ASSET PURCHASE
AND
LIABILITIES ASSUMPTION
AGREEMENT
BY AND AMONG
MOBILE IMAGING CONSORTIUM, LIMITED PARTNERSHIP,
MOBILE IMAGING CONSORTIUM-NEW HAMPSHIRE,
AND
INSIGHT HEALTH CORP.
TABLE OF CONTENTS
1. Incorporation of Recitals . . . . . . . . . . . . . . . . .1
2. Sale and Purchase of Assets . . . . . . . . . . . . . . . .1
3. Assumption of Liabilities . . . . . . . . . . . . . . . . .1
4. Purchase Price. . . . . . . . . . . . . . . . . . . . . . .2
5. Closing: Transfer of Title and Assignment . . . . . . . . .3
6. Due Diligence Review. . . . . . . . . . . . . . . . . . . .4
7. Audit Statements. . . . . . . . . . . . . . . . . . . . . .4
8. Abandonment Date. . . . . . . . . . . . . . . . . . . . . .5
9. Consulting Agreement with ▇▇▇▇▇▇ ▇. ▇▇▇▇ Associates . . . .5
10. Further Assurances. . . . . . . . . . . . . . . . . . . . .5
11. Representations and Warranties of the Sellers . . . . . . .5
12. Representations and Warranties of the Buyer . . . . . . . .9
13. Sellers' Covenants. . . . . . . . . . . . . . . . . . . . 10
14. Buyer's Covenants . . . . . . . . . . . . . . . . . . . . 11
15. Conditions to the Obligations of Buyer. . . . . . . . . . 12
16. Escrow Agreement. . . . . . . . . . . . . . . . . . . . . 13
17. Sellers' Indemnity. . . . . . . . . . . . . . . . . . . . 14
18. Liability and Risk of Loss. . . . . . . . . . . . . . . . 14
19. Non-Competition . . . . . . . . . . . . . . . . . . . . . 14
20. Brokerage Commission. . . . . . . . . . . . . . . . . . . 14
21. Notice. . . . . . . . . . . . . . . . . . . . . . . . . . 15
22. Survival of Provisions. . . . . . . . . . . . . . . . . . 15
23. Default . . . . . . . . . . . . . . . . . . . . . . . . . 15
24. Miscellaneous Provisions. . . . . . . . . . . . . . . . . 15
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INDEX OF SCHEDULES
Schedule A Assets
Schedule B Excluded Assets
Schedule C Assumed Contracts
Schedule D Assumed Liabilities
Schedule E Allocation of Purchase Price
Schedule E(1) Tax Allocation
Schedule F Bean Consulting Agreement
Schedule G Sellers' Disclosure Schedule
Schedule H Patents/Trademarks
Schedule I Buyer's Disclosure Schedule
Schedule J Sellers' Opinion of Counsel
Schedule K Escrow Agreement
Schedule L Non-Competition Covenant
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ASSET PURCHASE
AND
LIABILITIES ASSUMPTION
AGREEMENT
THIS ASSET PURCHASE AND LIABILITIES ASSUMPTION AGREEMENT (the
"AGREEMENT"), dated as of this 3rd day of January, 1997, is made by and among
Mobile Imaging Consortium, Limited Partnership, a Maine limited partnership
with an address of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("MIC-ME"), and
Mobile Imaging Consortium-New Hampshire, a Maine general partnership with an
address of ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ("MIC-NH") (MIC-ME and
MIC-NH shall hereinafter be referred to collectively as the "SELLERS"), and
InSight Health Corp., a Delaware corporation with an address of ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("BUYER").
WHEREAS, Sellers are engaged in providing diagnostic services to their
customers and own certain tangible and intangible assets, including mobile
diagnostic imaging equipment;
WHEREAS, Sellers desire to sell certain of their assets to Buyer, all as
set forth herein;
WHEREAS, Buyer desires to purchase certain assets and assume certain
liabilities (and only such specified assets and liabilities) of the Sellers,
all as set forth herein;
NOW THEREFORE, in consideration of the premises and covenants as set
forth herein, and subject to the representations, warranties, and conditions
contained herein, the parties agree as follows:
1. INCORPORATION OF RECITALS. The recitals set forth above are
incorporated herein by reference.
2. SALE AND PURCHASE OF ASSETS. Subject to the terms and conditions
hereinafter set forth, Sellers shall sell to Buyer, and Buyer shall purchase
and acquire from Sellers, certain of the Sellers' assets, including the
Sellers' equipment, machinery, furnishing, fixtures, vehicle, computers,
software, inventory, trade names, copyrights, copyrighted materials,
telephone numbers, goodwill, contracts, leases, agreements, permits, and
licenses, a listing of which is set forth on Schedule A, attached hereto and
incorporated by reference (the "Assets"). Specifically excluded from this
Agreement and the purchase obligations herein are:
(a) the assets set forth on SCHEDULE B, attached hereto and incorporated
by reference; and
(b) all cash, cash equivalents, investment securities, property taxes
receivable, prepaid insurance premiums, tax refunds, and accounts
receivable owned by Sellers as of the Closing Date, as defined below
(the "CURRENT ASSETS").
3. ASSUMPTION OF LIABILITIES. Simultaneous with its purchase of the
Assets, Buyer shall assume the payment and performance of the obligations of
Sellers under the contracts, leases, and
agreements included among the Assets to be assumed by Buyer hereunder, which
contracts, leases, and agreements are listed on SCHEDULE C, attached hereto
and incorporated by reference. Buyer shall further assume payment of only
such other liabilities of Sellers as are specifically described on SCHEDULE
D, attached hereto and incorporated by reference. The foregoing described
liabilities shall hereinafter be referred to collectively as the "ASSUMED
LIABILITIES." Buyer shall not assume any liability or obligation for any
liability not specifically referred or scheduled herein, including any
liabilities with respect to Sellers' employees, employee benefit plans,
salaries, any unpaid overtime, accrued vacation time, back wages, associated
tax liabilities, or other benefits or obligations. Under no circumstances
shall Buyer assume or be deemed to have assumed any liability for unpaid
overtime, back wages, associated tax liabilities or other benefits arising
from or related to Seller's employment of any individual; provided that with
respect to Sellers' employees who become employees of Buyer as of the Closing
Date, if permitted under applicable law and Sellers' employment practices,
policies, and procedures, Buyer shall credit such employees for any accrued
vacation time and sick time, subject to advance reimbursement for said
obligations by Sellers in an amount to be determined and paid as of the
Closing Date.
4. PURCHASE PRICE. In addition to its assumption of the Assumed
Liabilities, Buyer shall pay to Sellers as consideration for their sale of
the Assets the sum of six million eight hundred thousand dollars ($6,800,000)
(the "PURCHASE PRICE"), to be allocated between MIC-ME and MIC-NH as set
forth on SCHEDULE E, attached hereto and incorporated by reference. The
Purchase Price shall be paid as follows:
(a) Twelve thousand five hundred dollars ($12,500) shall be deposited
with MIC-ME simultaneously with the execution of this Agreement (the
"MIC-ME DEPOSIT");
(b) Twelve thousand five hundred dollars ($12,500) shall be deposited
with MIC-NH simultaneously with the execution of this Agreement (the
"MIC-NH Deposit"); and
(c) the balance of the Purchase Price shall be paid at the Closing, as
defined below and as set forth below.
The MIC-ME Deposit and MIC-NH Deposit shall be refunded to Buyer in full
(without interest thereon) in the event that this Agreement (i) is terminated
because Buyer is unable, despite its good faith efforts, to timely obtain
Maine and New Hampshire Certificates of Need and any other regulatory
approvals necessary for the transaction prior to the Abandonment Date, as
defined in Section 8 herein; (ii) is terminated in accordance with Section 6
on or before the Due Diligence Termination Date (as defined in Section 6);
(iii) is terminated in accordance with Section 7; (iv) is terminated because
either of the Sellers are unable (for any reason other than the default of
Buyer) to consummate the transactions contemplated by this Agreement; or (v)
is terminated because Buyer's conditions to Closing set forth in Section 15
are not satisfied.
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The parties agree to allocate the Purchase Price and the Assumed Liabilities
among the Assets for all purposes (including financial accounting and tax
purposes) in accordance with the allocation set forth on SCHEDULE E(1), and
shall make all necessary filings (including those required under Internal
Revenue Code Section 1060) in accordance with that allocation.
5. CLOSING: TRANSFER OF TITLE AND ASSIGNMENT. The closing of the
transactions contemplated by this Agreement shall take place at the offices
of Van Meer & ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or
at such other place as the parties may mutually agree, at 9:00 a.m. on the
date ten (10) days after the Buyer has obtained all Certificates of Need and
all other regulatory approvals necessary for consummation of the transactions
contemplated hereby (or, if such date falls on a weekend or holiday, the
first business day thereafter) (such closing being called the "CLOSING" and
such date being called the "CLOSING DATE").
At the Closing, Sellers shall deliver to Buyer the following:
(a) Bills of Sale and Assignments transferring to Buyer all of the Assets,
together with certificates or other evidence of title to the Assets,
properly endorsed to Buyer; and
(b) Assignments and assumptions of contracts, leases, and agreements with
respect to each of Sellers' contracts, leases, and agreements among
the Assets; and
(c) Consents to assignment and assumption from each of the other parties
to such contracts, leases, and agreements, each of which consents
shall provide that Sellers are released from any further obligation
under any such contract, lease, or agreement; and
(d) Originals (or, where unavailable, attested copies) of each such
contract, lease, or agreement among the Assets; and
(e) Accurate interim financial statements for each of the Sellers for the
month ended most recently prior to the Closing; and
(f) Final accounting of the Current Assets as of the Closing; and
(g) Statement of prorations as of the Closing of taxes, rents, lease
payments, and other charges; and
(h) Opinion of Counsel to Sellers regarding the due organization and
existence of Sellers, the authority of Sellers to conclude the
transactions provided for herein and the due execution of the
instruments at the Closing and other matters set forth therein; and
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(i) Such other items as Buyer and its counsel may reasonably request.
At the Closing, Buyer shall deliver to the Sellers the following:
(a) Buyer shall deliver to MIC-NH a cashiers or certified check, or wire
transfer, in the total amount of one million one hundred fifty six
thousand dollars ($1,156,000) less the MIC-NH Deposit;
(b) Buyer shall deliver to MIC-ME a cashiers or certified check, or wire
transfer, in the total amount of five million six hundred forty-four
thousand dollars ($5,644,000) less the MIC-ME Deposit.
6. DUE DILIGENCE REVIEW. Buyer shall have the right to review and
inspect the Assets and the Assumed Liabilities and to conduct, at Buyer's
sole cost and expense, such other due diligence as Buyer shall deem
appropriate. Sellers shall cooperate with Buyer by promptly providing
reasonable access to the Assets and all information and materials reasonably
requested by the Buyer in connection therewith and the Assumed Liabilities,
all of which shall be subject to the Confidentiality Agreement referenced
below. Such inspections shall be conducted by Buyer on business days during
normal business hours, unless otherwise agreed; provided, however, that in
order to minimize disruption of Sellers' business, Buyer shall have no
contact with any employee of either Seller (except senior management) without
the prior coordination of such contact through the respective Seller. Such
due diligence review shall be completed within fourteen (14) days after the
completion of the 1996 financial audit as set forth in Section 7, but in no
event before January 31, 1997 (assuming Sellers' cooperation as set forth
above) (the "DUE DILIGENCE TERMINATION DATE") and, notwithstanding any
disclosures set forth on SCHEDULE G, Buyer shall have the right to terminate
this Agreement by written notice to the Sellers on or before the Due
Diligence Termination Date if Buyer's due diligence reveals questions or
issues, in Buyer's sole discretion, as to the nature or worth of the Assets,
the nature or extent of the Assumed Liabilities, the viability of either of
the Seller's business, the collectability of the Sellers' accounts
receivable, or any other matter impacting the transactions contemplated
herein. In the event this Agreement is terminated pursuant to this Section
6, Buyer shall have no further liabilities or obligations to Sellers other
than as set forth herein and the MIC-NH Deposit and MIC-ME Deposit shall be
refunded to Buyer within ten (10) days. In the event that this Agreement is
terminated for any reason, the Buyer shall promptly return all such
information and materials to the respective Sellers and Buyer shall continue
to be bound by the terms of that certain July 26, 1996, Confidentiality
Agreement with respect to such information.
7. AUDIT STATEMENTS. Sellers shall cause to be conducted, at their
cost and expense (except as provided below in Section 23), a certified
financial audit of each of the Sellers for the fiscal years ended 1994, 1995,
and 1996. Such audits shall be completed as soon as reasonably possible.
Buyer shall have the right to terminate this Agreement within ten (10) days
after the completion of such audits in the event such audits reveal any
material issues, in Buyer's sole discretion, as to the nature or worth of the
Assets, the nature or extent of the Assumed Liabilities, the viability of
either of the Seller's business, or any other matter impacting the transaction
-4-
contemplated herein. In the event this Agreement is terminated pursuant to
this Section 7, Buyer shall have no further liabilities or obligations to
Sellers other than as set forth herein and the MIC-NH Deposit and MIC-ME
Deposit shall be refunded to Buyer within ten (10) days. The Closing shall
be conditioned upon the completion of the audits for 1994, 1995 and 1996, and
delivery of such audits to Buyer at least fourteen (14) days before the
Closing Date.
8. ABANDONMENT DATE. Notwithstanding anything herein to the contrary,
if the Closing does not take place by the close of business on March 31, 1997
(the "ABANDONMENT DATE"), any party shall have the option to terminate this
Agreement on or within five (5) working days after the Abandonment Date;
provided, however, that if the Closing does not take place as a result solely
of any delay in obtaining any regulatory approval, the Abandonment Date
automatically shall be extended for an additional sixty (60) days; provided
further, however, that if such regulatory approval is not obtained within such
extended period, any party may terminate this Agreement. The foregoing shall
not be construed to terminate or otherwise affect any claims either party may
have against the other for breach of any obligation arising out of this
Agreement, or any other agreement entered into in connection herewith, prior
to the Abandonment Date. The parties will seek and use their reasonable
efforts to obtain all governmental and regulatory approvals for the
consummation of the transactions contemplated by this Agreement, and the
parties will cooperate with each other and their respective agents with
respect to obtaining such governmental and regulatory approvals.
9. CONSULTING AGREEMENT WITH ▇▇▇▇▇▇ ▇. ▇▇▇▇ AND ▇▇▇▇▇▇ ▇. ▇▇▇▇
ASSOCIATES. Buyer shall offer to enter into a consulting agreement with ▇▇▇▇▇▇
▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇ Associates, substantially in form and substance as
attached hereto as SCHEDULE F, attached hereto and incorporated herein.
10. FURTHER ASSURANCES. From time to time after the Closing Date,
Sellers shall give to Buyer and its representatives, auditors, and counsel
full access during normal business hours to all of the properties, books,
records, tax returns, contracts, licenses, franchises and all of the documents
of Sellers relating to the Assets and Assumed Liabilities, and shall furnish
to Buyer all information with respect thereto as Buyer may from time to time
reasonably request. From time to time after the Closing, at Buyer's request
and without further consideration, Sellers agree to execute and deliver at
Sellers' expense such other instruments of conveyance and transfer and take
such other action as Buyer reasonably may require more effectively to deliver
and vest in Buyer, and to put Buyer in legal and physical possession of, all
of the Assets and the Assumed Liabilities.
11. REPRESENTATIONS AND WARRANTIES OF THE SELLERS. The Sellers, jointly
and severally, represent and warrant to Buyer that except as set forth on the
Disclosure Schedule attached as Schedule G, attached hereto and incorporated
herein (which Disclosure Schedule makes explicit reference to the particular
representation or warranty as to which exception is taken, which in each case
shall constitute the sole representation and warranty as to which such
exception shall apply):
(a) The Assets as currently used and in effect do not violate any
applicable federal, state, local, or other governmental law,
ordinance, or regulation, or any applicable private restriction or
agreement material to the operation of
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Sellers' business, and Sellers are not aware of any such violations
that are material to the Sellers' business; and
(b) Subject to the required consents listed on Schedule G, the
conveyance and/or assignment of the Assets to Buyer will not
violate any applicable federal, state, local or other governmental
law, ordinance or regulation, or any applicable private restriction
or agreement to which Sellers are bound; and
(c) Each of MIC-ME and MIC-NH is a validly formed and legally existing
partnership. The Sellers have the full right, power, and authority
to execute and deliver this Agreement and to perform their
respective obligations hereunder, and to carry out the transactions
contemplated in this Agreement, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other
similar laws affecting creditors' rights generally. Without
limiting the generality of the foregoing, the Sellers' general
partners and limited partners have taken all action necessary to
authorize, and have duly authorized, the execution, delivery, and
performance of this Agreement by the Sellers. This Agreement
constitutes the valid and legally binding obligation of the
Sellers, enforceable in accordance with these terms and conditions;
and
(d) Except as set forth on Schedule G, there is no action, litigation,
investigation, condemnation, or proceeding of any kind pending or,
to the best of Sellers' knowledge and belief, threatened against
Sellers or any of the Assets; and
(e) Sellers have not received notice of actual or threatened
cancellation or suspension of any Certificate of Need or other
permit or license issued with respect to any of the Assets; and
(f) To the best of Sellers' knowledge and belief, no actions have been
taken by Sellers or by any other person or entity which could give
rise to:
(i) any adverse action regarding the Assets or
the operations conducted with such Assets, or
(ii) any charge of non-compliance with any
applicable federal or state law, rule, ordinance, or
regulations; and
(g) Subject to the required consents listed in Schedule G, Sellers have
good, clear, unencumbered, and marketable title to the Assets, free
and clear of all liens, and such title, rights, and interests are
freely transferable; and
(h) The Assets are fully and adequately insured by policies of
insurance for fire and extended coverage risks and liability; and
-6-
(i) Sellers have delivered or will promptly deliver to Buyer true and
correct copies of each of the contracts, leases, and agreements
included among the Assets, and all amendments and modifications
thereto, and each of such contracts, leases, and agreements is in
full force and effect, without any default by any party thereto; and
(j) Sellers have not entered into any other contract for the sale of
any of the Assets, nor are there any rights of first refusal or
options to purchase any of the Assets or any other rights of
otherwise that might prevent the consummation of the transactions
provided for in this Agreement; and
(k) The fair value of Sellers' assets substantially exceeds, and
following the consummation of the purchase and assumption
transactions provided for herein, shall substantially exceed
Sellers' liabilities, and the transactions provided for herein
shall not render either Seller insolvent; and
(l) Set forth in Schedule H is a list and brief description of all
patents, patent rights, patent applications, trademarks, trademark
applications, service marks, service ▇▇▇▇ applications, trade
names, and copyrights, and all applications for such, which are in
the process of being prepared, are owned by, or are registered in
the name of the Sellers or of which the Sellers are licensor or
licensee, or in which the Sellers have any right, and in each case
a brief description of the nature of such right. To the best of
Seller's knowledge, the Sellers own or possess adequate licenses
or other rights to use all patents, patent applications,
trademarks, trademark applications, service marks, service ▇▇▇▇
applications, trade names, copyrights, manufacturing processes,
formulae, trade secrets, and know how (collectively, "INTELLECTUAL
PROPERTY") necessary or desirable to the conduct of their
businesses as conducted and as proposed to be conducted. No claim
is pending or threatened to the effect that the operations of the
Sellers infringe upon or conflict with the asserted rights of any
other person under any Intellectual Property, and there is no basis
for any such claim (whether or not pending or threatened). No
claim is pending or threatened to the effect that any such
Intellectual Property owned or licensed by the Sellers or which the
Sellers otherwise have the right to ▇▇▇, is invalid or
unenforceable by the Sellers, and there is no known basis for any
such claim (whether or not pending or threatened). The Sellers
have not granted or assigned to any other person or entity any
right to sell or produce the products or proposed products or
provide the services or proposed services of the Sellers. No
officer, director, shareholder, partner, or employee of the Sellers
has an ownership interest in any of the trademarks, patents, or
other rights set forth in Schedule H; and
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(m) Subject to the required consents listed on Schedule G, neither the
execution and delivery of this Agreement nor the consummation of
the transactions herein contemplated, nor fulfillment of or
compliance with the terms and provisions hereof does or will: (i)
constitute a default, breach, violation, or grounds for termination
of any material agreement to which Sellers or any physician
providing services as an independent contractor or employee of
Sellers (hereinafter referred to as "Physician") is a party, or any
material license, permit, or other governmental authorization
issued to Sellers or (ii) result in the creation or imposition of
any lien, charge, or encumbrance upon any of the Assets; and
(n) Sellers have paid or made appropriate accruals for the payment of
all taxes, assessments, fees, and other governmental charges upon
any of their properties and assets required to have been paid or
accrued by them as of the Closing Date (including, without
limitation, all income, withholding, excise, unemployment, social
security, occupation, franchise, property, and import taxes,
duties, or charges, and all deficiency assessments, penalties, and
interest in respect thereof) and Sellers shall pay all such amounts
on or before the appropriate due date; and
(o) Sellers do not know of any material adverse condition or material
problem with any item of tangible property included in the Assets
and all such tangible property included in the Assets is in good
working condition; and
(p) Except as disclosed in the Schedules hereto, there are no written
or verbal employment agreements, commitments or understandings, and
all personnel are employed "at-will"; and
(q) The employee relations of Sellers are good. There is no pending
or, to the best of Sellers' knowledge, threatened employee strike,
work stoppage or labor dispute. No union representation question
exists respecting any employees of Sellers. No collective
bargaining agreement exists or is currently being negotiated by
Sellers, no demand has been made for recognition by a labor
organization by or with respect to any employees of Sellers is
taking place, and none of the employees of Sellers is represented
by any labor union or organization. There is no unfair practice
claim against Sellers before the National Labor Relations Board, or
any strike, dispute, slowdown, or stoppage pending or threatened
against or involving Sellers and none has occurred. Sellers are in
compliance with all federal and state laws respecting employment
and employment practices, terms and conditions of employment, and
wage and hours including compliance with any Internal Revenue
Service guidelines on employees and independent contracts. Sellers
have complied with all requirements with respect to the employment
of any person who is not a citizen of the United States. Sellers
are not engaged in
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any unfair labor practices (as defined in federal and state labor
laws). There are no pending or threatened equal employment
opportunity claims, wage and hour claims, unemployment compensation
claims, or workers' compensation claims against or involving
Sellers; and
(r) The accounts receivable of Sellers included with the Current Assets
are good and collectable, and Sellers will be able to collect one
million dollars ($1,000,000) of such accounts receivable between
the Closing Date and the date ninety (90) days from the Closing
Date for deposit in the escrow account referenced in Section 16
herein.
(s) To the best knowledge of the Sellers, the Sellers and their
officers, directors, shareholders, partners, and employees, and
persons who provide professional services under agreements with the
Sellers, have not engaged in any activities which are prohibited
under federal Medicare and Medicaid statutes, 42 U.S.C. S 1320a-7b,
or the regulations promulgated pursuant to such statutes or related
state or local statutes or regulations or which are prohibited by
rules of professional conduct; and
(t) No representation or warranty by the Sellers in this Agreement, and
no exhibit, schedule, or certificate furnished or to be furnished
by the Sellers pursuant hereto contains any untrue statement of a
fact, or omits to state a fact required to be stated therein or
necessary to make the statements contained herein not misleading.
There is no fact of which the Sellers are aware which has not been
disclosed in writing to Buyer, which adversely affects Sellers, or
which they believe would adversely affect the businesses,
prospects, financial condition, operations, properties, or affairs
of Sellers.
12. REPRESENTATIONS AND WARRANTIES OF THE BUYER. Buyer represents and
warrants to the Sellers that, except as set forth in the Disclosure Schedule
attached as Schedule I attached hereto and incorporated herein (which
Disclosure Schedule makes explicit reference to the particular representation
or warranty as to which exception is taken, which in each case shall
constitute the sole representation and warranty as to which such exception
shall apply):
(a) Buyer is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Buyer is
qualified to do business and is in good standing in both the State
of Maine and the State of New Hampshire. Buyer has the full right,
power, and authority to execute and deliver this Agreement and to
perform its obligations hereunder, and to carry out the
transactions contemplated in this Agreement, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium, or
other similar laws affecting creditors' rights generally. Without
limiting the generality of the foregoing, the Buyer has taken all
action necessary to authorize, and has duly authorized, the
execution, delivery, and performance
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of this Agreement by Buyer. This Agreement constitutes the valid
and legally binding obligation of Buyer, enforceable in accordance
with these terms and conditions; and
(b) The execution and delivery of this Agreement does not, and the
consummation of the transactions contemplated hereby will not,
violate any provisions of Buyer's Restated Certificate of
Incorporation or Restated Bylaws, or any judgment, decree,
mortgage, deed of trust, lease, agreement, indenture or other
instrument, law or regulation applicable to Buyer.
13. SELLERS' COVENANTS. The Sellers covenant to Buyer:
(a) Sellers shall operate and manage their businesses until the Closing
in substantially the same manner as such businesses have been
operated and managed by Sellers in the past and shall maintain the
physical condition of the Assets, reasonable wear and tear
excepted, and substantially maintain the status of the Assets until
the Closing; and
(b) Apart from sales of inventory in the ordinary course, Sellers shall
not knowingly sell, assign, or create any right, title, or interest
whatsoever in or to the Assets or create, or permit to exist, any
lien, encumbrance, or charge thereon, without promptly discharging
same; and
(c) Sellers shall advise Buyer promptly upon notification to Sellers of
any pending or threatened litigation or other legal or regulatory
action affecting the Assets, the Sellers, or Sellers' businesses;
and
(d) Sellers shall not knowingly take any action or omit to take any
action, which action or omission would have the effect of violating
any of the covenants of this Agreement or warranties or
representations of Sellers under this Agreement; and
(e) Sellers shall not execute any new contracts, leases, or agreements,
renew, extend, amend, modify, assign, or pledge any existing
contracts, leases, and agreements, or assign or pledge any amounts
payable thereunder, without the express prior written consent of
the Buyer (not to be unreasonably withheld); and
(f) Sellers shall provide to Buyer a list of the employees and
independent contractors who currently provide services incident to
the Assets and their current pay and benefits; and
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(g) Sellers shall cause all policies of insurance for fire and extended
coverage risks and liability in effect on the date of this
Agreement to be maintained in full force and effect through and
including the Closing Date; and
(h) Sellers shall take all steps necessary for them to obtain all
required consents of third parties to the assignment and assumption
of the contracts, leases, and agreements included among the Assets;
and
(i) Sellers shall obtain and/or cooperate with Buyer taking all steps
necessary for it to obtain all required consents and approvals to
the Buyer's assumption of the Assumed Liabilities pursuant to this
Agreement; and
(j) Sellers shall cooperate in Buyer's efforts to obtain the issuance
of Maine and New Hampshire Certificates of Need and other necessary
regulatory approvals; and
(k) Sellers shall not publicly disclose the terms or existence of this
Agreement, nor of any of the transactions provided for herein,
except that Sellers may disclose the fact of Buyer's agreement to
acquire the assets of Sellers to Sellers' employees as reasonably
necessary to facilitate the transaction, to governmental agencies
as necessary to obtain all regulatory approvals, and to third
parties as necessary to transfer the Assets or assign the contracts
contemplated by this Agreement; and
(l) Sellers shall not negotiate with any other party for the sale of
the Assets and Sellers shall notify Buyer of the fact of any
unsolicited offer to purchase the Assets and the identify of the
offeror; and
(m) Sellers shall cooperate in good faith with Buyer in addressing
other matters necessary to consummate the transaction; and
(n) Between the Due Diligence Termination Date and the Closing Date,
(i) no material adverse change in the results of operations,
financial condition, or business of Sellers, and no material loss
or damage to the Assets (whether or not covered by insurance),
shall have occurred; (ii) no material decline from the level of
revenues or prospects for future results shall have occurred; and
(iii) no event shall have occurred which shall materially adversely
affect the collectability of the accounts receivable included in
the Current Assets.
14. BUYER'S COVENANTS. Buyer covenants to Seller:
(a) Buyer shall cooperate in Sellers' taking all steps necessary for
them to obtain all required consents of third parties to assignment
and assumption of the contracts, leases, and agreements included
among the Assets; and
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(b) Buyer shall obtain and/or cooperate in Sellers' taking all steps
necessary for them to obtain all required consents and approvals to
Buyer's assumption of the Assumed Liabilities pursuant to this
Agreement, including, but not limited to, providing financial data
which may be reasonably required by such third party; and
(c) Buyer shall take all steps necessary for it to obtain all required
consents and approvals to the issuance of Maine and New Hampshire
Certificates of Need or other necessary regulatory approvals; and
(d) Buyer shall not publicly disclose the terms or existence of this
Agreement, nor of any of the transactions provided for herein,
EXCEPT that Buyer may disclose the fact of Buyer's agreement to
acquire the assets of Sellers to Buyer's employees and agents as
reasonably necessary to facilitate the transaction and to
governmental agencies as necessary to obtain all regulatory
approvals and as may otherwise be required by law; and
(e) Buyer shall, at least thirty (30) days prior to the Closing, notify
Sellers in writing as to which of Sellers employees Buyer intends
to hire and upon what terms, effective upon the Closing; and
(f) Buyer shall cooperate in good faith with Sellers in addressing
other details necessary to consummate the transaction.
15. CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligation of Buyer to
purchase and pay for the Assets and assume the Assumed Liabilities on the
Closing Date, and consummate any other transaction contemplated by this
Agreement, is, at its option, subject to the satisfaction, on or before the
Closing Date, of the following conditions:
(a) Buyer shall have received from counsel for the Sellers an Opinion
dated as of the Closing Date, substantially identical to the form
set forth in SCHEDULE J, attached hereto and incorporated herein.
(b) The representations and warranties contained in Section 10 of this
Agreement shall be true, complete, and correct on and as of the
Closing Date with the same effect as though such representations
and warranties have been made by the Sellers on and as of such
date, and the Sellers shall have certified to such effect to Buyer
in writing.
(c) Each of the Sellers shall have performed and complied with all
agreements contemplated herein that are required to be performed or
complied with by each of the Sellers prior to or at the Closing
Date, including completion of the audits referenced in Section 7,
which must be completed and delivered to Buyer at least fourteen
(14) days before the Closing Date.
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(d) Buyer shall have obtained all Board approvals and third-party
consents necessary to consummate the transactions contemplated
hereby; including, but not limited to, the consent of General
Electric Company, acting through GEMS, as the Buyer's primary
creditor.
(e) All corporate and other proceedings to be taken by the Sellers in
connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in form and
substance to Buyer and its counsel, and Buyer and its counsel shall
have received all such counterpart originals or certified or other
copies of such documents as they reasonably may request.
(f) Between the Due Diligence Termination Date and the Closing Date,
(i) no material adverse change in the results of operations,
financial condition of business of Sellers, and no material loss or
damage to the Assets (whether or not covered by insurance), shall
have occurred; (ii) no material decline from the level of revenues
or prospects for future results shall have occurred; and (iii) no
event shall have occurred which shall materially adversely affect
the collectability of the accounts receivable included in the
Current Assets.
(g) All necessary corporate and regulatory approvals for the
transactions contemplated by this Agreement shall have been
obtained.
(h) Buyer and its counsel shall have received copies of all supporting
documents reasonably requested by them.
(i) ▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇ Associates shall have entered
into the Consulting Agreement substantially in form and substance
as attached hereto as SCHEDULE F.
(j) Siemens' service department shall have completed an audit of the
Sellers' three MRI units and shall have brought all such units up
to manufacturer's specifications, all at Sellers' cost.
16. ESCROW AGREEMENT AND COLLECTION OF ACCOUNTS RECEIVABLE. At the
Closing, the parties will enter into the escrow agreement substantially in
the form attached hereto and incorporated herein as EXHIBIT ▇. ▇▇▇▇▇▇▇ agree
that they shall use best efforts to collect the accounts receivable included
in the Current Assets and deposit the funds received from such accounts
receivable, without any effect or deduction (including expenses) in the
escrow account, up to a maximum of one million dollars ($1,000,000). In the
event that either of the Sellers fail to take all steps necessary to collect
the accounts receivable referenced herein, Buyer, as agent of Sellers, shall
have the right to take all steps necessary to collect such accounts
receivable for deposit into the escrow account as contemplated by this
Section. In the alternative, the parties may enter into an agreement as of
the Closing Date whereby Buyer shall assume responsibility for collecting the
accounts receivable included within the Current Assets. Buyer shall be
granted a first lien security
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interest in Seller's account receivables to the extent necessary to secure
Buyer's interest hereunder. The escrowed funds shall be deposited as security
to indemnify Buyer pursuant to the provisions of Section 17.
17. SELLERS' INDEMNITY. Sellers, jointly and severally, shall
indemnify and hold harmless Buyer, its officers, directors, employees,
agents, successors and assigns, from and against any and all claims, damages,
liabilities, costs, and expenses arising out of any of the following:
(a) any obligation or liability of Sellers not assumed by
Buyer pursuant to this Agreement; or
(b) any event or circumstance involving the Assets or Sellers'
business which occurred prior to the Closing, with the exception of
the Assumed Liabilities; or
(c) any federal, state or local tax or fee incurred, accrued, or assessed
in connection with the Assets or Sellers' business with respect to any
period prior to the Closing; or
(d) the breach of any covenant, warranty, terms, condition or agreement of
the Sellers under this Agreement, or the material untruth or
inaccuracy of any representation or warranty made by the Sellers
herein, or in connection with the transactions provided for herein
(including, but not limited to, inaccurate, incomplete or misleading
financial statements).
18. LIABILITY AND RISK OF LOSS. Sellers shall remain liable for all
obligations and liabilities, costs and expenses, fixed or contingent, arising
out of the operation or ownership of any of the Assets and out of the conduct
of any business related to the Assets prior to the Closing, and shall remain
liable for all such obligations and liabilities not assumed by Buyer pursuant
to this Agreement following the Closing. All risk of loss of, and related
to, the Assets shall remain with Sellers through the Closing.
19. NON-COMPETITION. As additional consideration for Buyer's purchase
of the Assets and its assumption of the Assumed Liabilities pursuant to this
Agreement, Sellers shall deliver at Closing a Non-Competition Agreement in
the form of the attached Schedule L, executed by Sellers, their general and
limited partners, and each of their affiliated entities or individuals
specified thereon.
20. BROKERAGE COMMISSION. Sellers represent that they are responsible
for the commission, if any, owed to KPMG Peat Marwick with respect to the
transactions set forth in this Agreement. Buyer represents that it has
retained no broker in connection with this Agreement. If any claim on
behalf of any other broker or agent is made or upheld, then the party against
or through whom such claim is made shall defend, indemnify and hold the other
party harmless from and
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against any damages, costs or expenses in any way attributable to such claim,
including, but not limited to, reasonable attorneys' fees.
21. NOTICE. Whenever notice must be given under the provisions of this
Agreement, such notice must be in writing and either hand-delivered or sent
by certified mail, return receipt requested, postage prepaid, and addressed
to the parties at their respective addresses set forth in the preamble to
this Agreement (until either party notifies the other in writing of a
different address). A copy of any notice given to Buyer hereunder shall be
simultaneously provided to ▇▇▇▇ ▇. ▇▇▇▇▇, Esq., ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇. A copy of any notice given to Seller
hereunder shall be simultaneously provided to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., Van
Meer & ▇▇▇▇▇▇▇▇, P.A., ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
22. SURVIVAL OF PROVISIONS. All warranties, representations, hold
harmless, indemnity and non-competition obligations and restrictions made,
undertaken, and agreed to by Sellers under this Agreement shall survive the
Closing and the execution and delivery of the documents and instruments
executed and delivered at the Closing; provided, however, that the
representations and warranties set forth in Sections 11 and 12 shall survive
only for a period of eighteen (18) months following the Closing.
23. DEFAULT. If either of the Sellers defaults in the performance of
any obligation under this Agreement or breaches any warranty, representation,
or covenant herein as of or prior to the Closing, then Buyer, at its sole
option, may (i) terminate this Agreement, in which event (a) the full amount
of the respective Deposits shall be returned to Buyer, (b) in the event such
breach or default is due to an event, occurrence, or other matter which is
within the reasonable control of either Seller, each Seller shall pay Buyer
an additional twelve thousand five hundred dollars ($12,500) as liquidated
damages, and not as a penalty, that being a reasonable estimate of damages
that would be occasioned by such default but which damages likely would be
difficult to ascertain with certainty, and (c) no party shall have any
further rights or duties hereunder, (ii) extend or delay the Closing for a
reasonable period of time, not to exceed forty-five (45) days, during which
Sellers shall make good faith efforts to address the default, or (iii) accept
title to or assignment of the Assets and consummate the transactions
contemplated herein without any diminution in the Purchase Price. If Buyer
defaults in the performance of its duties under this Agreement as of or prior
to the Closing, then Sellers shall, as their sole and exclusive remedy,
terminate this Agreement by written notice to Buyer and (i) retain the
respective Deposits as reasonable liquidated damages, and not as a penalty,
that being a reasonable estimate of damages that would be occasioned by such
default but which damages likely would be difficult to ascertain with
certainty, and (ii) be entitled to be reimbursed by Buyer for the cost of the
audits conducted pursuant to Section 7, and no party shall have any further
rights or duties hereunder. Notwithstanding the above, there shall be no
such limitation of liability (i) for any acts which constitute gross
negligence or intentional misconduct or (ii) for any breach of any
representation, warranty, or covenant which occur or which are discovered
after the Closing. Nothing herein shall be deemed to limit the rights of
Sellers for breach by Buyer of that certain Confidentiality Agreement dated
July 26, 1996.
24. MISCELLANEOUS PROVISIONS.
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(a) This Agreement contains the entire agreement between the parties
relating to the transactions contemplated hereby, with the sole
exception of the Confidentiality Agreement dated July 26, 1996,
between Buyer and Sellers, which shall survive any termination of this
Agreement.
(b) No modification, waiver, amendment, discharge or change of this
Agreement shall be valid unless in writing and signed by the
party against whom enforcement of such modification, waiver,
amendment, discharge or change is sought.
(c) This Agreement shall not be assignable by any party without the prior
written consent of the others, except that Buyer may assign its
rights and obligations under this Agreement in whole or in part, and
from time to time, to any affiliate or affiliates of Buyer upon
written notice to Sellers, and such assignee shall be considered the
Buyer for purposes of this Agreement and all related documents. Except
as noted above, no other person or corporate entity shall acquire or
have any rights under or by virtue of this Agreement.
(d) If any one or more of the provisions of this Agreement should be ruled
wholly or partly invalid or unenforceable by a court or other
government body of competent jurisdiction, then: (a) the validity
and enforceability of all provisions of this Agreement not ruled to be
invalid or unenforceable shall be unaffected; (b) the effect of the
ruling shall be limited to the jurisdiction of the court or other
government body making the ruling; (c) the provision(s) held wholly or
partly invalid or unenforceable shall be deemed amended, and the court
or other government body is authorized to reform the provision(s), to
the minimum extent necessary to render them valid and enforceable in
conformity with the parties' intent as manifested herein and a
provision having a similar economic effect shall be substituted;
and (d) if the ruling and/or the controlling principle of law or
equity leading to the ruling, is subsequently overruled, modified, or
amended by legislative, judicial, or administrative action, the
provision(s) in question as originally set forth in this Agreement
shall be deemed valid and enforceable to the maximum extent permitted
by the new controlling principle of law or equity.
(e) The interpretation of this Agreement and the rights and obligations of
Buyer and Sellers hereunder shall be governed by the laws of the State
of Maine, without regard to choice of law provisions.
(f) The provisions, covenants and agreements herein contained shall inure
to the benefit of, and be binding upon, the parties hereto and their
respective legal representatives, successors and assigns.
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(g) All headings contained in this Agreement are for reference purposes
only and are not intended to affect in any way the meaning or
interpretation of this Agreement.
(h) This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which collectively shall
constitute one and the same agreement.
(i) Except as otherwise provided herein, each of the parties shall bear
its own expenses in connection with this Agreement.
(j) The waiver by any party of a breach or violation of any provision of
this Agreement shall not operate or be construed as a waiver of any
subsequent breach of such provision or any other provision of this
Agreement.
(k) In the event that any dispute between the parties arises out of this
Agreement, the parties shall meet and confer in good faith to resolve
such dispute. In the event such efforts do not resolve the dispute
within fifteen (15) days from the date the dispute arises, the parties
agree first to try in good faith to settle the dispute by mediation
administered by the American Arbitration Association under its
Commercial Mediation Rules before resorting to arbitration. If such
mediation does not resolve the dispute within thirty (30) days, the
dispute shall be settled by binding arbitration administered by the
American Arbitration Association under its Commercial Arbitration
Rules, such arbitration to be final, conclusive, and binding, and
judgment on the award rendered by the arbitrator(s) may be entered in
any court having jurisdiction thereof. This provision shall survive
termination of this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
WITNESS: MOBILE IMAGING CONSORTIUM, LIMITED
PARTNERSHIP
By Its General Partner:
SPIN ASSOCIATES
_________________________ By: ______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
MOBILE IMAGING CONSORTIUM -
NEW HAMPSHIRE
By Its General Partner:
SPIN ASSOCIATES II,
_________________________ By: ______________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
President
INSIGHT HEALTH CORP.
_________________________ By: ______________________________
Name:
Title:
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LIST OF SCHEDULES
------------------
SCHEDULE A: LIST OF ASSETS
SCHEDULE B: EXCLUDED ASSETS
SCHEDULE C: ASSUMED CONTRACTS, LEASES AND AGREEMENTS
SCHEDULE D: ASSUMED LIABILITIES
SCHEDULE E: ALLOCATION OF PURCHASE PRICE
SCHEDULE E(1): TAX ALLOCATION
SCHEDULE F: BEAN CONSULTING AGREEMENT
SCHEDULE G: SELLERS' DISCLOSURE SCHEDULE
SCHEDULE H: PATENTS/TRADEMARKS
SCHEDULE I: BUYER'S DISCLOSURE SCHEDULE
SCHEDULE J: SELLERS' OPINION OF COUNSEL
SCHEDULE K: ESCROW AGREEMENT
SCHEDULE L: NON-COMPETITION COVENANT
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SCHEDULE A
LIST OF ASSETS
SCHEDULE B
EXCLUDED ASSETS
SCHEDULE C
ASSUMED CONTRACTS, LEASES AND AGREEMENTS
SCHEDULE D
ASSUMED LIABILITIES
SCHEDULE E
ALLOCATION OF PURCHASE PRICE
SCHEDULE E(1)
TAX ALLOCATION
To be agreed upon by the parties prior to Closing.
SCHEDULE F
BEAN CONSULTING AGREEMENT
SCHEDULE G
SELLERS' DISCLOSURE SCHEDULE
SCHEDULE H
PATENTS/TRADEMARKS
SCHEDULE I
BUYER'S DISCLOSURE SCHEDULE
None
SCHEDULE J
SELLERS' OPINION OF COUNSEL
SCHEDULE K
ESCROW AGREEMENT
SCHEDULE L
NON-COMPETITION COVENANT