ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "AGREEMENT") is dated as of June 21,
1999, and is entered into between TD Ventures, Inc., a California corporation
("PURCHASER"), ▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual residing in San Juan Capistrano,
California and the owner of 90% of the issued and outstanding capital stock of
Purchaser ("YANKOFF"), and Integrated Behavioral Health, a California
corporation ("IBH").
WHEREAS, IBH is a behavioral health care management company offering
services designed to control employer health care costs and to monitor the
quality of behavioral health care services provided under employer health care
plans (the "BUSINESS");
WHEREAS, pursuant to the terms of a Letter of Intent between IBH and
Yankoff dated January 12, (the "Letter of Intent"), Yankoff was granted an
option to purchase certain assets of IBH; and
WHEREAS, by letter dated April 1, 1999, Yankoff exercised such option;
WHEREAS, IBH desires to sell certain of the assets and to transfer certain
liabilities related to the Business to Purchaser;
WHEREAS, Yankoff and Purchaser desire that Purchaser acquire such assets and
liabilities under the terms and conditions hereinafter set forth and for the
consideration provided herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Section 1. ASSETS TO BE PURCHASED BY PURCHASER. Upon the terms and
subject to the conditions and provisions set forth in this Agreement, on the
Closing Date (as defined in Section 12), IBH shall convey, sell, transfer,
assign, quitclaim and deliver to Purchaser, and Purchaser shall purchase from
IBH, all right, title and interest in and to those the Acquired Assets, as
described in Section 3 hereof.
Section 2. CONSIDERATION. Upon the terms and subject to the conditions
contained in this Agreement, as consideration for the Acquired Assets and in
full payment therefor, Purchaser will pay the aggregate sum of Five Hundred
Twelve Thousand Five Hundred Dollars ($512,500) (the "PURCHASE PRICE"), payable
to the order of IBH as follows:
(a) Purchaser shall pay to IBH at Closing the sum of Fifty Thousand
Dollars ($50,000) by certified check or wire transfer;
(b) Purchaser shall deliver to IBH at Closing a promissory note (the
"Note") payable to IBH in the principal amount of Four Hundred Sixty Two
Thousand Five Hundred Dollars ($462,500), bearing interest at ten percent (10%)
per annum, payable in 36 equal monthly installments of principal and interest,
such Note shall be in the form of EXHIBIT A hereto. The indebtedness evidenced
by the Note shall be secured pursuant to a Security Agreement in the form of
EXHIBIT B hereto.
(c) Purchaser will propose an allocation of the Purchase Price in
accordance with the allocation method required by Section 1060 of the Internal
Revenue Code of 1986, as amended (the "Code") and the regulations thereunder.
Subject to IBH's agreement with such allocation, which will not be unreasonably
withheld, IBH and Purchaser each agree to report the federal, state and local
income and other tax consequences of the transactions contemplated herein, and
in particular to report the information required by Code Section 1060(b), in a
manner consistent with such allocation.
Section 3. DESCRIPTION OF ASSETS. Subject to Section 4, below, the
assets of the Business to be sold by IBH and purchased by Purchaser (the
"ACQUIRED ASSETS") shall consist of the following:
(a) All of the equipment, machinery, and furniture related to the Business
and described on SCHEDULE 3;
(b) All contracts including real estate leases, equipment leases and
contracts with the current customers of IBH described in SCHEDULE 3(B)
to the extent transferable;
(c) All deposits, goodwill and accounts of IBH described on SCHEDULE 3;
(d) All of the applicable intellectual property rights, including but not
limited to "Integrated Behavioral Health," "IBH," and any other name,
trademark, trade name or symbol similar thereto) applied for, issued
or owned by IBH or otherwise relating to the Business of IBH,
including any fictitious business names all as described on SCHEDULE
3, provided, however, IBH shall not be obligated to change its
corporate name unless Purchaser agrees to reimburse IBH for costs
related to such name change (including reasonable attorneys' fees);
(e) All customer lists and all other information, whether or not
confidential, owned or used by IBH in support of the marketing,
service and sales of the Business, and all contact lists of service
providers and vendors for such items;
(f) All brochures, advertising materials, sales literature, reference
catalogs relating solely to the advertising and promotion of the
Business provided such material do not include mention of CORE,
WorkAbility or any derivatives or variations thereof;
(g) All express or implied warranties, rebates and credits from any
suppliers to the Business;
(h) The IBH's PPO Network as described in SCHEDULE 3; and
(i) All books, records and accounts, correspondence, employment records,
and to the extent transferable, telephone numbers, directory listings,
e-mail addresses, web pages, licenses, certifications, permits,
manuals, reference manuals, design drawings, warranties and any
confidential information stored on paper, computer or otherwise.
Section 4. ASSETS RETAINED. Notwithstanding any Schedule hereto or any
other provision of this Agreement, IBH shall retain, and Purchaser shall have no
rights to, any of the following rights or assets (the "RETAINED ASSETS"):
(a) Information or documents in the possession of CORE, INC. ("CORE") or
any of its affiliates at a location other than IBH's Irvine,
California offices; provided, however, IBH shall provide Purchaser
access to and permit Purchaser to make copies of any such documents to
the extent the documents are referred to in item 3(i), above;
(b) Cash, accounts receivable and bank accounts of IBH;
(c) Minute books, corporate and financial records of IBH;
(d) Any attorney-client privileged communication or document relating
directly or indirectly to IBH's operation of the Business;
(e) The trademarks and tradenames "CORE," "WorkAbility," and all
derivatives and variations thereof;
(f) The WorkAbility program or other intellectual property developed by
CORE and its affiliated corporations;
(g) The cash management and accounts receivable collection system utilized
by IBH in Boston, Massachusetts or Irvine, California.
(h) CORE's web site;
(i) The telephone switch utilized by both CORE and IBH; and
(j) CORE's information system, utilized by IBH, including server(s),
e-mail service, and winframes and related items and services, except
as specifically indicated in Section 7, below.
Section 5. LIABILITIES.
(a) ASSUMPTION OF LIABILITIES BY PURCHASER. As additional consideration
for the assignment and transfer of the Acquired Assets, and except as otherwise
provided in Section 5(b) hereof, effective the Closing Date, Purchaser shall
assume all liabilities of the Business, including liabilities of IBH pursuant to
lease obligations related to fixed assets and office space rental, accrued
employee benefits (including but not limited to accrued vacation benefits), and
liabilities and obligations under the customer contracts transferred or to be
transferred by IBH to Purchaser following the date of transfer of the Acquired
Assets including, without limitation those liabilities listed on SCHEDULE 5
hereto collectively, (the "ASSUMED LIABILITIES").
(b) RETENTION OF LIABILITIES BY IBH. IBH retains, and Purchaser shall not
assume, any obligations or liabilities of IBH relating to the Retained Assets
and all other obligations and liabilities, including professional liabilities
for services rendered by IBH prior to the Closing Date (whether or not related
to the Acquired Assets), other than the Assumed Liabilities (collectively, the
"RETAINED LIABILITIES").
Section 6. NON-ASSIGNMENT OF CERTAIN ITEMS. Notwithstanding anything
to the contrary in this Agreement, to the extent that the assignment hereunder
of any item of the Acquired Assets shall require the consent of any other party
(or in the event that any of the same shall be nonassignable), neither this
Agreement nor any action taken pursuant to its provisions shall constitute an
assignment or an agreement to assign if such assignment or attempted assignment
would constitute a breach thereof, a violation of law, or result in the loss or
diminution thereof; PROVIDED, HOWEVER, that in each such case, all parties
hereto shall use their best efforts to obtain the consent of such other party to
an assignment to Purchaser. If such consent is not obtained, IBH and Purchaser
shall cooperate in any reasonable arrangement designed to provide to Purchaser
the benefits and obligations under any such Acquired Asset.
Section 7. FURTHER ASSURANCES; EMPLOYEES; E-MAIL. At any time and from
time to time after the date hereof, at the request of Purchaser, and without
further consideration, IBH hereby agrees to execute and deliver such other bills
of sale and instruments of conveyance, assignment or transfer and take such
other action as is reasonably required to convey to, transfer to, or vest in
Purchaser or its successors and assigns, or put Purchaser or its successors and
assigns in possession of any or all of the Acquired Assets intended to be sold,
conveyed, assigned, transferred and delivered to Purchaser. Similarly,
Purchaser agrees to execute and deliver to IBH such documents and to take such
other actions as are necessary to confirm assumption of the Assumed Liabilities
or to otherwise confirm the actions intended to be taken under this Agreement.
Purchaser will offer employment, commencing as of the Closing Date, to all
employees listed on SCHEDULE 7. Notwithstanding the foregoing, and without
breaching the foregoing, Purchaser reserves the right to review staffing levels,
wages, benefits and conditions of employment after the Closing, and to make
appropriate changes, if in its judgment such changes are necessary in light of
then existing business conditions or individual employee performance.
IBH shall cause CORE to continue to provide to Purchaser through October
31, 1999 the e-mail system currently utilized by IBH at no cost, provided
Purchaser's use is consistent with IBH's use of such system prior to Closing.
For the period November 1 through December 31, 1999, Purchaser shall pay CORE
$150.00 per month in advance for continued use of the e-mail system. Neither
IBH nor CORE shall be responsible for upgrading or improving such e-mail beyond
its present uses or capacity nor have any obligation to make the system
available to Purchaser after December 31, 1999. Purchaser's sole and exclusive
remedy if dissatisfied with such e-mail system is a refund of the monthly
payment and such refund shall only be made if requested by Purchaser in writing
to CORE within fifteen (15) days of the cause of dissatisfaction. Following
CORE's receipt of a request for a refund or upon Purchaser's failure to make the
monthly pre-payments, CORE shall have no obligation to continue to provide such
e-mail service to Purchaser.
Section 8. ACCESS TO BOOKS AND RECORDS. In connection with any matter
relating to any period prior to the Closing Date, IBH and Purchaser shall, for a
period of three (3) years, upon the reasonable request and at the expense of the
other, permit the other and its representatives access, upon reasonable notice
and at reasonable times, to the books and records of IBH and Purchaser, to the
extent that such access is reasonably required by the other in connection with
(i) the preparation of any required tax returns or financial reports, or (ii)
any claim, litigation, audit or investigation or any other proper purpose
relating to the Business prior the Closing Date hereof; PROVIDED, HOWEVER, that
the foregoing shall be done in a manner so as to not interfere unreasonably with
the conduct of the business of IBH or Purchaser. During the five (5) year
period beginning on the Closing Date, IBH and Purchaser shall not dispose of or
permit the disposal of any such books and records not required to be retained
under such policies without first giving sixty (60) days' prior written notice
to the other offering to surrender the same to the other at the other's expense,
and IBH and Purchaser will use their reasonable efforts to assist the other in
identifying those documents related to the conduct of the Business.
IBH and Purchaser hereby agree in connection with their review of the books
and records of the other pursuant to this Section 8, that it will keep
confidential all information obtained by it (and unrelated to the Business)
until such information shall, other than by action of IBH or Purchaser (as the
case may be), become publicly known or available; PROVIDED, HOWEVER, that
nothing contained herein shall prevent IBH and Purchaser at any time from
furnishing any required information to any governmental authority or agency
pursuant to lawful process or from complying with its legal or contractual
obligations.
To the extent such records include confidential patient information, all
parties shall comply with all laws applicable to the confidentiality of patient
records.
Section 9. REPRESENTATIONS AND WARRANTS.
(a) PURCHASER'S REPRESENTATIONS AND WARRANTIES. Purchaser and
Yankoff hereby represent and warrant to IBH that:
(i) ORGANIZATION, AUTHORITY AND VALIDITY. Purchaser is a
corporation organized, validly existing and in good
standing under the laws of the State of California and
has all requisite corporate power and authority to
enter into this Agreement, perform its obligations
hereunder and consummate the transactions contemplated
hereby. All necessary and appropriate corporate
action has been taken by Purchaser with respect to the
execution and delivery of this Agreement and the other
documents and agreements referred to herein or related
hereto. This Agreement constitutes a valid and
binding obligation of Purchaser, enforceable in
accordance with its terms; and
(ii) ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED
CONSENTS. The execution, delivery and performance by
Purchaser of this Agreement and any other documents
contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (i) does not
require the consent of any governmental or regulatory
authority or any other third party; (ii) will not
conflict with any provision of Purchaser's certificate
of incorporation or bylaws; (iii) will not conflict
with, result in a breach of, or constitute a default
under any law, ordinance, regulation, ruling,
judgment, order or injunction of any court or
governmental instrumentality to which Purchaser is a
party or by which Purchaser or its or his properties
are bound; (iv) will not conflict with, constitute
grounds for termination of, result in a breach of,
constitute a default under, require any notice under,
or accelerate or permit the acceleration of any
performance required by the terms of any agreement,
instrument, license or permit, material to this
transaction, to which Purchaser is a party or by which
Purchaser or any of its properties are bound.
(iii) OWNERSHIP OF PURCHASER. The authorized capital stock
of Purchaser consists of 1,000,000 shares of common
stock, 100,000 shares of common stock which are issued
and outstanding (the "SHARES") and 90% of which are
owned beneficially and of record by Yankoff.
(b) IBH'S REPRESENTATIONS AND WARRANTIES. IBH hereby represents
and warrants to Purchaser and Yankoff that:
(i) ORGANIZATION, AUTHORITY AND VALIDITY. IBH is a
corporation organized, validly existing and in good
standing under the laws of the state of California and
has all requisite corporate power and authority to
enter into this Agreement, perform its obligations
hereunder and consummate the transactions contemplated
hereby. All necessary and appropriate corporate
action has been taken by IBH with respect to the
execution and delivery of this Agreement and the other
documents and agreements referred to herein or related
hereto. This Agreement constitutes a valid and
binding obligation of IBH, enforceable in accordance
with its terms;
(ii) TRANSFER OF TITLE. Subject to Section 6 hereof, the
delivery to Purchaser of the Acquired Assets pursuant
to the provisions of this Agreement will transfer to
Purchaser good and marketable title to the Acquired
Assets, free and clear of all liens, charges, claims,
encumbrances or restrictions of any nature whatsoever;
(iii) ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED
CONSENTS. The execution, delivery and performance by
IBH of this Agreement and any other documents
contemplated hereby (with or without the giving of
notice, the lapse of time, or both): (i) does not
require the consent of any governmental or regulatory
authority or any other third party; (ii) will not
conflict with any provision of IBH's articles of
incorporation or bylaws, (iii) will not conflict with,
result in a breach of, or constitute a default under
any law, ordinance, regulation, ruling, judgment,
order or injunction of any court or governmental
instrumentality to which IBH is a party or by which
IBH or its properties are bound; (iv) will not
conflict with, constitute grounds for termination of,
result in a breach of, constitute a default under,
require any notice under, or accelerate or permit the
acceleration of any performance required by the terms
of any agreement, instrument, license or permit,
material to this transaction, to which IBH is a party
or by which IBH or any of its properties are bound;
and (v) will not create any claim, lien, charge,
encumbrances or restriction upon the Shares or any of
the assets or properties of IBH;
(iv) CONSENTS TO CERTAIN CONTRACTS AND AGREEMENTS.
Notwithstanding the representations and warranties in
Section 9(b)(ii) and (iii), above, certain contracts
and agreements to be assigned hereunder by IBH to
Purchaser require the written consent of the other
party thereto, and it is the responsibility of
Purchaser to obtain such written consents.
Accordingly, for the purposes of the foregoing
representations and warranties, such consents shall be
deemed to have been obtained by Purchaser; and
(v) FINANCIAL STATEMENTS. Attached hereto as SCHEDULE 9
are IBH's unaudited financial statements for the
fiscal year ended December 31, 1998 and unaudited
interim financial statements for the two-month period
ended February 28, 1999, reflecting statements of
operations for the periods indicated which have been
prepared in accordance with CORE's divisional format
and do not necessarily reflect generally accepted
accounting principles consistently applied,
(collectively, the "FINANCIAL STATEMENTS").
(c) IBH makes no representation or warranty concerning any of
the following matters and no indemnification shall be due
Purchaser or Yankoff in connection with any of the following
matters:
(i) any so-called Y2K issues relating to the Business or
Acquired Assets;
(ii) failure of the parties to comply with any applicable
bulk sales laws;
(iii) issues, matters or claims in any way relating to the
PPO Network transferred to Purchaser; and
(iv) issues, matters or claims in any way relating to
clients' claims accounts.
Section 10. CONSENTS; APPROVALS; COMPLIANCE WITH LAWS. (a) IBH and
Purchaser will use their reasonable best efforts in cooperation with each other
to obtain all consents from third parties and governmental authorizations or
approvals and to file any necessary notices or reports required in order to
consummate the transactions contemplated hereby.
(b) Yankoff and Purchaser each agree and acknowledge that no
consulting fees or other payments are due Yankoff for his services to IBH and
any of IBH's affiliated corporations.
Section 11. INDEMNIFICATION.
(a) PURCHASER INDEMNITY. Purchaser agrees effective the Closing
Date to indemnify and hold harmless IBH and any successors
to IBH and any other corporation affiliated with IBH,
including CORE, and their respective employees, officers,
directors, agents, attorneys and representatives from and
against any and all claims, demands, liabilities, actions,
lawsuits, proceedings, losses, damages, costs and expense,
including reasonable attorneys' fees (collectively,
"CLAIMS") asserted against, resulting to, imposed upon, or
incurred or suffered by IBH or the affiliated indemnified
parties, as a direct result of, or arising directly from,
(i) the Acquired Assets based upon events following the date
of transfer of the Acquired Assets or (ii) the Acquired
Liabilities.
(b) IBH INDEMNITY. Except for the Assumed Liabilities and
except as provided in Sections 5(b) and 6, IBH hereby agrees
to indemnify and hold harmless Purchaser and any successor
to Purchaser, and their respective employees, officers,
directors, agents, attorneys and representatives from and
against any and all (i) Claims asserted against, resulting
to, imposed upon, or incurred or suffered by, Purchaser as a
direct result of or arising directly from the Acquired
Assets prior to the Closing Date; PROVIDED, HOWEVER, no
indemnification with respect to the Acquired Assets shall be
provided for Claims for indemnification by Purchaser
asserted more than one year after the Closing Date and in no
event shall IBH's total indemnification obligation exceed
$100,000 (unless IBH's insurance covers such claims in which
event the $100,000 shall be increased to the amount of
coverage actually paid by the insurance carrier).
Section 12. CLOSING. The closing of the sale of the Business shall
occur at 10:00 A.M. on June 21, 1999 at the offices of CORE, Inc., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ (the "CLOSING DATE"), or such other date and
time as shall be mutually agreed upon by the parties, provided that the
following requirements shall have been satisfied or waived, as applicable, on or
prior to the Closing Date:
(a) DELIVERY BY PURCHASER OF PURCHASE PRICE AND OTHER DOCUMENTS.
Purchaser shall have delivered to IBH :
(i) the $50,000 referred to in Section 2(a);
(ii) the Note in the form attached hereto as EXHIBIT A;
(iii) the Security Agreement in the form attached hereto as
EXHIBIT B; and
(iv) Written consents from all third parties listed on
SCHEDULE 12 whose consents are required in connection
with the transfer of the IBH contracts, agreements or
leases being transferred hereunder.
(b) DELIVERY OF DOCUMENTS BY IBH. IBH shall have delivered to
Purchaser:
(i) The ▇▇▇▇ of Sale in the form attached hereto as
EXHIBIT C.
(ii) The Non-Competition Agreement with CORE, Inc., in the
form attached hereto as EXHIBIT D; and
(iii) UCC-3 termination statements releasing the security
interest of Fleet Bank in the Acquired Assets.
(c) OTHER DOCUMENTS. Purchaser and IBH shall have agreed on the
form and content of and/or delivered and/or entered into
other agreements, including:
(i) letters to be sent to IBH's customers and employees
notifying them of the sale of the Business to
Purchaser;
(ii) an Assignment and Assumption Agreement in the form
attached hereto as EXHIBIT E.
(iii) other reasonably requested documents in such form as
mutually agreed between the parties.
The parties agree that time shall be of the essence.
Section 13. NOTICES. All notices and other communications required or
permitted under this Agreement shall be deemed to have been duly given and made
if in writing and if served either by personal delivery (including overnight
delivery or courier service) to the party for whom intended or by being
deposited, postage prepaid, certified or registered mail, return receipt
requested, in the United States mail bearing the address shown in this Agreement
for, or such other address as may be designated in writing hereafter by, such
party:
if to IBH:
c/o CORE, INC.
▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Chief Financial Officer
with a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Rich, May, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
if to Purchaser or Yankoff:
▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With copies to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, LLP
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Section 14. BINDING EFFECT; ASSIGNMENT. This Agreement and the various
rights and obligations arising hereunder shall inure to the benefit of and be
binding upon IBH, its successors and permitted assigns, and Purchaser, and its
successors and permitted assigns. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be transferred or assigned (by
operation of law or otherwise) by any party hereto without the prior written
consent of the other.
Section 15. CAPTIONS. The Article and Section headings of this
Agreement are inserted for convenience only and shall not constitute a part of
this Agreement in construing or interpreting any provision hereof.
Section 16. EXPENSES OF TRANSACTION. Purchaser, Yankoff and IBH shall
each be responsible for the payment of their respective legal and financial
adviser and accounting fees, and any other costs or expenses incurred by them in
connection with this Agreement and the transactions contemplated hereby.
Section 17. WAIVER; CONSENT. This Agreement may not be changed,
amended, terminated, augmented, rescinded or discharged (other than by
performance), in whole or in part, except by the agreement in writing of the
parties hereto, and no waiver of any of the provisions or conditions of this
Agreement or any of the rights of a party hereto shall be effective or binding
unless such waiver shall be in writing and signed by the party claimed to have
given or consented thereto. Except to the extent that a party hereto may have
otherwise agreed in writing, no waiver by that party of any condition of this
Agreement or document delivered on the Closing Date or breach by any other party
of any of its obligations or representations hereunder or thereunder shall be
deemed to be a waiver of any other condition or subsequent or prior breach of
the same or any other obligation or representation by such other party, nor
shall any forbearance by the first party to seek a remedy for any noncompliance
or breach by such other party be deemed to be a waiver by the first party of its
rights and remedies with respect to such noncompliance or breach.
Section 18. NO THIRD-PARTY BENEFICIARIES. Except for the
indemnification rights set forth in Section 11, nothing herein, expressed or
implied, is intended or shall be construed to confer upon or give to any person,
firm, corporation or legal entity, other than the parties hereto and their
shareholders, any rights, remedies or other benefits under or by reason of this
Agreement.
Section 19. COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which when
taken together shall constitute one and the same instrument.
Section 20. SEVERABILITY. With respect to any provision of this
Agreement finally determined by a court of competent jurisdiction or arbitrator
pursuant to Section 21 to be unenforceable, or to violate law, IBH and Purchaser
hereby agree that such court or arbitrator shall have jurisdiction to reform
such provision so that it is enforceable to the maximum extent permitted by law,
and the parties agree to abide by such court's or arbitrator's determination.
In the event that any provision of this Agreement cannot be reformed, such
provision shall be deemed to be severed from this Agreement, but every other
provision of this Agreement shall remain in full force and effect.
Section 21. DISPUTES. If the parties are unable, after good faith
negotiations, which each hereby covenants to undertake, to resolve any dispute
arising between them within sixty (60) days after notice is given of such
dispute, then the dispute will be referred to arbitration before one arbitrator
in Orange County, California, or any other place mutually agreed upon by
Purchaser and IBH, in accordance with the applicable rules then in effect of the
Judicial Arbitration & Mediation Services (JAMS). The determination made by the
arbitrator in accordance with California rules of evidence and discovery shall
be delivered in writing to the parties hereto and shall be final and binding and
conclusive upon the parties hereto and the amount of the claim, if any,
determined to exist shall be a valid claim and judgment may be entered upon such
decision in accordance with applicable law in any court having jurisdiction
thereof. The arbitration award may include (i) a provision that the prevailing
party in such arbitration recover its costs relating to the arbitration and
reasonable attorneys' fees from the other party, (ii) the amount of such costs
and fees and (iii) an order that the losing party pay the fees and expenses of
the arbitrators.
Section 22. GOVERNING LAW. This Agreement shall in all respects be
construed in accordance with and governed by the laws of the State of
California.
Section 23. NO BROKERS. Yankoff and Purchaser represent and warrant to
IBH that no agent or broker or other person acting pursuant to authority of
Yankoff or Purchaser is entitled to any commission or finder's fee in connection
with this Agreement or the transactions contemplated by this Agreement. IBH
represents and warrants to Yankoff and Purchaser that no agent or broker or
other person acting pursuant to authority of IBH is entitled to any commission
or finder's fee in connection with this Agreement or the transactions
contemplated by this Agreement.
Section 24. ENTIRE AGREEMENT. This Agreement (including the documents
and other agreements referred to herein) constitutes the entire agreement among
the parties and supersedes any prior understandings, agreements, or
representations by or among the parties, written or oral, to the extent they
have related in any way to the subject matter hereof, including, without
limitation, the letter of intent between the parties dated January 12, 1999, as
amended.
INTEGRATED BEHAVIORAL HEALTH
By:_/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ IV__
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇
Chief Executive Officer
TD Venture, Inc.
By:_/S/▇▇▇ ▇. ▇▇▇▇▇▇▇, PRESIDENT
▇▇▇ ▇. ▇▇▇▇▇▇▇
President
_/S/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇, individually