EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") dated April 23, 2001,
between PROXYMED, INC., a Florida corporation ("Buyer"), with its principal
business address at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇,
and MDP CORPORATION, a Georgia corporation ("Seller"), with its principal
business address at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇, the sole shareholder of Seller ("Shareholder"), who resides at ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇. Seller and Shareholder are sometimes
collectively referred to in this Agreement as "Selling Parties".
Buyer desires to purchase from Seller and Seller desires to sell to
Buyer, on the terms and subject to the conditions of this Agreement,
substantially all of the medical data processing ("MDP") assets and MDP Business
of Seller (the "Business").
THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties contained in this Agreement, the parties agree as
follows:
ARTICLE 1. TRANSFER OF MDP ASSETS AND ASSETS EXCLUDED FROM TRANSFER TO BUYER
Subject to the terms and conditions set forth in this Agreement, Seller
agrees to sell, convey, transfer, assign and deliver to Buyer, and Buyer agrees
to purchase from Seller at the Closing described in Article 3 hereof,
substantially all of the MDP assets and properties related to the Business of
Seller of every kind, character and description (except for real property and
other assets specifically excluded), whether tangible, intangible, personal or
mixed, and wherever located, all of which are sometimes collectively referred to
in this Agreement as the "MDP Assets" or "Assets", including the following:
1.1 Contracts and Agreements. All right, title and interest of
Seller in the contracts and licenses that Seller has relating to the Business,
other than those specifically referred to elsewhere in this Agreement, and as
more fully described on SCHEDULE 1.1 (for patient statement agreements for which
Seller need only provide a list of current customers), to be assumed by Buyer
pursuant to Article 4 (such contracts, agreements and licenses together
collectively referred as the "Contracts"). Seller shall provide Buyer with
copies of all contracts listed on SCHEDULE 1.1 prior to Closing.
1.2 Equipment. All of Seller's right, title and interest in the
furniture, fixtures, equipment, computer hardware, paper, envelopes and office
supplies and other tangible personal property of every kind and description that
are located upon or within the real property of Seller, and/or are owned or
leased by Seller, and/or are utilized in connection with the Business (whether
or not upon or within the real property), a list of the fixed assets of such
items is attached to SCHEDULE 1.2 (hereinafter referred to collectively as the
"Equipment").
1.3 Software Programs, Licenses and Contracts. All of Seller's
right, title and interest to all owned or leased software programs, and all
other contracts, agreements,
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licenses and other commitments and arrangements, oral or written, with any
person or entity respecting the ownership, license, acquisition, design,
development, distribution, marketing, use or maintenance of software programs,
source and object codes, related technical or user documentation and databases
relating to the Business, as more fully described on SCHEDULE 1.3, including all
licenses for off-the-shelf, generally available software (hereafter referred to
collectively as the "Software Programs"), to be assumed by Buyer pursuant to
Article 4.
1.4 Cash, Accounts Receivables and Accounts Payable.
(a) Cash, accounts receivables at face amount with an
invoice date of ninety (90) days or less prior to the Closing Date,
less general accounts payable at face amount and accrued liabilities
for which invoices have not been received resulting from obligations of
Seller due and owing in the course of the Business prior to the Closing
Date (other than those accounts payable specifically referred to in
this agreement or a schedule hereto) in a net amount of $475,000 (i.e.,
cash, plus accounts receivable less accounts payable) on the Closing
Date.
(b) All accounts receivable with an invoice date more
than ninety (90) days prior to the Closing Date.
(c) Selling Parties represent and warrant that the
accounts receivables referred to in Section 1.4(a) are valid and arose
from bona fide sales and deliveries of goods, performance of services
or other transactions in the ordinary course of Seller's Business.
1.5 Accounts Receivable. In the event that Seller does not
transfer to Buyer all of Seller's accounts receivable described in Section
1.4(a), Buyer shall collect for Seller's account such unassigned accounts
receivable and remit to Seller the proceeds of such collections once a week.
1.6 Other Intangibles. All trade names, trademarks, service marks,
copyrights, patents, patent rights, licenses, brand names, trade secrets,
technical know-how, goodwill, rights, if any, to domain names and phone numbers
and other intangibles relating to the Business as more fully described on
SCHEDULE 1.6.
1.7 Prepaid Expenses and Deposits. Except as otherwise provided in
this Agreement or any exhibits attached hereto, all prepaid expenses and other
prepaid items and deposits (except customer and client deposits which are
liabilities subject to Section 2.1 (e) relating to the Business.
1.8 Excluded Assets. The following assets of Seller shall not be
acquired by Buyer and shall be deemed excluded assets (collectively, the
"Excluded Assets"):
(a) Seller's minute books, accounting books and records
and other books and records relating to internal governance matters,
and any books and records not related to the Business and operations
thereof;
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(b) All claims, rights or interest of Seller in and to
any refunds of federal, state or local franchise, income or other Taxes
or fees of any nature whatsoever which relate solely to any period
prior to the Closing Date;
(c) all pieces of artwork owned by the Selling Parties;
(d) one 1997 Land Rover SUV;
(e) $17,000 promissory note from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ to
Seller; and
(f) one chest of drawers and an armoire located at
Shareholder's residence.
1.9 All Property Not Elsewhere Described. Except as
described in SCHEDULE 1.8, all other properties of Seller of every kind,
character or description owned, used or held for use (whether or not
exclusively) in connection with Seller's MDP Assets and Business, wherever
located and whether or not similar to the things set forth elsewhere in this
Article 1, including, without limitation, all employee and personnel records and
files, all sales and marketing records and materials, any software or equipment
related warranties and manuals, and copies of all accounting and financial
records that Buyer or its independent accountants deem necessary to carry on the
Business.
ARTICLE 2. PURCHASE PRICE
2.1 Payment of Purchase Price. In consideration for the transfer
and assignment by Seller of the MDP Assets and in consideration of the
representations, warranties and covenants of Selling Parties set forth herein,
Buyer shall pay Seller a total of Ten Million Dollars ($10,000,000) ("the
Purchase Price") as follows:
(a) Three Million Dollars ($3,000,000) in immediately
available funds at the Closing as more fully described in Section 3.2
hereof; and
(b) Seven Million Dollars ($7,000,000) twelve (12) months
after the Closing Date in immediately available funds as more fully
described in Section 3.2; and
(c) Buyer shall assume and satisfy when due, and shall
indemnify Seller against, liabilities and obligations of Seller under
the contracts or other agreements specified on SCHEDULE 4, but only to
the extent that such liabilities or obligations accrue on or after the
Closing Date; and
(d) Buyer shall assume and satisfy, and shall indemnify
Seller from and against all debts, liabilities, accounts payable and
obligations of Buyer due and owing in the ordinary course of the
Business on or after the Closing Date,.
(e) Buyer shall assume and satisfy when due Seller's
obligations with respect to deposits which Seller's customers or
clients have made for postage and services that may have to be returned
to the customer or client as follows:
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(i) in the aggregate amount of $125,000 based
upon customer or client requests for deposit returns submitted
within eighteen (18) months from the Closing Date.
(ii) Seller shall be responsible for any customer
or client requests for deposit refunds submitted within
eighteen (18) months from the Closing Date in excess of
$125,000.
(iii) Buyer shall be responsible for all client
and customer deposit refunds submitted by the customer or
client after eighteen (18) months from the Closing Date.
2.2 Allocation of Purchase Price. The parties agree that the
Purchase Price shall be allocated as set forth on SCHEDULE 2.2 and that such
allocation will be used by the parties in reporting the transaction contemplated
by this Agreement for tax purposes.
ARTICLE 3. THE CLOSING
The closing of the purchase and sale of the MDP Assets and the Business
by Seller to Buyer (the "Closing") shall take place at the offices of ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00
A.M. Eastern Time, on May 1, 2001 or at such other place and/or time as the
parties may agree in writing (the "Closing Date"). The Schedules described
herein shall be completed to the satisfaction of Buyer and Seller at least three
(3) days prior to Closing. In the event that the conditions specified in this
Agreement have not been fulfilled by such date, Buyer (if such failure of
conditions is on the part of Selling Parties) or Seller (if such failure of
conditions is on the part of Buyer) may extend the Closing Date for a period or
periods not exceeding an aggregate of thirty (30) days by written notice to the
other party. If, on the original or any postponed Closing Date, Seller has been
unable to obtain all waivers and consents of third parties required by this
Agreement, then Buyer, on written notice, may postpone the Closing to a time not
later than 10:00 A.M. Eastern Time, on May 30, 2001.
3.1 Selling Parties' Obligations at the Closing. At Closing,
Selling Parties shall deliver or cause to be delivered to Buyer:
(a) Assignment and assumption agreements for all
contracts, leases and agreements, personal property and equipment
leases, and all other contracts and accounts payable of Seller to be
assumed in connection herewith, substantially in the form of SCHEDULE
3.1(a), and accompanied by all consents obtained prior to the Closing
Date; and
(b) Instruments of assignment and transfer (including a
▇▇▇▇ of sale) of all of the other MDP Assets of Seller to be
transferred hereunder, substantially in the form of SCHEDULE 3.1(b).
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Simultaneously with the consummation of the transfer, Seller,
through its officers, agents, and employees, shall put Buyer into full
possession and enjoyment of all the MDP Assets to be sold, conveyed,
transferred, assigned and delivered by this Agreement.
Selling Parties, at any time before or after the Closing Date,
shall execute, acknowledge and deliver any further assignments, conveyances and
other assurances, documents and instruments of transfer reasonably requested by
Buyer, and shall take any other action consistent with the terms of this
Agreement that may reasonably be requested by Buyer for the purpose of
assigning, transferring, granting, conveying and confirming to Buyer, or
reducing to its possession, any or all property and MDP Assets to be conveyed
and transferred by this Agreement. If requested by Buyer, Selling Parties agree
to prosecute or otherwise enforce in their own names for the benefit of Buyer
any claims, rights, or benefits that are transferred to Buyer by this Agreement
and that require prosecution or enforcement in either of the Selling Parties'
name. Any prosecution or enforcement of claims, rights, or benefits under this
Section shall be solely at Buyer's expense, unless the prosecution or
enforcement is made necessary by a breach of this Agreement by Selling Parties.
3.2 Buyer's Obligations at Closing. At Closing, Buyer shall wire
transfer $3,000,000 payable to Seller or its assignee(s) and execute a twelve
(12) month Secured Promissory Note ("Note") in the amount of Seven Million
Dollars ($7,000,000) at seven percent (7%) interest per annum, interest to be
payable monthly, and Security Agreement in favor of Seller or its assignee(s)
pledging the MDP Assets, the form of Note and Security Agreement to be
substantially as set forth in SCHEDULE 3.2.
ARTICLE 4. ASSUMPTION OF LIABILITIES
Buyer shall assume and become liable for or shall pay, perform and
discharge all obligations from and after the Closing Date under the contracts,
agreements and licenses listed on SCHEDULE 4. In addition, Buyer shall assume
and pay when due any outstanding purchase orders of Seller at the Closing Date
for goods not delivered to Seller by such date, as well as all debts,
liabilities, accounts payable and obligations related to the Business arising
after the Closing Date. All obligations of Seller assumed by Buyer under this
Article 4 and Section 2.1 shall be referred to as the "Assumed Liabilities."
Buyer is not assuming or indemnifying Seller for any obligations of the Selling
Parties which have been excluded in Section 1.8, or obligations relating to
federal, state or local taxes or licenses, including without limitation, any
interest or penalties, or, or any claims relating to the intellectual property
of MDP arising on or before the Closing Date, or any other debts, liabilities,
accounts payable or obligations, arising on or before the Closing Date not
specifically agreed to in writing by Buyer. Buyer is also not assuming Seller's
obligations related to a letter agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇, dated July 1,
1998, regarding a $20,000 bonus due July 1, 2001 and a $55,000 payment due upon
a change in control of Seller. Buyer is also not assuming Seller's $150,000 line
of credit with Bank of America dated as of May 1, 2000 and the promissory note
dated December 31, 1996 in favor of ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇.
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ARTICLE 5. ADJUSTMENTS TO PURCHASE PRICE
(a) Prorations. The parties shall prorate, as of the Closing Date,
payment obligations under the obligations assumed by Buyer pursuant to Section
4, personal property ad valorem taxes, utility charges, prepaid expenses and any
other similar items.
(b) Final Determination of Adjustments
(i) Within fifteen (15) days after the Closing Date,
Seller shall deliver to Buyer a certificate, together with supporting
documentation reasonably satisfactory to Buyer, setting forth, as of
12:01 a.m. on the Closing Date, the prorations to be made and the cash,
accounts receivable and accounts payable of the Seller transferred to
the Buyer.
(ii) The Buyer shall have fifteen (15) days after the
submission date within which to deliver to the Seller notice setting
forth any objections to the certificate described in subsection (i)
next above, together with a copy of any working papers or other
documents relating to such proposed changes.
(iii) The Seller and Buyer shall attempt jointly to resolve
any discrepancies within ten (10) days after receipt of any objections
of the Buyer, which resolution, if achieved, shall be binding upon all
parties to the Agreement and a new certificate shall be prepared,
revised in accordance with the parties' resolution. If the parties
cannot resolve the discrepancy to their mutual satisfaction within such
ten day period, the dispute shall be submitted to arbitration in
accordance with the provisions of Article 20.
(iv) If, as a result of an adjustment mutually agreed upon
by the parties or determined by arbitration, one party is determined to
owe an amount to the other party, such amount shall be paid in
immediately available funds within two (2) Business days after such
determination.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES
Selling Parties, jointly and severally, hereby represent and warrant to
Buyer that the following facts and circumstances are and, except as contemplated
hereby, at all times up to the Closing Date will be true and correct in all
material respects, and hereby acknowledge that such facts and circumstances
constitute the basis upon which Buyer is induced to enter into and perform this
Agreement. Any exceptions to the representations and warranties made hereby are
disclosed on a schedule attached hereto corresponding to the Section numbers of
this Article, except as otherwise specified herein. All such representations and
warranties are subject to the items set forth in the schedules even though
express references to the schedules are not set forth below. Disclosure in any
schedule shall be deemed included in all schedules where applicable.
6.1 Organization, Good Standing and Qualifications. Seller is an S
Corporation pursuant to Section 1361, et seq., of the Internal Revenue Code
("Code") and is duly organized, validly existing, and in good standing under the
laws of the State of Georgia, has
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all necessary corporate powers to own its properties and to carry on its
Business as now owned and operated by it. SCHEDULE 6.1 lists any subsidiaries of
Seller and all the shareholders of Seller and their respective interests.
6.2 Financial Reports. SCHEDULE 6.2 to this Agreement sets forth
the Financial Reports of Seller's MDP Business as of December 31, 2000, and for
the three (3) months ended March 31, 2001 (the "Stub Period") as compiled by
Seller's independent public accountant and certified as complete and accurate in
all material respects by the chief executive officer of Seller and by the
Shareholder. The Financial Reports accurately and completely present the
financial position of the Business on a cash basis in all material respects of
Seller for the respective periods indicated, except that the Financial Reports
for the Stub Period Date are subject to usual and customary fiscal period end
type adjustments. The Financial Report for the fiscal year ended December 31,
2000 shall also be audited by an independent certified public accountant within
45 days after the Closing of this transaction, and Buyer agrees to pay the costs
for such audited report. The Financial Reports in SCHEDULE 6.2, as later audited
according to GAAP by an independent public account, and the Stub Period as
compiled and later updated and carried forward through the Closing Date are
referred to as the "Financial Report(s)". Except as listed on Annex A to
SCHEDULE 6.2, Seller's MDP Business has no material liabilities or obligations
of any nature (known or unknown, absolute, contingent or otherwise) of the type
required to be reflected or disclosed in a cash basis balance sheet (or the
notes thereto) that were not fully reflected or reserved against in the
Financial Reports or disclosed elsewhere in this Agreement. Business.
6.3 Absence of Specified Changes. Except as set forth on SCHEDULE
6.3 hereof, since the Stub Period Date, there has not been any:
(a) Transactions by Seller relating to the Business
except in the ordinary course of Business;
(b) Capital expenditure or purchase commitments by Seller
exceeding Five Thousand Dollars ($5,000);
(c) Material adverse change in the financial condition,
liabilities, Assets, MDP Business or prospects relating to the
Business;
(d) Destruction, damage to, or loss of any MDP Assets of
Seller (whether or not covered by insurance) that materially adversely
affects the financial condition, MDP Business or prospects relating to
the Business;
(e) Labor trouble or other event or condition of any
character materially adversely affecting the financial condition, MDP
Business, Assets or prospects relating to the Business;
(f) Increase in the salary or other compensation payable
or to become payable by Seller to any of its officers, directors,
employees or consultants, or the declaration, payment or commitment or
obligation of any kind for the payment by Seller of a bonus or other
additional salary or compensation to any such person;
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(g) Sale or transfer of any MDP Asset of Seller, except
in the ordinary course of business;
(h) Execution, creation, amendment or termination of any
contract, agreement or license relating to the Business, except in the
ordinary course of business;
(i) Loan by Seller to any person or entity, or guaranty
or indemnification by Seller of any loan, including any draws on any
lines of credit;
(j) Waiver or release of any right or claim of Seller
relating to the MDP Assets, except in the ordinary course of business;
(k) Mortgage, pledge or other encumbrance of any MDP
Asset of Seller;
(l) Other event or condition of any character that has or
might reasonably have a material adverse effect on the financial
condition, MDP Business, Assets or prospects of Seller relating to the
Business;
(m) Net loss of any MDP customer or third party payer of
Seller, after counting increased revenues from new customers and third
party payers, resulting in a material adverse change in revenues over
five percent (5%) since the Stub Period from the same period in the
year 2000.
(n) Distributions to Shareholder or any third parties not
contemplated by or inconsistent with this Agreement
(o) Agreement by Seller to do any of the things described
in the preceding clauses (a) through (n).
6.4 Tax Matters.
(a) Except as disclosed on SCHEDULE 6.4, all federal,
state and local tax returns for all periods ending on or before the
Closing Date that are or were required to be filed by or with respect
to Seller have been filed or extensions obtained on a timely basis, and
in accordance with the laws, regulations and administrative
requirements of any applicable taxing authority. All such tax returns
that have been filed on or before the Closing Date were, when filed,
and continue to be, true, correct and complete in all material respects
business.
(b) Seller has paid all taxes that have or may become due
for all periods ending on or before the Closing Date.
(c) Shareholder agrees that he will file the required S
Corporation federal and state tax returns for Seller when due and will
pay all applicable taxes shown to be due thereon.
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6.5 Leased Property. SCHEDULE 6.5 to this Agreement is a
description of each parcel of real property leased by Seller. A true, correct
and complete copy of the lease property has been delivered to Buyer. Such lease
is valid and in full force, and, to Seller's Knowledge, there does not exist any
default or event that with notice or lapse of time, or both, would constitute a
default under the lease.
6.6 Contracts. The contracts described in SCHEDULES 1.1 and 1.3
consist of all written and oral contracts, licenses and agreements, and any
other commitments, or understandings entered into by Seller in the ordinary
course of MDP Business with its customers, clients and other third parties other
than those specifically referred to elsewhere in this Agreement. True, correct
and complete copies of such contracts and agreements, together with any written
or oral modifications (to be reduced to writing), described in SCHEDULES 1.1 and
1.3 have been disclosed and made available to Buyer. Except as may be disclosed
on SCHEDULES 1.1 and 1.3, all such contracts and agreements are valid and in
full force, and to the Seller's Knowledge, there does not exist any default or
threat of default, or event that with notice or lapse of time, or both, would
constitute default under any of these contracts and agreements, except for
certain consents to assignment of some Contracts that have not been obtained.
There have been no claims or defaults, and to the Knowledge of the Selling
Parties, there are no facts or conditions which if continued, or unnoticed, will
result in a default under these contracts or agreements, except for the consents
referred to above.
As used in this Section 6.6 and the remainder of this
Agreement, Selling Parties will be deemed to have "Knowledge" or "Known" of a
particular fact or other matter if such individual is aware of or should be
aware of such fact or other matter upon exercising reasonable inquiry and
diligence as appropriate within the scope of such individual's position. Selling
Parties will only be deemed to have "Knowledge" of a particular fact or other
matter if the Shareholder as of the Closing Date has Knowledge of such fact or
other matter.
Except as set forth in SCHEDULE 4, Seller is not a party to,
nor are the MDP Assets bound by, any other agreement not entered into in the
ordinary course of MDP Business, any indenture, mortgage, deed of trust, lease
or any other agreement that is unusual in nature, duration or amount, including,
without limitation, any agreement requiring the performance by Seller of any
obligation for a period of time extending beyond one year from the Closing Date
or calling for consideration of more than $5,000 or requiring purchases at
prices in excess of, or sales at prices lower than, prevailing market prices. To
Selling Parties' Knowledge, all contracts which will be assigned to or assumed
by Buyer under this Agreement are valid and binding upon the parties thereto. To
Selling Parties' Knowledge, there is no default or threat of default, or event
that with notice or lapse of time, or both, would constitute a default by any
party to any of the agreements listed in SCHEDULE 4, except as set forth on
SCHEDULE 4 and in regard to the consents referred to in this Section 6.6. Seller
has not received notice that any party to any of the agreements listed in
SCHEDULE 4 intends to cancel or terminate any of these agreements or to exercise
or not exercise any options under any of these agreements. Except as set forth
on SCHEDULE 6.6, to Selling Parties' Knowledge, Seller is not a party to, nor is
Seller or the MDP Assets bound by, any agreement that is materially adverse to
the MDP Business, property or financial condition of Seller's MDP Business.
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6.7 Other Tangible Personal Property. The tangible personal
property described in Sections 1.2 and 1.3 and SCHEDULES 1.2 and 1.3 of this
Agreement constitutes substantially all the items of tangible personal property
owned by, in the possession of, or used by Seller in connection with its MDP
Business. Except as stated in SCHEDULES 1.2 and 1.3, no tangible personal
property used by Seller in connection with its MDP Business is held under any
lease, security agreement, conditional sales contract, or other title retention
or security arrangement, or is in the possession of anyone other than an
employee of Seller.
6.8 Trade Names; Trademarks; Copyrights; Etc. Except as set forth
in SCHEDULE 6.8, Seller does not use any other trademark, service ▇▇▇▇, trade
name, copyright or brand name, or own any trademarks, trademark registrations or
applications, trade names, service marks, copyrights, copyright registrations or
applications or brand names, telephone or facsimile number, or domain name in
its MDP Business. To the Knowledge of Selling Parties, no person (other than
Seller) owns any trademark, trademark registration or application, service ▇▇▇▇,
trade name, copyright, copyright registration or application, or brand name, the
use of which is necessary or contemplated in connection with the performance of
any contract to which Seller is a party. To the Knowledge of Seller, Seller has
the right and authority to use its trade names, trademarks, copyrights,
telephone or facsimile number, or domain name in its MDP Business as are
necessary to enable it to conduct and to continue to conduct its MDP Business,
and to its Knowledge, such use does not and will not conflict with, infringe or
violate any intellectual or proprietary rights of others.
6.9 Patents and Patent Rights. SCHEDULE 6.9 to this Agreement is a
complete schedule of all patents, inventions, industrial models, processes,
designs, formulas and applications for patents owned by Seller or in which
Seller has any rights, licenses or immunities relating to its MDP Business
("Intellectual Properties"). The patents and applications for patents listed in
SCHEDULE 6.9 are valid and in full force and effect and are not subject to any
taxes, maintenance fees or actions falling due within 90 days after the Closing
Date. Except as set forth in SCHEDULES 6.9 or 6.17, there have not been any
administrative, judicial, arbitration, or other adversary proceedings concerning
the Intellectual Properties listed in SCHEDULE 6.9. Each patent application is
awaiting action by its respective patent office except as otherwise indicated in
SCHEDULE 6.9. To the Knowledge of Seller, the manufacture, use or sale of the
inventions, models, designs and systems covered by the Intellectual Properties
listed in SCHEDULE 6.9 do not violate or infringe on any patent or any
proprietary or personal right of any person, firm or corporation, and Seller, to
its Knowledge, has not infringed and is not now infringing on any patent or
other right belonging to any person, firm or corporation. Except as set forth in
SCHEDULE 6.9, Seller is not a party to any license, agreement or arrangement,
whether as licensee, licenser or otherwise, with respect to any patent,
application for patent, invention, design, model, process, trade secret or
formula. relating to its MDP Business. Seller has the right and authority to use
such inventions, trade secrets, processes, models, designs and formulas as are
necessary to enable it to conduct and to continue to conduct all phases of its
MDP Business in the manner presently conducted, and such use does not and will
not conflict with, infringe or violate any patent or other rights of others.
6.10 Trade Secrets. SCHEDULE 6.10 to this Agreement is a true and
complete list, without extensive or revealing descriptions, of trade secrets
used by Seller in (or owned
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by Seller and useful in) the operation of its MDP Business, including all
customer lists, processes, know-how and other technical data.
6.11 Other Intangible Property. SCHEDULE 6.11 to this Agreement is
a true and complete list of all Software Programs and all other intangible MDP
Assets, other than those specifically referred to elsewhere in this Agreement,
including, without limitation, all of Seller's right, title and interest owned
and/or leased Software Programs, databases, and all other agreement, contracts,
licenses and other commitments, oral or written, with any person or entity
respecting the ownership, license, acquisition, design, development,
distribution, marketing, use or maintenance of Software Programs, source and
object codes, related technical or user documentation manuals relating to
Seller's MDP Business.
6.12 Title to MDP Assets. Seller has good and marketable title to
all the MDP Assets and its interest in the MDP Assets to be conveyed to Buyer
hereunder, whether real or personal, mixed, tangible, and intangible, which
constitute all the MDP Assets and interest in MDP Assets that are used in the
MDP Business of Seller. Except as set forth on SCHEDULE 6.12, all the MDP Assets
are free and clear of mortgages, liens, pledges, charges, encumbrances,
equities, claims, easements, rights of way, covenants, conditions or
restrictions, except for (i) those disclosed in Seller's Financial Reports as of
the Stub Period Date, or in the Schedules to this Agreement; (ii) the lien of
current taxes not yet due and payable relating to any of its MDP Assets and MDP
Business; and (iii) possible minor matters that, in the aggregate, are not
substantial in amount and do not materially detract from or interfere with the
present or intended use of any of these MDP Assets, nor materially impair MDP
Business operations. All the MDP Assets are in operating condition and repair,
ordinary wear and tear excepted. Except as set forth on the appropriate Schedule
listing such MDP Assets, neither any officer, nor any director or employee of
Selling Parties, nor any spouse, child or other relative of any of these
persons, owns, or has any interest, directly or indirectly, in any of the
personal property or MDP Assets, owned by or leased to Seller, or any
copyrights, patents, trademarks, trade names or trade secrets licensed by
Seller.
6.13 Customers and Transactions. SCHEDULE 6.13 to this Agreement is
a correct and current list of all customers and clients of Seller together with
summaries by month of all transactions made to each customer for fiscal year end
2000 through the Stub Period. Except as indicated in Schedule 6.13, Selling
Parties have no Knowledge of any facts indicating that any specific customers
and clients intend to cease doing business with Seller or materially alter the
amount of the business that they are presently doing with Seller, except that
customers and clients regularly change their relationships.
6.14 Existing Employment Arrangements. SCHEDULE 6.14 to this
Agreement is a list of all employment contracts and collective bargaining
agreements, and all pension, bonus, profit-sharing, deferred compensation, stock
option, or other agreements or arrangements providing for employee or outside
consultant remuneration or benefits of those directly related to the MDP
Business to which Seller is a party or by which Seller is obligated, whether
legally binding or in the nature of informal understandings. All these contracts
and arrangements are in full force and effect, and neither Seller nor
Shareholder has Knowledge that any party is in default under them. The Seller
has received no oral or written notice of claims of defaults and, to the
Knowledge of Selling Parties, there are no facts or conditions which if
continued, or on notice, will result in a default under these contracts or
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arrangements. There is no pending or, to the Knowledge of Selling Parties,
threatened labor dispute, strike or work stoppage affecting Seller's MDP
Business. Buyer agrees to continue to allow an employee to attend classes at
Georgia Tech every other Friday as necessary on condition that Shareholder
continues to pay one half of such employee's tuition and Buyer is not obligated
to provide any stay pay, tuition, or other related compensation or benefit in
return.
6.15 Insurance Policies. SCHEDULE 6.15 to this Agreement is a
description of all insurance policies held by Seller concerning the MDP Assets.
All these policies are in the respective principal amounts set forth in SCHEDULE
6.15. Seller has maintained and now maintains (i) insurance on all the MDP
Assets of a type customarily insured, covering property damage and loss of
income by fire or other casualty; and (ii) adequate insurance protection against
all liabilities, claims, and risks against which it is customary to insure,
including without limitation, errors and omissions coverage.
6.16 Compliance With Laws. To Selling Parties' Knowledge, Seller
has complied with, and is not in violation of, applicable federal, state or
local statutes, laws and regulations affecting the MDP Assets or the operation
of its MDP Business, except as set forth in SCHEDULE 6.16, and for such
exceptions as would not individually or collectively have a materially adverse
effect in the MDP Business or the Assets.
6.17 Litigation. Except as set forth in SCHEDULE 6.17, there is no
suit, action, arbitration or legal, administrative or other proceeding, or
governmental investigation pending or, to the best Knowledge of Selling Parties,
threatened, against or affecting Seller's MDP Business, or Assets. The matters
set forth in SCHEDULE 6.17, if decided adversely to Seller, will not result in a
material adverse change in its MDP Business or Assets. Selling Parties have
furnished or made available to Buyer copies of all court papers and other
documents relating to the matters set forth in SCHEDULE 6.17. Seller is not in
default with respect to any order, writ, injunction or decree of any federal,
state, local or foreign court, department, agency or instrumentality
specifically pertaining to the Seller. Except as set forth in SCHEDULE 6.17,
Seller is not presently engaged in any legal action to recover moneys due to it
or damages sustained by it relating to its MDP Business or Assets.
6.18 MDP Assets Sufficient for Conduct of MDP Business. The MDP
Assets constitute substantially all of the MDP Assets, exclusive of sufficient
working capital, as is presently needed by Seller to conduct its Business as it
is presently conducted.
6.19 Agreement Will Not Cause Breach or Violation. Except for
consents to assign certain Contracts which have not been obtained, neither the
entry into this Agreement nor the consummation of the transactions contemplated
hereby will result in or constitute any of the following: (i) a breach of any
term or provision of this Agreement; (ii) a default or an event that, with
notice or lapse of time or both, would be a default, breach or violation of the
Articles of Incorporation or Bylaws of Seller or any lease, license, promissory
note, conditional sales contract, commitment, indenture, mortgage, deed of trust
or other agreement, instrument or arrangement to which Seller is a party or by
which Seller or the MDP Business and Assets are bound; (iii) an event that would
permit any party to terminate any agreement or to accelerate the maturity of any
indebtedness or other obligation to which either Selling Party is a party; (iv)
the creation or imposition of any lien, charge or encumbrance on any of the MDP
Assets; or (v) the violation of any law, regulation,
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ordinance, judgment, order or decree applicable to or affecting Seller's MDP
Business or Assets.
6.20 Authority and Consents. Except as set forth in SCHEDULE 6.20,
Selling Parties have the right, power, legal capacity and authority to enter
into, and perform its obligations under this Agreement, and Buyer waives any
other approvals, consents or permits of any person or governmental authority
(other than Selling Parties) necessary in connection with the consummation of
the transaction contemplated by this Agreement. The execution and delivery of
this Agreement and the consummation of this transaction by Selling Parties have
been, or prior to the Closing will have been, duly authorized by all necessary
corporate action of Selling Parties (including any necessary action by Selling
Parties security holders). This Agreement constitutes a legal, valid and binding
obligation of Selling Parties enforceable in accordance with its terms except as
limited by bankruptcy and insolvency laws and by other laws affecting the rights
of creditors generally.
6.21 Personnel Identification and Compensation. SCHEDULE 6.21 is a
list of the names and addresses of all officers, directors, employees, agents
and consultants of Seller, stating the rates of compensation payable to each and
setting forth all vacation time, sick leave and other paid time off accrued for
each of them through the Closing Date, and the date and amounts of each persons
last salary increase. No other person, except accountants, auditors and
attorneys regularly performs compensable services for Seller.
6.22 Bank Accounts. SCHEDULE 6.22 lists (i) the names and addresses
of all persons holding a power of attorney on behalf of Seller and (ii) the
names and addresses of all banks or other financial institutions in which Seller
has cash or a cash equivalents, accounts, investments, deposits or a
safe-deposit box, with the names of all persons authorized to draw on these
accounts or deposits or who have access to these boxes.
6.23 Bulk Transfer Act. Buyer hereby waives any Bulk Sale Act
compliance by Seller.
6.24 Labor Matters. To the Knowledge of the Selling Parties, as to
those employees directly involved in Seller's MDP Business whom Buyer may wish
to offer employment, Seller is in compliance in all material respects with all
currently applicable federal, state and local laws and regulations respecting
discrimination, disability, terms and conditions of employment, wages and hours,
occupational safety and health and employment practices except for such failures
to comply as would not reasonably be expected to have a material adverse effect,
either individually or in the aggregate, on Seller. As of the date hereof,
Seller has received no notice from any governmental entity and, as of the date
hereof, there has not been asserted before any governmental entity any claim,
action or proceeding to which Seller is a party, and the Seller has received no
notice of any investigation or hearing pending or threatened concerning Seller,
arising out of or based upon any such laws, regulations or practices.
6.25 Documents Delivered. Each copy or original of any agreement,
contract or other instrument which is identified in any exhibit delivered by
Selling Parties or their counsel to Buyer (or its counsel or representatives),
whether before or after the execution
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hereof, is in fact what is purported to be by Selling Parties and has not been
amended, canceled or otherwise modified.
6.26 Full Disclosure. None of the written representations and
warranties made by Selling Parties in this Agreement or the schedules hereto,
contains or will contain any untrue statement of a material fact, or omits any
material fact the omission of which would make the statements made herein, in
light of the circumstances under which they were made, not misleading. There is
no fact Known to Selling Parties which materially adversely affects the
Financial Reports, MDP Assets, liabilities, MDP Business, operations or
prospects of Seller's MDP Business that has not been set forth herein or
heretofore communicated to Buyer in writing pursuant hereto.
6.27 Absence of Undisclosed Liabilities. Seller does not have and
will not have as of the Closing, except as to the extent reflected or reserved
against on the face of its Financial Reports or reflected in SCHEDULE 6.27
hereto, or otherwise disclosed in this Agreement, any material debts,
liabilities or obligations (whether absolute, accrued, contingent or otherwise)
including, without limitation, any liabilities for environmental pollution, any
foreign or domestic tax liabilities or deferred tax liabilities incurred in
respect of or measured by Seller's income, or any other material debts,
liabilities or obligations relating to or arising out of any act, omission,
transaction, circumstance, sale of goods or services, stated facts or other
condition related to its MDP Business or the Assets, except those incurred in
the ordinary course of business.
ARTICLE 7. BUYER'S REPRESENTATIONS AND WARRANTIES AND AGREEMENT
Buyer hereby represents and warrants to Selling Parties that the
following representations are true and correct, and at all times up to the
Closing Date will be true and correct, and hereby acknowledges that such
representations constitute the basis upon which the Selling Parties are induced
to enter into and perform this Agreement.
7.1 Authority and Consents. Buyer represents and warrants that
Buyer is a corporation duly organized, existing and in good standing under the
laws of Florida. Buyer has the right, power, legal capacity and authority to
enter into and perform its obligations under this Agreement, and no approvals or
consents of any persons other than its Board of Directors or its Series C
Warrantholders, including Commonwealth Associates, are necessary in connection
with it. The execution and delivery of this Agreement and the consummation of
this transaction by Buyer have been, or prior to the Closing will have been,
duly authorized by all necessary corporate action of Buyer. This Agreement
constitutes a legal, valid and binding obligation of Seller enforceable in
accordance with its terms, except as limited by bankruptcy and insolvency laws
and by other laws affecting the rights of creditors generally.
7.2 SEC Reports. Copies of Buyer's reports on Forms ▇▇-▇, ▇▇-▇,
▇-▇, and 8-K, and any amendments thereto, filed with the Securities and Exchange
Commission ("SEC") during fiscal year end 2000 and through the Closing Date (the
"Reports") have been available to the Selling Parties through the Internet, and
Buyer has strongly recommended Selling Parties and their advisors to read such
Reports. The Reports were timely filed with the SEC and did not, at the time
they were filed, contain any untrue statement of a material fact or
14
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading. There has not been any material or adverse change in the
Business, assets or liabilities of Buyer which has occurred since the date of
the last report, and which has not been disclosed to the Selling Parties. There
is no fact known to Buyer which materially adversely affects its condition,
assets, liabilities, Business, operations or prospects that has not been set
forth in its Reports.
7.3 Agreement Will Not Cause Breach or Violation. Neither the
entry into this Agreement nor the consummation of the transactions contemplated
hereby will result in or constitute any of the following: (i) a breach of any
term or provisions of this Agreement; (ii) a default or an event that, with
notice or lapse of time or both, would be a default, breach or violation of the
Articles of Incorporation or Bylaws of Buyer or, to the Knowledge of Buyer, any
lease, license, promissory note, conditional sales contract, commitment,
indenture, mortgage, deed of trust or other agreement, instrument or arrangement
to which Buyer is a party or by which Buyer is bound; (iii) to the knowledge of
Buyer, an event that would permit any party to terminate any agreement or to
accelerate the maturity of any indebtedness or other obligation; or (iv) to the
knowledge of Buyer, the violation of any law, regulation, ordinance, judgment,
order or decree applicable to or affecting Buyer.
ARTICLE 8. PARTIES' OBLIGATIONS BEFORE CLOSING.
Selling Parties covenant that, except as otherwise agreed in writing by
Buyer, from the date of this Agreement until the Closing:
8.1 Buyer's Access to Premises and Information. Buyer and its
counsel, accountants and other representatives shall be entitled to have full
access during normal MDP business hours to all Seller's properties, books,
accounts, records, contracts and documents of or relating to the MDP Business
and Assets, but shall not restrict or inhibit Seller's normal MDP business
operations. Selling Parties shall furnish or cause to be furnished to Buyer and
its representatives all data and information concerning the MDP Business,
Assets, finances and properties of Seller that may reasonably be requested.
8.2 Conduct of MDP Business in Normal Course. Selling Parties
shall carry on its MDP Business and activities diligently and in substantially
the same manner as they previously have been carried on, and shall not make or
institute any unusual or novel methods of management, accounting or operation
that will vary materially from the methods used by Seller as of the date of this
Agreement. Selling Parties shall use its best efforts, without making any
commitments on behalf of Buyer, to preserve its MDP Business organization
intact, to keep available to Seller its present officers and employees, and to
preserve its present relationships with suppliers, customers and others having
MDP Business relationships relating to its MDP Business with it.
8.3 Maintenance of Insurance. Unless requested by Buyer, Seller
shall continue to carry its existing insurance, subject to variations in amounts
required by the ordinary operations of its MDP Business. At the request of Buyer
and at Buyer's sole expense, the amount of insurance against fire and other
casualties which, at the date of this Agreement,
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Seller carries on any of the Assets or in respect of its MDP Business and
operations shall be increased by such amount or amounts as Buyer shall specify.
8.4 Employees and Compensation. Seller shall not do, or agree to
do, any of the following acts relating to its MDP Business: (i) grant any
increase in salaries payable or to become payable to any officer, employee,
sales agent or representative, or consultant; or (ii) increase benefits payable
to any officer, employee, sales agent, representative or consultant under any
bonus or pension plan or other contract or commitment. Seller will remain liable
to pay each employee the base salary, bonus and severance, if any, plus any
other compensation due, including any unused or accrued vacation or sick time,
through the date of Closing, and comply with all tax withholding provisions of
applicable federal, state, local and foreign laws and have or will pay over to
the proper governmental authorities all amounts required to be so withheld and
paid over. Seller's employees will be free to become employees of Buyer after
the Closing Date should the Buyer elect to offer employment to any such
employees, and such employees accept any such offer of employment.
8.5 New Transactions. In regards to its MDP Business, Seller shall
not do, or agree to do, any of the following acts:
(a) Enter into any contract, commitment or transaction
not in the usual and ordinary course of its MDP Business;
(b) Make any capital expenditures or commitments or draw
down any lines of credit or enter into any leases of capital equipment
or property with a value in excess of $5,000 without the prior consent
of Buyer, which consent shall not be unreasonably withheld;
(c) Sell or dispose of any capital MDP Assets with a
value in excess of $5,000 without the prior consent of Buyer, which
consent shall not be unreasonably withheld; or
(d) Make any distributions to Shareholder or any third
parties not contemplated by or inconsistent with this Agreement.
8.6 Payment of Liabilities and Waiver of Claims. In regards to
obligations and rights to be assumed by or transferred to Buyer, Seller shall
not do, or agree to do, any of the following acts: (i) pay any obligation or
liability, fixed or contingent, other than to pay current liabilities as they
become due and payable (ii) waive or compromise any right or claim; or (iii)
cancel, without full payment, any note, loan or other obligation owing to
Seller.
8.7 Existing Agreements. With regard to its MDP Business, Seller
shall not modify, amend, cancel or terminate any of its existing contracts or
agreements, or agree to do any of those acts.
8.8 Consent of Others. As soon as reasonably practical after the
execution and delivery of this Agreement, and in any event on or before the
Closing Date, Seller shall use
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reasonable best efforts to obtain any written consents listed on SCHEDULE 8.8
and will promptly furnish to Buyer executed copies of those consents obtained by
Seller.
8.9 Representations and Warranties True and Complete at Closing.
Selling Parties shall use all reasonable efforts to assure that all
representations and warranties of Selling Parties set forth in this Agreement
and in any Schedule will also be true and complete as of the Closing Date as if
made on that date and that all conditions precedent to the Closing shall have
been met. Selling Parties shall promptly disclose to Buyer any information
contained in the Schedules to this Agreement which, because of an event
occurring after the date hereof, is incomplete or is no longer correct as of all
times after the date hereof until the Closing Date; provided, however, that none
of such disclosures shall be deemed to modify, amend or supplement the
representations and warranties of Selling Parties or the Schedules hereto for
the purposes of Article 9 hereof, unless Buyer shall have consented thereto in
writing.
8.10 Sales and Use Taxes. Selling Parties hereby agree to indemnify
and hold Buyer harmless against any and all claims arising out of sales,
business license, use and other tax liabilities relating to its MDP Business
arising prior to the Closing Date. Shareholder agrees to furnish to Buyer
certificate(s) in good standing from the appropriate governmental agencies where
it is incorporated.
8.11 Statutory Filings. Seller shall cooperate fully with Buyer in
preparing and filing all information and documents deemed necessary or desirable
by Buyer under any statutes or governmental rules or regulations pertaining to
the transactions contemplated by this Agreement.
8.12 No Shop. From the date of this Agreement to the earlier of the
Closing, the termination of this Agreement or May 15, 2001, the Selling Parties
will not, directly or indirectly, through any officer, director, stockholder.
agent or otherwise (i) solicit, initiate or encourage the submission of
inquiries, proposals or offers from any corporation, partnership, person or
other entity or group relating to any acquisition or purchase of all or
substantially all of the assets of, or equity interest in, the Assets or
Business of MDP or any merger, consolidation or Business combination involving
MDP; (ii) enter into negotiations regarding the foregoing or furnish to any
person or entity information concerning the Assets or Business of MDP or any of
the foregoing; or (iii) otherwise cooperate with or assist to participate in,
facilitate or encourage, any effort or attempt by any other person to do or seek
any of the foregoing.
ARTICLE 9. CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
The obligations of Buyer to purchase the MDP Assets under this
Agreement are subject to the satisfaction, at or before the Closing, of all the
conditions set out below in this Article 9. Buyer may waive any or all of these
conditions in accordance with Section 14.2 hereof; provided, however, that no
such waiver of a condition shall constitute a waiver by Buyer of any of its
other rights or remedies, at law or in equity, if Selling Parties shall be in
default of any of their representations, warranties or covenants under this
Agreement.
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9.1 Accuracy of Selling Parties' Representations and Warranties.
All representations and warranties by Selling Parties in this Agreement or in
any written statement that shall be delivered to Buyer by Selling Parties under
this Agreement shall be true and correct in all material respects on and as of
the Closing Date as though made at that time.
9.2 Absence of Liens. At or within five (5) days prior to the
scheduled Closing, Buyer, if it elects, may obtain a UCC search report dated as
of a date not more than ten (10) days before the Closing Date issued by the
appropriate state governmental agency in Georgia, and the county within which
Seller's principal place of Business is located, reasonably satisfactory to
counsel for Buyer, indicating that there are no filings under the Uniform
Commercial Code on file which name Seller or Shareholder as a debtor or
otherwise indicating any lien not satisfied on the Assets, except for the liens
otherwise disclosed in Schedules hereto.
9.3 Selling Parties' Performance. Selling Parties shall have
performed, satisfied, and compiled in all material respects with all covenants,
agreements, and conditions required by this Agreement to be performed or
compiled with by Selling Parties on or before the Closing Date.
9.4 Certification by Seller. Buyer shall have received a
certificate, dated the Closing Date, signed by Seller's president and chief
executive officer and Shareholder certifying, in such detail as Buyer and its
counsel may reasonably request, that the conditions specified in Section 9.1 and
9.3 have been fulfilled.
9.5 Opinion of Selling Parties' Counsel. Buyer shall have received
from legal counsel for Selling Parties, an opinion dated as of the Closing Date,
in form and substance satisfactory to Buyer and its counsel, that:
(a) This Agreement has been duly and validly authorized
and, when executed an delivered by Selling Parties, will be valid and
binding on Selling Parties and enforceable in accordance with its
terms, except as limited by bankruptcy and insolvency laws and by other
laws affecting the rights of creditors generally;
(b) To the best of counsel's knowledge and belief and
without independent inquiry and except as set forth in SCHEDULE 6.17 to
this Agreement, such counsel does not know of any suit, action,
arbitration or legal, administrative or other proceeding or
governmental investigation pending or threatened against or affecting
Seller or its MDP Business or any of its properties, or financial or
other condition;
(c) To the best of counsel's knowledge and belief and
without independent inquiry, neither the execution nor delivery of this
Agreement nor the consummation of the transaction contemplated in this
Agreement will constitute (i) a default, or an event that would with
notice or lapse of time or both constitute a default under, or
violation or breach of (A) Seller's Articles of Incorporation or
Bylaws, or (B) to such counsel's knowledge without independent inquiry,
any indenture, license, lease, franchise, mortgage, instrument or other
agreement or statute, rule, regulation, judgment, order or decree to
which Selling Parties are a party, or by which Selling Parties are a
party, or by
18
which Selling Parties or the Assets may be bound; or (ii) an event that
would permit any party to any agreement or instrument to terminate it
or to accelerate the maturity of any indebtedness or other obligation
of Seller; or (iii) to such counsel's knowledge without independent
inquiry, an event that would result in the creation or imposition of
any lien, charge or encumbrance on any of the Assets; and
(d) To such counsel's knowledge and belief without
independent inquiry, every consent, approval, authorization or order of
any court or governmental agency or body that is required for the
consummation by Buyer of the transaction contemplated by this Agreement
has been obtained or has been waived by Buyer, and such counsel has not
been informed that any such consent, approval, authorization or order
has been rescinded or is no longer in effect as of the Closing Date.
9.6 Absence of Litigation. No action, suit or proceeding before
any court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
9.7 Corporate Approval. The execution and delivery of this
Agreement by Selling Parties, and the performance of its covenants and
obligations under it, shall have been duly authorized by all necessary corporate
action, and Buyer shall have received copies of all resolutions pertaining to
that authorization, certified by the secretary of Seller and of Shareholder.
9.8 Consents. Seller shall use its best efforts to obtain the
landlord's consent relating to the Leased Property prior to the Closing.
9.9 Approval of Documentation. The form and substance of all
certificates, instruments, opinions and other documents delivered to Buyer under
this Agreement shall be satisfactory in all reasonable respects, to Buyer and
its counsel.
9.10 Continuity of Management/Consulting Agreement. Buyer shall
have made arrangements reasonably suitable to it for the employment by Buyer of
sufficient Seller employees to continue the operation of the MDP Business being
transferred without disruption thereto. Further, Shareholder, pursuant to the
Security Agreement, shall be retained as a consultant reporting to the Senior
Vice President of Payer Services, and act as the General Manager of the Business
full time for the first 60 days after the Closing and thereafter, part time as a
consultant overseeing the Business, with no compensation therefor, for a period
of one (1) year.
9.11 Condition of MDP Assets. The Assets shall not have been
materially or adversely affected in any way as a result of any fire, accident,
storm or other casualty or labor or civil disturbance or act of God or the
public enemy.
ARTICLE 10. CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
The obligations of Selling Parties to sell and transfer the Assets
under this Agreement are subject to the satisfaction, at or before the Closing,
of all the following conditions set out
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below in this Article 10. Selling Parties may waive any or all of these
conditions in accordance with Section 14.2 hereof; provided, however, that no
such waiver of a condition shall constitute a waiver by Selling Parties of any
of their other rights or remedies, at law or in equity, if Buyer shall be in
default of any of its representations, warranties or covenants under this
Agreement.
10.1 Accuracy of Buyer's Representations and Warranties. All
representations and warranties by Buyer contained in this Agreement or in any
written statement delivered by Buyer under this Agreement, including but not
limited to the Reports available to Selling Parties referred to Section 7.2
hereof, shall be true on and as of the Closing as though such representations
and warranties were made on and as of that date.
10.2 Buyer's Performance. Buyer shall have performed and complied
with all covenants and agreements, and satisfied all conditions that it is
required by this Agreement to perform, comply with, or satisfy, before or at the
Closing.
10.3 Opinion of Buyer's Counsel. Buyer shall have furnished Seller
with an opinion, dated as of the Closing Date of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esquire,
Chief Legal Officer for Buyer, in form and substance satisfactory to the Seller
and its counsel, to the effect that:
(a) Buyer is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida
and has all requisite corporate power to perform its obligations under
this Agreement;
(b) All corporate proceedings required by law or by the
provisions of this Agreement to be taken by Buyer on or before the
Closing Date, in connection with the execution and delivery of this
Agreement and the consummation of the transactions contemplated by this
Agreement, have been duly and validly taken;
(c) Buyer has the corporate power and authority to
acquire the MDP Assets and Business for the consideration set forth
herein;
(d) To such counsel's knowledge without independent
inquiry, every consent, approval, authorization or order of any court
or governmental agency or body that is required for the consummation by
Buyer of the transactions contemplated by this Agreement has been
obtained or has been waived by Seller and will be in effect on the
Closing Date;
(e) The consummation of the transaction contemplated by
this Agreement does not violate or contravene any of the provisions of
the Restated Articles of Incorporation or Bylaws of Buyer, or to the
best of such counsel's knowledge without independent inquiry, any
indenture, agreement, statute, judgment or order to which Buyer is a
party or by which Buyer is bound;
(f) This Agreement has been duly and validly authorized
by the Board of Directors of Buyer and the Series C Warrantholders and,
when executed and delivered by Buyer, will be valid and binding on
Buyer and enforceable in accordance
20
with its terms, except as limited by bankruptcy and insolvency laws and
by other laws affecting the rights of creditors generally.
10.4 Buyer's Corporate Approval. Buyer shall have received
corporate authorization and approval from its Board of Directors and from its
Series C Preferred Shareholders and Warrantholders for the execution and
delivery of this Agreement, and all other corporate action necessary or proper
to fulfill the obligations of Buyer to be performed under this Agreement on or
before the Closing Date.
10.5 Certification by Buyer. Shareholder shall have received a
certificate, dated the Closing Date, signed by a chief financial officer of
Buyer certifying, in such detail as Seller and its counsel may reasonably
request, that the conditions specified in Section 10.1 and 10.2 have been
fulfilled.
10.6 Absence of Litigation. No action, suit or proceeding before
any court or any governmental body or authority, pertaining to the transaction
contemplated by this Agreement or to its consummation, shall have been
instituted or threatened on or before the Closing Date.
10.7 Consents. All necessary agreements and consents of any parties
to the consummation of the transaction contemplated by this Agreement, or
otherwise pertaining to the matters covered by it, shall have been obtained on
or before the Closing Date.
10.8 Approval of Documentation. The form and substance of all
certificates, instruments, opinions and other documents delivered to Selling
Parties under this Agreement shall be satisfactory in all reasonable respects,
to Shareholder and his counsel.
10.9 Payment of Purchase Price. The Buyer shall have paid the
Purchase Price for the Assets to be paid at Closing as specified in Section 2.1,
and Buyer shall have executed the Note and all other documents required to be
executed by Buyer in this Agreement.
ARTICLE 11. EMPLOYEES
11.1 Employee Plans. Except as set forth on SCHEDULE 11.1, Buyer is
not assuming any obligations of Seller relating to any Employee Plan. "Employee
Plan" includes all pension, retirement, disability, medical, dental or other
health insurance plans, life insurance or other death benefit plans, profit
sharing, deferred compensation, stock option, bonus or other incentive plans,
vacation benefit plans, severance plans or other employee benefit plans or
arrangements including, without limitation, any pension plan as defined in
Section 3(2) of the Employee Retirement Income Security Act of 1974 ("ERISA")
and any welfare plan as defined in Section 3(1) of ERISA, whether or not funded,
covering any employee of Seller or to which Seller is a party or bound or makes
or has made any contribution or by which Seller may have any liability to any
Subject Employee (including any such plan formerly maintained by or in
connection with which Seller may have any liability to any Subject Employee, and
any such plan which is a multi-employer plan as defined in Section 3(37)(A) of
ERISA).
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ARTICLE 12. OBLIGATIONS AFTER THE CLOSING
12.1 Preservation of Goodwill. Following the Closing, Selling
Parties will not undertake any activities which would cause Buyer's reasonable
expectations with respect to the goodwill, MDP Business reputation, employee
relations and prospects connected with the Assets to be materially impaired.
12.2 Indemnification of Buyer. Selling Parties shall, jointly and
severally, indemnify and hold Buyer harmless from and against all damages,
claims and expenses (including reasonable attorneys' fees) arising out of any
misrepresentation, breach of warranty or nonfulfillment of any covenant made by
the Selling Parties in this Agreement. Notwithstanding the foregoing sentence,
Selling Parties shall not be liable to Buyer with respect to those claims in the
aggregate that do not exceed $25,000. In addition, the Selling Parties'
indemnification of Buyer hereunder shall be limited to and shall not exceed
$10,000,000, except for any claims and obligations arising on or prior to the
Closing Date relating to the representations and warranties regarding federal,
state and local taxes, to intellectual property and to the Accounts Receivable,
for which Selling Parties agree to indemnify Buyer fully without regard to these
limits).
12.3 Access to Records. From and after the Closing, Selling Parties
shall allow Buyer, and its counsel, accountants and other representatives, such
access to records which after the Closing may be in the custody or control of
Selling Parties as Buyer reasonably requires in order to comply with its
obligations under the law or under contracts assumed by Buyer pursuant to this
Agreement.
12.4 Non-Competition and Non-Solicitation. Except for the services
to be provided to Buyer pursuant to the Security Agreement, Shareholder shall
not for five (5) years from the date of this Agreement engage in any Business
within the United States which is competitive to the Business, and, for a period
of two (2) years after the date of this Agreement, Shareholder shall not solicit
any employee of Seller either prior to or after the Closing Date to leave such
employment, or hire such employee.
12.5 Deposit of Checks. Upon Buyer's request, Selling Parties shall
cooperate with Buyer in making all necessary or desirable arrangements so that
checks and other payments on Accounts Receivable purchased by Buyer pursuant to
this Agreement may be deposited into Buyer's bank accounts without endorsement
by the Seller.
12.6 Hold Back and Setoff. In the event that any claim is made
against Buyer or the Assets being acquired herein which arises prior to or after
the date of Closing for which Selling Parties, jointly or severally, are
obligated herein, Buyer will have the right to hold back a reasonable amount for
such claim from any payments that may be due Seller or its assignee(s) under
Sections 2.1(b) until such claim has been settled or finally determined by a
court of competent jurisdiction. Subject to the provisions of Section 12.9, in
the event Buyer pays any such claim, Buyer may setoff such amounts including any
interest, reasonable attorney fees and costs it has incurred in defending
itself, from any contingency payments that may be due under Section 2.1(b).
Notwithstanding the foregoing sentence, the Selling Parties shall not be
responsible for any defense expenses of the Buyer so long as the Selling Parties
continue to defend any such claim until the final resolution of the claims.
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12.7 Indemnification of Selling Parties. Buyer shall indemnify and
hold Selling Parties harmless from and against all damages, claims and expenses
(including reasonable attorneys' fees) arising out of any misrepresentation,
breach of warranty or nonfulfillment of any covenant of Buyer contained in this
Agreement. Notwithstanding the foregoing sentence, Buyer shall not be liable to
Selling Parties with respect to those claims in the aggregate that do not exceed
$25,000. In addition, Buyers' indemnification of Selling Parties hereunder shall
be limited to and shall not exceed $10,000,000.
Notwithstanding any other provision of this Agreement, except
for Buyer's obligation to pay the consideration for the Assets referred to in
Section 2.1 hereof and in connection with liabilities, contracts, and payables
and obligations of Seller to be specifically assumed hereunder, Buyer shall not
be liable to Seller and/or Shareholder on any warranty, representation or
covenant made by Buyer in this Agreement, or under any of its indemnities in
this Agreement, regarding any claims in the aggregate that do not exceed
$25,000.
12.8 Location of the MDP Assets and Business. Buyer agrees to keep
the MDP Assets and Business at its present location in Atlanta, Georgia and to
retain Shareholder as consultant full time for at least the first 60 days after
Closing acting as the general manager and thereafter acting as a part time
consultant overseeing the Business at such location pursuant to the terms of the
Security Agreement for so long as the Secured Promissory Note remains due and
payable.
12.9 Indemnification Procedures.
(a) In connection with the indemnification provisions
contained herein, the party claiming indemnification shall promptly
notify the indemnifying party in writing of such a claim.
(b) The indemnifying party shall be entitled to assume
the defense or settlement thereof with counsel of its own choosing,
which counsel shall be reasonably satisfactory to the indemnified
party, by notifying the party claiming indemnification of such fact
within twenty (20) days after the indemnifying party receives the said
written notice; provided, however, that: (a) the indemnified party
shall be entitled to participate, at its own expense, in any such
action or proceeding or in any negotiations or proceedings to settle or
otherwise eliminate any claim for which indemnification is being
sought; and (b) the indemnifying party shall not be entitled to settle,
compromise, decline to appeal or otherwise dispose of such claim,
action or proceeding without the consent of the indemnified party if
such claim, action or proceeding in the reasonable judgment of the
indemnified party either (i) involves a request for relief other than
money damages; or (ii) in the event of an adverse ruling, could have a
material adverse effect on the indemnified party.
(c) In the event that the indemnifying party does not
assume the defense or settlement of any claim, action or proceeding,
the indemnified party may conduct the investigation, defense, trial
and, if necessary, appeal of, and/or may settle any such claim, action
or proceeding.
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(d) In the event that the indemnifying party fails to
defend any claim, legal fees or other reasonable and actual costs and
expenses paid or incurred by the indemnified party shall be paid to the
indemnified party by the indemnifying party within thirty (30) days
after receipt by the indemnifying party of the indemnified party's
itemized invoice.
12.10 Exclusive Remedy. Except with regard to the Note and the Security
Agreement, the terms of this Article 12 shall provide the exclusive remedy of
the Selling Parties and the Buyer for claims brought for damages for any and all
breaches of representations, warranties or covenants made in this Agreement or
in any document delivered in connection with this Agreement.
12.11 Access to Records. From and after the Closing, Selling Parties
shall allow Buyer, and its counsel, accountants and other representatives, such
access to records which after the Closing may be in the custody or control of
Selling Parties as Buyer reasonably requires in order to comply with its
obligations under the law or under contracts assumed by Buyer pursuant to this
Agreement.
12.12 S Corporation Taxes. Shareholder agrees that he will prepare and
file any required S corporation federal and state and local tax returns for
Seller when due, and will pay all applicable taxes shown to be due thereon.
ARTICLE 13. COSTS
13.1 Finder's or Broker's Fees. Each of the parties represents and
warrants that it has dealt with no broker or finder in connection with any of
the transactions contemplated by this Agreement, and, insofar as it knows, no
broker or other person is entitled to any commission or finder's fee in
connection with any of these transactions.
13.2 Expenses. Except as otherwise provided in this Agreement, each
of the parties shall pay all costs and expenses, including, but not limited to
attorneys' and accounting fees, incurred or to be incurred by it in negotiating
and preparing this Agreement and in closing and carrying out the transactions
contemplated by this Agreement.
ARTICLE 14. FORM OF AGREEMENT
14.1 Headings. The subject headings of the Articles and Sections of
this Agreement are included for purposes of convenience only, and shall not
affect the construction or interpretation of any of its provisions.
14.2 Entire Agreement; Modification; Waiver. This Agreement
constitutes the entire agreement between the parties pertaining to the subject
matter contained in it and supersedes all prior and contemporaneous agreements,
representations, and understandings of the parties. No supplement, modification
or amendment of this Agreement shall be binding unless executed in writing by
all the parties. No waiver of any of the provisions of this Agreement shall be
deemed, or shall constitute, a waiver of any other provision, whether or
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not similar, nor shall any waiver constitute a continuing waiver. No waiver
shall be binding unless executed in writing by the party making the waiver.
ARTICLE 15. PARTIES
15.1 Parties in Interest. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties to it and their
respective successors and assigns, nor is anything in this Agreement intended to
relieve or discharge the obligation or liability of any third persons to any
party to this Agreement, nor shall any provision give any third persons any
right of subrogation or action over against any party to this Agreement.
15.2 Assignment. Buyer may not assign or delegate any of its rights
or obligations under this Agreement or any part hereof without the prior written
consent of Seller, except for any assignment in connection with the sale of all
or substantially all of Buyer's assets or capital stock to an unaffiliated third
party. Except as otherwise set forth herein the Selling Parties may not assign
or delegate any of their respective rights or duties hereunder without the prior
written consent of the Buyer. This Agreement shall be binding on and shall inure
to the benefit of the parties to it and their respective heirs, legal
representatives, successors and assigns.
ARTICLE 16. REMEDIES
16.1 Recovery of Litigation Costs. If any legal action or any
arbitration or other preceding is brought for the enforcement of this Agreement,
or because of an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the successful or
prevailing party or parties shall be entitled to recover reasonable attorneys'
fees and other costs incurred in that action or proceeding, in addition to any
other relief to which it or they may be entitled.
16.2 Conditions Permitting Termination. Either party may on the
Closing Date terminate this Agreement by written notice to the other, without
liability to the other, if any bona fide action or proceeding shall be pending
against either party on the Closing Date that could result in an unfavorable
judgment, decree or order that would prevent or make unlawful the carrying out
of this Agreement.
16.3 Selling Parties' Right to Cure.
(a) Notwithstanding any provision of this Agreement to the
contrary, in the event that Buyer obtains actual knowledge of any breach of any
representation or warranty of the Selling Parties in this Agreement or that
Selling Parties have failed to obtain any consent required to be obtained by
them, and in the event Buyer intends to assert such breach or failure as failure
of Buyer's conditions precedent to Closing, Buyer shall immediately notify
Selling Parties of such breach or failure, and Selling Parties shall have twenty
(20) days within which to cure such breach or failure to the reasonable
satisfaction of Buyer. In the event Selling Parties are unable to cure such
breach or failure within said 30 day period, Selling Parties shall proceed in
good faith to cure such breach or failure, and the Closing
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Date shall be postponed appropriately until (i) Selling Parties have cured such
breach or failure, (ii) Buyer waives such breach or failure, or (iii) either
Selling Parties or Buyer elect (by delivering written notice of such election to
the other party) to proceed promptly with the Closing and to resolve the issue
of such breach or failure pursuant to subsection (b) next below; provided,
however, that from and after June 30, 2001, if the Closing has not occurred,
each of Selling Parties, on the one hand, and Buyer, on the other, shall have
the right to terminate this Agreement without liability to such party unless
such party is in breach of its obligations under this Agreement.
(b) In the event that Selling Parties are unable to cure a breach
or failure described in paragraph (a) next above within 30 days of the date the
Buyer notifies Selling Parties of such breach or failure, and if either Sellers
or Buyer elect to proceed pursuant to this subsection, (i) Sellers and Buyer
shall proceed in good faith to agree upon the amount of cash Buyer would be
required to expend to cure such breach or failure (the "Cure Amount"), (ii) the
Cure Amount shall be reflected as an adjustment on the certificate under Section
5(b)(i), and (iii) the parties shall proceed with the Closing as soon as
practicable thereafter. If Selling Parties and Buyer cannot agree upon the Cure
Amount within 30 days of the date either party notifies the other of such
party's election to proceed under this Section 16.3 (b), the parties shall
proceed promptly with the Closing and the dispute regarding the Cure Amount
shall be submitted to arbitration, binding upon both parties and not subject to
dispute or review, as follows:
(i) Such arbitration shall take place before and in
accordance with the arbitration rules of the American Arbitration
Association (the "AAA") and all issues relating to arbitrability or the
enforcement of this agreement to arbitrate shall be governed by the
Federal Arbitration Act (9 U.S.C. ss.1 et seq.) and the federal common
law of arbitration.
(ii) If either party fails to appear at the properly
noticed arbitration proceeding regarding the Cure Amount, an award may
be entered against such party by default or otherwise, notwithstanding
such failure to appear.
(iii) Arbitration proceedings shall take place in Atlanta,
Georgia, unless otherwise agreed by Buyer and the Selling Parties, and
shall be conducted before three (3) arbitrators, one of which shall be
chosen by Buyer and one by the Selling Parties, and the third of which
shall be selected by the two (2) arbitrators so chosen. If the two
arbitrators so chosen are unable to agree upon a third arbitrator,
Buyer and the Selling Parties shall petition the AAA to appoint the
third arbitrator.
(iv) If the determination of the Cure Amount is made after
the Closing, Selling Parties or Buyer shall promptly make appropriate
payment in cash to the other party. Selling Parties, on the one hand,
and Buyer, on the other hand, shall each bear a fraction of the cost of
such arbitration, the numerator of which fraction shall equal, with
respect to the Selling Parties, the difference between Selling Parties'
determination of the Cure Amount and the arbitrators' determination of
the Cure Amount, and, with respect to Buyer, the difference between
Buyer's determination of the Cure Amount and the arbitrators'
determination of the Cure Amount, and the denominator of which
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fraction with respect to both the Selling Parties and Buyer shall equal
the aggregate sum of the two differences.
ARTICLE 17. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations, warranties, covenants and agreements in this
Agreement or in any Schedule, instrument, certificate, opinion or other writing
provided for in it, shall survive the Closing for a period of two (2) years
thereafter.
ARTICLE 18. NOTICES
All notices, requests, demands and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given on the
date of service if served personally on the party to whom notice is to be given,
or on the third day after mailing if mailed to the party to whom notice is to be
given, by first class mail registered or certified, postage prepaid, return
receipt requested, and properly addressed as follows:
SELLER: MDP Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Mr. ▇▇▇▇▇ ▇▇▇▇▇, President and CEO
SHAREHOLDER: ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
with copy to: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attn. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
BUYER: ProxyMed, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Chief Executive Officer
with copy to: ProxyMed, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Chief Legal Officer
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Any party may change its address for purposes of this Article by giving the
other parties written notice of the new address in the manner set forth above.
ARTICLE 19. GOVERNING LAW
This Agreement shall be construed in accordance with, and governed by,
the laws of the State of Georgia, without regard to its conflict of laws
provisions.
ARTICLE 20 ARBITRATION
20.1 Except as otherwise provided herein, any dispute, controversy
or claim arising out of or relating to this Agreement or any contract or
agreement entered into pursuant hereto or the performance by the parties of its
or their terms shall be settled by binding arbitration held in Atlanta, Georgia,
in accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect, except as specifically otherwise provided in this
Section 20.1. The interpretation and enforceability of this Section 20.1 shall
be governed exclusively by the Federal Arbitration Act, 9 U.S.C. ▇▇.▇▇. 1-16.
20.2 If the matter in controversy (exclusive of attorney fees and
expenses) shall appear, as at the time of the demand for arbitration, to exceed
$100,000.00, then the panel to be appointed shall consist of three neutral
arbitrators; otherwise, one neutral arbitrator.
20.3 The arbitrator(s) shall allow such discovery as the
arbitrator(s) determine appropriate under the circumstances and shall resolve
the dispute as expeditiously as practicable, and if reasonably practicable,
within one hundred twenty (120) days after the selection of the arbitrator(s).
The arbitrator(s) shall give the parties written notice of the decision, with
the reasons therefor set out, and shall have thirty (30) days thereafter to
reconsider and modify such decision if any party so requests within ten (10)
days after the decision. Thereafter, the decision of the arbitrator(s) shall be
final, binding, and nonappealable, absent fraud or arithmetical error, with
respect to all persons, including, without limitation, persons who have failed
or refused to participate in the arbitration process.
20.4 The arbitrator(s) shall have authority to award relief under
legal or equitable principles, including interim or preliminary relief, and to
award the costs of the arbitration and recovery of attorneys fees and expenses
in such manner as may be consistent with Section 16.1 hereof.
20.5 All proceedings under this Article 20, and all evidence given
or discovered pursuant hereto, shall be maintained in confidence by all parties.
20.6 The decision shall be binding, and the prevailing party may
enforce such decision in any court of competent jurisdiction.
20.7 The fact that the dispute resolution procedures specified in
this Agreement shall have been or may be invoked shall not excuse any party from
performing its obligations under this Agreement and during the pendency of any
such procedure all parties shall
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continue to perform their respective obligations in good faith, subject to any
rights to terminate this Agreement that may be available to any party and to the
right of set off provided herein.
20.8 All applicable statutes of limitation shall be tolled while
the procedures specified in this Article 20 are pending. The parties will take
such action, if any, required to effectuate such tolling.
ARTICLE 21 MISCELLANEOUS
21.1 Announcements. Except as and to the extent required by any
applicable law, regulation or order, including Securities and Exchange
Commission regulations, no party to this Agreement shall, and each shall direct
its representatives not to, directly or indirectly, make any public comment,
statement or communication with respect to, or otherwise disclose or permit the
disclosure of the existence of negotiations regarding a proposed transaction
between the parties or any of the terms, conditions or other aspects of a
proposed transaction without prior written consent of the other party, In the
event any party is required by applicable law, regulation or order to make any
such disclosure, such party shall provide prior notice of such required
disclosure to the other party. Selling Parties and Buyer agree to make a public
announcement of the Closing of this transaction and Buyer will deliver to Seller
a copy of the proposed public announcement relating to this transaction prior to
the publication thereof in order to give Seller an opportunity to make
recommendations with respect thereto, which recommendation shall in no way be
binding on Buyer.
21.2 Confidentiality. Buyer and Selling Parties hereby ratify and
confirm that they have entered into a legally binding agreement dated March 14,
2001, whereby Buyer and Selling Parties on behalf of themselves have agreed as
to matter of confidentiality, all as more fully set out on Addendum "A" attached
hereto and incorporated herein by reference. The Confidentiality Agreement shall
survive for two (2) years from the Closing Date.
21.3 Further Actions. Each party shall execute and deliver such
other certificates, agreements and other documents and take such other actions
as may reasonably be requested by the other parties in order to consummate or
implement the transactions contemplated by this Agreement.
21.4 Severable Covenants. In the event that any provision contained
herein is declared invalid or illegal, the other provisions hereof shall not be
affected or impaired thereby and shall remain valid and enforceable.
21.5 Specific Performance. In the event of a breach or threatened
breach by any party hereto of the provisions of this Agreement, the other party
hereto shall be entitled to specific performance. Nothing herein shall be
construed as prohibiting any party hereto from pursuing any other remedies
available for such breach or threatened breach, including the recovery of
damages, except that Selling Parties shall not be liable to Buyer for any
monetary damages for any breach by Selling Parties that Buyer was aware of prior
to the Closing Date.
21.6 Counterparts. This Agreement may be signed in two or more
counterparts, any one of which need not contain the signatures of more that one
party, but all such
29
counterparts taken together will constitute one and the same instrument. In
addition, execution of this Agreement may be transmitted by one party to the
other via facsimile.
IN WITNESS WHEREOF, the parties to this Agreement have duly executed it
as of the day and year first above written.
BUYER:
PROXYMED, INC.
Attest:
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------- ----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Secretary Chief Financial Officer
and Executive Vice President
SELLER:
MDP CORPORATION
Attest:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------- ----------------------------
Secretary ▇▇▇▇▇ ▇▇▇▇▇, President
President and Chief
Executive Officer
SOLE SHAREHOLDER:
/s/ ▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇▇ ▇▇▇▇▇
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