execution and delivery by the Companies of
this Agreement do not, and the performance by the Companies of their respective
obligations under this Agreement and the consummation of the transactions
contemplated hereby and in the other Acquisition Documents will not:
(a) conflict with or result in a violation or breach of
any of the terms, conditions or provisions of the charter documents, bylaws or
other organizational documents of either of the Companies;
(b) conflict with or result in a violation or breach of
any term or provision of any law, Order, Permit, statute, rule or regulation
applicable to the Companies, the Mobile Business, or the Purchased Assets;
(c) result in a breach of, or default under (or give rise
to right of termination, cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license, permit
agreement, lease or other similar instrument or obligation to which either of
the Companies, the Mobile Business or the Purchased Assets may be bound, except
for such breaches or defaults as set forth in SECTION 3.5(c) of the Disclosure
Schedule as to which requisite waivers or consents will have been obtained by
the Closing Date; or
(d) result in an imposition or creation of any
Encumbrance on the Mobile Business or the Purchased Assets.
3.6 CONSENTS AND GOVERNMENTAL APPROVALS AND FILINGS. Except as set
forth in Section 3.6 of the Disclosure Schedule, no consent, approval or action
of, filing with or notice to any Governmental or Regulatory Authority or other
Persons is required in connection with the execution, delivery and performance
of this Agreement or the consummation of the transactions contemplated hereby or
by the other Acquisition Documents.
3.7 BOOKS AND RECORDS. The minute books and other corporate
records of the Companies (and each of them) as made available to Purchaser
contain a true and complete record, in all material respects, of all actions
taken at all meetings and by all written consents in lieu of meetings of the
shareholders, the boards of directors and committees of the boards of directors
of the Companies. The other Books and Records of each Company are true, correct
and complete.
3.8 FINANCIAL STATEMENTS. Nuclear Imaging Systems, Inc. has
previously delivered to Purchaser the Financial Statements. Such Financial
Statements (i) are true, correct and complete, (ii) are in accordance with the
Books and Records of Nuclear Imaging Systems, Inc., (iii) have been prepared in
conformity with GAAP, and (iv) fairly present the financial condition and
results of operations of Nuclear Imaging Systems, Inc. as of the respective
dates thereof and for the periods covered thereby; PROVIDED that the Interim
Financial Statements are subject to normal year-end adjustments and lack
footnotes and certain other presentation items.
9
3.9 NOTICE TO CREDITORS. The Companies and ▇▇▇▇▇▇▇ have each given
notice as is required by applicable law of the motions seeking approval of the
transactions described herein and in the other Acquisition Documents to all:
(i) creditors (and interest holders) of the Companies
and/or ▇▇▇▇▇▇▇;
(ii) parties to Assumed Contracts referred to in SECTION
2.1(c) and parties to the three real property leases
referred to in SECTION 2.10;
(iii) customers of the Mobile Business including those
identified by the Customer Lists and Accounts
referred to in SECTION 2.1(b);
(iv) each of the Radiation Officers;
(v) the Environmental Protection Agency and all
governmental authorities either engaged in the
regulation or oversight of the services performed in
the Mobile Business or having any regulatory or other
interest in any assets, rights, permits, licenses or
contracts assigned or transferred to Purchaser
including the Permits and the Radiation Material
Licenses referred to in SECTION 2.1(d) and the
related Schedule;
(vi) parties in pending or threatened lawsuits or other
Actions and Proceedings, involving Companies and/or
▇▇▇▇▇▇▇;
(vii) parties who have asserted or have threatened to
assert claims against or interests in any of the
Purchased Assets;
(viii) taxing authorities with jurisdiction over either of
the Companies and/or ▇▇▇▇▇▇▇ and/or their respective
assets;
(ix) unions and parties to any employment contract or
collective bargaining agreement, written or oral; and
(x) employees of the Companies (and either of them).
3.10 NO ADVERSE CHANGES. Since December, 1999:
(a) Neither Company has cancelled, compromised, waived or
released any right or claim (or series of related rights and claims) relating to
the Mobile Business or the Purchased Assets either involving more than $5,000 in
any case, or $15,000 in the aggregate.
(b) Neither Company has paid, discharged or satisfied any
claims, liabilities or obligations (absolute, accrued, asserted or unasserted,
contingent or otherwise) relating to its Mobile Business or the Purchased Assets
involving more than $5,000 in any case, or $15,000 in the aggregate.
10
(c) There has not been any resignation or termination of
any key officers or employees of either Company, including, without limitation,
those acting as a Radiation Safety Officer with respect to a Radiation Materials
License, or any impending or threatened resignation or termination of employment
of any such officer or employee, except as disclosed in the Disclosure Schedule.
(d) There has not been a revaluation by either Company of
any of the Purchased Assets.
(e) Neither Company has returned any deposits or received
requests or threats to return any deposits in connection with or any
cancellation or threatened cancellation of any Assumed Contracts.
(f) None of ▇▇▇▇▇▇▇, either Company nor any officer or
employee thereof has negotiated or agreed to do any of the things described in
the preceding clauses (a) through (e) (other than negotiations with Purchaser
and its representatives regarding the transactions contemplated by this
Agreement).
3.11 NO UNDISCLOSED LIABILITIES. Except as disclosed in SECTION
3.11 of the Disclosure Schedule or in the Financial Statements or in the
Schedules filed in the Bankruptcy Case, there are no Liabilities, nor any basis
for any claim against the Companies (or either of them) for any such
Liabilities, relating to or affecting the Companies (or either of them), the
Mobile Business or the Purchased Assets, other than Liabilities incurred after
the end of the period covered by the Interim Financial Statements in the
Ordinary Course of Business which have not had, and could not reasonably be
expected to result in, individually or in the aggregate, a Material Adverse
Effect on the Companies, the Mobile Business or the Purchased Assets.
3.12 PURCHASED ASSETS. The Disclosure Schedule contains in SECTION
3.12 a complete and accurate schedule specifying the location of all of the
Purchased Assets, where applicable, as of the Closing Date. The Purchased Assets
(together with the Excluded Assets referenced in SECTION 2.2 hereof), constitute
all property of any nature owned by and/or used in, or useful to, the operation
of the Mobile Business as conducted at this date. All tangible personal property
of the Companies included in the Purchased Assets is in good operating condition
and repair, ordinary wear and tear excepted. Nuclear Imaging Systems, Inc. shall
be in actual possession of all of the Purchased Assets as of the Closing Date.
11
3.13 REAL PROPERTY. The Disclosure Schedule in SECTION 3.13
contains a description of each parcel of real property leased by either Company
relating to the Mobile Business as lessee (the "Real Property"), which pieces of
Real Property include the real property subject to each of Lease No. 1, Lease
No. 2, and Lease No. 3 (which three leases are referred to as the "Real Property
Leases). Nuclear Imaging Systems, Inc. has a valid leasehold interest in all
such Real Property for the periods and on the terms indicated in SECTION 3.13 of
the Disclosure Schedule, and each of the representations and warranties of
Nuclear Imaging Systems, Inc. and/or Cardiovascular Concepts, P.C., made in
SECTION 2.10 above with regard to the Real Property Leases is true and correct.
Nuclear Imaging Systems, Inc. has rights of ingress and egress with respect to
the Real Property, and all buildings, structures, facilities, fixtures and other
improvements thereon material for the operation of the Mobile Business. There is
no pending or contemplated or threatened condemnation of any of the respective
parcels of Real Property or any part thereof. None of such Real Property,
buildings, structures, facilities, fixtures or other improvements, or the use
thereof, contravenes or violates any building, zoning, fire protection,
administrative, occupational safety and health or other applicable law, rule, or
regulation except for any contravention or violation which individually or in
the aggregate could not reasonably be expected to result in a Material Adverse
Effect on the Mobile Business. Each lease with respect to the Real Property is a
legal, valid and binding agreement of Nuclear Imaging Systems, Inc. subsisting
in full force and effect enforceable in accordance with its terms, and except as
set forth in SECTION 3.13 of the Disclosure Schedule, there is no, and neither
Company has received notice of any, default (or any condition or event which,
after notice or lapse of time or both, would constitute a default) thereunder.
The leases in effect (including each of the Real Property Leases, as amended or
extended) allow the particular use of the premises involved, and no provision of
any lease prohibits or unduly limits either Company's ability to conduct its
business so as to have a Material Adverse Effect on either Company if enforced.
Neither Company owes any brokerage commissions with respect to any such Real
Property. Neither Company owns any real property.
3.14 LICENSES. SECTION 3.14 of the Disclosure Schedule lists all
contracts, licenses and agreements to which either Company is a party that are
currently in effect and that are necessary or useful in connection with the
Mobile Business. The contracts, licenses and agreements listed in SECTION 3.14
of the Disclosure Schedule are in full force and effect. The consummation of the
transactions contemplated by this Agreement and/or in the other Acquisition
Documents in the Bankruptcy Court Order will neither violate nor result in the
breach, modification, cancellation, termination or suspension of such contracts,
licenses and agreements (except as such events are not enforceable or actionable
post-bankruptcy). Each Company is in compliance with, and has not breached any
term any of such contracts, licenses and agreements and, to the knowledge of
▇▇▇▇▇▇▇ and/or each Company (after diligent inquiry), all other parties to such
contracts, licenses and agreements are in compliance with, and have not breached
any term of, such contracts, licenses and agreements.
3.15 NON-INFRINGEMENT. The operation of the Mobile Business, as
such Mobile Business currently is conducted, has not, does not and will not
infringe or misappropriate the intellectual property of any third party or
constitute unfair competition or trade practices under the laws of any
jurisdiction. Neither Company (including each Company's officers, directors and,
to the knowledge of ▇▇▇▇▇▇▇ and/or each Company, after diligent inquiry,
employees) has received notice from any third party that the operation of the
Mobile Business or
12
any act, product or service of either Company infringes or misappropriates the
intellectual property of any third party or constitutes unfair competition or
trade practices under the laws of any jurisdiction. To the knowledge of ▇▇▇▇▇▇▇
and/or each Company, (i) no Person has or is infringing or misappropriating any
intellectual property of either Company, and (after diligent inquiry) (ii) there
have been, and are, no claims asserted against either Company or against any
customer of either Company, related to any product or service of either Company.
3.16 CONFIDENTIAL INFORMATION. Each of the Companies has taken
reasonable steps to protect its rights in its confidential information and trade
secrets or any trade secrets or confidential information of third parties
provided to either (or both) of Companies and, without limiting the foregoing,
each of the Companies has and enforces a policy requiring each employee and
contractor with access to any intellectual property of either of them to execute
a proprietary information/confidentiality agreement substantially in such
Company's standard form and all current and former employees and contractors of
either (or both) of the Companies have executed such an agreement ("Trade Secret
Agreement"). Neither of the Companies nor (to the knowledge of ▇▇▇▇▇▇▇ and/or
either Company), any employees or consultants of either of the Companies, have
caused any of the trade secrets of such Company to become part of the public
knowledge or literature, nor has either Company or any of such Company's
employees or consultants permitted any such trade secrets to be used, divulged
or appropriated for the benefit of Persons to the material detriment of either
Company.
3.17 COMPLIANCE WITH LAW. Each Company is in compliance with all
applicable laws, statutes, orders, ordinances and regulations, whether federal,
state, local or foreign. Neither of the Companies, ▇▇▇▇▇▇▇ nor any employee of
any of them has received any notice to the effect that, or otherwise has been
advised that, either Company is not in compliance with any of such laws,
statutes, orders, ordinances or regulations.
3.18 CONTRACTS. SCHEDULE 2.1(c) contains a true and complete list
of each of all written or oral contracts, agreements or other arrangements to
which ▇▇▇▇▇▇▇ and/or either Company is a party and by which the Mobile Business
and the Purchased Assets are bound or affected (and, to the extent oral,
accurately describes the terms of such contracts, agreements and commitments).
Each Assumed Contract is in full force and effect and constitutes a legal, valid
and binding agreement, enforceable in accordance with its terms, of each party
thereto; and each Company which is a party thereto has performed all of its
required obligations under, and is not, in any respect, in violation or breach
of or default under, either with the lapse of time, giving or notice or both,
any such contract, agreement or commitment. The other parties to any such
contract, agreement or commitment are not in violation or breach of or default
under, either with the lapse of time, giving of notice or both, any such
contract, agreement or commitment. Neither ▇▇▇▇▇▇▇ nor any the present or former
employees, officers or directors of either Company is a party to any oral or
written contract or agreement prohibiting any of them from freely competing with
other parties or engaging in the Mobile Business as now operated.
3.19 [OMITTED].
13
3.20 INVENTORY. The inventory of each Company is in good and
merchantable condition, and suitable and usable at its carrying value in the
Ordinary Course of Business for the purposes for which intended. There is no
material adverse condition affecting the supply of materials available to either
Company. All inventories used in or relating to the conduct of the Mobile
Business are owned by Nuclear Imaging Systems, Inc. free and clear of any
Encumbrances. To the knowledge of ▇▇▇▇▇▇▇ and each Company, no supplier of
either Company is in violation of any federal, state, local or foreign law,
ordinance, regulation or order, which violation has a Material Adverse Effect on
such supplier's ability to produce or supply the Companies with any product
necessary for the operations of the Mobile Business.
3.21 [OMITTED].
3.22 PLANTS, BUILDINGS, STRUCTURES, FACILITIES AND EQUIPMENT.
Except as set forth in Section 3.21 of the Disclosure Schedule, (a) all plants,
buildings, structures, facilities and equipment used by either Company in the
conduct of the Mobile Business are structurally sound with no known material
defects and are in good operating condition and repair (subject to normal wear
and tear) so as to permit the operation of the Mobile Business as presently
conducted; (b) no such plant, building, structure, facility or equipment is in
need of maintenance or repairs except for ordinary, routine maintenance and
repairs which are not material in nature or cost; and (c) with respect to each
plant, building, structure, facility or item of equipment, neither Company has
received notification that it is in violation, in any material respect, of any
applicable building, zoning, subdivision, fire protection, health or other law,
order, ordinance or regulation and no such violation exists.
3.23 CUSTOMER LISTS AND ACCOUNTS. SCHEDULE 2.1(b) contain a true
and correct list (the "Customer Lists and Accounts") of both Companies'
customers and accounts during the 1999 fiscal year and the eight (8) month
period ended August 31, 2000 relating to the Mobile Business. Except as set
forth in the Disclosure Schedule, since December 31, 1999, no single customer or
group of affiliated customers contributing more than $5,000 per annum to the
gross revenues of the Mobile Business has stopped doing business with the
Companies, and to the knowledge of ▇▇▇▇▇▇▇ and each Company (after diligent
inquiry), no such customer has an intention to discontinue doing business or
reduce the level of gross revenues from that in fiscal years 1999 with the
Mobile Business.
3.24 RELATIONSHIPS WITH SUPPLIERS AND LICENSORS. No current
supplier to either Company has notified either ▇▇▇▇▇▇▇ or either Company of an
intention to terminate or substantially alter its existing business relationship
with the Companies, nor has any licensor under a license agreement with either
Company, notified ▇▇▇▇▇▇▇ and/or either Company of an intention to terminate or
substantially alter either Company's rights under such license.
3.25 INSURANCE. Set forth in SECTION 3.25 of the Disclosure
Schedule is a complete and accurate list of all primary, excess and umbrella
policies, bonds and other forms of insurance currently owned or held by or on
behalf of and/or providing insurance coverage to either Company or the Purchased
Assets (or any of either Company's directors, officers, salespersons, agents or
employees), including the following information for each such policy: type(s) of
insurance coverage provided; name of insurer; effective dates; policy number;
per occurrence and annual aggregate deductibles or self-insured retentions; per
occurrence and
14
annual aggregate limits of liability and the extent, if any, to which the limits
of liability have been exhausted. All policies set forth on the Disclosure
Schedule are in full force and effect, and with respect to such policies, all
premiums currently payable or previously due have been paid, and no notice of
cancellation or termination has been received with respect to any such policy.
All such policies are sufficient for compliance with all requirements of law and
all agreements to which either Company is a party or otherwise bound, and are
valid, outstanding, collectible and enforceable policies and, to the knowledge
of ▇▇▇▇▇▇▇ and each Company (after diligent inquiry), provide adequate insurance
coverage for the Companies, the Mobile Business and the Purchased Assets and
will remain in full force and effect through the respective dates set forth in
the Disclosure Schedule. None of such policies contains a provision that would
permit the termination, limitation, lapse, exclusion or change in the terms of
coverage of such policy (including, without limitation, a change in the limits
of liability) by reason of the consummation of the transactions contemplated by
this Agreement or the other Acquisition Documents. Complete and accurate copies
of all such policies and related documentation have previously been provided to
the Purchaser.
3.26 LABOR AND EMPLOYMENT RELATIONS. To the best of the knowledge
of ▇▇▇▇▇▇▇ and each Company (after diligent inquiry), no officer, executive or
other employees of either Company has expressed any intention NOT to become an
employee of Purchaser if Purchaser offers such officer, executive or employee
employment. There have not been any material labor problems and/or work
stoppages involving either Company or its respective predecessors or any
application filed by a union or employee thereof with the National Labor
Relations Board ("NLRB") or similar state, local or foreign agency; or any
complaint filed with the NLRB and to the knowledge of ▇▇▇▇▇▇▇ and each Company,
no work stoppage has been threatened or is planned. Except as set forth on the
Disclosure Schedule, there is no union with which any employees of either
Company is affiliated.
3.27 CERTAIN EMPLOYEES. Set forth in SECTION 3.27 of the Disclosure
Schedule is a list of the names of each Company's employees and consultants as
of the date hereof involved in the management and operation of the Mobile
Business, together with the title or job classification of each such person and
the total compensation (with wages and bonuses, if any, separately detailed)
paid in 1999 (if applicable) and the current rate of pay for each such person on
the date of this Agreement. Except as set forth in SECTION 3.27 of the
Disclosure Schedule, none of such persons has an employment agreement or
understanding, whether oral or written, with either Company which is not
terminable on notice by the applicable Company without cost or other liability
to such Company. Furthermore, each Company acknowledges and agrees that to the
extent Purchaser makes any offers of employment to any of the persons listed in
SECTION 3.27 and such employee accepts such offer, the employee shall be deemed
to have resigned effective on the Closing Date or, if later, the date upon which
employment is accepted by the employee, and all damages or other claims by the
applicable Company against such person relating to the cessation of employment
by the employee with such Company shall be deemed waived by the Companies. In
addition, each Company as may be applicable shall cooperate in transitioning
such employee to the employment of Purchaser. In no event shall Purchaser assume
any obligation or Liability owing by either Company or ▇▇▇▇▇▇▇ (or MMC) to any
employee employed by Purchaser (or not employed by Purchaser) except as may be
explicitly set forth in a final employment agreement (if any) between Purchaser
and such employee.
15
3.28 ABSENCE OF CERTAIN DEVELOPMENTS. Since the end of the period
covered by the Interim Financial Statements, except as set forth in SECTION 3.28
of the Disclosure Schedule, neither Company has:
(a) sold, leased, subleased, assigned or transferred any
of Purchased Assets, except in the Ordinary Course of Business, or cancelled any
debts or claims;
(b) made any changes in any employee compensation,
severance or termination agreement, commitment or transaction other than routine
salary increases consistent with past practice or offer employment to any
individuals with an annual compensation, including salary, cash, bonuses and
commissions, in excess of Ten Thousand Dollars ($10,000);
(c) entered into any transaction or operated the Mobile
Business, not in the Ordinary Course of Business;
(d) made any changes in its accounting methods or
practices or ceased making accruals for taxes, obsolete inventory, vacation and
other customary accruals;
(e) caused to be made any reevaluation of any of its
Assets and Properties;
(f) caused to be entered into any amendment or
termination of any lease, customer or supplier contract or other material
contract or agreement or permit or license to which it is a party;
(g) made any material change in any of its business
policies, including, without limitation, advertising, distributing, marketing,
pricing, purchasing, personnel, sales, returns, budget or product acquisition or
sale policies;
(h) terminated or failed to renew, or received any
written threat (that was not subsequently withdrawn) to terminate or fail to
renew, any contract or other agreement that is or was material to the Mobile
Business or its financial condition;
(i) permitted to occur or be made any other event or
condition of any character which has had a Material Adverse Effect on it;
(j) waived any rights material to its financial or
business condition;
(k) made any illegal payment or rebates; or
(l) entered into any agreement to do any of the
foregoing.
3.29 PERMITS. SECTION 3.29 of the Disclosure Schedule contains a
true and complete list of all Permits used in and material, individually or in
the aggregate, to the Mobile Business or the Purchased Assets and all Radiation
Materials Licenses. All such Permits and Radiation Materials Licenses are
currently effective and valid and have been validly issued and are freely
transferable to Purchaser at the Closing. No additional Permits or Radiation
Materials Licenses are necessary to enable the conduct of the Mobile Business in
compliance with all applicable federal, state and local laws. Neither the
execution, delivery or performance of this
16
Agreement nor the mere passage of time (except as specifically noted in SECTION
3.29 of the Disclosure Schedule) will have any effect on the continued validity
or sufficiency of the Permits or Radiation Materials Licenses, nor will any
additional Permits or Radiation Materials Licenses be required by virtue of the
execution, delivery or performance of this Agreement to enable the Companies to
conduct the Mobile Business as now operated. To the knowledge of ▇▇▇▇▇▇▇ and
each of the Companies (after diligent inquiry), there is no pending Action or
Proceeding by any Governmental or Regulatory Authority which could affect the
Permits or their sufficiency for the current conduct of the Mobile Business or
of the conduct of the Mobile Business after the Closing. Each of the Companies
has provided Purchaser with true and complete copies of all Permits and
Radiation Materials Licenses listed in SECTION 3.29 of the Disclosure Schedule.
3.30 BROKERS. Neither ▇▇▇▇▇▇▇ nor either of the Companies has
retained any broker in connection with the transactions contemplated hereunder.
Purchaser has, and will have, no obligation to pay any broker's, finder's,
investment banker's, financial advisor's or similar fee in connection with this
Agreement or the transactions contemplated hereby (or by any of the Acquisition
Documents) by reason of any action taken by or on behalf of ▇▇▇▇▇▇▇ or either
Company.
3.31 PERFORMANCE OF ASSUMED CONTRACTS. With respect to the Assumed
Contracts, after the Closing, Purchaser shall be able to perform under such
Assumed Contracts in a manner similar to that which the Companies performed
during the ninety (90) day period prior to the Closing without obtaining any
license or permit.
3.32 MATERIAL MISSTATEMENTS AND OMISSIONS. The statements,
representations and warranties of the Companies contained in this Agreement
(including the exhibits and schedules hereto) and in each document, statement,
certificate or exhibit furnished or to be furnished by or on behalf of ▇▇▇▇▇▇▇
and/or each of the Companies pursuant hereto, or in connection with the
transactions contemplated hereby, taken together, do not contain and will not
contain any untrue statement of a material fact and do not or will not omit to
state a material fact necessary to make the statements or facts contained herein
or therein, in light of the circumstances made, not misleading.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to the Companies as of the
Closing as follows:
4.1 ORGANIZATION OF PURCHASER. Purchaser is a corporation duly
incorporated, validly existing, and in good standing under the laws of the State
of Delaware. Purchaser is duly authorized to conduct business and is in good
standing under the laws of each jurisdiction where such qualification is
required except for any jurisdiction where failure so to qualify would not have
a Material Adverse Effect upon Purchaser. Purchaser has full power and
authority, and holds all permits and authorizations necessary, to carry on the
business in which it is engaged and to own and use the properties owned and used
by it except where the failure to have such power and authority or to hold such
license, permit or authorization would not have a Material Adverse Effect on
Purchaser.
17
4.2 AUTHORITY OF PURCHASER. Purchaser has all necessary corporate
power and corporate authority and has taken all corporate actions necessary to
enter into this Agreement, to consummate the transactions contemplated hereby
and to perform its obligations hereunder and no other proceedings on the part of
Purchaser are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Purchaser and constitutes a legal, valid and binding
obligation of Purchaser enforceable against Purchaser in accordance with its
terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally and (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other
equitable remedies.
ARTICLE V.
COVENANTS OF THE COMPANIES
The Companies and each of them covenants and agrees as follows:
5.1 MAINTENANCE OF BUSINESS PRIOR TO CLOSING.
(a) Except as otherwise contemplated by this Agreement,
during the period from March 31, 2000 to the Closing Date, each Company has
conducted and will continue to conduct the Mobile Business and operations in
accordance with its Ordinary Course of Business and seek to preserve intact its
respective business organizations and seek to preserve its respective current
relationships with the customers and other persons with whom each (or both) has
business relations to the extent consistent with their Ordinary Course of
Business. Without limiting the generality of the foregoing and, except as
otherwise expressly provided in this Agreement, prior to the Closing Date,
without the prior written consent of Purchaser, neither Company will:
(i) sell, transfer or otherwise dispose of, or
agree to sell, transfer or otherwise dispose
of any Purchased Assets or permit any
Encumbrance on any Purchased Assets;
(ii) permit any insurance (or reinsurance)
policies to be cancelled or terminated or
any of the coverage thereunder to lapse,
unless simultaneously with such termination,
cancellation or lapse, replacement policies
with similarly rated insurance companies
providing coverage equal to or greater than
coverage remaining under those cancelled,
terminated or lapsed are in full force and
effect;
(iii) make any changes to the accounting methods,
principles or practices applicable to either
Company, except as required by GAAP;
(iv) permit any damage, destruction or casualty
loss, whether covered by insurance or not,
material to (A) either Company taken as a
whole, (B) any Real Property used by either
Company in the conduct of the Mobile
Business or (C) to any Purchased Assets;
18
(v) through negotiation or otherwise, make any
commitment or incur any Liability with
respect to any labor organization;
(vi) make any capital expenditure or commitment
or additions to the Purchased Assets;
(vii) enter into or amend any other agreements,
licenses, commitments or transactions,
except (A) agreements, commitments or
transactions made in the Ordinary Course of
Business in an amount not to exceed $5,000
in the aggregate or (B) operating leases in
an amount not to exceed in the aggregate
$5,000 per month on a cumulative basis;
(viii) make any change to its Certificate (or
Articles) of Incorporation, bylaws or other
organizational documents;
(ix) fail to perform in a timely manner any of
its obligations under the Assumed Contracts;
(x) take any other action which would result in
a Material Adverse Effect on either Company;
or
(xi) agree, whether in writing or orally, whether
formally or informally, to engage in any of
the actions described in clauses (i) through
(x) of this SECTION 5.1.
5.2 INVESTIGATION BY PURCHASER. Each Company shall allow Purchaser
or its authorized representatives, at Purchaser's own expense during regular
business hours, or otherwise with the consent of the applicable Company (which
consent shall not be unreasonably withheld), to interview employees of the
Companies and to make such inspection of each Company and to inspect (and, if
applicable, make copies of) Books and Records, plants, offices, warehouses and
other facilities of each Company as requested by Purchaser or its authorized
representatives and reasonably necessary for or reasonably related to the
Purchased Assets or the operation of the Mobile Business, including historical
financial information, concerning the Mobile Business.
5.3 CONSENTS. As soon as practicable after execution of this
Agreement, the Companies will commence and pursue all reasonable action required
hereunder or under applicable law to (a) obtain all necessary or appropriate
approvals of the Bankruptcy Court, (b) obtain all permits, consents, approvals
and agreements of third persons, and (c) give all notices and make all filings
in each case as may be necessary to authorize, approve or permit the full and
complete consummation of the transactions contemplated hereby (and by the other
Acquisition Documents) by the Closing Date.
19
5.4 NOTIFICATION OF CERTAIN MATTERS. Each of the parties (and
▇▇▇▇▇▇▇, as indicated by his signature below) shall give prompt notice to the
other party, of (i) the discovery of a fact or facts of which the notifying
party has actual knowledge which cause it to conclude that any of the
representations, warranties or statements made by it or in an any exhibit,
schedule or other document delivered pursuant to this Agreement, may be false or
misleading or omission of any facts necessary in order to make such
representations, warranties or statements not false or misleading; (ii) the
occurrence, or failure to occur, of any event which occurrence or failure would
be likely to cause any representation or warranty made by them in this Agreement
to be untrue or inaccurate any time from the date hereof to the Closing Date;
and (iii) any failure of the notifying party to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder. Each party hereto shall use all reasonable efforts to remedy any
failure on its or his part to comply with or satisfy any covenant, condition or
agreement to be complied with or satisfied by it hereunder. During the period
from the date of this Agreement to the Closing Date, each Company agrees (and
▇▇▇▇▇▇▇ agrees as indicated by his signature below) to promptly notify Purchaser
of any material change in, or outside of, the normal course of business or
operations of either Company and of any Governmental or Regulatory Authority
complaints, investigative hearings, or the institution, threat (to the extent
▇▇▇▇▇▇▇ and either Company have or should have knowledge of such threat) or
settlement of litigation, in each case involving an amount in excess of $5,000
and relating to either Company, and shall keep Purchaser fully informed in
reasonable detail of such events. Neither Company shall enter into any
settlements over $5,000 in connection with any such litigation without the prior
written consent of Purchaser.
5.5 BEST EFFORTS. Subject to the terms and conditions of this
Agreement, each of the parties hereto will use its best efforts to take, or
cause to be taken, all action, or to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, obtaining all consents and approvals of all
Persons and Governmental or Regulatory Authorities and removing any injunctions
or other impairments or delays or otherwise which are necessary to the
consummation of the transactions contemplated by this Agreement.
5.6 FILINGS. Each of the parties hereto will use its best efforts
to make or cause to be made all such filings and submissions as may be required
under applicable laws and regulations for the consummation of the transactions
contemplated by this Agreement. Each of the Companies and Purchaser will
coordinate and cooperate with one another in exchanging such information and
provide each other such assistance as any other party may reasonably request in
connection with the foregoing.
5.7 PUBLIC ANNOUNCEMENTS. Except as required by applicable law,
prior to the Closing, neither Company shall issue or cause the publication of
any press release or otherwise make any public statement with respect to the
transactions contemplated hereby without the prior written consent of Purchaser.
5.8 EMPLOYEE MATTERS. The parties acknowledge and affirm their
intention that Purchaser shall not assume any liabilities or obligations of
either Company to any current or former employee of either Company. Purchaser
shall not have any liability or obligation to or in
20
respect of any employee or agent of either Company, including but not limited to
any liability or obligation (i) to employ or engage any such employee or agent,
(ii) arising from such employee or agent's dismissal by either Company or any
notice and/or payment in lieu of notice required by applicable law in connection
with such dismissal, or (iii) in respect of any compensation, tenure, seniority,
benefit, or welfare plan or arrangement of any kind.
ARTICLE VI.
CONDITIONS TO THE OBLIGATIONS OF PURCHASER
It shall be a condition precedent to each and every obligation
of Purchaser hereunder, that each of the following shall and remain satisfied:
6.1 DOCUMENTS. The following shall have been delivered to
Purchaser in form and substance satisfactory to Purchaser:
(a) this Agreement, duly executed by both Companies;
(b) the "Maintenance Escrow Agreement" in the form of
EXHIBIT A attached hereto, duly executed by both Companies;
(c) the "Equipment Lease Agreement" substantially in the
form of EXHIBIT B attached hereto, duly executed by Nuclear Imaging Systems,
Inc.;
(d) a "Radiation Safety Officer Services Agreement" for
(and duly executed by) each of the Radiation Safety Officers in substantially
the form of EXHIBIT I attached hereto;
(e) a certificate of the Secretary of each of the
Companies substantially in the form of EXHIBIT H attached hereto, certifying as
of the Closing Date (A) a true and complete copy of the organizational documents
of the applicable Company certified as of a recent date by the Secretary of
State of Pennsylvania, (B) a true and complete copy of the resolutions of the
board of directors of each Company and the resolutions of the shareholders of
each Company, each authorizing the execution, delivery and performance of this
Agreement by the applicable Company and the consummation of the transactions
contemplated hereby (C) certificates of good standing of each Company in the
state of its incorporation and all states where it is qualified to do business,
and (D) incumbency matters;
(f) consents to assignment for such of the Assumed
Contracts as either (i) have been obtained, or (ii) are not subject to an
assumption and assignment approved by the Bankruptcy Court Order;
(g) an agreement by the lessor of Lease No. 2 to the
replacement of the existing Lease No. 2 with a month-to-month lease on the same
terms and rental rate as the existing lease, but in favor of Purchaser and on a
month-to-month basis, subject to termination on 30-days' notice, all as more
particularly described in SECTION 2.10(b) above, and otherwise in form and
substance satisfactory to Purchaser, unless the applicable Company assumes and
assigns Lease No. 2 to Purchaser after having used its best efforts to obtain
the agreement to the replacement of Lease No. 2;
21
(h) documentation evidencing transfer of all Radiation
Materials Licenses set forth in SCHEDULE 2.1(D) attached hereto;
(i) documentation evidencing transfer of New Jersey's
biohazardous waste permit;
(j) an Agreement to provide services to Purchaser,
substantially in the form of EXHIBIT J attached hereto (the "MMC Services
Agreement"), duly executed by MMC;
(k) a "Non-Competition Agreement" by and between
Purchaser and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, substantially in the form of EXHIBIT E attached
hereto (the "Non-Competition Agreement"), duly executed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇;
(l) an "Indemnity Agreement" by ▇▇▇▇▇▇▇ in favor of
Purchaser in the form of EXHIBIT G attached hereto; and
(m) a "Consulting Agreement" executed by ▇▇▇▇▇▇▇ in
substantially the form of EXHIBIT L attached hereto.
6.2 BANKRUPTCY COURT ORDER. The Bankruptcy Court shall have
entered the Bankruptcy Court Order and such order shall have become final and
non-appealable without any notice of appeal having been filed and which shall be
in all respects in form and substance satisfactory to Purchaser and which shall
approve:
(a) the sale, transfer and assignment to Purchaser of all
the Purchased Assets (including, without limitation, the Customer Lists and
Accounts), free and clear of all liens, claims and encumbrances (including all
Encumbrances and all adverse claims of any kind whatsoever including for any
taxes payable on account of the sale of the Purchased Assets and/or for which
Purchaser might otherwise by required to withhold any portion of the Purchase
Price for the Purchased Assets) with all such liens, claims and encumbrances to
attach to the proceeds of the sale, transfer and assignment to Purchaser;
(b) the assumption by the applicable Company of all the
Assumed Contracts (and any other executory contracts or unexpired leases which
constitute part of the Purchased Assets) and the assignment thereof effective on
the Closing Date to Purchaser, free and clear of liens, claims Encumbrances,
adverse claims and rights of setoff;
(c) the assumption and assignment of Lease No. 1;
(d) execution and performance of a lease that replaces
Lease No. 2 or, alternatively, the assumption and assignment of Lease No. 2 if
the applicable Company's best efforts to obtain the agreement referred to herein
and in SECTION 2.10(b) fails;
(e) the usage by Purchaser of 1/12 of the premises
subject to Lease No. 3 free of additional charge;
22
(f) the acquisition by Purchaser of the Permits, the
Radiation Materials Licenses, the Mobile Business Records, and all pre-paid
expenses and deposits relating to the Mobile Business, in each case, free and
clear of liens, claims Encumbrances, adverse claims and rights of setoff;
(g) the Equipment Lease Agreement; and
(h) all other Acquisition Documents duly executed by the
applicable Company or other party (other than Purchaser) which is a party
thereto.
6.3 REPRESENTATIONS, WARRANTIES AND COVENANTS. All representations
and warranties of each Company contained in this Agreement shall be true and
correct on and as of the Closing Date and ▇▇▇▇▇▇▇ and each Company shall have
performed all agreements and covenants required to be performed by them prior to
or on the Closing Date under the Acquisition Documents to which each is a party.
6.4 NO ACTIONS OR PROCEEDINGS. No Actions or Proceedings shall
have been instituted or threatened which question the validity or legality of
the transactions contemplated hereby or by the other Acquisition Documents.
6.5 MATERIAL ADVERSE EFFECT. ▇▇▇▇▇▇▇ and each Company shall not
have acted or caused either Company or any Person to have acted in any manner
which has created or could reasonably create any material adverse change, or any
event or development which, individually or together with other such events,
could reasonably be expected to result in a Material Adverse Effect on the
Mobile Business or the Purchased Assets.
6.6 CONSENTS. All court orders, permits, authorizations, consents,
approvals and waivers from third parties and Governmental or Regulatory
Authorities and other Persons necessary or appropriate (as determined by
Purchaser in its sole discretion) to permit the applicable Company to perform
its obligations hereunder (or under the other Acquisition Documents) and to
consummate the transactions contemplated hereby or by the other Acquisition
Documents by either Company or ▇▇▇▇▇▇▇ shall have been obtained, including
without limitation approvals required from the Nuclear Regulatory Commission,
all such approvals to be in form and substance acceptable to Purchaser.
ARTICLE VII.
MISCELLANEOUS
7.1 NOTICES. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally against written receipt or by facsimile transmission with
answer back confirmation or mailed (postage prepaid by certified or registered
mail, return receipt requested) or by overnight courier to the parties at the
following addresses or facsimile numbers:
23
IF TO EITHER COMPANY, TO:
Nuclear Imaging Systems, Inc.
The ▇▇▇▇ Building
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
IF TO PURCHASER, TO:
Digirad Imaging Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
WITH COPIES TO:
▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this SECTION 7.1, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this SECTION 7.1, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this SECTION 7.1, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
7.2 ENTIRE AGREEMENT. This Agreement (and all Exhibits and
Schedules attached hereto, all other documents delivered in connection herewith)
supersedes all prior discussions and agreements among the parties with respect
to the subject matter hereof and contains the sole and entire agreement among
the parties hereto with respect thereto.
7.3 WAIVER. Any term or condition of this Agreement may be waived
at any time by the party that is entitled to the benefit thereof, but no such
waiver shall be effective unless set forth in a written instrument duly executed
by or on behalf of the party waiving such term or condition. No waiver by any
party hereto of any term or condition of this Agreement, in any one or more
instances, shall be deemed to be or construed as a waiver of the same or any
other term or condition of this Agreement on any future occasion. All remedies,
either under this Agreement or by law or otherwise afforded, will be cumulative
and not alternative.
24
7.4 AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument duly executed by or on behalf of each
party hereto.
7.5 NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person.
7.6 NO ASSIGNMENT; BINDING EFFECT. Neither this Agreement nor any
right, interest or obligation hereunder may be assigned by any party hereto
without the prior written consent of the other parties hereto and any attempt to
do so will be void. This Agreement is binding upon, inures to the benefit of and
is enforceable by the parties hereto and their respective successors and
assigns.
7.7 HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.
7.8 SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(iii) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (iv) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and mutually
acceptable to the parties herein.
7.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of
California applicable to
contracts executed and performed in such State, without giving effect to
conflicts of laws principles.
7.10 ARBITRATION AND VENUE. Any controversy or claim arising out of
or relating to this Agreement or the making, performance or interpretation
thereof shall be submitted to arbitration in San Diego,
California, pursuant to
the rules and procedures of the American Arbitration Association before a panel
of three arbitrators. The ruling of the arbitrator shall be final, and judgment
thereon may be entered in any court having jurisdiction. If any question is
submitted to a court of law for resolution, then the Superior Court of the
County of San Diego or the United States District Court having jurisdiction in
the County of San Diego shall be the exclusive court of competent jurisdiction
for the resolution of such question. Each party will bear one half of the cost
of the arbitration filing and hearing fees, and the cost of the arbitrator. Each
party will bear its own attorneys' fees, unless otherwise decided by the
arbitrator. The parties understand and agree that the arbitration shall be
instead of any civil litigation and that the arbitrator's decision shall be
final and binding to the fullest extent permitted by law and enforceable by any
court having jurisdiction thereof. Each party shall be entitled to pre-hearing
discovery as provided in
California Code of Civil Procedure Section 1283.05
25
7.11 CONSENT TO JURISDICTION AND FORUM SELECTION. The parties
hereto agree that all actions or proceedings arising in connection with this
Agreement shall be initiated and tried exclusively in the State and Federal
courts located in the County of San Diego, State of
California. The
aforementioned choice of venue is intended by the parties to be mandatory and
not permissive in nature, thereby precluding the possibility of litigation
between the parties with respect to or arising out of this Agreement in any
jurisdiction other than that specified in this SECTION 7.11. Each party hereby
waives any right it may have to assert the doctrine of FORUM NON CONVENIENS or
similar doctrine or to object to venue with respect to any proceeding brought in
accordance with this paragraph, and stipulates that the State and Federal courts
located in the County of San Diego, State of
California shall have in personam
jurisdiction and venue over each of them for the purposes of litigating any
dispute, controversy or proceeding arising out of or related to this Agreement.
Each party hereby authorizes and accepts service of process sufficient for
personal jurisdiction in any action against it as contemplated by this SECTION
7.11 by registered or certified mail, return receipt requested, postage prepaid,
to its address for the giving of notices as set forth in this Agreement, or in
the manner set forth in SECTION 7.1 of this Agreement for the giving of notice.
Any final judgment rendered against a party in any action or proceeding shall be
conclusive as to the subject of such final judgment and may be enforced in other
jurisdictions in any manner provided by law.
7.12 EXPENSE. Except as otherwise provided in this Agreement, each
Company and Purchaser shall pay the expenses and costs of such Company and
Purchaser, respectively, incidental to the preparation of this Agreement and to
the consummation of the transactions contemplated hereby.
7.13 CONSTRUCTION. No provision of this Agreement shall be
construed in favor of or against any party on the ground that such party or its
counsel drafted the provision. Any remedies provided for herein are not
exclusive of any other lawful remedies which may be available to either party.
This Agreement shall at all times be construed so as to carry out the purposes
stated herein.
7.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by facsimile, each of which will be deemed an original, but all
of which together will constitute one and the same instrument.
7.15 FURTHER ASSURANCES. In case at any time after the Closing any
further action is necessary or desirable to carry out the purposes of this
Agreement, each of the parties will take such further action (including the
execution and delivery of such further instruments and documents) as the other
party reasonably may request, all the sole cost and expense of the requesting
party (unless the requesting party is entitled to indemnification therefor under
this ARTICLE VII).
[SIGNATURE PAGE TO FOLLOW]
26
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the parties hereto, or their duly authorized officer, as of the
date first above written.
DIGIRAD IMAGING SYSTEMS, INC.,
a Delaware corporation
By:/S/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
---------------------------------------------
Title: PRESIDENT & CEO
--------------------------------------------
NUCLEAR IMAGING SYSTEMS, INC.,
a Pennsylvania corporation
By:/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Title: PRESIDENT
--------------------------------------------
CARDIOVASCULAR CONCEPTS, P.C.,
a Pennsylvania professional corporation
By: /S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------------
Title: PRESIDENT
--------------------------------------------
By executing where indicated below, the undersigned hereby makes to
Purchaser each of the representations and warranties set forth in
ARTICLE III of this Agreement, all of which are prefaced by words to
the effect that "by executing where indicated below, ▇▇▇▇▇▇▇ represents
and warrants to Purchaser that . . ." In addition, the undersigned
acknowledges and agrees to be bound by the provisions of SECTION 5.4
above and any other provision of this Agreement referring to ▇▇▇▇▇▇▇'▇
signature below. By executing where indicated below, the undersigned
further acknowledges and agrees that he is not a party to this
agreement, nor is he a third party beneficiary of this Agreement.
Date: __________________
/S/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
27
SCHEDULE 2.1(a)
EQUIPMENT, LEASEHOLD IMPROVEMENTS, HARDWARE,
SOFTWARE & OTHER OPERATING ASSETS USED IN THE MOBILE BUSINESS
DIGIRAD IMAGING SYSTEMS, INC.
NUCLEAR IMAGING SYSTEMS
PURCHASED ASSETS
INVENTORY # DESCRIPTION MODEL # SERIAL #
------------------ ---------------------------------------------------- ------------------ -----------------------------
1 Executive Desk 5 Drawer
------------------ ---------------------------------------------------- ------------------ -----------------------------
2 GE 3 Line Phone
------------------ ---------------------------------------------------- ------------------ -----------------------------
3 RICOH 2000L Fax Dec 1999 2000L M9099200171
------------------ ---------------------------------------------------- ------------------ -----------------------------
4 Apple Macintosh Computer w/Monitor 1993 SG3111J7C2C
------------------ ---------------------------------------------------- ------------------ -----------------------------
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------ ---------------------------------------------------- ------------------ -----------------------------
6 Cork Bulletin Board
------------------ ---------------------------------------------------- ------------------ -----------------------------
7 & 8 Marker Boards
------------------ ---------------------------------------------------- ------------------ -----------------------------
9 Metal Book Shelf
------------------ ---------------------------------------------------- ------------------ -----------------------------
10 2 Drawer File Cabinet
------------------ ---------------------------------------------------- ------------------ -----------------------------
11 & 12 4 Drawer Small Metal File Cabinets bk/bg
------------------ ---------------------------------------------------- ------------------ -----------------------------
13 Kenmore Microwave Oven
------------------ ---------------------------------------------------- ------------------ -----------------------------
14 Laser Writer Select Printer BG3331CV120
------------------ ---------------------------------------------------- ------------------ -----------------------------
15 Folding Table
------------------ ---------------------------------------------------- ------------------ -----------------------------
16 RICOH Copy Machine FT4527 51564
------------------ ---------------------------------------------------- ------------------ -----------------------------
17 & 18 Cork Boards for Van Keys
------------------ ---------------------------------------------------- ------------------ -----------------------------
19 4 - Hot Files (for paper work)
------------------ ---------------------------------------------------- ------------------ -----------------------------
20 Secretarial Chair
------------------ ---------------------------------------------------- ------------------ -----------------------------
21 GE Small Refrigerator
------------------ ---------------------------------------------------- ------------------ -----------------------------
22-25 5 Shelf Metal Storage Racks (for supplies)
------------------ ---------------------------------------------------- ------------------ -----------------------------
26 Rubbermaid 2 Shelf Cart on Wheels
------------------ ---------------------------------------------------- ------------------ -----------------------------
27 Sparklett Water Cooler 9513180747
------------------ ---------------------------------------------------- ------------------ -----------------------------
28 ▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇ ▇▇▇ ▇▇▇▇)
------------------ ---------------------------------------------------- ------------------ -----------------------------
29 11 Pocket Hot File
------------------ ---------------------------------------------------- ------------------ -----------------------------
30 31 32 3 Yellow Hot Lab Storage Bins
------------------ ---------------------------------------------------- ------------------ -----------------------------
33 & 34 Well Counter ▇▇▇▇▇▇ 2200 138688
------------------ ---------------------------------------------------- ------------------ -----------------------------
35 ▇▇▇▇▇ Table (hot lab area)
------------------ ---------------------------------------------------- ------------------ -----------------------------
▇▇ ▇▇▇▇ ▇ ▇▇▇▇▇▇ ▇▇▇▇ (▇▇▇ ▇▇▇ ▇▇▇▇)
------------------ ---------------------------------------------------- ------------------ -----------------------------
▇▇ & ▇▇ ▇▇▇▇ ▇▇▇▇▇▇ (▇▇▇ ▇▇▇ ▇▇▇▇)
------------------ ---------------------------------------------------- ------------------ -----------------------------
39 ▇▇▇▇▇ Chair
------------------ ---------------------------------------------------- ------------------ -----------------------------
40 5 Drawer ▇▇▇▇▇ Desk
------------------ ---------------------------------------------------- ------------------ -----------------------------
41 AT&T Phone 715 AS5THA18351MTE
------------------ ---------------------------------------------------- ------------------ -----------------------------
42 3 Door White Cabinet (for storage)
------------------ ---------------------------------------------------- ------------------ -----------------------------
43 1/2 Cork 1/2 Marker Board
------------------ ---------------------------------------------------- ------------------ -----------------------------
44 4 Drawer Black File Cabinet
------------------ ---------------------------------------------------- ------------------ -----------------------------
INVENTORY # DESCRIPTION MODEL # SERIAL #
------------------ ---------------------------------------------------- ------------------ -----------------------------
45 6 Split Shelf Metal Storage Rack
------------------ ---------------------------------------------------- ------------------ -----------------------------
46 & 47 2 Round Stools (for tech)
------------------ ---------------------------------------------------- ------------------ -----------------------------
48 Tyco BP Unit Stand Alone 89984609
------------------ ---------------------------------------------------- ------------------ -----------------------------
49 Standby Baumanometer
------------------ ---------------------------------------------------- ------------------ -----------------------------
50 Patient Step Stool with Handle
------------------ ---------------------------------------------------- ------------------ -----------------------------
▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ 119935848
------------------ ---------------------------------------------------- ------------------ -----------------------------
52 Metal Storage Rack 6 Shelf (van supplies)
------------------ ---------------------------------------------------- ------------------ -----------------------------
53 Metal Storage Rack 4 Shelf
------------------ ---------------------------------------------------- ------------------ -----------------------------
54 ▇▇▇▇▇ Fargo Alarm System N6119V1
------------------ ---------------------------------------------------- ------------------ -----------------------------
55 ▇▇▇▇▇▇ Vacuum Cleaner Encore Supreme
------------------ ---------------------------------------------------- ------------------ -----------------------------
56 Patient Step Stool
------------------ ---------------------------------------------------- ------------------ -----------------------------
57 4 Sets of Privacy Screens
------------------ ---------------------------------------------------- ------------------ -----------------------------
58 2 Door Metal Storage Closet
------------------ ---------------------------------------------------- ------------------ -----------------------------
59 Ansul Sentry Fire Extinguisher NV540140
------------------ ---------------------------------------------------- ------------------ -----------------------------
60 Ansul Sentry Fire Extinguisher NV540132
------------------ ---------------------------------------------------- ------------------ -----------------------------
61 Cork Board (for drivers)
------------------ ---------------------------------------------------- ------------------ -----------------------------
62 Canon Fax Machine B640 UWZ63923
------------------ ---------------------------------------------------- ------------------ -----------------------------
63 Canon Copier Machine PC12 NTF04087
------------------ ---------------------------------------------------- ------------------ -----------------------------
64 Executone Phone System (5) B0045239
------------------ ---------------------------------------------------- ------------------ -----------------------------
65 Answering Machine AT&T A320IN
------------------ ---------------------------------------------------- ------------------ -----------------------------
66 3 Executive Desks
------------------ ---------------------------------------------------- ------------------ -----------------------------
67 3 Chairs
------------------ ---------------------------------------------------- ------------------ -----------------------------
68 1 Computer Hutch
------------------ ---------------------------------------------------- ------------------ -----------------------------
69 Computer Digital Acer 810W KA437DNHR3
------------------ ---------------------------------------------------- ------------------ -----------------------------
70 Monitor VRC16 2A41872887
------------------ ---------------------------------------------------- ------------------ -----------------------------
71 Keyboard RT101 70840963
------------------ ---------------------------------------------------- ------------------ -----------------------------
72 Mouse MS28 LC2041015591
------------------ ---------------------------------------------------- ------------------ -----------------------------
73 3 Oxygen Tanks
------------------ ---------------------------------------------------- ------------------ -----------------------------
74 4 Oxygen Valves
------------------ ---------------------------------------------------- ------------------ -----------------------------
75 3 Oxygen Carts
------------------ ---------------------------------------------------- ------------------ -----------------------------
76 Oxygen Mask
------------------ ---------------------------------------------------- ------------------ -----------------------------
77 Monarch ▇▇▇▇ III Bike
------------------ ---------------------------------------------------- ------------------ -----------------------------
78 2 ▇▇▇▇▇▇▇ E550 EKG Machines 10105 10103
------------------ ---------------------------------------------------- ------------------ -----------------------------
79 ▇▇▇▇▇▇▇ Defibrilator DC200 30533
------------------ ---------------------------------------------------- ------------------ -----------------------------
80 IV Holder
------------------ ---------------------------------------------------- ------------------ -----------------------------
81 2 Folding Tables
------------------ ---------------------------------------------------- ------------------ -----------------------------
82 3 Supply Shelves
------------------ ---------------------------------------------------- ------------------ -----------------------------
83 2 Bio Bins
------------------ ---------------------------------------------------- ------------------ -----------------------------
84 8 Drug Boxes
------------------ ---------------------------------------------------- ------------------ -----------------------------
85 2 Folding Tables 5 Feet
------------------ ---------------------------------------------------- ------------------ -----------------------------
86 Folding Table 7 Feet
------------------ ---------------------------------------------------- ------------------ -----------------------------
87 HP Fax Machine w/Stand SG682M31N0
------------------ ---------------------------------------------------- ------------------ -----------------------------
88 Desk Lamp
------------------ ---------------------------------------------------- ------------------ -----------------------------
2
INVENTORY # DESCRIPTION MODEL # SERIAL #
------------------ ---------------------------------------------------- ------------------ -----------------------------
89 5 Trash Cans
------------------ ---------------------------------------------------- ------------------ -----------------------------
90 Drug Cabinet
------------------ ---------------------------------------------------- ------------------ -----------------------------
91 6 OS/Chairs
------------------ ---------------------------------------------------- ------------------ -----------------------------
92 Stool
------------------ ---------------------------------------------------- ------------------ -----------------------------
93 3 Book Cases
------------------ ---------------------------------------------------- ------------------ -----------------------------
94 3 Desk Chairs
------------------ ---------------------------------------------------- ------------------ -----------------------------
95 2 File Cabinets
------------------ ---------------------------------------------------- ------------------ -----------------------------
96 3 Metal Shelves 6 Foot
------------------ ---------------------------------------------------- ------------------ -----------------------------
97 2 Phones
------------------ ---------------------------------------------------- ------------------ -----------------------------
98 Camera Table
------------------ ---------------------------------------------------- ------------------ -----------------------------
99 Canon Copier Machine PC11re NT000545
------------------ ---------------------------------------------------- ------------------ -----------------------------
100 4 Oxygen Masks
------------------ ---------------------------------------------------- ------------------ -----------------------------
101 3 IV Poles
------------------ ---------------------------------------------------- ------------------ -----------------------------
102 Bike
------------------ ---------------------------------------------------- ------------------ -----------------------------
103 2 Hot Lab Trash Cans
------------------ ---------------------------------------------------- ------------------ -----------------------------
104 Spare Set of Ramps for Van
------------------ ---------------------------------------------------- ------------------ -----------------------------
105 Water Cooler 983847445
------------------ ---------------------------------------------------- ------------------ -----------------------------
106 Vacuum Dirt Devil
------------------ ---------------------------------------------------- ------------------ -----------------------------
107 Refrigerator G95001121
------------------ ---------------------------------------------------- ------------------ -----------------------------
108 ▇▇▇▇▇▇▇ Microwave
------------------ ---------------------------------------------------- ------------------ -----------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇
------------------ ---------------------------------------------------- ------------------ -----------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇ MD-31-240-01
------------------ ---------------------------------------------------- ------------------ -----------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 001-10-14-1
------------------ ---------------------------------------------------- ------------------ -----------------------------
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ - ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇-▇▇▇▇
------------------ ---------------------------------------------------- ------------------ -----------------------------
113 Mobile System #1 - Location PM see below
------------------ ---------------------------------------------------- ------------------ -----------------------------
114 Mobile System #6 - Location ATN see below
------------------ ---------------------------------------------------- ------------------ -----------------------------
115 Mobile System #8 - Location PM see below
------------------ ---------------------------------------------------- ------------------ -----------------------------
116 Mobile System #9 - Location PM see below
------------------ ---------------------------------------------------- ------------------ -----------------------------
117 Mobile System #10 - Location MD see below
------------------ ---------------------------------------------------- ------------------ -----------------------------
118 Mobile System #11 - Location ATN-ST see below
------------------ ---------------------------------------------------- ------------------ -----------------------------
119 Mobile System #12 - Location NC see below
------------------ ---------------------------------------------------- ------------------ -----------------------------
120 Mobile System #13 - Location PM see below
------------------ ---------------------------------------------------- ------------------ -----------------------------
121 Mobile System #14 - Location PM see below
------------------ ---------------------------------------------------- ------------------ -----------------------------
System #1: Dose ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ # ▇▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ # ▇▇▇▇▇; Survey
Meter #2 serial # 94494
System #6: Dose ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ # ▇▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ # ▇▇▇▇▇; Survey
Meter #2 serial # 72857
System #8: Dose ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ # ▇▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ # ▇▇▇▇▇; Survey
Meter #2 serial # 95155
System #9: Dose Calibrator serial # 70890; Survey Meter serial # 108711 &
106528; Survey Meter #2 serial # N/A
System #10: Dose Calibrator serial # 71728; Survey Meter serial # 103857 &
72028; Survey Meter #2 serial # N/A
System #11: Dose ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ # ▇▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ # ▇▇▇▇▇; Survey
Meter #2 serial # 92625
System #12 Dose Calibrator serial # 71591; Survey Meter serial # 106588 &
106606; Survey Meter #2 serial # N/A
System #13: Dose ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ # ▇▇▇▇▇; ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ # ▇▇▇▇▇; Survey
Meter #2 serial # 92978
System #14: Dose Calibrator serial # 71765; Survey Meter serial # 89399 & 99958;
▇▇▇▇▇▇ ▇▇▇▇▇ #▇ ▇▇▇▇▇▇ # ▇/▇
▇
SCHEDULE 2.1(b)
CUSTOMER LISTS AND ACCOUNTS
Schedule 2.1.b
Mobil Customers
NAME STATE
1 Aganwal MD/Rockville
2 Cardiology Center/Fiutowski MD/Rockville
3 Greater Annapolis Medical Group/▇▇▇▇▇▇ MD/Rockville
4 ▇▇▇▇▇▇ ▇▇▇▇▇▇ MD/Rockville
5 Varma MD/Rockville
6 The Heart Center/▇▇▇▇ ▇▇▇▇▇▇▇▇ NJ
7 Menlo Park Medical Group/▇▇▇▇ ▇▇▇▇▇▇ NJ
8 ▇▇▇▇▇, ▇▇▇▇ NJ
9 ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. NJ
10 Cumberland Med. Assoc./Covnarsky & ▇▇▇▇▇▇ NJ
11 Feitell NJ
12 Werres NJ
13 Newport Medical Associates/Dongo & Cabalez NJ
14 ▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇/▇▇▇▇▇▇ NJ
15 University of Medicine & Dentistry/▇▇▇▇▇▇▇▇ NJ
16 Alliance Medical Associates/▇▇▇▇ NC
17 ▇▇▇▇▇▇ NC
18 ▇▇▇▇▇▇▇▇ Cardiology/▇▇▇▇▇▇▇▇▇ Penn
19 Internal Medicine Associates/▇▇▇▇▇▇ NJ
20 ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇/DeCalli Penn
21 North Penn Cardiology/▇▇▇▇▇▇▇ Penn
22 Physician Care, PC/▇▇▇▇ ▇▇▇▇
23 Pocono Cardiology Assoc/Fried Penn
24 Pottsville Internists/▇▇▇▇▇▇ ▇▇▇▇
25 Schuylkill Cardiology/Banning Penn
26 ▇▇▇▇▇▇▇ NJ
27 ▇▇▇▇▇▇▇ NJ
28 ▇▇▇▇▇▇▇▇ NJ
29 Gohle DE
30 Tullner MD
31 Alikan MD
32 ▇▇▇▇▇▇▇▇ MD
33 ▇▇▇▇▇▇▇▇ NC
34 ▇▇▇▇ PA
35 ▇▇▇▇▇▇▇ NJ
36 ▇▇▇▇▇ (▇▇▇▇▇ office) NJ
37 Nehzad NJ
▇▇ ▇▇▇▇ ▇▇▇▇▇▇/▇▇▇▇▇. ▇▇
39 ▇▇▇▇▇▇▇▇ MD
40 Carusa NC
41 Gracko Penn
42 ▇▇▇▇ ▇▇▇▇
SCHEDULE 2.1(c)
ASSUMED CONTRACTS
All agreements between Company and the customers listed in Schedule 2.1(b) of
this Agreement, all leases and permits listed on Schedule 2.1(d), plus the
following contracts:
Agreement between Nuclear Imaging Systems, Inc. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ MD
evidenced by letter dated September 11, 2000 whereby ▇▇. ▇▇▇▇▇▇ agrees to
provide RSO consulting services to the
Digirad Corporation.
Any and all agreements (written or oral) to provide RSO consulting services
between Nuclear Imaging Systems, Inc. and any of ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, and ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇.
SCHEDULE 2.1(d)
RADIATION MATERIALS LICENSES AND PERMITS
MOBILE LICENSES
----------------------- ------------------------------------------ ------------------------------------------ ---------------------
STATE LICENSES ADDRESSES RSO
----------------------- ------------------------------------------ ------------------------------------------ ---------------------
Pennsylvania 1) NRC ▇▇-▇▇▇▇▇-▇▇ 1)2241 ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
2) PA-0651 (will apply for new Digirad ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
mobile license for PA) 2) Temporarily out of Bethlehem
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------- ------------------------------------------ ------------------------------------------ ---------------------
New Jersey 1) NRC ▇▇-▇▇▇▇▇-▇▇ 1) ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇
2) NJ 20443-02 ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
----------------------- ------------------------------------------ ------------------------------------------ ---------------------
Maryland 1) MD ▇▇-▇▇▇-▇▇ (Rockville) 1) ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇
----------------------- ------------------------------------------ ------------------------------------------ ---------------------
North Carolina 1) NC ▇▇▇-▇▇▇▇-▇▇ (Burlington) 1) ▇▇▇▇ ▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇
22157
----------------------- ------------------------------------------ ------------------------------------------ ---------------------
SCHEDULE 2.1(g)
PREPAID EXPENSES AND DEPOSITS RELATING TO MOBILE BUSINESS
PURCHASE PRICE:
PRE-PAID EXPENSES $
DEPOSITS:
▇▇▇▇▇▇▇ Construction - facility lease deposits for
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 4,503.13
▇▇▇▇▇▇ Enterprise - security deposit for ▇▇▇▇-▇ ▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ $ 813.00
▇▇▇▇▇▇ ▇▇▇▇▇ - security deposit for ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ $ 1,800.00
-----------
TOTAL DEPOSITS $ 7,116.13
TOTAL PRE-PAID EXPENSES AND DEPOSITS $ 7,116.13
===========
SCHEDULE 2.2
EXCLUDED ASSETS
LEASED EQUIPMENT
PART I: ASSETS SUBJECT TO EQUIPMENT LEASE AGREEMENT
----------- -------------------------- ------- -------- --------- ---------- --------- --------
NIS LOCATION CHAIR SERIAL PICKER CAMERA SERIAL # PICKER
SYSTEM# NIS # # SITE # NIS # SITE #
----------- -------------------------- ------- -------- --------- ---------- --------- --------
1 Plymouth Meeting, PA 8 V5124 77572 1 M105 77561
----------- -------------------------- ------- -------- --------- ---------- --------- --------
5 Plymouth Meeting, PA 7 US122 77574 5 MO131 77226
----------- -------------------------- ------- -------- --------- ---------- --------- --------
6 Allentown, PA 5 V5120 77575 6 136 77224
----------- -------------------------- ------- -------- --------- ---------- --------- --------
8 Ply Mtg. PA (Clemente I) 10 115R 200608 8 149 77227
----------- -------------------------- ------- -------- --------- ---------- --------- --------
9 Plymouth Meeting, PA 1 US130 76535 9 M152 77571
----------- -------------------------- ------- -------- --------- ---------- --------- --------
10 Rockville, MD 9 125 76451 10 153 76450
----------- -------------------------- ------- -------- --------- ---------- --------- --------
11 Glen Burnie, MD 2 133 77576 11 159 77231
----------- -------------------------- ------- -------- --------- ---------- --------- --------
12 Burlington, NC 4 135 77578 12 161 77228
----------- -------------------------- ------- -------- --------- ---------- --------- --------
13 Plymouth Meeting, PA 3 U5134 76449 13 164 77233
----------- -------------------------- ------- -------- --------- ---------- --------- --------
14 Plymouth Meeting, PA 5 121 77579 14 166 77235
----------- -------------------------- ------- -------- --------- ---------- --------- --------
WK 3 ▇▇▇▇▇▇▇, ▇▇ ▇/▇ ▇▇▇▇▇
----------- -------------------------- ------- -------- --------- ---------- --------- --------
----------- ------------ ------------------ --------------------- ------------ -----------------------
NIS COMPUTER SERIAL # PRINTER SERIAL # DRIVE #1
SYSTEM#
----------- ------------ ------------------ --------------------- ------------ -----------------------
1 MAC IIFX MITS CP100VA 100776 Infinity 44
----------- ------------ ------------------ --------------------- ------------ -----------------------
5 MAC IIFX MITS CP100VA 101098 Syquest 44
----------- ------------ ------------------ --------------------- ------------ -----------------------
6 MAC IIFX MIYS CP 110V 100581 Infinity 44
----------- ------------ ------------------ --------------------- ------------ -----------------------
8 Quadro 950 MIYS CP 110V 100423 Infinity 44/MO
----------- ------------ ------------------ --------------------- ------------ -----------------------
9 Quadro 950 F32442UT671 MITS CP100VA 100328 Infinity 44/MO
----------- ------------ ------------------ --------------------- ------------ -----------------------
10 Quadro 950 F3250DGJ671 MITS CP100VA 101168 Sony MO 128MA
----------- ------------ ------------------ --------------------- ------------ -----------------------
11 Quadro 950 F330709R671 MITS CP 110V 100017 Sony MO128MB
----------- ------------ ------------------ --------------------- ------------ -----------------------
12 Quadro 950 XB33B34HY671 MITS CP 110V 101156 Sony MO128MB
----------- ------------ ------------------ --------------------- ------------ -----------------------
13 Quadro 950 MITS CP100VA Sony MO128MB
----------- ------------ ------------------ --------------------- ------------ -----------------------
14 Quadro 950 MITS CP100VA Sony MO128MB
----------- ------------ ------------------ --------------------- ------------ -----------------------
WK 3 MAC IIFX N/A
----------- ------------ ------------------ --------------------- ------------ -----------------------
PART II: REMAINING EXCLUDED ASSETS
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
LOCATION YEAR DESCRIPTION VAN # VIN # REG. EXP. INS. EXP. PLATE # TITLE
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ E350 Ford Spect Van 18 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 7/31/00 3/15/00 ZA48743PA N
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ E350 Ford Spect Van 20 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 12/31/99 3/15/00 ZB52584PA N
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
Plymouth Meeting, PA 1994 E350 Ford Spect Van 1 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 12/31/99 3/15/00 ZB14593PA N
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
Plymouth Meeting, PA 1993 E350 Ford Spect Van 11 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 1/31/00 3/15/00 YY60823PA N
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
Plymouth Meeting, PA 1993 E350 Ford Spect Van 12 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 1/31/00 3/15/00 YY60822PA N
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
Plymouth Meeting, PA 1993 E350 Ford Spect Van 13 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 12/31/99 3/15/00 YZ09163PA N
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
Plymouth Meeting, PA 1994 E350 Ford Spect Van 15 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 4/30/00 3/15/00 YZ37110PA N
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
Plymouth Meeting, PA 1993 E350 Ford Spect Van 22 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 5/30/00 3/15/00 YZ09164PA N
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
Rockville, MD 1994 E350 Ford Spect Van 6 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 4/30/00 3/15/00 YZ37111PA N
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
Rockville, MD 1994 E350 Ford Spect Van 9 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 7/31/00 3/15/00 ZA48742PA N
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
Rockville, MD 1993 E350 Ford Spect Van 14 ▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇▇ 7/31/00 3/15/00 YX39813PA Y-Title #46505285801NU
---------------------- ----- --------------------- ------ ------------------ ---------- ---------- ---------- ----------------------
SCHEDULE 2.3
ASSUMED LIABILITIES
None.
SCHEDULE 2.7
ALLOCATION OF PURCHASE PRICE
PURCHASE PRICE:
Cash $ 725,000.00
Less: amounts reserved for reasonable attorneys
fees and transaction costs $ (25,000.00)
------------
Net purchase price $ 700,000.00
============
PURCHASE PRICE ALLOCATION:
Equipment, leasehold improvements, hardware, software,
other operating assets - Schedule 2.1(a) $ 55,500.00
Rights, title and interest in customer contracts and
agreements - Schedule 2.1(c) $ 637,383.87
Prepaid expenses and deposits - Schedule 2.1(g) $ 7,116.13
------------
Total $ 700,000.00
============
EXHIBIT A
MAINTENANCE ESCROW AGREEMENT
THIS MAINTENANCE ESCROW AGREEMENT dated as of this 29th day of
September 2000 (the "Agreement") is entered into by and among NUCLEAR IMAGING
SYSTEMS, INC. ("NIS"), DIGIRAD IMAGING SYSTEMS, INC. ("▇▇▇▇▇▇▇▇▇"), ▇▇▇
FINANCIAL SERVICES, INC. ("Assignee") and U.S. TRUST COMPANY, NATIONAL
ASSOCIATION, ("Escrow Agent") (collectively, "Parties").
WHEREAS, NIS is indebted to Assignee on account of certain
indebtedness owed by NIS to Assignee, which indebtedness is secured by certain
assets of NIS;
WHEREAS, NIS, an affiliate of NIS, Cardiovascular Concepts,
P.C. ("CVC"), and Purchaser are parties to an
Asset Purchase Agreement (the "A/P
Agreement") pursuant to which Purchaser agreed to purchase and NIS (and CVC)
agreed to sell to Purchaser certain assets comprising the "Mobile Business" of
NIS and/or CVC, some or all of which assets are encumbered by a lien in favor of
Assignee;
WHEREAS, out of the agreed upon purchase price of $725,000,
the sum of $100,000 was to be and hereby is deposited into escrow with Escrow
Agent subject to a first priority lien and security interest in favor of
Purchaser to secure the maintenance obligations of NIS owed to Purchaser, and
subject the liens and security interests of Assignee which are subordinate to
those in favor of Purchaser, and subject to the terms this Agreement in order to
fund certain maintenance obligations of NIS with respect to certain equipment
encumbered by a lien in favor of Assignee, but which equipment is being leased
to Purchaser, not purchased by Purchaser (the "Leased Equipment") as set forth
in an "Equipment Lease Agreement" between NIS and Purchaser which is to be
executed concurrently with the A/P Agreement; and
WHEREAS, Escrow Agent has indicated its willingness to act as
escrow holder for the compensation set forth in EXHIBIT 1 attached hereto.
NOW, THEREFORE, the Parties agree as follows:
ARTICLE I
1. APPOINTMENT AND ACCEPTANCE. The Purchaser, NIS and
Assignee hereby appoint Escrow Agent as escrow agent for the purposes and upon
the terms and conditions hereinafter set forth. Escrow Agent hereby accepts such
appointment and agrees to act as escrow agent hereunder and to hold, invest and
dispose of any funds received by it hereunder in accordance with the terms and
conditions hereinafter set forth.
2. OPENING OF ESCROW FUND. On or before the Closing Date
defined in the A/P Agreement, NIS will cause to be delivered to Escrow Agent the
sum of $100,000 (the "Escrow Fund") to be deposited in a federally insured,
interest-bearing account.
1
3. PURPOSE OF AGREEMENT. The Purchaser, NIS and Assignee
represent to Escrow Agent that (a) this Agreement has been executed and the
deposit of the Escrow Fund hereunder has been made pursuant to the A/P Agreement
for the purpose of providing a fund for the maintenance of the Leased Equipment
(which is encumbered by a lien in favor of Assignee) in the event NIS should
fail to perform its maintenance obligations under the A/P Agreement and the
Equipment Lease Agreement ("Maintenance Claims"), and (b) CVC has no interest in
the Escrow Fund.
ARTICLE II
1. DISBURSEMENTS FOR MAINTENANCE. During the term of
this Escrow (and subject to paragraphs II.2 and Article VII, below), Escrow
Agent shall disburse such sums as are demanded by Purchaser in accordance with
the following procedure:
a. If NIS fails to maintain the Leased
Equipment as required by the Equipment Lease
Agreement, Purchaser shall give telephonic
or fax notice of the deficiency in
performance of maintenance to both NIS and
Assignee, and (if telephonic notice was
used) shall immediately send a written
confirmation thereof to NIS via facsimile (a
"Maintenance Notice").
b. If NIS is not able to give adequate
assurance to Purchaser within 24 hours of
receipt of the telephonic or written notice
of the maintenance deficiency that Purchaser
will cure the deficiency, Purchaser may
contract with a third party to provide the
necessary maintenance to the Leased
Equipment, which contract may either be for
a one-time only servicing of the equipment,
or may be a contract to provide service for
the remainder of the term of the Equipment
Lease Agreement, in Purchaser's sole and
absolute discretion.
c. Simultaneously with obtaining services from
a third party, Purchaser shall (i) send to
Escrow Agent a copy of the Maintenance
Notice and a copy of the service contract or
invoice for repair (if the Leased Equipment
was already repaired at the cost of
Purchaser), and (ii) send to Assignee and
NIS a copy of the service contract or
invoice for repair (if the Leased Equipment
was already repaired at the cost of
Purchaser).
d. Upon receipt of a copy of the service
contract or invoice for repair (if the
Leased Equipment was already repaired at the
cost of Purchaser), Escrow Agent shall (i)
promptly reimburse Purchaser for any sums
already paid for maintenance by Purchaser
using the funds in the Escrow Fund, and (ii)
in the event a service contract was entered
into, arrange for payments thereunder as and
when they are due under the contract.
2
e. The sole means by which NIS or Assignee may
bar release of funds from the Escrow Fund is
by obtaining an appropriate court order on
not less than 1 Business Day's notice to
Purchaser enjoining payment from the Escrow
Fund on the basis that either (i) NIS did
not breach its maintenance obligation, or
(ii) the cost of repair or the maintenance
contract terms are unreasonable.
2. EFFECT OF END OF EQUIPMENT LEASE AGREEMENT. Unless
directed otherwise by Purchaser or by an order of a court of competent
jurisdiction, 30 days after the end of the lease term set forth in the Equipment
Lease Agreement, all undisbursed funds remaining in the Escrow Fund (net of sums
payable to Escrow Agent as set forth in this Agreement and in EXHIBIT 1) shall
be delivered to Assignee at the address provided in this Agreement or at such
other address as Assignee may provide to Escrow Agent in writing.
ARTICLE III
The Escrow Agent undertakes to perform only the duties
expressly set forth in this document. The Escrow Agent shall not be bound by any
waiver, modification, amendment, termination, cancellation or revision of this
Escrow Agreement, unless the foregoing is in writing, signed by all the parties
to this Escrow Agreement, and the prior consent of the Escrow Agent has been
obtained. The Escrow Agent shall not be bound by any assignment of the rights,
duties or obligations under this Escrow Agreement by any party unless, the
Escrow Agent receives prior written notification of such assignment and the
Escrow Agent gives prior written consent to such assignment. The Escrow Agent
shall perform any act ordered by a court of competent jurisdiction.
ARTICLE IV
NIS agrees to indemnify the Escrow Agent for, and to hold
Escrow Agent harmless, against any and all, fees, expenses, claims, suits,
actions, proceedings investigations judgments, arbitration decisions,
deficiencies, damages, awards, settlements, reasonable legal fees and expenses
of attorney(s) chosen by the Escrow Agent, liabilities and expenses incurred
based upon, but not limited to, a mistake of fact or law, act, performance,
non-performance, alleged act, alleged omission, actual omission, act or omission
based upon the advice of counsel or any other cause committed while performing
any and all duties in connection with and under this Escrow Agreement. In
addition, except where Escrow Agent is guilty of willful misconduct or
negligence, the Escrow Agent shall receive full indemnification protection from:
a. Purchaser when relying upon any certificate,
instruction, statement, request, notice,
advice, direction, agreement, instrument,
document, signature of Purchaser believed by
the Escrow Agent to be genuine, or any
assumption by the Escrow Agent that any
person purporting to give the Escrow Agent
any of the foregoing on behalf of Purchaser
in accordance with the provisions herein has
been duly authorized to do so; and
3
b. Assignee when relying upon any certificate,
instruction, statement, request, notice,
advice, direction, agreement, instrument,
document, signature of Assignee believed by
the Escrow Agent to be genuine, or any
assumption by the Escrow Agent that any
person purporting to give the Escrow Agent
any of the foregoing on behalf of Assignee
in accordance with the provisions herein has
been duly authorized to do so.
This Escrow Agreement hereby grants to the Escrow Agent a lien
on the Escrow Fund (which lien shall become invalid and unenforceable with
respect to any portion of the Escrow Fund wired or delivered to Purchaser which
shall receive such funds free and clear of such security interest) to enable the
Escrow Agent to secure the aforementioned indemnity.
The Escrow Agent shall be under no duty to institute or defend
any type of proceeding which may arise regarding this Escrow Agreement
ARTICLE V
The Escrow Agent may resign and be discharged from the duties
and obligations under this agreement at any time by giving no fewer than fifteen
(15) days written notice of such resignation to the parties herein, specifying
the date when such resignation shall take effect. Thereafter, the Escrow Agent
shall have no further obligation, except to hold the Escrow Fund as depository.
In the event of such resignation, the parties to this Escrow Agreement agree
that they will jointly appoint a banking corporation, trust company, attorney or
other qualified person as successor escrow agent within fifteen (15) days of
notice of such resignation. The Escrow Agent shall refrain from taking any
action until such Escrow Agent has received joint written instructions from the
parties herein, designating the successor escrow agent. Upon receipt of such
instruction, the Escrow Agent shall, as soon as all fees are received in full,
promptly deliver all of the escrowed Documents and the Escrow Funds to such
successor escrow agent in accordance with such instructions. Upon receipt of the
Escrow Fund, the successor escrow agent shall be bound by all the provisions
herein and shall promptly deliver a written instrument to each of the parties
detailing the terms in which the successor escrow agent agrees to be bound.
ARTICLE VI
All notices, requests, demands, instructions, certificates,
documents or other communications under this Escrow Agreement shall be in
writing and shall be given by registered mail with return receipt requested and
postage prepaid, by telecopy (or like transmission) or by personal delivery to
the parties at the following addresses:
If to ESCROW AGENT:
U.S. Trust Company, a National Association
▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
4
If to NIS:
Nuclear Imaging Systems, Inc.
The ▇▇▇▇ Building
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
If to Purchaser:
Digirad Imaging Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
ARTICLE VII
The Escrow Agent shall be entitled to compensation from NIS
and only NIS, inasmuch as neither Purchaser nor Assignee shall bear any expense
nor incur any liability in connection with this Escrow or the Escrow Agreement,
for its services under this Escrow Agreement in accordance with the fee schedule
and payment procedure described in EXHIBIT 1 attached hereto. These fees are
intended to be full compensation for the Escrow Agent's services as contemplated
by this Escrow Agreement. However, if (i) the conditions for disbursement of
funds under this Escrow Agreement are not fulfilled; (ii) the Escrow Agent
renders any material service not contemplated by this Escrow Agreement; (iii)
there is any assignment of this Escrow Agreement; (iv) there is any material
modification of this Escrow Agreement; (v) any material controversy arises under
this Escrow Agreement; (vi) the Escrow Agent is made a party to, or justifiably
intervenes in, any litigation pertaining to this Escrow Agreement or the subject
matter of this Escrow Agreement, then the Escrow Agent shall be reasonably
compensated by NIS for any extraordinary services rendered. The Escrow Agent
shall not be required to distribute funds or to terminate this Escrow Agreement
prior to receipt of its fees in full.
ARTICLE VIII
The rights of the Escrow Agent and the obligations of and
indemnifications provided pursuant to this document shall survive the
termination of this Agreement.
ARTICLE IX
Escrow Agent shall be under no duty to institute or defend any
type of proceeding which may arise regarding this Escrow Agreement.
ARTICLE X
This Agreement is executed in the State of Pennsylvania and
shall be governed and interpreted in accordance with the laws of the State of
Pennsylvania.
5
ARTICLE XI
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. There are no third party beneficiaries
of this Agreement. This Agreement is binding on the parties hereto, their
executors, administrators, heirs at law, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have caused this Escrow
Agreement to be executed as of the date first above mentioned.
DIGIRAD IMAGING SYSTEMS, INC.,
a Delaware corporation
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
DVI FINANCIAL SERVICES, INC.
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
NUCLEAR IMAGING SYSTEMS, INC.,
a Pennsylvania corporation
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
U.S. TRUST COMPANY, NATIONAL ASSOCIATION
By:
------------------------------------------------
Title:
---------------------------------------------
Address:
-------------------------------------------
-------------------------------------------
6
EXHIBIT B
EQUIPMENT LEASE AGREEMENT
AGREEMENT TO LEASE EQUIPMENT
THIS AGREEMENT TO LEASE EQUIPMENT (this "AGREEMENT") is
entered into as of September 29, 2000 by and between DIGIRAD IMAGING SYSTEMS,
INC. ("LESSEE"), and NUCLEAR IMAGING SYSTEMS, INC., a Pennsylvania corporation
("LESSOR") based on the following facts and understandings:
WHEREAS, Lessor is a debtor and debtor in possession in
chapter 11 case No. 00-19698 (the "Bankruptcy Case") pending in the United
States Bankruptcy Court for the Eastern District of Pennsylvania (the
"Bankruptcy Court");
WHEREAS, Lessor, as part of its larger business, operates a
service that provides mobile delivery of diagnostic cardiac services, diagnostic
imaging equipment and related technical services to physicians providing
cardiology services (the "Mobile Business");
WHEREAS, Lessee has purchased certain assets of Lessor
pertaining to the Mobile Business, on the terms and conditions set forth in an
"
Asset Purchase Agreement" (the "A/P Agreement") approved by the Bankruptcy
Court;
WHEREAS, certain assets not purchased under the A/P Agreement
but relating to the Mobile Business is comprised of equipment which is either
subject to a lien and security interest in favor of DVI Financial Services, Inc.
("DVI") or subject to a lease under which DVI is the Lessor, and certain of
which equipment Lessee desires to lease for a period of time until Lessee can
replace such equipment;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and promises contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
I. THE LEASE
1.1 LEASE OF EQUIPMENT. Set forth on SCHEDULE 1 attached
hereto (the "SCHEDULE") is a list of ten (10) "Systems" as identified by a
separate line item on SCHEDULE 1. During the "Term" of this Lease (as defined in
Section 1.2), Lessor shall be obligated to lease to Lessee and Lessee shall
lease from Lessor, the Systems identified on SCHEDULE 1 as System nos. 1, 5, 11,
and 12, subject to the terms and conditions set forth herein and subject to
Lessor's maintenance obligation which maintenance obligation may be addressed,
in part, by the ability of Lessor to substitute any of the other Systems listed
on SCHEDULE 1 to replace any of System nos. 1, 5, 11, and/or 12 should one or
more of those four Systems require maintenance or repair more efficiently
addressed by the substitution of any of System nos. 6, 8, 9, 10, 13, or 14 for a
malfunctioning System. Such substitution, and the ability of Lessor to effect
such a substitution, shall not affect or increase the rent obligation payable by
Lessee hereunder. The Systems leased to Lessee, together with all substitutions,
replacements, repairs, parts and attachments, improvements and accessions
thereto are referred to as the "EQUIPMENT". Lessor shall at all times retain
such legal or equitable rights in the Equipment as it had prior to the execution
of this Agreement, it being expressly agreed by both parties that this Agreement
and the lease it represents (the "LEASE") is an agreement of lease (and/or
sublease) only.
1.2 TERM OF LEASE. The Term of this Lease shall begin on
the date when the conditions precedent to the effectiveness hereof (the
"Commencement Date") have been satisfied as set forth in Section 1.6 below and
shall continue until November 30, 2000, subject to extension on a week to week ,
and a System by System basis if on or before the date that is 3 calendar days
before the last day of the Term, Lessee sends notice to Lessor via fax or hand
delivery that the Lease will be extending the Term as to specified Systems for
another weeks, and such extension shall then extend the "Term" to the date
specified in the notice as to the indicated System. The term "COMMENCEMENT DATE"
shall mean the date upon which all of the following are true: (a) the A/P
Agreement
1.
has been approved by the Bankruptcy Court and all conditions precedent to the
effectiveness of the A/P Agreement shall have been satisfied, (b) this Agreement
has been approved by the Bankruptcy Court, and (c) Lessor has delivered
possession of the Equipment to Lessee.
1.3 RENTAL PAYMENTS. Lessee shall pay Lessor Rent at a
rate of $500 per week per System included as part of the leased "Equipment"
(I.E., four Systems as of the Commencement Date), payable in arrears on October
31, 2000 and November 30, 2000, and thereafter on the last day of each weekly
extension, if any. The first payment for the period between the Commencement
Date and November 1, 2000 shall be equal to a pro rated rental payment based on
$500 per System divided by 7 multiplied by the actual number of days from the
Commencement Date to November 1, 2000. All Rent and other amounts payable by
Lessee to Lessor hereunder shall be paid to Lessor's designee and assignee, DVI,
by check payable to DVI, at the address specified above, or at such other place
(or person or entity) as DVI may designate in writing to Lessee from time to
time.
1.4 RETURN OF EQUIPMENT. Upon expiration of the Term,
Lessee shall immediately return the Equipment to Lessor's designee, which
designee shall be DVI unless DVI designates otherwise in writing. In other
words, the designation of DVI as the designee for the return of the Equipment
may altered only by a writing signed by DVI. Lessee shall bear no expense for
the return of the Equipment. Lessee's sole responsibility shall be to make the
Equipment available for pick up by DVI or its designee at a mutually convenient
time.
1.5 ABATEMENT OF RENT. Notwithstanding the foregoing
paragraphs 1.2, 1.3, and 1.4, Lessee may elect at any time during the Term to
return individual Systems as identified on Schedule 1 without terminating the
Lease or the Term (except as to the individual System) and receive an abatement
of the Rent payable to DVI equal to $500 per System returned per week. To make
this election for any given individual System, on or before the Monday of the
calendar week at the end of which, Lessee intends to return a particular System,
Lessee shall notify DVI and Lessor in writing of the election to return a
particular identified System and Lessee shall make the System available to DVI
for pick up on the following Monday or on such other date as is mutually agreed
to by DVI and Lessee. No matter when the designated System is picked up by DVI,
however, all obligations of Lessee with respect to such designated System shall
cease after the first to occur of (1) the date DVI picks up the System, and (2)
the last calendar day of the week which marks the end of the Term for such
system due to termination in accordance with this Section 1.5. The abatement of
Rent shall be effective as of the Monday after notice in accordance with this
Paragraph 1.5 is given.
1.6 CONDITIONS PRECEDENT TO LESSEE'S OBLIGATIONS. It
shall be a condition precedent to each and every obligation of Lessee hereunder,
that each of the following conditions precedent shall be an remain satisfied
(unless waived in writing by Lessee):
(a) The Bankruptcy Court with jurisdiction over
the Lessor's bankruptcy case shall have approved the execution and performance
by Lessor of this Agreement , of the A/P Agreement and of all the "Acquisition
Documents" executed pursuant to the A/P Agreement pursuant to an order or orders
that are in form and substance satisfactory to Lessee and which order or orders
shall be final and non-appealable (and as to which no appeal has been taken,
I.E., a "Final Order");
(b) Lessor shall have executed and delivered
this Agreement, the A/P Agreement, and each of the Acquisition Documents to
Lessee;
(c) The Maintenance Escrow Agreement (or
counterparts thereof) shall have been fully executed by all parties thereto,
shall have been approved by the Bankruptcy Court (as one of the Acquisition
Documents) by a Final Order, and the Maintenance Escrow shall have been
established and funded, in each case to the satisfaction of Lessee;
(d) All Leased Equipment shall have been
delivered to Lessee;
(e) All representations and warranties set forth
herein shall be true and correct; and
(f) No default or Event of Default by Lessee or
any affiliate of Lessee shall have occurred hereunder, under the A/P Agreement,
under any Acquisition Document, or under any other agreement or
2.
document executed pursuant to any of them (including the Consulting Agreement
signed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and the "MMC Services Agreement" signed by Medical
Management Concepts, Inc.).
II. LESSEE OBLIGATIONS
2.1 RENT; PAYMENTS UNCONDITIONAL. LESSEE'S SOLE PAYMENT
OBLIGATION UNDER THIS LEASE IS FOR RENT, INSURANCE (AS PROVIDED IN SECTION 2.6)
AND OTHER SPECIFICALLY IDENTIFIED PAYMENT OBLIGATIONS. ALL OTHER COSTS, EXPENSES
AND LIABILITIES RELATING TO THE EQUIPMENT, INCLUDING IN RESPECT OF TAXES (IF
ANY) AND MAINTENANCE, SHALL BE BORNE SOLELY BY LESSOR. LESSEE'S OBLIGATION TO
PAY ALL SUCH RENT AND OTHER SUMS HEREUNDER, AND THE RIGHTS OF LESSOR (OR DVI) IN
AND TO SUCH PAYMENTS, SHALL BE ABSOLUTE AND UNCONDITIONAL, AND SHALL NOT BE
SUBJECT TO ANY ABATEMENT, REDUCTION, SETOFF, DEFENSE, COUNTERCLAIM,
INTERRUPTION, DEFERMENT OR RECOUPMENT, FOR ANY REASON WHATSOEVER.
2.2 USE OF EQUIPMENT. Lessee shall use the Equipment
solely in the conduct of its business, in a manner and for the use contemplated
by the manufacturer thereof, and in compliance with all Requirements of Law of
every Governmental Authority having jurisdiction over the Equipment or Lessee
and with the provisions of all policies of insurance carried by Lessee pursuant
to Section 2.6.
2.3 DELIVERY; INSTALLATION; RETURN; MAINTENANCE AND
REPAIR. Lessor shall be solely responsible, at its own expense, for (a) making
the Equipment available to Lessee, and (b) the installation, de-installation,
maintenance and repair of the Equipment, such that the Equipment remains in
excellent working order and repair in keeping with the standards required by law
and all Governmental Authorities, and in keeping with the prudence dictated by
the nature of the Equipment as medical equipment. Lessor ▇▇▇/▇▇ ▇▇▇ should it so
elect, shall be solely responsible, at its own expense, for re-taking possession
of the Equipment upon expiration or termination of the Lease Term and/or should
Lessee make an election as described in Paragraph 1.5. In the event that Lessor
does not perform maintenance services itself, Lessor shall ensure that the
Equipment is covered by a maintenance agreement, to the extent available, with
the manufacturer of the Equipment or other party reasonably acceptable to
Lessee. If Lessor or its agent fails to maintain the Equipment in accordance
with the standards set forth in this Agreement, and if no substitute System is
provided to Lessee that is satisfactory to Lessee, then Lessee may arrange for
such repair and maintenance and shall be reimbursed therefor from the escrow
(the "MAINTENANCE ESCROW") established and funded pursuant to the A/P Agreement
and the escrow agreement executed pursuant thereto. Should any of the Equipment
fail to be returned to DVI in good repair, condition and working order, ordinary
wear and tear excepted, Lessee shall have no liability therefor UNLESS Lessee
was grossly negligent or reckless in its use of the Equipment, but DVI may be
compensated therefor by any funds remaining in the Maintenance Escrow. If Lessee
was grossly negligent or reckless, Lessee shall be obligated to pay Lessor for
the out-of-pocket expenses Lessor (or DVI) incurs in bringing such Equipment up
to the status of such repair and working order as the Equipment would have had
but for Lessee's gross negligence or recklessness, but not in excess of the
Casualty Value for such Equipment
2.4 TAXES. Lessor shall pay, and hereby indemnifies
Lessee on a net, after-tax basis, against, and shall hold it harmless from, all
license fees, assessments, and sales, use, property, excise and other taxes and
charges, other than those measured by Lessee's net income, now and hereafter
imposed by any Governmental Authority upon or with respect to any of the
Equipment, or the possession, ownership, use or operation thereof, or any Lease,
or the consummation of the transactions contemplated by any Lease. Lessor shall
file personal property tax returns, and shall pay personal property taxes
payable with respect to the Equipment.
2.5 LOSS OF EQUIPMENT. Lessor assumes the risk that any
item of Equipment becomes lost, stolen, damaged, destroyed or otherwise unfit or
unavailable for use from any cause whatsoever other than Lessee's gross
negligence or recklessness (an "EVENT OF LOSS"). So long as an item of Equipment
is unavailable to Lessee due to an Event of Loss, Lessee shall have no liability
to Lessor or DVI to pay Rent therefor. However, should any insurance be payable
on account of such Event of Loss, then Lessee shall be entitled to receive or
retain from such insurance proceeds an amount equal to what is necessary for
Lessee to lease replacement Equipment, less any Rent payable, for the remainder
of the Term and DVI, shall receive the remainder.
3.
2.6 INSURANCE. Lessor shall retain for the Lease Term at
its own expense, property damage and liability insurance and insurance against
loss or damage to the Equipment as a result of fire, explosion, theft, vandalism
and such other risks of loss as are normally maintained on equipment of the type
leased hereunder by companies carrying on the business in which Lessee is
engaged, in such amounts, in such form and with such insurers as shall be
satisfactory to Lessee (and DVI) and Lessee shall reimburse Lessor for the pro
rated cost for each month a System remains subject to this Lease. In other
words, should Lessee return a System as described in Paragraph 1.5, the
obligation to reimburse Lessor for the insurance attributable to the individual
returned System shall cease. Each insurance policy shall name Lessor (or DVI) as
insured and Lessee and its assignees as additional insureds and loss payees
thereof as their interest may appear, and shall provide that it may not be
cancelled or altered without at least 30 days' prior written notice thereof
being given to Lessee and DVI (or 10 days' notice, in the event of non-payment
of premium).
2.7 LESSEE NEGATIVE COVENANTS. Without the prior written
consent of Lessor and DVI, which consent as it pertains to clause (c) below
shall not be unreasonably withheld, Lessee shall not: (a) assign, transfer, or
otherwise dispose of any Equipment, the Lease or any rights or obligations
thereunder; (b) create or incur, or permit to exist, any Lien with respect to
any of the Equipment; (c) cause or permit any of the Equipment to be moved from
the locations specified by Lessee in writing to Lessor (and DVI); or (d) cause
or permit any of the Equipment to be moved outside the United States.
2.8 IDENTIFICATION. Lessee shall place and maintain
permanent markings provided by Lessor on the Equipment evidencing ownership,
security and other interests therein, as specified from time to time by Lessor.
2.9 ALTERATIONS AND MODIFICATIONS. Lessee shall not make
any additions, attachments, alterations or improvements to the Equipment without
the prior written consent of Lessor, not to be unreasonably withheld. Any
addition, attachment, alteration or improvement to any item of Equipment shall
belong to and become the property of Lessor unless, at the request of Lessor, it
is removed prior to the return of such item of Equipment by Lessee. Lessee shall
be responsible for all costs relating to such removal and shall restore such
item of Equipment to the condition and value otherwise required hereunder.
2.10 PERSONAL PROPERTY. Lessee acknowledges and represents
that the Equipment shall be and remain personal property, notwithstanding the
manner by which it may be attached or affixed to realty, and Lessee shall do all
acts and enter into all agreements necessary to ensure that the Equipment
remains personal property. If requested by Lessor with respect to any item of
Equipment, Lessee shall obtain and deliver to Lessor equipment access
agreements, satisfactory to Lessor, from all persons claiming any interest in
the real property on which such item of Equipment is installed or located..
III. DEFAULT AND REMEDIES
3.1 EVENTS OF DEFAULT. The occurrence of any of the
following shall constitute an "EVENT OF DEFAULT" hereunder: (a) Lessee fails to
pay any Rent or other amount due under this Lease within five days after it
becomes due and payable; and (b) Lessee fails to perform any other covenant,
condition or agreement made by it under this Lease, and such failure continues
for 10 days.
3.2 REMEDIES. If an Event of Default exists, Lessor may
exercise any one or more of the following remedies, in addition to those arising
under applicable law: (a) proceed, by appropriate court action, to enforce
performance by Lessee of the applicable covenants of this Lease; (b) terminate
the Lease by 10 days' notice to Lessee and, unless Event of Default has been
cured within that time, take possession of any or all of the Equipment and, for
such purpose, enter upon any premises where the Equipment is located with or
without notice or process of law and free from all claims by Lessee or any other
person, or (c) require Lessee to assemble the Equipment and deliver it to DVI;
and (d) recover any and all accrued and unpaid Rent and other amounts owing
under the Lease for the remainder of the Term.
IV. MISCELLANEOUS
4.1 RIGHT TO USE. So long as no Event of Default exists,
neither Lessor nor its assignee (including DVI) shall interfere with Lessee's
right to use the Equipment under this Lease, nor with the ability of
4.
Lessee to substitute one of the Systems listed on SCHEDULE 1 (other than System
nos. 1, 5, 11, and 12) for System nos. 1, 5, 11, and 12, should any of the
latter fail to meet the requirements of Lessee.
4.2 RIGHTS AND REMEDIES. Each right and remedy granted to
Lessor under any Lease shall be cumulative and in addition to any other right or
remedy existing in equity, at law, by virtue of statute or otherwise, and may be
exercised by Lessor from time to time concurrently or independently and as often
and in such order as Lessor may elect. Any failure or delay on the part of
Lessor in exercising any such right or remedy shall not operate as a waiver
thereof.
4.3 SECTION HEADINGS; INTERPRETATION. Section headings
are inserted for convenience of reference only and shall not affect any
construction or interpretation of any Lease Document. In interpreting the
provisions of any Lease Document, (a) the term "including" is not limiting; (b)
references to "person" include individuals, corporations and other legal persons
and entities; (c) the singular of defined terms includes the plural and
vice-versa; and (d) section and paragraph references are to the document in
which such reference appears, unless the context otherwise requires.
4.4 ENTIRE LEASE. This Agreement constitutes the entire
agreement between Lessor and Lessee with respect to the lease of the Equipment.
No waiver or amendment of, or any consent with respect to, any provision of any
this Lease or any document executed pursuant hereto (each a "LEASE DOCUMENT")
shall bind either party unless set forth in a writing, specifying such waiver,
consent, or amendment, signed by both parties.
4.5 SEVERABILITY. Should any provision of any Lease
Document be or become invalid, illegal, or unenforceable under applicable law,
the other provisions of such Lease Document shall not be affected and shall
remain in full force and effect.
4.6 GOVERNING LAW AND JURISDICTION. THIS AGREEMENT AND
THE OTHER LEASE DOCUMENTS SHALL BE GOVERNED IN ALL RESPECTS BY THE LAWS OF THE
STATE OF
CALIFORNIA. LESSOR AND LESSEE WAIVE ALL RIGHTS TO TRIAL BY JURY IN ANY
LITIGATION ARISING FROM ANY LEASE DOCUMENT.
4.7 BANKRUPTCY COURT APPROVAL. Notwithstanding anything
herein to the contrary, this Agreement, and all other documents or instruments
executed concurrently herewith, shall not be effective until they have been
approved by the Bankruptcy Court and the order approving same shall have become
a final order such that no appeal has been filed or stay granted with respect
thereto.
DIGIRAD IMAGING SYSTEMS, INC. NUCLEAR IMAGING SYSTEMS, INC.,
Lessee Lessor
By: By:
------------------------- ---------------------------
Title: Title:
---------------------- ------------------------
5.
SCHEDULE 1
LEASED EQUIPMENT
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
NIS LOCATION CHAIR SERIAL PICKER CAMERA SERIAL # PICKER COMPUTER
SYSTEM# NIS # # SITE # NIS # SITE #
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
1 Plymouth Meeting, PA 8 V5124 77572 1 M105 77561 MAC IIFX
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
5 Plymouth Meeting, PA 7 US122 77574 5 MO131 77226 MAC IIFX
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
6 Allentown, PA 5 V5120 77575 6 136 77224 MAC IIFX
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
8 Ply Mtg. PA (Clemente I) 10 115R 200608 8 149 77227 Quadro 950
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
9 Plymouth Meeting, PA 1 US130 76535 9 M152 77571 Quadro 950
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
10 Rockville, MD 9 125 76451 10 153 76450 Quadro 950
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
11 Glen Burnie, MD 2 133 77576 11 159 77231 Quadro 950
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
12 Burlington, NC 4 135 77578 12 161 77228 Quadro 950
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
13 Plymouth Meeting, PA 3 U5134 76449 13 164 77233 Quadro 950
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
14 Plymouth Meeting, PA 5 121 77579 14 166 77235 Quadro 950
----------- -------------------------- ------- -------- --------- ---------- --------- -------- ------------
----------- ------------------ --------------------- ------------ -----------------------
NIS SERIAL # PRINTER SERIAL # DRIVE #1
SYSTEM#
----------- ------------------ --------------------- ------------ -----------------------
1 MITS CP100VA 100776 Infinity 44
----------- ------------------ --------------------- ------------ -----------------------
5 MITS CP100VA 101098 Syquest 44
----------- ------------------ --------------------- ------------ -----------------------
6 MIYS CP 110V 100581 Infinity 44
----------- ------------------ --------------------- ------------ -----------------------
8 MIYS CP 110V 100423 Infinity 44/MO
----------- ------------------ --------------------- ------------ -----------------------
9 F32442UT671 MITS CP100VA 100328 Infinity 44/MO
----------- ------------------ --------------------- ------------ -----------------------
10 F3250DGJ671 MITS CP100VA 101168 Sony MO 128MA
----------- ------------------ --------------------- ------------ -----------------------
11 F330709R671 MITS CP 110V 100017 Sony MO128MB
----------- ------------------ --------------------- ------------ -----------------------
12 XB33B34HY671 MITS CP 110V 101156 Sony MO128MB
----------- ------------------ --------------------- ------------ -----------------------
13 MITS CP100VA Sony MO128MB
----------- ------------------ --------------------- ------------ -----------------------
14 MITS CP100VA Sony MO128MB
----------- ------------------ --------------------- ------------ -----------------------
Each row of the foregoing chart describes a series of assets comprising a single
"System" for which the monthly rental rate is $2,000.
EXHIBIT C
OMITTED
4.
EXHIBIT D
OMITTED
EXHIBIT E
NON-COMPETITION AGREEMENT
NON-COMPETITION AND NON-DISCLOSURE AGREEMENT
This NON-COMPETITION AND NON-DISCLOSURE AGREEMENT (this
"Agreement") is made as of September 29, 2000 by and between Digirad Imaging
Systems, Inc., a Delaware corporation (the "Company"), and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇.
▇▇▇▇▇▇▇") pursuant to that certain "
Asset Purchase Agreement" dated as of the
date hereof (the "Purchase Agreement") and executed by and between the Company,
on the one hand, and Nuclear Imaging Systems, Inc. ("NIS") and Cardiovascular
Concepts, P.C. ("CVC"), on the other. Capitalized terms used herein and not
otherwise defined herein shall have the meanings given such terms in the
Purchase Agreement.
RECITALS
WHEREAS, NIS is a debtor and debtor in possession in chapter
11 case no. 00-19698 and CVC is a debtor and debtor in possession in chapter 11
case no. 00-19697, which have been consolidated together for administrative
purposes (together, the "Bankruptcy Case") both pending in the United States
Bankruptcy Court for the Eastern District of Pennsylvania (the "Bankruptcy
Court");
WHEREAS, ▇▇. ▇▇▇▇▇▇▇ is the principal and sole shareholder of
NIS and of CVC, and is himself a debtor in a chapter 11 case (the "▇▇▇▇▇▇▇
Case") before the Bankruptcy Court;
WHEREAS, the Company is purchasing from NIS and CVC all of its
assets (the "Purchased Assets") used in or pertaining to the mobile delivery of
diagnostic cardiac services, diagnostic imaging equipment and related technical
services to physicians providing cardiology services (the "Mobile Business")
pursuant to the Purchase Agreement, and pursuant to an order of the Bankruptcy
Court approving the sale and transfer of the Purchased Assets to the Company
pursuant to 11 U.S.C. ss.ss.363 and 365, among other things;
WHEREAS, the going concern value of the Purchased Assets and
the Mobile Business being acquired by the Company (the "Acquisition") would be
diminished substantially if ▇▇. ▇▇▇▇▇▇▇ were to compete with the Company in the
Mobile Business and the Company's business of providing mobile nuclear imaging
services (the "Company Business" and, together with the Mobile Business, called
the "Business") within the United States (the "Territory");
NOW, THEREFORE, in consideration of the mutual covenants set
forth in this Agreement, and in connection with the closing under the Purchase
Agreement and the sale of the Purchased Assets in connection therewith, the
parties hereto agree as follows:
1. NON-COMPETITION. As an inducement for the Company to enter
into the Purchase Agreement and to pay the Purchase Price for the Acquisition,
and in consideration of ▇▇. ▇▇▇▇▇▇▇'▇ exposure to confidential information of
the Company Business as well as the
1.
consideration payable to ▇▇. ▇▇▇▇▇▇▇ under the Consulting Agreement executed by
and between the Company and ▇▇. ▇▇▇▇▇▇▇ concurrently herewith, ▇▇. ▇▇▇▇▇▇▇
hereby covenants as follows:
a. IN GENERAL. Commencing on the date all conditions
precedent to the effectiveness of the Purchase Agreement have been satisfied
(the "Closing Date") and for a period of three (3) consecutive years thereafter
(the "Term"), except as otherwise provided in this Agreement, ▇▇. ▇▇▇▇▇▇▇ shall
not, directly or indirectly, own, manage, engage in, operate or conduct, prepare
to or plan to conduct or assist any person or entity to conduct any business, or
have any interest in any business, person, firm, corporation or other entity
("Competitor") as a principal, owner, agent, employee, shareholder, officer,
director, joint venturer, partner, security holder (except for the ownership of
publicly-traded securities constituting not more than five percent of the
outstanding securities of the issuer thereof), creditor (except for trade credit
extended in the ordinary course of business), consultant or in any other
capacity if that Competitor engages, directly or indirectly, in any business
which is substantially similar to or competitive with the Business anywhere in
the Territory.
b. NO DIVERSION OF OTHERS. During the Term, ▇▇. ▇▇▇▇▇▇▇
shall not, either for himself or for any other person, firm, corporation or
other entity, directly or indirectly, or by action in concert with others:
(i) induce or influence, or seek to induce or
influence, any person who is engaged by the Company or NIS or CVC or any
affiliate of any of them (in any such case, as an agent, employee, consultant,
or in any other capacity) or any successor thereto with the purpose of obtaining
such person as an employee or customer for a business competitive with the
Business; or
(ii) divert or take away or attempt to divert or
take away, or solicit or attempt to solicit, any existing customer of the
Company or NIS or CVC or any affiliate of any of them (whether or not such
customer is actually a customer of NIS, CVC or the Business as of the Closing
Date, and including without limitation any customer solicited by ▇▇. ▇▇▇▇▇▇▇ or
which became known by ▇▇. ▇▇▇▇▇▇▇ prior to the effectiveness of this Agreement)
with the purpose of obtaining such person as an employee or customer for a
business competitive with the Business.
c. ORGANIZING COMPETITIVE BUSINESS. Without limiting any
of the other provisions contained in this SECTION 1, during the Term, ▇▇.
▇▇▇▇▇▇▇ shall not (i) plan to compete, prepare to compete nor discuss the
Business with any third party that is planning or preparing to compete with the
Business in the Territory, (ii) act in concert with or conspire with agents,
employees, consultants, other representatives of the Company or any other third
party for the purpose of organizing any business activity competitive with the
Business in the Territory; nor (iii) take any other action to compete with the
Business anywhere in the Territory nor assist some third person to do so.
2. CONFIDENTIAL INFORMATION AND NON-DISCLOSURE.
a. DEFINITION OF CONFIDENTIAL INFORMATION. ▇▇. ▇▇▇▇▇▇▇
hereby acknowledges that the Purchased Assets include confidential and
proprietary information in
2.
existence prior to the date of this Agreement (collectively, "Confidential
Information"), which Confidential Information shall include, without limitation,
all of the following materials and information (whether or not reduced to
writing and whether or not patentable or protected by copyright): (i) all
customer lists, business methods, and marketing programs of NIS, CVC, and/or the
Company; (ii) any and all trade secrets concerning the business and affairs of
Mobile Business, business plans and projections, product specifications,
procedures, formulae, compositions, processes, designs, sketches, photographs,
graphs, drawings, samples, inventions, models, documentation, techniques,
diagrams, flowcharts, existing new products and new technology information,
product copies, manufacturing, development or marketing techniques, material
development or marketing timetables, strategies and development plans, and past,
current and planned research and development, current and planned manufacturing
and distribution methods and processes, customer lists, current customer
requirements, price lists, market studies, computer software and programs
(including object code and source code), computer software and database
technologies and information (and related processes, formulae, compositions,
improvements, devices, inventions, discoveries, designs, methods and
information) of the Mobile Business including but not limited to information
related to the customers, suppliers or personnel of such members of the
Business, and any other information, however, documented, of the Mobile
Business; (iii) any and all information concerning the business and affairs of
the Mobile Business (which includes historical financial statements, financial
projections and budgets, historical and projected sales, capital spending
budgets and plans, the names and backgrounds of key personnel and personnel
training and techniques and materials), however documented; and (iv) any and all
notes, analyses, compilations, studies, summaries, and other material prepared
by or for the Mobile Business containing or based, in whole or in part, on any
information included in the foregoing. The parties hereto agree that the failure
of any Confidential Information to be marked or otherwise labeled as
confidential or proprietary information shall not affect its status as
Confidential Information. Notwithstanding the foregoing, Confidential
Information shall not include (1) any information which is generally known to
the public or to companies in businesses similar to the Business, (2) any
information which later, through no act of NIS, CVC, their affiliates, ▇▇.
▇▇▇▇▇▇▇ or his affiliates, becomes generally known or (3) any information
required to be disclosed by Person pursuant to a subpoena or court order, or
pursuant to a requirement of a governmental agency or law of the United States
of America or a state thereof or any governmental or political subdivision
thereof, provided that (a) ▇▇. ▇▇▇▇▇▇▇ will provide the Company with prior
written notice of such disclosure in order that the Company may attempt to
obtain a protective order or the assurance of confidential treatment, and (b)
▇▇. ▇▇▇▇▇▇▇ will cooperate with the Company in attempting to obtain such order
or assurance.
b. NON-USE AND NON-DISCLOSURE. Commencing on the date of this Agreement and at
all times thereafter, ▇▇. ▇▇▇▇▇▇▇ shall hold in the strictest confidence (except
as previously approved by the Company in writing), and shall not, directly or
indirectly, disclose, divulge, reveal, report, publish, transfer or otherwise
communicate, or use for his own benefit or the benefit of any other person,
partnership, firm, corporation or other entity, or use to the detriment of the
Company,
Digirad Corporation, and/or the Business or misuse in any way, any
Confidential Information. ▇▇. ▇▇▇▇▇▇▇ acknowledges that he will in no way
infringe upon any intellectual property included in the Purchased Assets or used
in the Business and will in no way use, copy, appropriate or redistribute any
part of the Confidential Information (or any intellectual property), whether
obtained directly or indirectly from the Company, without a specific written
3.
license agreement with the Company. It is agreed that any derivative,
modification or elaboration of any Confidential Information by any third party
remains the proprietary property of the Company for purposes of this Agreement.
▇▇. ▇▇▇▇▇▇▇ and the Company each hereby covenants and agrees that, as between
them, all Confidential Information acquired by the Company constitutes
important, material and confidential and/or proprietary information of the
Business, constitutes unique and valuable information, and affects the
successful conduct of the Business and the Company's goodwill, and that the
Company shall be entitled to recover its damages, in addition to any injunctive
remedy that may be available, for any breach of this SECTION 2.
c. TRADE SECRETS. All trade secrets of the Business will
be entitled to all of the protection and benefits under all applicable federal
and state trade secrets law. If any information that the Company deems to be a
trade secret is found by a court of competent jurisdiction not to be a trade
secret for purposes of this Agreement, such information will, nevertheless, be
considered Confidential Information for purposes of this Agreement. ▇▇. ▇▇▇▇▇▇▇
hereby waives any requirement that the Company (or
Digirad Corporation) submit
proof of the economic value of any trade secret or post a bond or other
security.
d. OWNERSHIP. ▇▇. ▇▇▇▇▇▇▇ hereby acknowledges and agrees
that all right, title and interest in and to any Confidential Information shall
be the exclusive property of the Company. Without limiting the foregoing, ▇▇.
▇▇▇▇▇▇▇ shall assign to the Company any and all right, title or interest which
▇▇. ▇▇▇▇▇▇▇ may have in all Confidential Information made, developed or
conceived of in whole or in part by ▇▇. ▇▇▇▇▇▇▇. ▇▇. ▇▇▇▇▇▇▇ further agrees to
execute and deliver any and all instruments, and to do all other things
reasonably requested by the Company in order to vest more fully in the Company
all ownership rights in such Confidential Information. All equipment, notebooks,
documents, memoranda, reports, files, samples, books, correspondence, lists,
other written and graphic records, and the like, in any way relating to any
Confidential Information or the Business, which ▇▇. ▇▇▇▇▇▇▇ prepared, used,
constructed, observed, processed, or controlled (collectively, "Materials")
shall be the Company's exclusive property, and ▇▇. ▇▇▇▇▇▇▇ hereby agrees to
deliver all Materials, together with any and all copies thereof, promptly to the
Company at the Company's request.
3. REASONABLENESS OF RESTRICTIONS. ▇▇. ▇▇▇▇▇▇▇ HAS CAREFULLY READ
AND CONSIDERED THE PROVISIONS OF SECTIONS 1 AND 2 HEREOF AND, HAVING DONE SO,
HEREBY AGREES THAT THE RESTRICTIONS SET FORTH IN SUCH SECTIONS ARE FAIR AND
REASONABLE AND ARE REASONABLY REQUIRED FOR THE PROTECTION OF THE INTERESTS OF
THE COMPANY AND THE BUSINESS.
4. INJUNCTIVE RELIEF AND TERMINATION.
a. IN GENERAL. ▇▇. ▇▇▇▇▇▇▇ acknowledges and agrees that
the Company and/or
Digirad Corporation (the parent of the Company) shall suffer
irreparable harm in the event that ▇▇. ▇▇▇▇▇▇▇ breaches any of his obligations
under Section 1 or 2 hereof, and that monetary damages shall be inadequate to
compensate the Company and/or
Digirad Corporation for any such breach.
Notwithstanding the arbitration provision of the Purchase Agreement, ▇▇. ▇▇▇▇▇▇▇
agrees that in the event of any breach or threatened breach by ▇▇. ▇▇▇▇▇▇▇ of
any of the provisions of SECTION 1 or SECTION 2 hereof, the Company and/or
Digirad Corporation shall be
4.
entitled to a temporary restraining order, preliminary injunction and permanent
injunction in order to prevent or restrain any such breach or threatened breach
by ▇▇. ▇▇▇▇▇▇▇, or by any or all of ▇▇. ▇▇▇▇▇▇▇'▇ agents, representatives or
other persons directly or indirectly acting for, on behalf of or with ▇▇.
▇▇▇▇▇▇▇.
b. NO LIMITATION OF REMEDIES. Notwithstanding the
provisions set forth in SECTION 4(a), above, or any other provision contained in
this Agreement, the parties hereby agree that no remedy conferred by any of the
specific provisions of this Agreement, including, without limitation, this
SECTION 4, is intended to be exclusive of any other remedy, and each and every
remedy shall be cumulative and shall be in addition to every other remedy given
hereunder or now or hereafter existing at law or in equity or by statute or
otherwise.
5. MISCELLANEOUS.
a. NOTICES. All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered personally against written receipt or by facsimile
transmission with answer back confirmation or mailed (postage prepaid by
certified or registered mail, return receipt requested) or by overnight courier
to the parties at the following addresses or facsimile numbers:
If to ▇▇. ▇▇▇▇▇▇▇, to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o Nuclear Imaging Systems, Inc.
The ▇▇▇▇ Building
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ , ▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company, to:
Digirad Imaging Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
with copies to:
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇, Esq.
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this SECTION 5(a), be deemed given upon
delivery, (ii) if delivered by
5.
facsimile transmission to the facsimile number as provided in this SECTION 5(a),
be deemed given upon receipt, and (iii) if delivered by mail in the manner
described above to the address as provided in this SECTION 5(a), be deemed given
upon receipt (in each case regardless of whether such notice, request or other
communication is received by any other Person to whom a copy of such notice,
request or other communication is to be delivered pursuant to this Section). Any
party from time to time may change its address, facsimile number or other
information for the purpose of notices to that party by giving notice specifying
such change to the other parties hereto.
b. ENTIRE AGREEMENT. This Agreement, the Purchase
Agreement (and all exhibits and schedules attached thereto) and all other
documents delivered in connection herewith and therewith supersede all prior
discussions and agreements among the parties with respect to the subject matter
hereof and thereof and contains the sole and entire agreement among the parties
hereto with respect thereto.
c. WAIVER. Any term or condition of this Agreement may
be waived at any time by the party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party hereto of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by law or otherwise afforded, will be
cumulative and not alternative.
d. AMENDMENT. This Agreement may be amended,
supplemented or modified only by a written instrument duly executed by or on
behalf of each party hereto.
e. NO THIRD PARTY BENEFICIARY. The terms and provisions
of this Agreement are intended solely for the benefit of each party hereto and
the Company's successors or assigns and for the benefit of
Digirad Corporation,
and it is not the intention of the parties to confer third-party beneficiary
rights upon any other Person.
f. NO ASSIGNMENT; BINDING EFFECT. This Agreement shall
inure to the benefit of any successors or assigns of the Company and
Digirad
Corporation. ▇▇. ▇▇▇▇▇▇▇ shall not be entitled to assign his rights or
obligations under this Agreement.
g. HEADINGS. The headings used in this Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
h. SEVERABILITY. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (a) such provision will be
fully severable, (b) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof,
(c) the remaining provisions of this Agreement will remain in full force and
effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom and (d) in lieu of such illegal, invalid
or unenforceable provision, there will be added automatically as a part of this
6.
Agreement a legal, valid and enforceable provision as similar in terms to such
illegal, invalid or unenforceable provision as may be possible and mutually
acceptable to the parties herein.
i. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania
applicable to contracts executed and performed in such State, without giving
effect to conflicts of laws principles (other than any provisions thereof
validating the choice of the laws of the Commonwealth of Pennsylvania in the
governing law).
j. ATTORNEYS' FEES. In the event suit or action is
brought by any party under this Agreement to enforce or construe any of its
terms, the prevailing party shall be entitled to recover, in addition to all
other amounts and relief, its reasonable costs and attorneys' fees incurred at
and in preparation for arbitration, trial, appeal and review, such sum to be set
by the arbitrator or court before which the matter is heard.
k. CONSTRUCTION. No provision of this Agreement shall be
construed in favor of or against any party on the ground that such party or its
counsel drafted the provision. Any remedies provided for herein are not
exclusive of any other lawful remedies which may be available to either party.
This Agreement shall at all times be construed so as to carry out the purposes
stated herein.
l. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by facsimile, each of which will be deemed an
original, but all of which together will constitute one and the same instrument.
IN WITNESS WHEREOF, each of the parties hereto has duly
executed this Agreement as of the date first above written.
DIGIRAD IMAGING SYSTEMS, INC.
a Delaware corporation
By:
---------------------------------------
Name:
---------------------------------------
Title:
---------------------------------------
-----------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
[SIGNATURE PAGE TO THE ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
NON-COMPETITION AND NON-DISCLOSURE AGREEMENT]
7.
EXHIBIT F
OMITTED
EXHIBIT G
INDEMNITY AGREEMENT
THIS INDEMNITY AGREEMENT is executed as of this 29th day of
September, 2000 by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") in favor of Digirad Imaging
Systems, Inc. and its affiliates (including, without limitation,
Digirad
Corporation) as a material inducement to Digirad Imaging Systems, Inc. ("DIS")
to enter into and perform that certain
Asset Purchase Agreement (the "A/P
Agreement") between DIS, Cardiovascualar Concepts, P.C. ("CVC") and Nuclear
Imaging Services, Inc. ("NIS" and together with CVC, referred to as the
"Company") and dated on or about the date hereof. Capitalized terms not
otherwise defined herein shall have the meanings assigned to them in the A/P
Agreement.
1. INDEMNIFICATION. ▇▇▇▇▇▇▇ hereby agrees that he shall
indemnify, defend and hold harmless DIS and
Digirad Corporation and their
respective officers, directors, employees, agents, successors and assigns
(collectively the "Indemnitees") from and against any and all costs, losses,
Liabilities, damages, lawsuits, deficiencies, claims and expenses, including
without limitation, interest, penalties, costs of mitigation, clean-up or
remedial action, attorneys' fees and all amounts paid to third parties in
investigation, defense or settlement of any of the foregoing (collectively, the
"Damages"), suffered by any of the Indemnitees, incurred in connection with,
arising out of, resulting from or incident to:
(a) any breach of any covenant, representation,
warranty or agreement or the inaccuracy of any representation, made by
NIS, CVC, ▇▇▇▇▇▇▇, or any of their respective employees, agents or
representatives in or pursuant to the A/P Agreement or the other
Acquisition Documents;
(b) the filing of a petition under title 11 of
the United States Code (the "Bankruptcy Code") by or against Medical
Management Concepts, Inc. ("MMC") to the extent such Damages could have
been avoided or reduced by any Indemnitee if MMC had entered into the
agreements that MMC entered into with any of DIS, Digirad Corporation,
or any of their affiliates on or about the date hereof (the "Subject
Agreements") AFTER such petition of MMC was filed rather than before,
including without limitation, any fees, costs or losses or other
Damages incurred by and Indemnitee (i) in defending their respective
rights in such ensuing bankruptcy of MMC, (ii) in paying, whether
voluntarily or involuntarily, due to practical, legal or business need
or expedience, any debts or obligations of MMC that could have been
compromised or discharged if MMC had filed bankruptcy before the
Subject Agreements were entered into, or (iii) in protecting its rights
against third parties where the bankruptcy court's approval (upheld on
appeal, if any) of the Subject Agreements could have eliminated or
reduced such Damages.
2. PROCEDURE. Should any Indemnitee desire to assert a
claim for indemnification, such Indemnitee shall, if it is not DIS or Digirad
Corporation, first give notice of the claim to either DIS or Digirad
Corporation. If DIS or Digirad Corporation does not oppose assertion of the
claim by the Indemnitee, either DIS or Digirad shall provide written notice to
▇▇▇▇▇▇▇ of the claim (the "Claim Notice"). Upon receipt of a Claim Notice,
▇▇▇▇▇▇▇
1
shall have ten (10) days to object, in writing, to such claim (the "Dispute
Notice"), providing notice thereof to the party asserting the claim and, if
different, to DIS and Digirad Corporation. If the claim is not timely disputed
by ▇▇▇▇▇▇▇, the Indemnitee asserting a right to indemnification shall have the
right to enforce its indemnity rights as defined hereunder. If ▇▇▇▇▇▇▇ timely
provides a Dispute Notice, ▇▇▇▇▇▇▇ and the party or parties asserting the
indemnification claim and DIS and Digirad Corporation (if they choose to
participate in the resolution of the dispute) shall attempt in good faith to
agree upon the rights or the respective parties with respect to such claim. If
the parties agree as to the resolution of such claim, they shall prepare a
memorandum setting forth the terms of such resolution and signed by each party.
If no agreement is reached with thirty (30) days after delivery of the Dispute
Notice, any of ▇▇▇▇▇▇▇, the Indemnitee seeking indemnification, DIS or Digirad
Corporation may demand arbitration of the matter and the matter shall be settled
by arbitration conducted in accordance with this Agreement. The decision of the
arbitrators as to the validity and amount of any claim shall be final, binding
and conclusive upon the parties to the arbitration.
3. DEFENSE OF CLAIMS. If any Action or Proceeding is
filed or initiated against any Indemnitee, written notice thereof shall be given
to ▇▇▇▇▇▇▇ (and, if different, to DIS and Digirad Corporation) as promptly as
practicable (and in any event within ten (10) days after the service of the
citation or summons); provided, however, that the failure of any Indemnitee to
give timely notice to ▇▇▇▇▇▇▇ shall not affect rights to indemnification
hereunder except to the extent that ▇▇▇▇▇▇▇ has been materially prejudiced by
such failure to give timely notice, and the failure of the Indemnitee to give
either DIS or Digirad Corporation notice shall (a) oblige ▇▇▇▇▇▇▇ to notify DIS
and Digirad (if they are not the Indemnitee notifying ▇▇▇▇▇▇▇ of the Action or
Proceeding), and (b) the 15 day period referred to below within which ▇▇▇▇▇▇▇
must assume the defense of the Action or Proceeding shall be extended to 25 days
if and only if prior to the 15th day, ▇▇▇▇▇▇▇ has given notice to DIS and
Digirad Corporation where the Indemnitee has failed to do so. After such notice,
if ▇▇▇▇▇▇▇ shall acknowledge in writing to the Indemnitee providing notice to
▇▇▇▇▇▇▇ that ▇▇▇▇▇▇▇ shall be obligated under the terms of his indemnity
hereunder in connection with such Action or Proceeding, then ▇▇▇▇▇▇▇ shall be
entitled, if he so elects, to take control of the defense and investigation of
such Action or Proceeding and to employ and engage attorneys of his own choice
to handle and defend the same, such attorneys to be reasonably satisfactory to
the Indemnitee giving notice of the Action or Proceeding (and, if different, to
DIS and Digirad Corporation), at ▇▇▇▇▇▇▇'▇ cost, risk and expense (unless (i)
▇▇▇▇▇▇▇ has failed to assume the defense of such Action or Proceeding or (ii)
the named parties to such Action or Proceeding include both ▇▇▇▇▇▇▇ and the
subject Indemnitee, and such Indemnitee and its counsel determine in good faith
that there may be one or more legal defenses available to such Indemnitee that
are different from or additional to those available to ▇▇▇▇▇▇▇ and that joint
representation would be inappropriate), and to compromise or settle such Action
or Proceeding, which compromise or settlement shall be made only with the
written consent of the subject Indemnitee (and, if different, DIS and Digirad
Corporation), such consent not to be unreasonably withheld. The subject
Indemnitee (and, if different, DIS and Digirad Corporation) may withhold such
consent if such compromise or settlement would materially adversely affect the
conduct of the business of any of the subject Indemnitee, DIS and/or Digirad
Corporation. Notwithstanding the foregoing, the subject Indemnitee (and, if
different, DIS and Digirad Corporation) may not withhold consent if such
compromise or settlement includes an unconditional release of claims against the
subject Indemnitee (and, if different, DIS and Digirad Corporation). If (i)
▇▇▇▇▇▇▇ fails to assume the defense of such Action or Proceeding within
2.
fifteen (15) days after receipt of notice thereof pursuant to this Agreement, or
(ii) the named parties to such Action or Proceeding include both ▇▇▇▇▇▇▇ and the
subject Indemnitee and the subject Indemnitee and his, her or its counsel
determine in good faith that there may be one or more legal defenses available
to such Indemnitee that are different from or additional to those available to
▇▇▇▇▇▇▇ and that joint representation would be inappropriate, the subject
Indemnitee against which such Action or Proceeding has been filed or initiated
will (upon delivering notice to such effect to ▇▇▇▇▇▇▇) have the right to
undertake, at ▇▇▇▇▇▇▇'▇ cost and expense, the defense, compromise or settlement
of such Action or Proceeding on behalf of and for the account and risk of
▇▇▇▇▇▇▇; provided, however, that such Action or Proceeding shall not be
compromised or settled without the written consent of ▇▇▇▇▇▇▇, which consent
shall not be unreasonably withheld. In the event the subject Indemnitee assumes
defense of the Action or Proceeding, such Indemnitee will keep ▇▇▇▇▇▇▇
reasonably informed of the progress of any such defense, compromise or
settlement and will consult with, when appropriate, and consider any reasonable
advice from, ▇▇▇▇▇▇▇ of any such defense, compromise or settlement.
4. LIABILITY. ▇▇▇▇▇▇▇ shall be liable for any settlement
of any action effected pursuant to and in accordance with this Agreement and for
any final judgment (subject to any right of appeal), and ▇▇▇▇▇▇▇ agrees to
indemnify and hold harmless the subject Indemnitee (and all Indemnitees) from
and against any Damages by reason of such settlement or judgment. Furthermore,
regardless of whether ▇▇▇▇▇▇▇ or any given Indemnitee takes up the defense,
▇▇▇▇▇▇▇ will pay reasonable costs and expenses in connection with the defense,
compromise or settlement for any Action or Proceeding under this Agreement.
5. COOPERATION. Each Indemnitee shall cooperate in all
reasonable respects with ▇▇▇▇▇▇▇ and his attorneys in the investigation, trial
and defense of any Action or Proceeding and any appeal arising therefrom;
provided, however, that any Indemnitee that is named in such Action or
Proceeding, and DIS and Digirad Corporation may, at its own cost, participate in
the investigation, trial and defense of such Action or Proceeding and any appeal
arising therefrom. ▇▇▇▇▇▇▇ shall pay all expenses due under this Agreement as
such expenses become due.
6. SECURITY. As collateral for and to secure (a) the
payment and performance of ▇▇▇▇▇▇▇ under this Agreement, and (b) any and all
obligations ▇▇▇▇▇▇▇ may have or acquire under the A/P Agreement and the other
Acquisition Documents, ▇▇▇▇▇▇▇ hereby grants to DIS and Digirad Corporation a
security interest (which shall be of no less than first priority) in all
presently owned or hereafter acquired capital stock of ▇▇▇▇▇▇▇ in either DIS or
Digirad Corporation, together with all dividends and distributions received at
any time by ▇▇▇▇▇▇▇ on account of such capital stock, and together with whatever
may be received by ▇▇▇▇▇▇▇ on account of said capital stock (whether cash,
additional stock, or other personal property of any kind), together with all
proceeds of any of the foregoing. In addition, ▇▇▇▇▇▇▇ covenants and agrees to
execute and deliver to DIS and Digirad Corporation such further and additional
documentation as either DIS or Digirad Corporation may reasonably request to
provide DIS and Digirad a duly perfected, first priority security interest in
all such collateral described in this Section 6.
3.
Executed as of this ___ day of _________, September, 2000.
---------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
4.
EXHIBIT H
CERTIFICATE OF THE SECRETARY OF THE EACH COMPANY
CERTIFICATE OF NUCLEAR IMAGING SYSTEMS, INC.
BY ITS SECRETARY
Pursuant to the
Asset Purchase Agreement dated September ___,
2000 (the "Purchase Agreement") by and among Digirad Imaging Systems, Inc., a
Delaware corporation, and Nuclear Imaging Systems, Inc., a Pennsylvania
corporation, the undersigned hereby certifies as follows:
1. The undersigned is the duly elected, qualified and
acting Secretary of Nuclear Imaging Systems, Inc. (the "Company"), and, as such,
the undersigned is familiar with the facts certified herein.
2. Attached hereto as EXHIBIT A is a true and complete
copy of the Articles of Incorporation and bylaws of the Company certified by the
Secretary of State of Pennsylvania.
3. Attached hereto as EXHIBIT B is a certificate of each
appropriate Secretary of State certifying the good standing of the Company in
its state of incorporation.
4. Attached hereto as EXHIBIT C are resolutions relating
to proceedings of and action taken by the Company's board of directors and
stockholders, relating to approval of the Purchase Agreement and the
transactions contemplated thereby, all of which resolution are true, correct and
complete and remain in effect, and have not been modified, amended, rescinded or
revoked, as of the date hereof.
5. Each of the persons named below is the duly elected
and qualified incumbent in the office of the Company set forth opposite his or
her name and the signature set forth opposite his or her name is true and
correct signature.
NAME TITLE SIGNATURE
---- ----- ---------
President
---------------------- --------------------------
Chief Financial Officer
---------------------- --------------------------
Secretary
---------------------- --------------------------
IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Secretary this ____ day of _________, 2000.
----------------------------------------
Title:
CERTIFICATE OF CARDIOVASCULAR CONCEPTS, P.C.
BY ITS SECRETARY
Pursuant to the
Asset Purchase Agreement dated September ___,
2000 (the "Purchase Agreement") by and among Digirad Imaging Systems, Inc., a
Delaware corporation, Nuclear Imaging Systems, Inc., a Pennsylvania corporation,
and Cardiovascular Concepts, a Pennsylvania professional corporation, the
undersigned hereby certifies as follows:
1. The undersigned is the duly elected, qualified and
acting Secretary of Cardiovascular Concepts, P.C. (the "Company"), and, as such,
the undersigned is familiar with the facts certified herein.
2. Attached hereto as EXHIBIT A is a true and complete
copy of the Articles of Incorporation and bylaws of the Company certified by the
Secretary of State of Pennsylvania.
3. Attached hereto as EXHIBIT B is a certificate of each
appropriate Secretary of State certifying the good standing of the Company in
its state of incorporation.
4. Attached hereto as EXHIBIT C are resolutions relating
to proceedings of and action taken by the Company's board of directors and
stockholders, relating to approval of the Purchase Agreement and the
transactions contemplated thereby, all of which resolution are true, correct and
complete and remain in effect, and have not been modified, amended, rescinded or
revoked, as of the date hereof.
5. Each of the persons named below is the duly elected
and qualified incumbent in the office of the Company set forth opposite his or
her name and the signature set forth opposite his or her name is true and
correct signature.
NAME TITLE SIGNATURE
---- ----- ---------
President
---------------------- --------------------------
Chief Financial Officer
---------------------- --------------------------
Secretary
---------------------- --------------------------
IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Secretary this ____ day of _________, 2000.
Title:
-------------------------------------
Approved as to form and content:
----------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇, President
---------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, sole shareholder of the Company
EXHIBIT I
RADIATION SAFETY OFFICER SERVICES AGREEMENT
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement"), dated as of ________,
2000, is entered into by and between DIGIRAD IMAGING SYSTEMS, INC., a Delaware
corporation (the "Company"), and __________________, an individual (the
"Consultant").
WHEREAS, the Company is, concurrent with the execution of this
Agreement, purchasing certain assets of Nuclear Imaging Systems, Inc ("NIS")
pursuant to that certain
Asset Purchase Agreement dated of even date herewith
(the "Purchase Agreement");
WHEREAS, the Purchase Agreement requires the Company and the
Consultant to enter into this Agreement as a condition to the Company's
obligation to consummate the transactions contemplated under the Purchase
Agreement; and
WHEREAS, the Company desires the Consultant to provide the
services described herein and in the Attachments hereto, and the Consultant
desires to provide such services to the Company, on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the mutual covenants set
forth in this Agreement and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and the Consultant
hereby agree as follows:
1. TERM. The Company hereby retains the Consultant to
provide the Consulting Services (defined below) to the Company for an initial
period commencing on the date hereof and ending one year hereafter (the "Initial
Period"). This Agreement shall automatically renew for additional six-month
terms (each a "Subsequent Period") unless either party has provided the other
party with notice of its intent not to renew, at least thirty (30) days prior to
the end of the Initial Period or any Subsequent Period, as the case may be. The
Initial Period and all Subsequent Periods, if any, shall collectively be
referred to herein as the "Consulting Period."
2. NATURE OF CONSULTING SERVICES. During the Consulting
Period, the Consultant shall perform such services for the Company as may be
requested from time to time by the Company, including, but not limited to, those
services set forth in ATTACHMENT A hereto (the "Consulting Services"). The
Consultant shall report directly to the Chief Executive Officer of the Company
and shall provide the Consulting Services in accordance with the instructions of
the Chief Executive Officer of the Company.
3. TIME AND EFFORT. The Consultant shall provide the
Consulting Services personally at such times and locations as shall be requested
by the Company; provided, however, that under no circumstances shall Consultant
spend less than sufficient time to perform the
services as required under (i) the Materials License(s) described in ATTACHMENT
A (the "Materials License(s)") and (ii) all applicable laws, rules and
regulations relating to the Materials Licenses and the Consulting Services. The
Consultant shall be available within a reasonable period of time during the
normal business hours of the Company to provide the Consulting Services by
telephone or in person.
4. METHOD OF PERFORMING SERVICES.
a. PERFORMANCE OF OBLIGATIONS BY THE
CONSULTANT. Subject to the terms of this Agreement, the Consultant and the
Company shall together determine the method, details and means of performing the
Consulting Services to be provided under this Agreement. Except as set forth in
the description of the Consulting Services on ATTACHMENT A, the Consultant shall
have no authority to obligate or incur on behalf of the Company any expense,
liability or obligation, or to enter into any contract on behalf of the Company
with respect to any expense, liability or obligation, without the prior written
approval of the Company. The Consultant shall in all respects perform the
Consulting Services required to be performed by the Consultant hereunder in a
diligent and competent manner and shall comply with all provisions of the
Materials License(s) and all laws and regulations applicable thereto.
b. COOPERATION BY THE COMPANY. The Company
shall provide access to all documents and other information reasonably necessary
to enable the Consultant to perform the Consulting Services under this
Agreement. In the event that the Consultant deems it appropriate to perform on
the Company's premises any or all of its duties hereunder, the Company shall
furnish office space on its premises for use by the Consultant during the
Consulting Period for such purposes.
c. ACKNOWLEDGEMENT OF REPORTING RELATIONSHIPS.
The Consultant further acknowledges and agrees that all advice, recommendations
and other communications between the Consultant and the Company contemplated
hereunder will be made between the Consultant and the Chief Executive Officer of
the Company, or such other personnel as shall be designated by the Chief
Executive Officer.
d. CERTIFICATION AND TRAINING. The Consultant
represents and warrants that he is familiar with the provisions of the Materials
License(s) and all applicable laws thereto. The Consultant further represents
and warrants that het has obtained all certifications, experience and training
required under the laws, rules and regulations applicable to and under the terms
of the Materials License(s).
5. COMPENSATION.
a. CONSULTING FEES. In consideration for the
Consulting Services rendered to the Company by the Consulting pursuant to this
Agreement, the Company shall pay to the Consultant a consulting fee in the
amount of $150 per route per month ("consulting Fee"). The Consulting Fee
required to be paid by the Company shall be payable monthly in arrears;
PROVIDED, HOWEVER, that the amount of such monthly Consulting Fee shall be
prorated for any partial month during the Consulting Period.
-2-
b. REIMBURSEMENT OF EXPENSES. The Company shall
reimburse the Consultant for all reasonable out-of-pocket expenses incurred by
the Consultant in connection with the performance of the Consulting Service.
Reimbursement of such approved expenses shall be paid by the Company within
thirty (30) business days after receipt of a written statement of the Consultant
setting forth (in reasonable detail) the description and amount of such incurred
expenses.
c. REIMBURSEMENT OF LICENSURE FEES. The Company
shall reimburse the Consultant for all licensure fees incurred by the Consultant
in connection with the performance of the Consulting Services. Reimbursement of
such licensure fees shall be paid by the Company within thirty (30) days after
receipt of a written statement of the Consultant setting forth the description
and amount of such incurred licensure fees.
6. CONFIDENTIAL NON-DISCLOSURE. During the Consulting
Period and at all times thereafter, Consultants agrees as follows:
a. DEFINITION OF CONFIDENTIAL INFORMATION.
Consultant understands that the Company possesses and will possess Proprietary
Information which is important to its business. For purposes of this Agreement,
"Proprietary Information" is information that was or will be developed, created,
or discovered by or on behalf of the Company, or which became or will become
known by, or was or is conveyed to the Company (including, without limitation,
any confidential and proprietary information that the Company purchased from NIS
under the Asset Purchase Agreement), which has commercial value in the Company's
business. "Proprietary Information" includes, but is not limited to, information
about trade secrets, product specifications, data, procedures, know-how,
formulae, compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions, models, documentation, techniques, diagrams,
flowcharts, new products and new technology information, product prototypes,
product copies, manufacturing, development or marketing techniques, material
development or marketing timetables, strategies and development plans, and
ideas, past, current and planned research and development, current and planned
manufacturing distribution methods and processes, customer lists, current and
anticipated customer requirements, price lists, market studies, business plans,
computer software and programs computer programs, software, source code, object
code, algorithms, designs, technology, ideas, know-how, processes, formulas,
compositions, data, techniques, improvements, inventions (whether patentable or
not), works of authorship, business and product development plans, the salaries
and terms of compensation of Company employees and other consultants, customers
and other information concerning the Company's actual or anticipated business,
research or development, or which is received in confidence by or for the
Company from any other person. Consultant understands that the consulting
arrangement between Consultant and the Company creates a relationship of
confidence and trust between Consultant and the Company with respect to
Proprietary Information.
b. Consultant understands that the Company
possesses or will possess "Company Materials" which are important to its
business. For purposes of this Agreement, "Company Materials" are documents or
other media or tangible items that contain or embody Proprietary Information or
any other information concerning the business, operations or plans of
-3-
the Company, whether such documents have been prepared by Consultant or by
others. "Company Materials" include, but are not limited to, blueprints,
drawings, photographs, charts, graphs, notebooks, customer lists, computer
disks, tapes or printouts, sound recordings and other printed, typewritten or
handwritten documents, as well as samples, prototypes, models, products and the
like.
c. All Proprietary Information and all title,
patents, patent rights, copyrights, mask work rights, trade secret rights, and
other intellectual property and rights anywhere in the world (collectively
"Rights") in connection therewith shall be the sole property of the Company.
Consultant hereby assigns to the Company any Rights Consultant may have or
acquire in such Proprietary Information. At all times, both during the term of
this Agreement and after its termination, Consultant will keep in confidence and
trust and will not use or disclose any Proprietary Information or anything
relating to it without the prior written consent of an officer of the Company.
Consultant acknowledges that any disclosure or unauthorized use of Proprietary
Information will constitute a material breach of this Agreement and cause
substantial harm to the Company for which damages would not be a fully adequate
remedy, and, therefore, in the event of any such breach, in addition to other
available remedies, the Company shall have the right (without posting any bond
or other security) to obtain temporary, preliminary and/or permanent injunctive
relief.
d. All Company Materials shall be the sole
property of the Company. Consultant agrees that during the term of this
Agreement, Consultant will not remove any Company Materials from the business
premises of the Company or deliver any Company Materials to any person or entity
outside the Company, without the Company's prior express written consent.
Consultant further agrees that, immediately upon the Company's request and in
any event upon completion of the Consulting Services, Consultant shall deliver
to the Company all Company Materials, any documents, apparatus, equipment and
other physical property or any reproduction of such property used in connection
with the performance of the Consulting Services. At all times before or after
completion of the Consulting Services, the Company shall have the right to
examine any materials relating thereto to ensure Consultant's compliance with
the provisions of this Agreement.
e. Consultant agrees to perform, during and
after the term of this Agreement, all acts deemed necessary or desirable by the
Company to permit and assist it, in evidencing, perfecting, obtaining,
maintaining, defending and enforcing Rights in any and all countries. Such acts
may include, but are not limited to, execution of documents and assistance or
cooperation in legal proceedings. Consultant hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents, as
Consultant's agents and attorneys-in-fact to act for and in behalf and instead
of Consultant, to execute and file any documents and to do all other lawfully
permitted acts to further the above purposes with the same legal force and
effect as if executed by Consultant.
f. Consultant represents that performance of
all the terms of this Agreement will not breach any agreement to keep in
confidence proprietary information acquired by Consultant in confidence or in
trust prior to the execution of this Agreement. Consultant has
-4-
not entered into, and Consultant agrees not to enter into, any agreement either
written or oral that conflicts or might conflict with Consultant's performance
of the Services under this Agreement.
g. The following information shall not be
subject to the confidentiality requirements of Section 6: (1) information in the
public domain through no action of Consultant in breach of this Agreement; or
(2) information independently developed by Consultant, or (3) information
acquired by Consultant from a third party.
7. TERMINATION. Except as provided in SECTION 10 below,
this Agreement shall terminate and the obligations and covenants of the parties
hereunder shall be of no further force and effect on the earliest to occur of
the following events:
(a) The expiration of the Consulting Period;
(b) The liquidation or dissolution of the
Company, or the transfer of all or substantially all of the assets of the
Company, other than the transfer to an entity controlled by the Company;
(c) Thirty (30) days after a party ("Breaching
Party") has received written notice from the other party of the Breaching
Party's material breach of this Agreement; provided, however, that if such
material breach is capable of being cured, this Agreement shall not terminate if
the Breaching Party cures such breach within five (5) days of receiving such
notice.
8. INDEPENDENT CONTRACTOR. The Consultant shall act
solely in a consulting and advisory capacity hereunder and in consequence shall
not have authority to act for the Company or to give instructions or orders on
behalf of the Company or to make any decisions or commitments for or on behalf
of the Company. The Consultant shall not be an employee of the Company but shall
act in the capacity of an independent contractor. The Company shall not exercise
direction or control over the Consultant in the performance of its consulting
services under this Agreement. The Consultant shall be responsible for the
withholding and payment of any and all federal, state, local or other tax
payable in respect of this Agreement.
9. INDEMNIFICATION.
(a) The Consultant shall indemnify, defend and
hold harmless the Consultant from and against all losses, liabilities, damages,
costs and expenses of any nature whatsoever (including, without limitation,
reasonable attorneys' fees and costs related thereto) which Consultant may
suffer or incur as the result of the negligence or misconduct of the Company or
its partners, shareholders, officer, directors, employees, affiliates, agents,
representatives, attorneys, successors and assigns, in the performance of its
obligation under this Agreement.
(b) the Company agrees that is shall at its sole
expense at all times during the term of this Agreement secure and maintain
adequate insurance coverage, including but not limited to, liability, negligence
and malpractice of the Consultant associated with the performance of the
Consulting Services.
-5-
10. SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS. The
rights and obligations of the parties hereto pursuant to Sections 6, 9 and 10
hereof, and the obligation of the Company to pay any and all Consulting Fees
earned as of the termination of this Agreement and any reimbursable expenses
payable to the Consultant as of such termination date, shall survive the
termination of this Agreement.
11. NOTICES. All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered personally against written receipt or by facsimile
transmission with answer back confirmation or mailed (postage prepaid by
certified or registered mail, return receipt requested) or by overnight courier
to the parties at the following addresses or facsimile numbers:
If to the Consultant, to:
-----------------------------------
-----------------------------------
Facsimile No.:
--------------------
If to the Company, to:
Digirad Imaging Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this SECTION 11, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this SECTION 11, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this SECTION 11, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
12. OBLIGATIONS CONTINGENT ON PERFORMANCE. The
obligations of the Company hereunder, including its obligation to pay the
compensation provided for herein, are contingent upon the Consultant's
performance of its obligations hereunder.
13. ENTIRE AGREEMENT. This Agreement, the Purchase
Agreement and the documents executed in connection with the Purchase Agreement,
supersede all prior discussions
-6-
and agreements among the parties with respect to the subject matter hereof and
contain the sole and entire agreement between the parties hereto with respect
thereto.
14. WAIVER. Any term or condition of this Agreement may
be waived at any time by the party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party hereto of any term or condition of this Agreement, in any one or
more instances, shall be deemed to be or construed as a waiver of the same or
any other term or condition of this Agreement on any future occasion. All
remedies, either under this Agreement or by law or otherwise afforded, will be
cumulative and not alternative.
15. AMENDMENT. This Agreement may be amended,
supplemented or modified only by a written instrument duly executed by or on
behalf of each party hereto.
16. NO THIRD PARTY BENEFICIARY. The terms and provisions
of this Agreement are intended solely for the benefit of each party hereto and
the Company's successors or assigns, and it is not the intention of the parties
to confer third-party beneficiary rights upon any other person or entity.
17. NO ASSIGNMENT; BINDING EFFECT. This Agreement is
binding upon, inures to the benefit of and is enforceable by the parties hereto
and any successors or assigns of the Company. The Consultant shall not be
entitled to assign its right, interest or obligations under this Agreement
without the prior written consent of the Company, which consent shall not be
reasonable withheld.
18. HEADINGS. The headings used in this Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
19. SEVERABILITY. The Company and the Consultant intend
all provisions of this Agreement to be enforced to the fullest extent permitted
by law. Accordingly, if a court of competent jurisdiction determines that the
scope and/or operation of any provision of this Agreement is too broad to be
enforced as written, the Company and the Consultant intend that the court should
reform such provision to such narrower scope and/or operation as it determines
to be enforceable. If, however, any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future law, and not subject
to reformation, then (i) such provision shall be fully severable, (ii) this
Agreement shall be construed and enforced as if such provision was never a part
of this Agreement, and (iii) the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by illegal, invalid,
or unenforceable provisions or by their severance.
20. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania
applicable to contracts executed and performed in such Commonwealth, without
giving effect to conflicts of laws principles.
21. ARBITRATION. The parties hereto agree that any and
all disputes arise in connection with, or under the terms of this Agreement,
shall be resolved through final and
-7-
binding arbitration. Binding arbitration will be conducted in Philadelphia,
Pennsylvania in accordance with the rules and regulations of the American
Arbitration Association. The Company will bear the cost of the arbitration
filing and hearing fees, and the cost of the arbitrator. Each party will bear
its own attorneys' fees, unless otherwise decided by the arbitrator. The parties
hereto understand that the arbitration shall be instead of any civil litigation
and that the arbitrator's decision shall be final and binding to the fullest
extent permitted by law and enforceable by any court having jurisdiction
thereof.
22. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by facsimile, each of which will be deemed an
original, but all of which together will constitute one and the same instrument.
[SIGNATURE PAGE TO FOLLOW]
-8-
IN WITNESS WHEREOF, each of the parties hereto has duly
executed this Agreement as of the date first above written.
DIGIRAD IMAGING SYSTEMS, INC.,
a Delaware corporation
By:
--------------------------
Name:
------------------------
Title:
-----------------------
CONSULTANT
------------------------------
[SIGNATURE PAGE TO THE CONSULTING AGREEMENT]
ATTACHMENT A
DESCRIPTION OF CONSULTING SERVICES
1. TITLE
Radiation Safety Officer
2. MATERIALS LICENSE(S)
[LIST APPLICABLE LICENSE NUMBER AND DESCRIPTION]
3. DESCRIPTION OF SERVICES
a. Consultant along with radiation physicist is responsible for
the oversight of the radiation protection program of the Company.
b. Consultant along with radiation physicist shall perform the
services necessary to be qualified as a Radiation Safety Officer under the
Materials License(s) and applicable laws, rules and regulations, including,
without limitation, the following:
i. Identify radiation safety problems;
ii. Investigate radiation safety problems such as
overexposures, accidents, spills, losses, thefts, unauthorized receipts, uses,
transfers, disposals, mis-administrations, and other deviations from approved
radiation safety practice and implement corrective actions as necessary;
iii. Initiate, recommend or provide corrective actions for
radiation safety problems;
iv. Verify implementation of corrective actions; and
v. Retain records of all items listed under all
applicable laws.
c. Consultant shall have sufficient authority, organizational
freedom, and management prerogative, to communicate with and direct personnel
regarding applicable regulations and Materials License(s) provisions, to
terminate unsafe activities involving byproduct materials and to perform all
Consulting Services listed herein.
d. [ANY OTHER SERVICES MUTUALLY AGREED TO BY CONSULTANT AND
COMPANY AND EVIDENCED BY A WRITTEN DOCUMENT ATTACHED TO AND MADE PART OF THIS
AGREEMENT.]
-10-
EXHIBIT J
MMC SERVICES AGREEMENT
SERVICES AGREEMENT
THIS SERVICES AGREEMENT (the "Agreement") is made this 29th
day of September, 2000 by and among:
1. DIGIRAD IMAGING SYSTEMS, INC., a Delaware Corporation
with its principal place of business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇. (the "Company");
2. MEDICAL MANAGEMENT CONCEPTS, INC., a Pennsylvania
Corporation with its principal place of business at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ("MMC"); and
3. ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, in his individual capacity (▇▇.
▇▇▇▇▇▇▇).
WHEREAS:
A. MMC is in the business of providing medical billing
and related services.
B. ▇▇. ▇▇▇▇▇▇▇ is the sole shareholder of MMC.
C. ▇▇. ▇▇▇▇▇▇▇ is also the sole shareholder of Nuclear
Imaging Systems, Inc., a Pennsylvania corporation ("NIS"), which on August 4,
2000 commenced a voluntary chapter 11 case, identified as Case No. 00-19698 (the
"NIS Bankruptcy Case") in the United States Bankruptcy Court for the Eastern
District of Pennsylvania (the "Bankruptcy Court").
D. ▇▇. ▇▇▇▇▇▇▇ is himself a debtor and debtor in
possession in a bankruptcy case (the "▇▇▇▇▇▇▇ Case") pending before the
Bankruptcy Court.
E. The Company is in the process of purchasing certain
assets from NIS and/or its affiliate, Cardiovascular Concepts, P.C. ("CVC") as
set forth in that certain Asset Purchase Agreement ("A/P Agreement") dated as of
September 29, 2000, a condition to the effectiveness of which is both the
approval of the sale to the Company of the assets described in the A/P Agreement
by NIS and CVC free and clear of liens under 11 U.S.C. Section 363, and the
execution and delivery of this Agreement.
F. MMC desires to provide, and the Company desires to
purchase from MMC, the Services (defined below) for (1) an initial 3-year term
as to sales, marketing and general operation services (and then month-to-month
thereafter, unless terminated with or without cause), and (2) an initial 6-month
term (and then month-to-month thereafter, unless terminated with or without
cause) as to billing and collection services, in each case subject to the terms
and conditions set forth in this Agreement. In addition, the Company desires to
acquire and
1
MMC is willing to provide access to certain space and certain employees as more
fully described below and in the exhibits attached hereto.
NOW WHEREFORE, for fair and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, it is hereby agreed as
follows:
1. PROVISION OF SERVICES
1.1 During the Term of this Agreement and upon request of
Company from time to time, MMC agrees to undertake and complete, on behalf of
and under the direction of the Company, the services more particularly described
on EXHIBIT A attached hereto, which may be amended from time to time by mutual
agreement of the parties hereto (the "Services").
1.2 As the sole source of compensation for providing the
Services, the Company shall pay MMC in accordance with the pricing schedule set
forth on EXHIBIT B attached hereto; PROVIDED THAT the Company agrees to pay to
MMC on the Effective Date as an advance against fees earned the sum of $75,000
which prepayment shall be allocated evenly over the course of the ensuing 5
months, although if the Term of the Agreement is terminated as to either the
Sales, Marketing, and Operations Services or as to the Billing and Collections
Services as set forth in Section 6.3 below, then any unallocated prepayment may
be allocated to the sums payable on account of the Services for which the Term
has been terminated.
1.3 MMC will invoice the Company on a monthly basis for
the Services provided to the Company. All payments by the Company to MMC for
fees must be made within fifteen (15) days after the date of the invoice.
2. DUTIES OF MMC; WARRANTIES
2.1 MMC shall provide the Services:
(i) in a professional and workmanlike manner, as
determined by the Company in its sole
discretion;
(ii) in accordance with applicable laws and
regulations; and
(iii) in strict accordance with the specifications
and description of the Services set forth on
EXHIBIT A attached hereto.
2.2 MMC warrants that it has adequate premises,
equipment, knowledge, experience and competent personnel to carry out the
Services pursuant to the terms and conditions of this Agreement and all
applicable laws and regulations.
2.3 MMC shall maintain and furnish a current certificate
of insurance relating to a general liability package policy covering accounts
receivables, valuable papers and records, equipment, data processing, business
income and extra expense. MMC agrees to keep such insurance in effect during the
Term of this Agreement. MMC shall provide the Company with at least thirty (30)
days prior written notice of any change in such insurance.
2
2.4 MMC shall be responsible for providing the Services
as directed by the Company in a manner necessary to meet the day-to-day
requirements of the operations of the Company. MMC is expressly authorized to
perform only the Services as directed by the Company.
2.5 MMC shall employ, engage, supervise and terminate all
management, administrative, clerical, secretarial and other non-professional
personnel ("Administrative Personnel") as it decides are reasonably necessary
for the day-to-day operations of MMC to perform the Services. All Administrative
Personnel shall be compensated by MMC, shall be employees or agents of MMC, and
shall not be, or be deemed or considered to be, employees or agents of the
Company, or joint employees, or agents of the Company, for any purpose.
2.6 MMC shall complete and submit to patients or their
health insurance plans or other third party payors, including Medicare and
Medicaid, (collectively "Payors"), invoices for all services ("Technical
Services"), provided by the Company to patients or customers in the name of, and
for the account of, the Company. The invoices shall be completed on appropriate
Payor billing and claim forms and in accordance with applicable Payor policies
and procedures. MMC shall keep and maintain accurate separate books and records
pertaining to the ▇▇▇▇▇▇▇▇ and collections relating to the Technical Services
provided by the Company to patients and customers in a businesslike manner and
in conformity with the requirements of Payors.
2.7 MMC's marketing activities on behalf of the Company
shall be in compliance with all applicable laws and regulations and all ethical
principals consistent with applicable industry standards.
2.8 MMC shall maintain an office and employ sufficient
qualified employees and agents, including adequate sales staff, to assist in
diligently performing all of its duties. MMC shall cause a qualified employee or
representative to attend sales conferences and take advantage of technical
training programs, if offered, by the Company, for such persons at MMC's
expense.
2.9 MMC shall keep the Company informed as to any
problems encountered with the Services and as to any resolutions arrived at for
those problems, and shall communicate promptly to the Company any and all
modifications, operations changes, improvements of the Services, or new customer
requirements suggested by any entity or person solicited by or making inquiries
of MMC or by any employee or agent of MMC. MMC further agrees that the Company
shall acquire and hereby assigns any and all right, title and interest in and to
any such suggested modifications, design changes or improvements of the
Services, without the payment of any additional consideration therefore either
to MMC, its employees or agents, or to any customer of MMC.
2.10 At the Company's request, MMC shall promptly submit
to the Company reports containing such pertinent information about MMC's
customers and the Services and MMC's activity within any of the "Applicable
Markets" defined in EXHIBIT B (all of which Applicable Markets are collectively
referred to as the "Territory"). The Company may reasonably request information
concerning customers and business volumes, financial
3
information and operating plans. MMC shall advise and assist the Company with
respect to sales aids and furnish available information concerning competitive
Services sold in the Territory.
2.11 At the Company's request, MMC will provide quarterly
good faith forecasts and status reports on its efforts and anticipated orders.
2.12 MMC shall abide by the Company's policies regarding
sales of its Services, including, without limitation, the Company's standard
terms and conditions and the limited warranty delivered to the Company's
customers, if any. MMC shall communicate such policies to customers and shall
not make or imply any representations to customers which alter such policies.
MMC shall not make any warranties to the customers with respect to the Services.
2.13 MMC understands that the Company shall establish the
price of the Services to the Company's customers, and that the Company is not
bound to any price with respect to an order until the Company has accepted such
order and MMC will not imply or represent anything to the contrary to any person
or entity.
2.14 MMC shall provide reasonable assistance to the
Company in securing any licenses and permits for the sale and marketing of the
Services in the Territory.
3. COLLECTIONS PROCEDURE
3.1 The Company shall establish, at its expense, a lock
box ("Lock Box") in a financial institution selected by the Company. All billing
and claim forms related to Technical Services provided by the Company to
patients or customer shall name the address of the Lock Box as the only address
for payment of accounts receivable pertaining to Technical Services ("Accounts
Receivables") and name the Lock Box account ("Lock Box Accounts") as the only
bank account for the deposit of payments on the Accounts Receivables. MMC shall
notify all Payors that the address of the Lock Box is the only address for
payment of Accounts Receivables pertaining to the Technical Services, and that
the Lock Box Account is the only bank account for the deposit of payments on the
Accounts Receivables.
3.2 If MMC shall receive directly any payments with
respect to an Account Receivable, MMC shall hold the same in trust for the
Company and shall immediately (i) deposit such payments into the Lock Box
Account at the latest on the business day following the day on which MMC
received such payments and (ii) notify the Company of its receipt and deposit of
such payments to the Lock Box Account. In no event shall MMC have any right to
any payments received or collected for or on behalf of the Company. MMC hereby
assigns any and all of its rights, if any, to any payment received or collected
for or on behalf of the Company to the Company and covenants not to encumber in
any manner any such payments.
3.3 MMC shall reconcile receipts received and deposits
made into the Lock Box and/or the Lock Box Account from the various Payors and
account debtors on the Accounts Receivable against the sums billed to or
invoiced to such Payors and account debtors and, on a monthly basis no later
than the 15th calendar day for any month for the previous month ending, provide
the Company with a report reconciling sums billed against amounts paid, balances
owing and also including an accounts receivable aging report.
4
4. INDEMNIFICATION. MMC and ▇▇. ▇▇▇▇▇▇▇ hereby agree to jointly and
severally indemnify and hold the Company and its respective agents and employees
harmless from and against all suits, claims, actions, demands, losses,
liabilities, damages, settlements, penalties, fines, lost profits, costs and/or
expenses, including without limitation reasonable legal expenses and attorneys'
fees incurred by Company directly or indirectly as a result of the Services
rendered by MMC under this Agreement. The Company hereby agrees to indemnify and
hold MMC and ▇▇. ▇▇▇▇▇▇▇ and their respective agents and employees harmless from
and against all suits, claims, actions, demands, losses, liabilities, damages,
settlements, penalties, fines, lost profits, costs and/or expenses, including
without limitation reasonable legal expenses and attorneys' fees incurred by
either of them directly or indirectly as a result of the Company's conduct of
the Mobile Business.
5. CONFIDENTIALITY/OWNERSHIP
5.1 MMC agrees to keep confidential and not disclose or
use except in performance of its obligations under this Agreement, confidential
or proprietary information relating to the Company's technology or business that
MMC learns in connection with this Agreement and any other information received
from the Company, including without limitation, to the extent previously,
currently or subsequently disclosed to MMC or otherwise: information relating to
products or technology of the Company or the properties, composition, structure,
use or processing thereof, or systems therefor, or to the Company's business
(including without limitation, computer programs, code, algorithms, schematics,
data, know-how, processes, ideas, inventions (whether patentable or not), names
and expertise of employees and consultants, all information relating to
customers and customer transactions (including patient information) and other
technical, business, financial, customer and product development plans,
forecasts, strategies and information (all of the foregoing, "Confidential
Information"). MMC shall not disclose the terms of this Agreement to any third
party without the prior written consent of the Company. MMC shall use reasonable
precautions to protect the Company's Confidential Information and employ at
least those precautions that it would employ to protect its own confidential or
proprietary information, which shall, in no event, be less than these measures
which are commercially reasonable within the industry.
5.2 MMC shall notify its employees of their
confidentiality obligations with respect to the Confidential Information and
shall require all of its employees to sign an employee proprietary information
and inventions agreement in a form reasonably acceptable to the Company. The
confidentiality obligations of MMC and its employees shall survive the
expiration or termination of this Agreement.
5.3 MMC acknowledges and agrees that due to the unique
nature of the Company's Confidential Information, there can be no adequate
remedy at law for any breach of its obligations hereunder, that any such breach
may allow MMC or third parties to unfairly compete with the Company resulting in
irreparable harm to the Company, and therefore, that upon any such breach or any
threat thereof, the Company shall be entitled to appropriate equitable relief in
addition to whatever remedies it might have at law and to be indemnified by MMC
from any losses in connection with any breach or enforcement of MMC's
obligations hereunder or the unauthorized use or release of any such
Confidential Information. MMC will notify the Company in writing immediately
upon the occurrence of any such unauthorized
5
release or other breach. Any breach of this Section 5 will constitute a material
breach of this Agreement.
5.4 All information, documents and other materials
created by MMC for the purposes of the Services to the Company are owned by the
Company. Following completion of the Services, MMC shall return all such
materials to the Company.
6. TERM AND TERMINATION
6.1 EFFECTIVENESS. The "Effective Date" of this Agreement
shall be the date upon which each of the following conditions precedent to
effectiveness is satisfied or waived in writing by the Company:
(i) This Agreement shall have been duly executed
by all parties hereto;
(ii) The Bankruptcy Court shall have entered an
order in the NIS Bankruptcy Case (which was
consolidated for administrative purposes
with the chapter 11 case of CVC) in form and
substance satisfactory to the Company
approving the sale of the assets described
in the A/P Purchase Agreement to the Company
free and clear of liens under Bankruptcy
Code ss.363 and the time period for appeals
shall have run without any appeal having
been timely filed;
(iii) All conditions precedent to the
effectiveness of the A/P Agreement shall
have been satisfied or waived in writing by
the Company;
(iv) The "Employee Lease" and "▇▇▇▇ Building
Lease" agreements attached hereto as
Exhibits "C" and "D" respectively, shall
have been duly executed by MMC and delivered
to the Company;
(v) The accounts and Lock-Box arrangements
described in Section 3 shall have been
established and the Company shall have been
granted (and is hereby granted) by MMC a
lien and security interest of first priority
in all such accounts, Lock Boxes and funds
contained therein to secure the performance
by MMC of its obligations hereunder.
6.2 TERM. This Agreement will take effect upon the
Effective Date. The length of the term during which MMC must supply Services and
the Company must compensate MMC therefor as set forth in EXHIBIT B (absent early
termination for "cause" as set forth below) will vary as between the Services
falling within the scope of the "Sales, Marketing, and General Operations
Services" referred to on EXHIBIT A and the "Billing and Collections Services"
described on EXHIBIT A as follows:
(i) SALES, MARKETING, AND GENERAL OPERATIONS
SERVICES. MMC shall provided the Services
falling under the heading "Sales, Marketing,
and General Operations Services" as set
forth on EXHIBIT A for the
6
"Sales Services Initial Term" spanning the
period from the Effective Date until the
first to occur of 36 calendar months after
the Effective Date or October 31, 2003,
unless terminated earlier by the Company for
"cause" as set forth in Section 6.3 below.
At the conclusion of the Sales Services
Initial Term, the Term of the contract
relating to "Sales, Marketing, and General
Operations Services" referred to on EXHIBIT
A shall continue from calendar month to
calendar month unless terminated earlier by
either party upon one calendar month's prior
notice.
(ii) BILLING AND COLLECTIONS SERVICES. MMC shall
provided the Services falling under the
heading "Billing and Collections Services"
as set forth on EXHIBIT A for the
"Collections Services Initial Term" spanning
the period from the Effective Date until the
first to occur of 6 calendar months after
the Effective Date or March 31, 2001, unless
terminated earlier by the Company for
"cause" as set forth in Section 6.3 below.
At the conclusion of the Collections
Services Initial Term, the Term of the
contract relating to "Billing and
Collections Services" referred to on EXHIBIT
A shall continue from calendar month to
calendar month unless terminated earlier by
the Company upon one calendar month's prior
written notice, and by MMC on two calendar
month's prior written notice.
6.3 The Sales Services Initial Term, the Collections
Services Initial Term, or any subsequent extensions of either one of them, may
be terminated, at the Company's option (and the Company may elect to either (a)
"commute" either or both of the Initial Terms into month-to-month terms, or (b)
terminate this Agreement) at any time for "cause" without notice in the event:
(i) MMC ceases doing business for any reason or
fails to adequately perform the Services as
determined by the Company in the exercise of
its reasonable discretion;
(ii) The Company is the successful purchaser for
the so-called "Fixed Business" of NIS, and
the Company elects to make offers of
employment to a material number of employees
of MMC;
(iii) MMC suffers a change in control that is not
consented to by the Company in its sole and
absolute discretion or MMC attempts to
assign this agreement to a third party
without the consent of the Company in its
sole and absolute discretion;
(iv) MMC fails to strictly comply with the
provisions of Section 3, or in any way
commingles the funds of the Company
collected by MMC with the funds of any other
person or entity, or if the Company fails to
have 100% ownership of the funds in (and, as
a prophylactic measure, a duly perfected,
first priority security
7
interest in) the sums deposited into the
Lock Box account and the funds collected by
MMC on behalf of the Company under this
Agreement;
(v) MMC or any employee, agent or representative
of MMC commits any act in derogation of the
Company interests in the funds collected by
MMC on behalf of the Company or in
derogation of the relationships between the
Company and the persons or entities from
whom such funds are being collected or in
derogation of the Technical Services
provided by the Company to patients or
customers;
(vi) MMC fails to have at least as many sales
people assigned to marketing efforts on
behalf of the Technical Services provided by
the Company, allocated among the existing
territories, as were assigned to such
territories as of date NIS filed its
bankruptcy petition on behalf of NIS when it
marketed such services to patients and
customers; or
(vi) MMC knowingly commits or expressly permits
any party to commit any breach of the
confidentiality provisions of Section 5
hereof.
6.4 EFFECT OF TERMINATION.
(i) Termination or expiration of any Term
relating to one of the two categories of
Services provided hereunder shall not affect
the Term for the second category of Services
provided under this Agreement, and in any
event, the termination of any Term of this
Agreement will not affect Sections 4, 5, 7
and 9 of this Agreement, which will in all
cases survive termination or expiration of
any Term of this Agreement and this
Agreement, regardless of the reason for
termination.
(ii) Upon termination of the Terms of either of
the categories of Services provided
hereunder, MMC shall immediately return to
the Company, all of the Company's
proprietary and confidential information
relating to that category of Services,
together with any and all documents, notes
and other materials including, without
limitation, all copies and extracts of the
foregoing and all documentation and copies
thereof, along with all documentation
necessary or appropriate for the Company to
perform such Services itself or through a
third party.
8
7. ASSIGNMENT
7.1 MMC shall have no right or ability to assign,
transfer, subcontract or sub-license any obligations or benefit under this
Agreement without the prior written consent of the Company. The Company may
assign and transfer this Agreement and its rights and obligations hereunder to
any affiliate of the Company or to any third party who succeeds to all or
substantially all of its business, stock or assets relating to its performance
under this Agreement.
8. PUBLICITY
8.1 MMC will not disclose that the Company has retained
MMC to provide the Services herein without the prior written consent of the
Company, except that it is acknowledged that this Agreement will be available to
the public by virtue of the records and filings with the Bankruptcy Court in the
NIS Bankruptcy Case, and the ▇▇▇▇▇▇▇ Bankruptcy Case.
9. RECRUITING
9.1 In the event that the Company requests MMC, in
writing, to recruit persons (each a "Recruit") to become employees of the
Company, and such Recruits identified by MMC pursuant to such written request
are (a) not currently employed by MMC, (b) which are not independent contractors
of MMC, (c) which have not previously sought employment with the Company or any
affiliate of the Company, and/or (d) which were not separately recruited by
anyone acting by or on behalf of the Company or any affiliate of the Company,
and if any such Recruit is then, as a result of such recruiting effort by MMC,
employed by the Company and remains in the employ of the Company for a
continuous 365-day period, the Company shall pay to MMC a "finders fee" equal to
10% of such Recruit's first year salary, excluding bonuses.
10. MISCELLANEOUS
10.1 The failure of either party to enforce its rights
under this agreement at any time for any period shall not be construed as a
waiver of such rights.
10.2 This Agreement, together with the exhibits hereto,
represent the sole agreement between the parties with respect to the subject
matter hereof. This Agreement supersedes all prior or contemporaneous agreements
or discussions between the parties with respect to the subject matter hereof.
10.3 No changes or modifications or waivers are to be made
to this Agreement unless evidenced in writing and signed for and on behalf of
both parties.
10.4 Nothing contained in this Agreement will be deemed to
create, or be construed as creating, a joint venture or partnership between the
parties. Neither party is, by virtue of this Agreement or otherwise, authorized
as an agent or legal representative of the other party. Neither party is granted
any right or authority to assume or to create any obligation or responsibility,
express or implied, on behalf or in the name of the other party, or bind such
other party in any manner. The parties expressly agree and understand that the
employees of MMC shall in no way be deemed to be employees of the Company and
shall not be entitled to any
9
compensation or benefits other than that described herein. MMC agrees that it
will inform its employees of the foregoing.
10.5 In the event that any provision of this agreement
shall be determined to be illegal or unenforceable, that provision shall be
limited or eliminated to the minimum extent necessary so that this Agreement
shall otherwise remain in full force and effect and enforceable.
10.6 This agreement shall be governed in all respects by
the laws of the Commonwealth of Pennsylvania without regard to its conflict of
laws provisions, and both parties agree that the sole venue and jurisdiction for
disputes arising from this Agreement shall be the appropriate state or federal
court located in Philadelphia, Pennsylvania and both parties hereby submit to
the jurisdiction of such courts.
10.7 All patient records, which include, but are not
limited to, test results and other testing information, are and shall remain the
sole property of the Company. The Company and MMC agree that all patient records
shall be regarded as Confidential Information. 10.8 This Agreement may be
executed in counterparts, each of which will be deemed an original and all of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be executed as of the date first above written.
DIGIRAD IMAGING SYSTEMS, INC.
BY:
------------------------------------------------
NAME:
---------------------------------------------
TITLE:
--------------------------------------------
MEDICAL MANAGEMENT CONCEPTS, INC.
BY:
------------------------------------------------
NAME:
---------------------------------------------
TITLE:
--------------------------------------------
---------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
10
EXHIBIT A
DESCRIPTION OF SERVICES
MMC shall provide, in addition to any additional services
agreed upon by the parties from time to time or reasonably necessary to
effectuate the Services set forth below:
CATEGORY 1: BILLING AND COLLECTION SERVICES.
MMC shall provide the Company with Medical Billing and
Collection Services as described in this Agreement, and (a) any other services
as may be reasonably requested from time to time by the Company relating to such
Medical Billing and Collection Services , and (b) any other services which may
be necessary to performing Medical Billing and Collection Services. Among the
Services that fall within this Category 1 are the Services listed in Sections
2.6 and 3 of the Agreement.
CATEGORY 2: SALES, MARKETING AND OPERATIONS SERVICES.
a. SALES & MARKETING. .MMC shall provide sales and
marketing services as directed by the Company. MMC shall provide a direct sales
representative committed to the sales and marketing activities of the Company in
each of the following States: New Jersey, Pennsylvania, Maryland, North
Carolina, Delaware, and Washington D.C. MMC shall also provide a director of
sales and a Vice President of Sales to administer the sales and marketing
activities of the Company. Such sales and marketing services shall be in a
manner reasonably acceptable to the Company.
b. OPERATIONS SERVICES. MMC shall provide general
operations services, including scheduling, coordination, contract coordination,
health physics and general operational support.
c. OTHER. Among the Services that fall within this
Category 2 are the Services listed in Sections 2.7, 2.10, 2.11 and 2.14 of the
Agreement.
EXHIBIT B
PAYMENT FOR SERVICES
In consideration of the two categories of Services provided to
the Company by MMC as identified in Exhibit A, the Company shall pay MMC, on a
monthly basis the following:
FOR BILLING AND COLLECTIONS SERVICES (CATEGORY 1):
The Company shall pay to MMC a fee equal to five percent (5%)
of "Estimated Net Revenue" as that term is defined below, which Estimated Net
Revenue figure is subject to adjustment as set forth below.
FOR SALES, MARKETING AND OPERATIONS SERVICES (CATEGORY 2):
So long as the Sales Services Initial Term (or any month to
month extensions thereof) is in effect, the Company shall pay MMC as and when
set forth in Section 1.3 of the Agreement, a fee equal to twelve and one-half
percent (12.5%) of the "Estimated Net Revenue" (as that term is defined below)
attributable to the applicable month for which payment is due, which Estimated
Net Revenue figure is subject to adjustment as set forth below.
ADJUSTMENT OF PAYMENTS DUE TO ACTUAL COLLECTIONS:
Sixty days after the end of each calendar quarter, the
Estimated Net Revenue figures calculated for each month during that quarter will
be reviewed and compared to the actual collections on account of the ▇▇▇▇▇▇▇▇
made during the months in such quarter. If the payments to MMC over the course
of the quarter (in the aggregate) for either category of Services was too low
(an "Underpayment") because the Estimated Net Revenue figure in each of the
three month in the quarter was less than the actual collections received on
account of ▇▇▇▇▇▇▇▇ generated in those months, then the Company shall pay to MMC
the amount of the Underpayment within the next 15 days (unless there remains
outstanding some portion of the prepayment provided for in Section 1.3, in which
case the Underpayment amount will be set off to reduce the pre-payment balance).
If the payment to MMC based on the Net Estimated Revenue figures during the
course of the quarter was too high (an "Overpayment"), then the Overpayment
amount shall be deducted from any sums otherwise due or coming due from the
Company to MMC or, if none (such as, for example, because the Term of the
Agreement has ended) upon demand by the Company.
If after the conclusion of the 60 day period referred to
above, there remains any uncollected sums, MMC shall continue to maintain the
records for these accounts and when and if any such accounts ("Delinquents
Accounts") are collected by MMC, MMC shall be entitled to receive (unless the
Company is entitled to an offset of some type) 12.5% of the amount actually
collected if MMC is still providing Sales Marketing and Operations Services, and
5% of the amount actually collected if MMC is still providing Billing and
Collections Services. In the event a third party other than MMC has collected
these sums, the amount payable to the third party shall be deducted from sums
otherwise payable to MMC.
ADJUSTMENTS DUE TO OPEN TERRITORIES.
Should there be a sales territory for which a sales
representative is currently responsible that is later vacated for a period
longer than 30 days (an "Open Direct Sales Territory"), payment in accordance
with the foregoing formula will be reduced in an amount equal to the salary and
benefits that would have been payable to such a representative pro rated for the
full amount of time (including the 30-day period that triggered this remedy)
that the territory is "open." Should MMC fill the vacant position, MMC must give
notice to the Company of the replacement and if the Company has not obtained
substitute coverage for the territory, the payments to MMC will return to the
formula set forth above.
DEFINITIONS:
"ESTIMATED NET REVENUE" means an estimation performed on or
immediately following the end of any given calendar month of the net revenue
generated during such month then ending determined by calculating the gross sums
billed to customers of the Mobile Business by MMC for that particular month in
the "Applicable Markets" defined below, less "Contract Allowances" (defined
below) and "Bad Debt Losses" (as defined below) as determined from time to time
for the particular month.
"APPLICABLE MARKETS" refers the markets in the Commonwealth of
Pennsylvania and the States of New Jersey, Maryland, North Carolina, and
Delaware and in the District of Columbia.
"CONTRACT ALLOWANCES" means an amount based on a percentage
agreed upon by MMC and the Company and based on MMC's historical performance by
which gross ▇▇▇▇▇▇▇▇ are to be reduced due to discounts and contractual
reductions. Contract Allowances may be adjusted monthly based on MMC's
historical performance.
"BAD DEBT ALLOWANCES" means an amount based on a percentage
agreed upon by MMC and the Company and based on MMC's historical experience by
which gross ▇▇▇▇▇▇▇▇ are to be reduced due to poor payment history or
creditworthiness of customers. Bad Debt Allowances may be adjusted monthly based
on MMC's historical experience and the customer mix.
EXHIBIT C
EMPLOYEE LEASE
EMPLOYEE LEASE AGREEMENT
This EMPLOYEE LEASE AGREEMENT is made and entered into as of
this 29th day of September, 2000 by and between Digirad Imaging Systems, Inc., a
Delaware corporation, with its principal offices located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇-▇▇▇▇ (hereinafter referred to as "CLIENT") and Medical
Management Concepts, Inc., a Pennsylvania corporation having its principal
offices located at The ▇▇▇▇ Building, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (hereinafter referred to as "MMC.")
WHEREAS, MMC and CLIENT are parties to that certain "Services
Agreement" (the "MMC Services Agreement") dated as of the date hereof;
WHEREAS, CLIENT desires, for the purpose of staffing,
healthcare professionals to fill positions on a temporary basis for coverage as
requested on an as-needed basis;
WHEREAS, MMC is willing to provide healthcare professionals to
CLIENT to meet CLIENT's temporary staffing needs;
WHEREAS, on occasion MMC may have a need to utilize healthcare
professionals to meet its own staffing needs on a temporary basis;
WHEREAS, CLIENT may, but is not obligated to, provide
healthcare professionals employed by it to MMC to meet MMC's temporary staffing
needs;
THEREFORE, for fair and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, CLIENT and MMC agree as follows:
I. MMC'S RESPONSIBILITIES.
1.1 MMC will provide healthcare professionals possessing the
requisite skills and qualifications to fill specified positions, as defined in
writing by CLIENT.
1.2 MMC will verify that candidate has required experience and
licensure as defined by CLIENT for specified position.
1.3 MMC will provide CLIENT with documentation demonstrating that
healthcare professional is fully licensed or certified, or both, dependent upon
position requirements, to perform those duties required for the specific
position and is knowledgeable about the current standards of practice for the
specified position.
1.4 MMC will provide CLIENT with certificates of Professional
Liability Insurance and Worker's Compensation Insurance covering healthcare
professional, in nature and amounts satisfactory to CLIENT.
1.5 MMC will be responsible for all OSHA training, occupational
exposure instruction, current PPD and Hepatitis B testing for all healthcare
professionals to be provided by it to CLIENT under this Agreement.
1.6 MMC will be responsible for all compensatory payments,
associated taxes or other governmental payments due to or on behalf of
healthcare professionals provided by it to CLIENT during the term of the
Agreement. MMC agrees and understands that healthcare professionals provided by
it to CLIENT are not employees of CLIENT, but rather are employees of MMC for
purposes of state and federal tax and any other required withholding, as well as
for purposes of any health or other benefits plans, stock plans, 401(k) plans or
any other benefits or programs, and any state or federal law or regulation
covering employees.
1.7 MMC will abide by all state and federal wage and hour laws,
including properly classifying personnel provided by it to CLIENT. MMC also
agrees that it will comply with the provisions of the Immigration Reform and
Control Act ("IRCA") in verifying each healthcare professional's right to work
in the United States, and will comply with all other applicable labor and
employment laws and regulations.
1.8 MMC represents and warrants that personnel provided by it to
CLIENT will not be bound by, and will not enter into, any oral or written
agreement with any other party that conflicts in any way with obligations under
this Agreement or any agreement made or to be made in connection herewith.
CLIENT reserves the right to require personnel provided to it by MMC, as a
condition to providing services to client, to execute a separate agreement
confirming that no conflict of interest exists.
1.9 MMC understands and agrees that personnel provided by it to
CLIENT will be expected to adhere to CLIENT's policies regarding workplace
conduct and may be required, as a condition to providing services to client, to
execute a non-disclosure agreement concerning CLIENT's proprietary information
and/or inventions.
1.10 MMC agrees that, at all times during and after the term of
this Agreement, it will hold protected information in strictest confidence; will
not disclose protected information to any third party without the written
consent of CLIENT's CEO; will take all reasonable steps to safeguard protected
information; and will not use protected information for any purpose other than
supplying personnel to provide services for CLIENT. As noted above, CLIENT
reserves the right to require personnel who are to be provided to it by MMC
under this Agreement, as a condition to providing services to CLIENT, to execute
a separate agreement regarding the safeguarding of protected information.
Information is "protected information" where it consists of:
o information that CLIENT considers to be proprietary
and/or confidential and which was previously or is
hereafter disclosed or made available to MMC by
CLIENT, including information relating to CLIENT or
its business, products,
patients or employees that becomes available to MMC
due to MMC's access to CLIENT's property, products,
patients or employees; or
o information that has been or is created, developed,
conceived, reduced to practice or discovered by MMC
(alone or jointly with others, including MMC's
personnel) using any protected information or any
property or materials supplied to MMC or MMC's
personnel by CLIENT; or
o information that was or is created, conceived,
reduced to practice, discovered, developed by, or
made known to the particular employee of MMC that has
been utilized by CLIENT (alone or jointly with
others) during the period that such employee was
utilized by CLIENT during his or her assignment with
CLIENT.
By way of illustration but not limitation, protected information includes:
inventions, discoveries, developments, improvements, trade secrets, know-how,
ideas, techniques, designs, processes, formulae, data and software
(collectively, "inventions"); plans for research, development, new products,
marketing and selling; budgeting and financial information; production and sales
information including prices, costs, quantities and information about suppliers
and customers; information about business relationships and business plans and
projections; and information about skills and compensation of CLIENT's
employees, consultants or other agency personnel. The use and disclosure
restrictions in this section shall also apply to proprietary or confidential
information of a third party, including but not limited to patients, received by
CLIENT and disclosed to MMC.
II. CLIENT'S RESPONSIBILITIES.
2.1 CLIENT will provide a written job description to MMC defining
education, training, job experience and any special skills required for the
position to aid MMC in choosing qualified candidates.
2.2 CLIENT will accept a healthcare professional if s/he meets the
qualifications for the specific position requested as defined by CLIENT in its
written job description; provided that CLIENT shall have the right to refuse
where CLIENT has determined that the provided candidate is not qualified for the
position requested. If CLIENT feels a healthcare professional does not meet the
job qualifications from job description provided, CLIENT will notify MMC in
writing. MMC will then provide another healthcare professional as a replacement.
2.3 CLIENT will notify the MMC representative promptly in writing
of any unsatisfactory performance or conduct of a provided healthcare
professional.
2.4 CLIENT will use the provided healthcare professional for all
scheduled hours. MMC requires a four (4) hour minimum charge per scheduled day,
unless specifically stated otherwise in this Agreement. The minimum four (4)
hour charge will apply to CLIENT if cancellation notification is not received by
MMC within twenty-four (24) hours prior to the scheduled start time.
2.5 CLIENT will provide appropriate work schedule to the MMC
representative at least one (1) week in advance, unless needed time is
specifiable, e.g. every Wednesday.
2.6 CLIENT must notify MMC in writing at least four (4) weeks
before a scheduled holiday if coverage will be needed.
2.7 CLIENT will take no steps to recruit as its own employees
persons who are provided to the CLIENT by MMC during the term of this Agreement,
except upon written approval and authorization of MMC or as otherwise agreed in
writing by the parties. CLIENT understands that MMC employees are assigned to
the CLIENT to render specific services. CLIENT further acknowledges the
considerable expense incurred by MMC to advertise, recruit, interview, evaluate,
reference check and supervise its employees. Accordingly, CLIENT may not hire
MMC supplied personnel, or contract for services through another provider to
obtain the services of any MMC personnel who had been provided by MMC during the
term of this Agreement to CLIENT, until one (1) year following the date this
Agreement expires or is terminated.
2.8 If CLIENT is discovered to have breached section 2.7, MMC
shall be entitled to a payment of 30% of the gross annual salary paid to the
healthcare professional by MMC as liquidated damages for each such breach. This
remedy shall be in addition to, and not in limitation of, any additional rights,
remedies, or damages, to which MMC is or may be entitled at law or in equity.
The payment of liquidated damages shall not be construed as a release or waiver
by MMC of the right to prevent such violation in equity or otherwise.
III. PAYMENT.
3.1 CLIENT shall pay MMC based on the following rates and terms:
3.1.1 MMC shall ▇▇▇▇ CLIENT at the hourly rate as follows:
Nuclear Medicine Technologist $30.00 - $35.00
Nuclear Medicine Technologist
With Supervisory Experience $35.00 - $40.00
Cardiac Stress Nurse RN $30.00 - $40.00
Cardiac Stress Nurse LPN $25.00 - $35.00
Driver $15.00 - $20.00
3.1.2 MMC will guarantee the above rates for the effective
period of this Agreement. MMC reserves the right to notify CLIENT in writing
thirty (30) days prior to renewal of any rate changes.
3.1.3 Hours worked shall consist of the time the healthcare
professional begins and ends the project or task for which he or she is to be
utilized by CLIENT (subject to any applicable minimums) as demonstrated on
documentation provided to the CLIENT by and signed by an authorized
representative of CLIENT, inclusive of any travel time if in a company van.
IV. INVOICING.
Invoicing will be done on a monthly basis and is due upon
receipt. Interest on all accounts receivable over sixty (60) days will be 1.75
per cent per month (21% per annum). Hours will be rounded to the nearest quarter
hour for billing purposes. A 2.5 percent discount will be given if payment is
received within ten (10) days of the invoice.
V. HOLIDAYS.
Holidays are billed at 1 1/2 times the normal hourly rate. The
holiday begins at the start of the day shift and continues through the entire
night shift. The recognized holidays are as follows:
New Year's Day Thanksgiving
Memorial Day Day after Thanksgiving
July 4th Christmas Eve Day
Labor Day Christmas Day
VI. OVERTIME.
Overtime billing at 1 1/2 times the normal hourly rate will be
charged when the same healthcare professional works over forty (40) hours per
billing week for CLIENT. MMC understands and agrees that the healthcare
professionals provided by it to CLIENT are not to work hours in excess of forty
in one week unless requested or authorized to do so in writing by CLIENT.
VII. NONPAYMENT.
In the event of nonpayment of any amounts owing under this
agreement, CLIENT agrees to pay all reasonable attorney's fees and legal
expenses, incurred by MMC, in connection with the collection of such amounts,
within the limits provided by applicable state law.
VIII. TERMINATION.
8.1 This Agreement shall terminate as and when the MMC Services
Agreement terminates.
8.2 Upon termination of this Agreement, as provided above, neither
party shall have any further obligations accruing after the date of termination,
including, without limitation, payment of compensation for provision of
personnel, except for those obligations incurred prior to termination.
IX. INDEMNIFICATION.
9.1 CLIENT hereby agrees to indemnify, defend and hold harmless
MMC, its officers, directors, employees, agents, successors and assigns (each,
an "MMC Indemnitee") for
and against any and all liabilities, losses, damages, judgements, deficiencies,
fines, penalties, settlements and expenses (including, but not limited to,
reasonable attorneys' fees, expert fees and other costs of defense) which such
MMC Indemnitee suffers and which arises from any act or omission by CLIENT
and/or any one or more of CLIENT'S directors, employees, agents, successors and
assigns, and which is alleged or determined to be negligent, reckless,
intentional, or in violation of law or regulation in connection with this
Agreement. CLIENT'S obligations hereunder shall apply whether or not MMC
Indemnitee is determined or alleged to be solely, jointly and/or severally
liable.
9.2 MMC hereby agrees to indemnify, defend and hold harmless
CLIENT, its officers, directors, employees, agents, successors and assigns
(each, a "CLIENT Indemnitee") for and against any and all liabilities, losses,
damages, judgements, deficiencies, fines, penalties, settlements and expenses
(including, but not limited to, reasonable attorneys' fees, expert fees and
other costs of defense) which such CLIENT Indemnitee suffers and which arises
from any act or omission by MMC and/or any one or more of MMC'S directors,
employees, agents, successors and assigns, and which is alleged or determined to
be negligent, reckless, intentional, or in violation of law or regulation in
connection with this Agreement. MMC'S obligations hereunder shall apply whether
or not CLIENT Indemnitee is determined or alleged to be solely, jointly and/or
severally liable.
X. MISCELLANEOUS.
10.1 The term of this Agreement may be modified or extended upon
the mutual written agreement of the parties.
10.2 CLIENT and MMC agree that nothing in this agreement shall be
construed as creating an employment relationship between CLIENT and healthcare
professionals; nor is this Agreement intended to create an agency relationship
between CLIENT and MMC . In other words, neither of the parties hereto nor any
of their respective representatives or employees shall be construed to be the
agent, the employer, representative or employee of the other.
10.3 Neither party may assign any of its rights or delegate any of
its responsibilities without prior consent of the other, which consent shall not
be unreasonably withheld.
10.4 Neither party will discriminate on the basis of race, color,
sex, creed, national origin, age, handicap/disability, sexual preference,
military status or any other basis prohibited by state and/or federal law. MMC
is an equal opportunity employer.
10.5 This Agreement has been negotiated, executed and is to be
performed in and shall be governed by the laws of the Commonwealth of
Pennsylvania.
10.6 This is the entire agreement between the parties with regard
to the matters set forth herein. There are no third party beneficiaries of this
Agreement. This Agreement is in addition to the rights and obligations of the
parties set forth in the MMC Services Agreement which deals with matters other
than those set forth herein.
10.7 All notices to be given by either party to the other shall be
in writing and be sent by certified mail, postage prepaid, return receipt
requested or by recognized courier service, and
shall be deemed given on the date so mailed to the address of the party to whom
given. For purposes of this Agreement, notices to be given to MMC shall be
delivered to:
Medical Management Concepts, Inc.
The ▇▇▇▇ Building
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
And notices to CLIENT shall be delivered to:
Digirad Imaging Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
XI. CLIENT'S PROVISION OF PERSONNEL TO MMC.
As noted in the Recitals, it is contemplated by the parties
that from time to time, MMC may desire to utilize healthcare professionals who
are employed by CLIENT to meet MMC's temporary staffing needs. If written
request for such staffing is made by MMC to CLIENT, CLIENT may, but is not
required to, provide its own healthcare professionals to MMC to meet such
temporary staffing needs. If CLIENT does in fact provide personnel to MMC, then
the terms of this Agreement (including the rates of compensation) shall apply
and (i) MMC shall have all the rights and responsibilities of CLIENT, as
specified herein, with respect to the engagement pursuant to which CLIENT
provides personnel to MMC, and (ii) CLIENT shall have all the rights and
responsibilities of MMC, as specified herein, with respect to the engagement
pursuant to which CLIENT provides personnel to MMC.
[SIGNATURE PAGE TO FOLLOW]
IN WITNESS WHEREOF, the parties hereto have caused this
agreement to be executed as of the date first above written.
DIGIRAD IMAGING SYSTEMS, INC.
BY:
--------------------------------------
NAME:
-----------------------------------
TITLE:
----------------------------------
MEDICAL MANAGEMENT CONCEPTS, INC.
BY:
--------------------------------------
NAME:
-----------------------------------
TITLE:
----------------------------------
EXHIBIT D
▇▇▇▇ BUILDING LEASE
SUB-LEASE AGREEMENT
Medical Management Concepts, Inc., a Pennsylvania corporation
("MMC") agrees to sub-lease to Digirad Imaging Systems, Inc. a Delaware
corporation (Digirad") space within the premises located at The ▇▇▇▇ Building
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (the "▇▇▇▇ Building") for the
use of conducting business in the ordinary course of the administration of
Digirad's cardiovascular medical testing business to be performed by Digirad or
its designated employees or agents at the ▇▇▇▇ Building. The leased area (the
"Leased Area") shall encompass as much square footage of the ▇▇▇▇ Building
required by Digirad not to exceed five hundred (500) square feet, together with
access to all common spaces and a non-exclusive easement for egress and ingress
to leased premises over the existing streets, driveways and rights-of way in
connection with the ▇▇▇▇ Building.
a. The term of this lease shall be co-extensive with
that certain "Services Agreement" made September 29, 2000 by and among Digirad,
MMC, and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ in his individual capacity. The Leased Area shall be
utilized up to seven day(s) per week in accordance with Digirad's requirements.
b. Digirad shall have the right to terminate the lease
at any time by giving MMC thirty (30) days written notice.
c. No rent or any other fees shall be owing by Digirad
to MMC under this agreement because it is acknowledged and agreed that the
compensation and other fees paid to MMC under the Services Agreement referenced
in section a. hereof also compensate MMC for this Sub-Lease Agreement.
d. Digirad and its employees and agents shall be
permitted to use any and all utilities associated with the leased and common
space, as well as computers, printers, office supplies, facsimile machines,
telephones, and other items reasonably necessary to the conduct of Digirad's
business. All such items shall be provided by MMC at no cost to Digirad.
e. MMC and MMC's agents shall have the right to enter
the leased premises at all reasonable times, but shall not interfere with
Digirad (or any employees or agents of Digirad) or the business operations of
Digirad.
f. MMC shall not be responsible for loss of or damage to
or theft of the contents of the Leased Area belonging to MMC, except in the case
of willful or negligent acts of MMC or its agents, guests, or employees.
g. MMC agrees to maintain policies of comprehensive
general liability insurance with regard to the Leased Area.
h. Digirad shall not have the right to sublease, assign,
mortgage or pledge the Leased Area without first obtaining the written consent
of MMC.
i. MMC agrees to cooperate with Digirad and to provide
Digirad with any and all things or consents reasonably necessary to enable
Digirad to use the Leased Area in order for Digirad to operate its business. MMC
agrees to execute any additional documents requested by Digirad to effectuate
the intent of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Sub-Lease Agreement to be duly executed as of September 29, 2000.
Medical Management Concepts, Inc. Digirad Imaging Systems, Inc.
By:________________________________ By:_________________________________
Its:_______________________________ Its:________________________________
EXHIBIT K
OMITTED
EXHIBIT L
CONSULTING AGREEMENT
THIS CONSULTING AGREEMENT ("Agreement"), dated as of September
29, 2000, is entered into by and among DIGIRAD IMAGING SYSTEMS, INC., a Delaware
corporation (the "Company") and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, an individual (the
"Consultant").
WHEREAS, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ("▇▇▇▇▇▇▇") is the principal and sole
shareholder of NUCLEAR IMAGING SYSTEMS, INC. ("NIS") which is a debtor and
debtor in possession in chapter 11 case No. 00-19698 and is also the principal
of Cardiovascular Concepts, P.C. ("CVC") the debtor and debtor in possession in
chapter 11 case no. 00-19697, both of which chapter 11 cases have been
consolidated together for administrative purposes (together, the "Bankruptcy
Case"), and both of which are pending in the United States Bankruptcy Court for
the Eastern District of Pennsylvania (the "Bankruptcy Court");
WHEREAS, ▇▇▇▇▇▇▇ is himself a debtor in a chapter 11 case (the
"▇▇▇▇▇▇▇ Case") before the Bankruptcy Court;
WHEREAS, NIS and CVC have entered into an asset purchase
agreement (the "A/P Agreement") which has been approved by the Bankruptcy Court
and by which the Company has purchased the "Mobile Business" from NIS and CVC;
WHEREAS, the Company desires the Consultant to provide the
services described herein and in the Attachments hereto, and the Consultant
desires to provide such services to the Company, on the terms and conditions set
forth herein;
NOW, THEREFORE, in consideration of the mutual covenants set
forth in this Agreement and other good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the Company and the Consultant
hereby agree as follows:
1. TERM. The Company hereby retains the Consultant as an
independent contractor to provide the Consulting Services (defined below) to the
Company for a period of three (3) years (the "Initial Term") commencing on the
Commencement Date (defined below), subject to termination as and when set forth
in Section 10. This Agreement shall automatically renew for additional six (6)
month terms (each an "Subsequent Period") unless either party has provided the
other party with notice of its intent not to renew, at least thirty (30) days
prior to the end of the Initial Period or any Subsequent Period, as the case may
be, or unless terminated as set forth in Section 10. The Initial Period and all
Subsequent Periods, if any, shall collectively be referred to herein as the
"Consulting Period." The term "Commencement Date" shall mean the date when all
of the following are true: (a) all the conditions precedent to the effectiveness
of that certain Asset Purchase Agreement between the Company, NIS and CVC dated
as of September 29, 2000 have been satisfied, including the execution and
delivery to the Company by Consultant of that certain "Non-Competition and
Non-Disclosure Agreement" in the form of Exhibit "E" to the Asset Purchase
Agreement (the "Non-Competition Agreement"); (b) the
"Services Agreement" between Medical Management Concepts, Inc. ("MMC") and the
Company has been fully executed and all conditions precedent to its
effectiveness have been satisfied; (c) this Agreement has been fully executed,
and (d) the Company (in the exercise of its reasonable discretion) has no
insecurity as to the enforceability of this agreement by the Company.
2. NATURE OF CONSULTING SERVICES. During the Consulting
Period, the Consultant shall perform such services for the Company as may be
requested from time to time by the Company, including, but not limited to, those
services set forth in Attachment A hereto (the "Consulting Services"). The
Consultant shall report directly to the Chief Executive Officer (or his
designee) of the Company and shall provide the Consulting Services in accordance
with the instructions of the Chief Executive Officer of the Company.
3. TIME AND EFFORT. The Consultant shall provide the
Consulting Services personally at such times and locations as shall be requested
by the Company; provided, however, that under no circumstances shall Consultant
spend less than sufficient time to perform the services required and described
in Attachment A and all applicable laws, rules and regulations relating to the
Consulting Services. The Consultant shall be available at all times during the
normal business hours of the Company to provide the Consulting Services by
telephone or in person.
4. METHOD OF PERFORMING SERVICES.
a. PERFORMANCE OF OBLIGATIONS BY THE
CONSULTANT. Subject to the terms of this Agreement, the Consultant and the
Company shall together determine the method, details and means of performing the
Consulting Services to be provided under this Agreement. Except as set forth in
the description of the Consulting Services on Attachment A, the Consultant shall
have no authority to obligate or incur on behalf of the Company any expense,
liability or obligation, or to enter into any contract on behalf of the Company
with respect to any expense, liability or obligation, without the prior written
approval of the Company. The Consultant shall in all respects perform the
Consulting Services required to be performed by the Consultant hereunder in a
diligent and competent manner and shall comply with all laws and regulations
applicable thereto.
b. COOPERATION BY THE COMPANY. The Company
shall provide access to all documents and other information reasonably necessary
to enable the Consultant to perform the Consulting Services under this
Agreement. In the event that the Consultant deems it appropriate to perform on
the Company's premises any or all of its duties hereunder, the Company shall
furnish office space on its premises for use by the Consultant during the
Consulting Period for such purposes.
c. ACKNOWLEDGEMENT OF REPORTING RELATIONSHIPS.
The Consultant further acknowledges and agrees that all advice, recommendations
and other communications between the Consultant and the Company contemplated
hereunder will be made between the Consultant and the Chief Executive Officer of
the Company, or such other personnel as shall be designated by the Chief
Executive Officer.
d. CERTIFICATION AND TRAINING. The Consultant
represents and warrants that he is familiar with the business of providing
mobile nuclear imaging services.
e. USE OF NAMES. In its efforts, Consultant
will use the Company's then-current names for the Services (but will not
represent or imply that he or any other person or entity other than the Company
is the Company or is a part of the Company and will obtain the Company's prior
written approval of any such use) and will not add to, delete from or modify any
sales or marketing documentation or forms provided by the Company, except with
the prior written consent of the Company. Consultant will not otherwise use or
register (or make any filing with respect to) any trademark, name or other
designation relevant to the subject matter of this Agreement anywhere in the
world. Consultant will not contest anywhere in the world the use by the Company
or use authorized by the Company of any trademark, name or other designation
relevant or similar to the subject matter of this Agreement or application or
registration therefor, whether during or after the term of this Agreement.
Consultant acknowledges and agrees that Consultant has no interest in or right
to the Company's names, designations or trademarks, or any label or design or
other marks used in connection with the Company or the Services. Consultant
further acknowledges and agrees that all of its use of such trademarks, names or
other designations shall inure to the benefit of the Company.
5. COMPENSATION.
a. STOCK INCENTIVES. As an inducement to
Consultant to enter into this Agreement and the Non-Competition Agreement, and
to perform the Consulting Services in an exceptional manner, Consultant shall
receive common stock in DIGIRAD CORPORATION, a Delaware corporation ("Digirad"),
the parent corporation of the Company up to an aggregate number of 150,000
shares, provided Consultant meets the terms and conditions of the "earn out"
criteria described below:
"EARN OUT" CRITERIA. If the "Revenue" (defined below)
actually collected by the Company on account of the
Mobile Business acquired by the Company from NIS and
CVC pursuant to that certain Asset Purchase Agreement
dated as of September 29, 2000 exceeds $5,500,000
during the first 12 calendar months of the Consulting
Period, Consultant shall receive 50,000 shares of
common stock. If such Revenue as is collected by the
Company during the second 12 calendar-month period of
the Consulting Period exceeds the actual Revenue
collected during the first 12 calendar-month period
of the Consulting Period by at least 10%, Consultant
shall receive an additional 50,000 shares of common
stock of Digirad. If such Revenue as is collected by
the Company during the third 12 calendar-month period
of the Consulting Period exceeds the actual Revenue
collected during the second 12 calendar-month period
of the Consulting Period by at least 10%, Consultant
shall receive an additional 50,000 shares of common
stock of Digirad for a potential aggregate of 150,000
shares. If the Revenue collected in the second 12
months of the Consulting Period is insufficient to
entitle Consultant to the second tranche of $50,000
shares of the Company, Consultant shall be eligible
during the third 12 months of the Consulting Period
to receive a second
tranche of 50,000 shares if and only if the third
year goal is met at the same level as though the
second year's goal had been met.
For the purposes of this section 5, "Revenue" is defined as cash collected by or
on behalf of the Company for services billed during the particular 12-month
period tested, measured at the conclusion of the third calendar month after the
12-month period tested and which Revenue has been generated by the Mobile
Business from services rendered in New Jersey, Pennsylvania, North Carolina,
Delaware, Maryland, and the District of Columbia only.
b. REIMBURSEMENT OF EXPENSES. The Company shall
reimburse the Consultant for all reasonable out-of-pocket expenses incurred by
the Consultant in connection with the performance of the Consulting Service.
Reimbursement of such approved expenses shall be paid by the Company within
fifteen (15) business days after receipt of a written statement of the
Consultant setting forth (in reasonable detail) the description and amount of
such incurred expenses.
c. NO OTHER COMPENSATION. The Company shall not
be under any obligation to provide any salary, benefits or other compensation to
Consultant other than as explicitly set forth herein.
6. CONFIDENTIAL NON-DISCLOSURE. During the Consulting
Period and at all times thereafter, Consultant agrees as follows:
a. DEFINITION OF CONFIDENTIAL INFORMATION.
Consultant understands that the Company possesses and will possess Proprietary
Information which is important to its business. For purposes of this Agreement,
"Proprietary Information" is information that was or will be developed, created,
or discovered by or on behalf of the Company, or which became or will become
known by, or was or is conveyed to the Company, which has commercial value in
the Company's business. "Proprietary Information" includes, but is not limited
to, information about trade secrets, product specifications, data, procedures,
know-how, formulae, compositions, processes, designs, sketches, photographs,
graphs, drawings, samples, inventions, models, documentation, techniques,
diagrams, flowcharts, new products and new technology information, product
prototypes, product copies, manufacturing, development or marketing techniques,
material development or marketing timetables, strategies and development plans,
and ideas, past, current and planned research and development, current and
planned manufacturing distribution methods and processes, customer lists,
current and anticipated customer requirements, price lists, market studies,
business plans, computer software and programs computer programs, software,
source code, object code, algorithms, designs, technology, ideas, know-how,
processes, formulas, compositions, data, techniques, improvements, inventions
(whether patentable or not), works of authorship, business and product
development plans, the salaries and terms of compensation of Company employees
and other consultants, customers and other information concerning the Company's
actual or anticipated business, research or development, or which is received in
confidence by or for the Company from any other person. Consultant understands
that the consulting arrangement between Consultant and the Company creates a
relationship of confidence and trust between Consultant and the Company with
respect to Proprietary Information.
b. Consultant understands that the Company
possesses or will possess "Company Materials" which are important to its
business. For purposes of this Agreement, "Company Materials" are documents or
other media or tangible items that contain or embody Proprietary Information or
any other information concerning the business, operations or plans of the
Company, whether such documents have been prepared by Consultant or by others.
"Company Materials" include, but are not limited to, blueprints, drawings,
photographs, charts, graphs, notebooks, customer lists, computer disks, tapes or
printouts, sound recordings and other printed, typewritten or handwritten
documents, as well as samples, prototypes, models, products and the like.
c. All Proprietary Information and all title,
patents, patent rights, copyrights, mask work rights, trade secret rights, and
other intellectual property and rights anywhere in the world (collectively
"Rights") in connection therewith shall be the sole property of the Company.
Consultant hereby assigns to the Company any Rights Consultant may have or
acquire in such Proprietary Information. At all times, both during the term of
this Agreement and after its termination, Consultant will keep in confidence and
trust and will not use or disclose any Proprietary Information or anything
relating to it without the prior written consent of an officer of the Company.
Consultant acknowledges that any disclosure or unauthorized use of Proprietary
Information will constitute a material breach of this Agreement and cause
substantial harm to the Company for which damages would not be a fully adequate
remedy, and, therefore, in the event of any such breach, in addition to other
available remedies, the Company shall have the right (without posting any bond
or other security) to obtain temporary, preliminary and/or permanent injunctive
relief.
d. All Company Materials shall be the sole
property of the Company. Consultant agrees that during the term of this
Agreement, Consultant will not remove any Company Materials from the business
premises of the Company or deliver any Company Materials to any person or entity
outside the Company, without the Company's prior express written consent.
Consultant further agrees that, immediately upon the Company's request and in
any event upon completion of the Consulting Services, Consultant shall deliver
to the Company all Company Materials, any documents, apparatus, equipment and
other physical property or any reproduction of such property used in connection
with the performance of the Consulting Services. At all times before or after
completion of the Consulting Services, the Company shall have the right to
examine any materials relating thereto to ensure Consultant's compliance with
the provisions of this Agreement.
e. Consultant agrees to perform, during and
after the term of this Agreement, all acts deemed necessary or desirable by the
Company to permit and assist it, in evidencing, perfecting, obtaining,
maintaining, defending and enforcing Rights in any and all countries. Such acts
may include, but are not limited to, execution of documents and assistance or
cooperation in legal proceedings. Consultant hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents, as
Consultant's agents and attorneys-in-fact to act for and in behalf and instead
of Consultant, to execute and file any documents and to do all other lawfully
permitted acts to further the above purposes with the same legal force and
effect as if executed by Consultant.
f. Consultant represents that performance of
all the terms of this Agreement will not breach any agreement to keep in
confidence proprietary information acquired by Consultant in confidence or in
trust prior to the execution of this Agreement. Consultant has not entered into,
and Consultant agrees not to enter into, any agreement either written or oral
that conflicts or might conflict with Consultant's performance of the Services
under this Agreement.
7. NON-COMPETITION. In addition to the obligations of
Consultant under the Non-Competition Agreement, and not in lieu thereof,
Consultant agrees that commencing on the execution of this Agreement and
continuing until three years after the Consultation Period, Consultant will not,
without the express written permission of Company, as an employee, agent,
consultant, advisor, independent contractor, general partner, officer, director,
stockholder, investor, lender or guarantor of any corporation, partnership or
other entity, or in any other capacity directly or indirectly:
a. Participate or engage in the design,
development, manufacturing, production, marketing, sale or servicing of any
product, or the provision of any service, that directly relates to Mobile
Nuclear Imaging Services (the "Business") in the United States or in any country
in the world;
b. Induce or attempt to induce any person who
at the time of such inducement is an employee of the Company or the Company's
subsidiaries to perform work or services for any other person or entity other
than the Company or its subsidiaries;
c. Induce or attempt to induce any customer or
client of either the Company or NIS to cease doing business with the Company or
to switch some or all of their business from Company to another provider of
services similar to those provided by the Company, or
d. Permit the name of Consultant to be used in
connection with a competitive Business.
Notwithstanding the foregoing, Consultant will not be prohibited from competing
with the Company in the United States or another country, if the Company or its
affiliates, or any entity deriving title to their good will or capital stock,
ceases to carry on a like Business therein; provided, however, that this
exception to Consultant's covenant not to compete only applies to the state or
country in which the Business of the Company was previously but is no longer
carried on and does not affect the enforceability of this Paragraph in the
states or countries in which the Business is continued.
As partial consideration for the foregoing provisions of this
Section 7, the Company agrees that so long as Consultant does not breach any
provision of this Section 7 (or otherwise materially breach this Agreement or
the Non-Competition Agreement), Consultant's entitlement to receive the stock
referred to in Section 5 shall be subject to a minimum distribution of 100,000
shares which, if not previously distributed to Consultant, shall be distributed
at the conclusion of the 3 years during which Consultant is not permitted to
compete as described in this Section 7.
8. SAVINGS CLAUSE. If any restriction set forth in
Section 7 above is held to be unreasonable, then Consultant agrees, and hereby
submits, to the reduction and limitation of such prohibition to such area or
period as shall be deemed reasonable. Consultant agrees that during the period
Consultant renders services to the Company, Consultant will not engage in any
employment, business, or activity that is in any way competitive with the Mobile
Business of the Company (or natural or likely expansions thereof), and
Consultant will not assist any other person or organization in competing with
the Company or in preparing to engage in competition with the Mobile Business of
the Company (or natural or likely expansions thereof).
9. INJUNCTIVE RELIEF. Consultant expressly agrees that
the covenants set forth in Sections 7(a) and 7(c) are reasonable and necessary
to protect the Company and its legitimate business interests, and to prevent the
unauthorized dissemination of confidential Information to competitors of the
Company. Consultant also agrees that the Company will be irreparably harmed and
that damages alone cannot adequately compensate the Company if there is a
violation of Sections 6 or 7 by Consultant, and that injunctive relief against
Consultant is essential for the protection of the Company. Therefore, in the
event of any such breach, it is agreed that, in addition to any other remedies
available, the Company shall be entitled as a matter of right to injunctive
relief in any court of competent jurisdiction, plus attorneys' fees actually
incurred for the securing of such relief.
10. TERMINATION OF CONSULTING PERIOD. As noted above, the
Consulting Period shall end at the end of the Initial Period plus each
Subsequent Period as becomes effective, unless the period is terminated sooner
under this Section 10. The Consulting period may be terminated prior to the
conclusion of the Initial Period or any ensuing Subsequent Period as and when
set forth below:
a. Immediately upon the liquidation or
dissolution of the Company, or the transfer of all or substantially all of the
assets of the Company to a third party, other than the transfer to an entity
controlled by the Company or Digirad, the Consulting Period shall terminate, in
which case, the remaining stock subject to the earn out for any period for which
Consultant may still be eligible shall be promptly transferred to Consultant as
full compensation for and discharge of any damages Consultant may suffer as a
result of the early termination of the Consulting Period;
b. Thirty (30) days after Consultant has
received written notice from the Company the Consultant has materially breached
this Agreement, in which case, Consultant shall not be entitled to receive any
further compensation or stock as provided for in this Agreement. Examples of
material breach shall include, but not be limited, breaches of Section 6 or 7 of
this Agreement,
c. Sixty (60) days after Consultant provides
notice to the Company that Consultant desires to cease providing services to the
Company hereunder, in which case: (i) if Consultant provides such notice of
termination of the Consulting Period without cause, Consultant shall not be
entitled to receive any further compensation or stock as provided for in this
Agreement, and (ii) if Consultant provides such notice of termination of the
Consulting Period due to alleged material breach by the Company, the remaining
stock subject to the earn out for any period for which Consultant may still be
eligible shall be promptly transferred to
Consultant as full compensation for and discharge of any damages Consultant may
suffer as a result of the early termination of the Consulting Period. Material
breach by the Company shall be limited to the failure to deliver stock to
Consultant as set forth herein,
11. INDEPENDENT CONTRACTOR. Nothing herein contained
shall be deemed to create an agency, joint venture, partnership or franchise
relationship between parties hereto. Consultant acknowledges that it is an
independent contractor, is not an agent or employee of the Company and is not
entitled to any Company employment rights or benefits and is not authorized to
act on behalf of Company. Consultant shall be solely responsible for any and all
tax obligations of Consultant, including but not limited to, all city, state and
federal income taxes, social security withholding tax and other self employment
tax incurred by Consultant. Company shall not dictate the work hours of
Consultant during the term of this Agreement. Anything herein to the contrary
notwithstanding, the parties hereby acknowledge and agree that Company shall
have no right to control the manner, means, or method by which Consultant
performs the services called for by this Agreement. Rather, Company shall be
entitled only to direct Consultant with respect to the elements of services to
be performed by Consultant and the results to be derived by Company, to inform
Consultant as to where and when such services shall be performed, and to review
and assess the performance of such services by Consultant for the limited
purposes of assuring that such services have been performed and confirming that
such results were satisfactory. Company shall be entitled to exercise broad
general power of supervision and control over the results of work performed by
Consultant's personnel to ensure satisfactory performance, including the right
to inspect, the right to stop work, the right to make suggestions or
recommendations as to the details of the work, and the right to propose
modifications to the work.
12. INDEMNIFICATION. The Consultant shall indemnify,
defend and hold harmless the Company and its partners, shareholders, officers,
directors, employees, affiliates, agents, representatives, attorneys, successors
and assigns, and each of them (each a "Company Indemnitee"), from and against
all losses, liabilities, damages, costs and expenses of any nature whatsoever
(including, without limitation, reasonable attorneys' fees and costs related
thereto) which any such Company Indemnitee may suffer or incur as the result of
the negligence or misconduct of the Consultant in the performance of the
Consulting Services under this Agreement. Without limiting the generality of the
foregoing, the parties specifically agree that the indemnity provisions of this
Section 9 shall include any and all losses, liabilities, damages, costs,
expenses and lost profits incurred by the Company associated with any loss of
the services of the Consultant. The Company hereby agrees to indemnify and hold
Consultant harmless from and against all suits, claims, actions, demands,
losses, liabilities, damages, settlements, penalties, fines, lost profits, costs
and/or expenses, including without limitation reasonable legal expenses and
attorneys' fees incurred by Consultant directly or indirectly as a result of the
Company's conduct of the Mobile Business
13. SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS.
Termination of the Consulting period shall not terminate this Agreement. Thus,
although Consultant shall no longer be required to provide Consulting Services
to the Company and the Company shall not be obligated to provide any further
stock or compensation to Consultant after termination of the Consulting Period,
the remaining obligations, such as those set forth in Section 6, 7, and 12 shall
remain in full force and effect.
14. NOTICES. All notices, requests and other
communications hereunder must be in writing and will be deemed to have been duly
given only if delivered personally against written receipt or by facsimile
transmission with answer back confirmation or mailed (postage prepaid by
certified or registered mail, return receipt requested) or by overnight courier
to the parties at the following addresses or facsimile numbers:
If to the Consultant, to:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
c/o Nuclear Imaging Systems, Inc.
The ▇▇▇▇ Building
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇ , ▇▇ ▇▇▇▇▇
Facsimile No: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company, to:
Digirad Imaging Systems, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Executive Officer
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 14, be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 14, be deemed given upon receipt, and (iii) if
delivered by mail in the manner described above to the address as provided in
this Section 14, be deemed given upon receipt (in each case regardless of
whether such notice, request or other communication is received by any other
Person to whom a copy of such notice, request or other communication is to be
delivered pursuant to this Section). Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
15. OBLIGATIONS CONTINGENT ON PERFORMANCE. The
obligations of the Company hereunder, including its obligation to pay the
compensation provided for herein, are contingent upon the Consultant's
performance of its obligations hereunder.
16. ENTIRE AGREEMENT. This Agreement, the Purchase
Agreement and the documents executed in connection with the Purchase Agreement,
supersede all prior discussions and agreements among the parties with respect to
the subject matter hereof and contain the sole and entire agreement between the
parties hereto with respect thereto.
17. WAIVER. Any term or condition of this Agreement may
be waived at any time by the party that is entitled to the benefit thereof, but
no such waiver shall be effective unless set forth in a written instrument duly
executed by or on behalf of the party waiving such term or condition. No waiver
by any party hereto of any term or condition of this Agreement, in
any one or more instances, shall be deemed to be or construed as a waiver of the
same or any other term or condition of this Agreement on any future occasion.
All remedies, either under this Agreement or by law or otherwise afforded, will
be cumulative and not alternative.
18. AMENDMENT. This Agreement may be amended,
supplemented or modified only by a written instrument duly executed by or on
behalf of each party hereto.
19. NO THIRD PARTY BENEFICIARY. The terms and provisions
of this Agreement are intended solely for the benefit of each party hereto and
the Company's successors or assigns, and it is not the intention of the parties
to confer third-party beneficiary rights upon any other person or entity.
20. NO ASSIGNMENT; BINDING EFFECT. This Agreement is
binding upon, inures to the benefit of and is enforceable by the parties hereto
and any successors or assigns of the Company. The Consultant shall not be
entitled to assign its right, interest or obligations under this Agreement
without the prior written consent of the Company.
21. HEADINGS. The headings used in this Agreement have
been inserted for convenience of reference only and do not define or limit the
provisions hereof.
22. SEVERABILITY. The Company and the Consultant intend
all provisions of this Agreement to be enforced to the fullest extent permitted
by law. Accordingly, if a court of competent jurisdiction determines that the
scope and/or operation of any provision of this Agreement is too broad to be
enforced as written, the Company and the Consultant intend that the court should
reform such provision to such narrower scope and/or operation as it determines
to be enforceable. If, however, any provision of this Agreement is held to be
illegal, invalid, or unenforceable under present or future law, and not subject
to reformation, then (i) such provision shall be fully severable, (ii) this
Agreement shall be construed and enforced as if such provision was never a part
of this Agreement, and (iii) the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by illegal, invalid,
or unenforceable provisions or by their severance.
23. GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Pennsylvania
applicable to contracts executed and performed in such State, without giving
effect to conflicts of laws principles.
24. ARBITRATION. The Consultant agrees that any and all
disputes that the Consultant has with the Company or any of its employees, which
arise out of the Consultant's employment hereunder, the termination of the
Consultant's services, or under the terms of this Agreement, shall be resolved
through final and binding arbitration. This shall include, without limitation,
disputes relating to this Agreement, any disputes regarding the Consultant's
employment by the Company or the termination thereof, claims for breach of
contract or breach of the covenant of good faith and fair dealing, and any
claims of discrimination or other claims under any federal, state or local law
or regulation now in existence or hereinafter enacted and as amended from time
to time concerning in any way the subject of the Consultant's employment with
the Company or its termination. Binding arbitration will be conducted in
Philadelphia, Pennsylvania, in accordance with the rules and regulations of the
American Arbitration
Association. Each party will bear one half of the cost of the arbitration filing
and hearing fees, and the cost of the arbitrator. Each party will bear its own
attorneys' fees, unless otherwise decided by the arbitrator. The Consultant
understands and agrees that the arbitration shall be instead of any civil
litigation and that the arbitrator's decision shall be final and binding to the
fullest extent permitted by law and enforceable by any court having jurisdiction
thereof. Each party will bear one half of the cost of the arbitration filing and
hearing fees, and the cost of the arbitrator. Each party will bear its own
attorneys' fees, unless otherwise decided by the arbitrator. Each party will
bear one half of the cost of the arbitration filing and hearing fees, and the
cost of the arbitrator. Each party will bear its own attorneys' fees, unless
otherwise decided by the arbitrator. The parties understand and agree that the
arbitration shall be instead of any civil litigation and that the arbitrator's
decision shall be final and binding to the fullest extent permitted by law and
enforceable by any court having jurisdiction thereof. Each party shall be
entitled to pre-hearing discovery as provided by
California Code of Civil
Procedure Section 1283.05 (notwithstanding that Pennsylvania law is otherwise
applicable).
25. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by facsimile, each of which will be deemed an
original, but all of which together will constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has duly
executed this Agreement as of the date first above written.
DIGIRAD IMAGING SYSTEMS, INC.,
a Delaware corporation
By:
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Name:
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Title:
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CONSULTANT
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ATTACHMENT A
DESCRIPTION OF CONSULTING SERVICES
MARKETING, ADMINISTRATION AND PROMOTION. Consultant shall use its best efforts
to actively market, promote and administer the Mobile Business as directed by
the Company ("Services") on a continuing basis, shall comply with good business
practices and all applicable laws and regulations and shall diligently perform
all other duties as mutually agreed upon herein.