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EXHIBIT 10.8
ASSET PURCHASE AGREEMENT
BETWEEN
AMERICAN MEDCARE CORPORATION AND
INFO SYSTEMS OF NORTH CAROLINA, INC.
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TABLE OF CONTENTS
PAGE
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SECTION I.
DEFINITIONS..............................................................................................1
1.1 CERTAIN DEFINITIONS....................................................................1
SECTION II.
PURCHASE AND SALE OF ASSETS..............................................................................4
2.1 PURCHASE/SALE..........................................................................4
2.2 ASSUMPTION OF LIABILITIES AND OBLIGATIONS..............................................4
2.3 NO EMPLOYEES OF INFO/CURE GROUP........................................................5
2.4 PURCHASE PRICE.........................................................................5
2.5 CLOSING................................................................................6
2.6 EFFECTIVE DATE.........................................................................7
2.7 CALCULATION OF ADJUSTMENTS.............................................................7
2.8 PURCHASE PRICE ALLOCATION..............................................................8
SECTION III.
REPRESENTATIONS AND WARRANTIES OF ISI....................................................................9
3.1 CORPORATE..............................................................................9
3.2 FINANCIAL STATEMENTS..................................................................10
3.4 ABSENCE OF CERTAIN FINANCE AND BUSINESS CHANGES.......................................12
3.5 GUARANTIES/LIENS......................................................................13
3.6 NO UNDISCLOSED LIABILITIES............................................................13
3.7 ACCOUNTS RECEIVABLE...................................................................13
3.8 OWNERSHIP OF INTELLECTUAL PROPERTY....................................................14
Software .............................................................................14
Other Intellectual Property Rights Relating to the Software...........................14
Trademark.............................................................................15
Software Developers...................................................................15
Rights of Licensees...................................................................16
No Infringements......................................................................16
Licensed Software.....................................................................17
ISI Software..........................................................................18
Supplier Software.....................................................................18
Confidentiality.......................................................................18
Source Code Escrow Agreements.........................................................19
Clear Title...........................................................................19
3.9 PROPERTY AND EQUIPMENT................................................................19
3.10 LICENSE AGREEMENTS....................................................................19
3.11 CONSULTING AND DEVELOPMENT AGREEMENTS.................................................20
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3.12 MAINTENANCE/COMMITMENTS...............................................................21
3.13 ALL INTANGIBLE ASSETS USED IN THE BUSINESS............................................22
3.14 EMPLOYEES/CONSULTANTS/DIRECTORS.......................................................22
3.15 ASSUMED AGREEMENTS....................................................................22
3.16 LITIGATION AND ADVERSE EVENTS.........................................................23
3.17 COMPLIANCE WITH APPLICABLE LAW........................................................23
3.20 BROKERS AND FINDERS...................................................................24
3.21 NO UNTRUE STATEMENTS..................................................................24
3.22 REPRESENTATIONS REGARDING NOTE........................................................25
SECTION IV.
REPRESENTATIONS AND WARRANTIES OF AMC...................................................................26
4.1 ORGANIZATION AND STANDING OF AMC......................................................27
4.2 AUTHORIZATION - AMC...................................................................27
4.3 BROKERS AND FINDERS...................................................................28
4.4 NO UNTRUE STATEMENTS..................................................................28
SECTION V.
CONDITIONS TO THE OBLIGATIONS OF AMC....................................................................28
5.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE...........................................28
5.2 THIRD PARTY CONSENTS..................................................................29
5.3 OPINION OF ISI'S COUNSEL..............................................................29
5.4 AUTHORIZATION.........................................................................29
5.5 ▇▇▇▇ OF SALE..........................................................................29
5.6 MANAGEMENT AGREEMENT..................................................................30
5.7 DISTRIBUTOR AGREEMENT.................................................................30
5.8 ISI SOFTWARE LICENSE AGREEMENT........................................................30
5.9 UPDATE DISCLOSURE SCHEDULE............................................................30
SECTION VI.
CONDITIONS TO THE OBLIGATIONS OF ISI....................................................................30
6.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE...........................................30
6.2 OPINION OF COUNSEL TO AMC.............................................................31
6.3 NOTE..................................................................................31
6.4 AUTHORIZATION.........................................................................31
6.5 ASSUMPTION AGREEMENT..................................................................31
6.6 MANAGEMENT AGREEMENT..................................................................31
6.7 DISTRIBUTOR AGREEMENT.................................................................32
6.8 ISI SOFTWARE LICENSE AGREEMENT........................................................32
SECTION VII.
CONDUCT OF BUSINESS.....................................................................................32
7.1 CONDUCT OF BUSINESS...................................................................32
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Maintain Corporate Existence, Etc.....................................................32
Disposition of Assets.................................................................33
Full Access...........................................................................33
SECTION VIII.
CONFIDENTIALITY AND SECURITY............................................................................33
8.1 CONFIDENTIALITY.......................................................................33
SECTION IX.
INDEMNIFICATION.........................................................................................38
9.1 INDEMNIFICATION BY ISI................................................................38
9.2 INDEMNIFICATION BY AMC................................................................41
9.3 REIMBURSEMENT.........................................................................43
9.4 CLAIMS................................................................................44
9.5 RESOLUTION OF DISPUTES................................................................45
SECTION X.
COVENANT NOT TO COMPETE.................................................................................46
SECTION XI.
TERMINATION AND ABANDONMENT.............................................................................47
11.1 TERMINATION AND ABANDONMENT...........................................................47
11.2 RIGHTS AND OBLIGATIONS ON TERMINATION.................................................49
SECTION XII.
MISCELLANEOUS PROVISIONS................................................................................49
12.1 INVESTIGATIONS; SURVIVAL OF WARRANTIES................................................49
12.2 HEADINGS..............................................................................50
12.3 FURTHER ASSURANCES....................................................................50
12.4 FORCE MAJEURE.........................................................................50
12.5 CUMULATIVE REMEDIES...................................................................51
12.6 ENTIRE AGREEMENT......................................................................51
12.7 SPECIFIC PERFORMANCE..................................................................51
12.8 NOTICES...............................................................................51
12.9 NON-WAIVER OF DEFAULT.................................................................52
12.10 PARTIAL INVALIDITY....................................................................52
12.11 DUPLICATE ORIGINALS...................................................................53
12.12 ASSIGNMENT............................................................................53
12.13 FEES AND EXPENSES.....................................................................53
12.14 GOVERNING LAW.........................................................................53
12.15 COUNTERPARTS AND EXHIBITS.............................................................53
12.16 PUBLICITY.............................................................................54
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ASSET PURCHASE AGREEMENT
BETWEEN
AMERICAN MEDCARE CORPORATION AND
INFO SYSTEMS OF NORTH CAROLINA, INC.
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made as of the 3rd day
of December, 1996 by and between American Medcare Corporation, a Delaware
corporation ("AMC") and Info Systems of North Carolina, Inc., a North Carolina
corporation ("ISI").
WHEREAS, ISI desires to sell the business conducted by its division
generally known as the Info/Cure Group and the assets used in such business.
WHEREAS, AMC is willing to acquire such business and assets upon the
terms and conditions set forth in this Agreement.
NOW THEREFORE, in consideration of the mutual promises herein made and
of other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
SECTION I.
DEFINITIONS
1.1 CERTAIN DEFINITIONS
(a) "Affiliate" or "Affiliate of ISI" means any person,
corporation, subsidiary, or other business entity
which, whether directly or indirectly through one or
more intermediaries, controls, is controlled by, or
is under common control with, ISI.
(b) "Copyright" means all copyright ownership of the
Software and Documentation.
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(c) "Documentation" means all technical manuals and
notes, user manuals, and all other documents
developed or in development relating to or used in
the development, maintenance, support, enhancement
and use of the Software, including pending
improvements, fixes and enhancements regardless of
the media upon which the Documentation exists, which
is owned by ISI.
(d) "Info/Cure Group" means the business conducted by ISI
that develops, markets, installs and supports the
Info/Cure physician practice management system for
organizations ranging from solo practitioners and
primary care and single specialty clinics with 2 to
20 physicians to larger multi-specialty and
hospital-based groups with over 20 physicians. The
Info/Cure Group also provides the Info/Cure physician
practice management systems to multi-entry provider
networks such as managed service organization and
physician hospital organizations.
(e) "Info/Cure physician practice management system" or
"Info/Cure System" means the current software medical
practice management system of ISI that automates
patient registration, appointment scheduling, patient
billing, insurance processing and provides other
related features.
(f) "Intellectual Property" means all patents, patent
pending, copyrights, trade secrets, techniques,
know-how, and other intangible assets which are owned
by ISI and are legally protectable or recognized as
forms of property, whether or not reduced to practice
or a writing and are used by
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the Info/Cure Group, excluding the Software, Licensed
Software, ISI Software and Supplier Software.
(g) "License Agreements" means those agreements entered
into by ISI or the Info/Cure Group (or its
predecessors) as licensor for the licensing of any
Software, Licensed Software and/or Intellectual
Property.
(h) "Licensed Software" shall mean all software, object
source and executable code, licensed, sold or leased
by Info/Cure Group as licensor or lessor which is not
owned or to the extent not owned by ISI excluding
Supplier Software (as hereinafter defined). A list of
the Licensed Software is set forth in Section 1.03(h)
of the Disclosure Schedule.
(i) "Management of ISI" means the current chief executive
officer, the chief operating officer, and chief
financial officer of ISI and the general manager of
the Info/Cure Group.
(j) "Software" means all software, object, source and
executable code, licensed, sold or leased by the
Info/Cure Group as lessor, including the software
constituting the Info/Cure System, in whole or in
part, and all fixes, updates, upgrades and
enhancements hereto developed or being developed as
well as other software developed or being developed
for marketing to physicians, clinics, hospitals and
medical groups which is owned by ISI (except ISI
Software, Licensed Software and Supplier Software). A
list of the Software is set forth in Section 1.03(j)
of the Disclosure Schedule.
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(k) "Trademarks" mean the trademarks listed in Section
1.03(k) of the Disclosure Schedule.
SECTION II.
PURCHASE AND SALE OF ASSETS
2.1 PURCHASE/SALE
On the Closing Date (as hereafter defined), AMC does hereby
agree to purchase, and ISI hereby agrees to sell, assign, transfer and deliver,
pursuant to the terms and conditions contained herein all of the following
assets, tangible and intangible (collectively "Assets"), used, licensed and sold
by the Info/Cure Group and owned by ISI wherever located:
All accounts receivable of the Info/Cure Group
Work in process of the Info/Cure Group
Info/Cure System
Software
Documentation
Copyrights
Trademarks
Fixed assets listed in Section 2.1 of the Disclosure Schedule
("Fixed Assets")
License Agreements
Supply Contracts (as hereinafter defined)
Maintenance Agreements (as hereinafter defined)
Intellectual Property
All warranties, representations and guaranties made by
vendors and other suppliers of the assets to the
Info/Cure Group which are outstanding.
Advertising materials
Books and records necessary for the conduct of the Business
(as hereinafter defined) after the Closing
Goodwill and going concern of the Info/Cure Group
2.2 ASSUMPTION OF LIABILITIES AND OBLIGATIONS
AMC shall assume on the Closing Day only the following
liabilities and obligations (collectively "Assumed Obligations") of ISI:
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Obligations of the Info/Cure Group under its maintenance and
service agreements as of the Closing Date pursuant to the
Maintenance Agreements and listed in Section 2.2(i) of the
Disclosure Schedule which shall be updated as of the Closing
Date.
Customer Deposits as of the Closing Date listed in Section
2.2(ii) of the Disclosure Schedule which shall be updated as
of the Closing Date.
Obligations of ISI under the License Agreements as of the
Closing Date with the customers listed in Section 2.2(iii) of
the Disclosure Schedule.
Accounts payable-trade of the Info/Cure Group, including for
hardware, as described in Section 2.2(iv) of the Disclosure
Schedule which shall be updated as of the Closing Date.
Commissions payable as described in Section 2.2(v) of the
Disclosure Schedule which shall be updated as of the Closing
Date.
2.3 NO EMPLOYEES OF INFO/CURE GROUP
It is agreed that AMC assumes no obligations to hire any
employees of ISI, including employees of the Info/Cure Group, and assumes no
liability or obligation of ISI by reason of it hiring or not hiring any such
employees. It is the intent of ISI to reassign certain employees to other
operations of ISI. ISI agrees to make available its employees currently working
for the Info/Cure Group to provide those services required during the
transaction period pursuant to the Management Agreement.
2.4 PURCHASE PRICE
(a) The consideration payable by AMC for the Assets and
the other covenants of ISI contained herein, subject
to the assumption of the Assumed Obligations, shall
be $1,750,000 subject to adjustment as set forth in
paragraphs 2.4(b), 2.7 and 2.9 ("Purchase Price").
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(b) The Purchase Price of $1,750,000 is based on the fact
that the sum of the Assumed Obligations, determined
in accordance with generally accepted accounting
principles consistently applied on an accrual basis
("GAAP"), on the Closing Date will not exceed the sum
of the accounts receivable of the Info/Cure Group
(net of reserves for bad debts) ("Net Accounts
Receivable") and the work in process on the Closing
Date, which constitute Assets to be purchased
hereunder, by more than $325,000.
If the Assumed Obligations exceed the sum of the Net Accounts Receivable and the
work in process by more than $325,000, the Purchase Price shall be an amount
equal to $1,750,000 less the amount in excess of $325,000.
(c) In full consideration of the sale, assignment,
transfer, conveyance and delivery of the Assets and
the covenants of ISI set forth herein and the
assumption of the Assumed Obligations, AMC shall
deliver to ISI on the Closing Date (i) $150,000 by
wire transfer to an account designated by ISI and
(ii) a promissory note ("Note") in the form of
Exhibit A hereto in the principal amount of the
Purchase Price less $150,000. The Note shall bear
interest at the rate of 2% over the prime rate of
interest as published in The Wall Street Journal
adjusted as of the first day of each calendar
quarter.
2.5 CLOSING
The closing ("Closing") of the transactions contemplated by
this Agreement shall occur at 10:00 a.m. local time, December 2, 1996 at the
offices of AMC in Atlanta, Georgia, or
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such other date or place as the parties hereafter mutually agree in writing,
subject to the conditions set forth hereafter.
2.6 EFFECTIVE DATE
The effective date of the consummation of the transactions
contemplated herein shall be as of the commencement of business of the Info/Cure
Group on the day of the Closing ("Closing Date").
2.7 CALCULATION OF ADJUSTMENTS
(a) AMC shall cause, at its expense, a balance sheet to
be prepared as of the Closing Date of the Assets
being purchased and Assumed Obligation being assumed.
The balance sheet shall be completed within sixty
(60) days after the Closing Date. As soon as such
financial statement is available to AMC, AMC shall
deliver to ISI the financial statement. ISI shall
have thirty (30) days to review and object to the
balance sheet. Any disagreements as to the amounts of
any adjustment to be made to the balance sheet, if
not mutually resolved, shall be resolved as provided
in paragraph 9.5, except that the arbitrator(s) shall
be person(s) experienced in financial and accounting
matters. Upon the final resolution of the financial
statement as of the Closing Date, a final adjustment
shall be made to the consideration paid at the
Closing as provided in paragraph 2.4 and the
principal amount of the Note shall be appropriately
adjusted.
(b) The parties shall use their best efforts to estimate
the amount of the adjustment on or prior to the
Closing Date and the Purchase Price as of the
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Closing Date will reflect such tentative adjustment
which will be subject to further adjustment pursuant
to the provisions of paragraph 2.7(a). All
adjustments shall be made by increasing or decreasing
the principal amount of the Note as of the Closing
Date.
2.8 PURCHASE PRICE ALLOCATION
The parties agree to allocate the Purchase Price among the
Assets in accordance with the allocation formula attached hereto as Exhibit B.
2.9 POST CLOSING ADJUSTMENT
If the revenues for maintenance and service ("Service
Revenue") from the customers of the Info/Cure Group prior to the Closing during
the one year period commencing on December 1, 1996 and ending November 30, 1997
("Period") is less than $1,269,000, the Purchase Price will be reduced by an
amount equal to the difference ("Difference") between $1,269,000 and the Service
Revenue for the Period. In no event shall the adjustment pursuant to this
paragraph 2.9 exceed $635,000. This adjustment shall first be made to the Note
by reducing the principal amount thereof as of the Closing. To the extent it
exceeds the unpaid principal balance of the Note, ISI shall promptly pay such
amount to AMC. The determination of the Service Revenue shall initially be made
by AMC. Such determination shall be made in accordance with GAAP and in
accordance with past practice as used to categorize revenues. AMC, within ninety
(90) days after the end of the Period, shall give ISI notice of any claimed
Difference. In the event the parties are unable to agree upon the amount of the
Difference within thirty (30) days after receipt of the notice by ISI of the
Difference, the matter may be referred by either party to arbitration in
accordance with paragraph 9.5. AMC shall permit ISI and its accountants
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reasonable access to its books and records to determine the amount of the
Service Revenues. All such information shall be kept confidential except to the
extent it is used in the arbitration proceeding.
SECTION III.
REPRESENTATIONS AND WARRANTIES OF ISI
ISI represents and warrants to AMC on the date hereof and on the date
of the Closing as follows:
3.1 CORPORATE
(a) ISI is a corporation duly organized, validly existing
and in good standing under the laws of North Carolina
and is qualified to conduct business in all other
jurisdictions in which the character of its assets
and the nature of its business requires it to be
qualified to do business and in which the failure to
be so qualified could have a materially adverse
effect on its business, operations, prospects, assets
or financial condition.
(b) A true, correct and complete copy of the Articles of
Incorporation and bylaws of ISI are as set forth in
Section 3.1(b) of the Disclosure Schedule.
(c) To the knowledge of the Management of ISI, ISI or
Info/Cure Group holds all licenses, permits,
authorizations and other approvals from all
governmental authorities necessary for the conduct of
the business of the Info/Cure Group as currently
conducted ("Business") which failure could have a
material adverse effect on its business, operations,
prospects,
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assets or financial condition of the Info/Cure Group.
A complete list of such licenses, permits,
authorizations and approvals are set forth in Section
3.1(c) of the Disclosure Schedule.
(d) The execution, delivery and performance of this
Agreement by ISI has been duly and validly authorized
by its Board of Directors and constitutes a legal,
valid and binding obligation of ISI enforceable in
accordance with its terms and does not violate any
other agreement or require the consent or approval of
any other person except as set forth in Section 3.1
(d) of the Disclosure Schedule. A duly certified copy
of the minutes of the Board of Directors of ISI
approving the execution and delivery of this
Agreement has been delivered to AMC. No authorization
is required by the shareholders of ISI with respect
to the authorization, execution, delivery of and
performance under this Agreement.
(e) The Info/Cure Group is the only Info/Cure Group or
unit of ISI which markets the Software, except as set
forth in Section 3.1(e) of the Disclosure Schedule.
3.2 FINANCIAL STATEMENTS
The unaudited balance sheets as of June 30, 1996 and the
statements of income of the Info/Cure Group for the fiscal year ended June 30,
1996 and for the three-month period ended September 30, 1996 have been prepared
in accordance with GAAP and presents fairly the results of the operations of the
Info/Cure Group during those periods. Said financial
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statements are sometimes collectively referred to as "Financial Statements." A
true, correct and complete copy of the Financial Statements are set forth in
Section 3.2 of the Disclosure Schedule.
3.3 CUSTOMERS
(a) ISI or Info/Cure Group have granted over 300 licenses
to use the Software and the Licensed Software.
Section 3.3(a)(i) of the Disclosure Schedule contains
the list of more than 90 licensed users of the
Software and the Licensed Software who have
contracted for annual maintenance, which contracts
are currently in effect. Section 3.3(a)(ii) of the
Disclosure Schedule contains a list of the licensed
users of the Software and the Licensed Software (as
hereinafter defined) who have contracted for
maintenance and support during the period October 1,
1995 through September 30, 1996 on a time and
material basis. Sections 3.3(a)(i) and 3.3(a)(ii)
shall be updated as of the Closing. Section
3.3(a)(iii) of the Disclosure Schedule contains a
list of all customers of the Info/Cure Group whose
aggregate fees and other charges during the twelve
(12) month period ending September 30, 1996 exceeded
$100,000.
(b) Neither ISI or the Info/Cure Group has received any
notice or other communication (written or, to the
knowledge of the Management of ISI, oral) from any
customer listed on Section 3.3(a)(i), (ii) or (iii)
of the Disclosure Schedule terminating or reducing in
any material respect or setting forth an intention to
terminate or reduce in any material respect in
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the future the amount of business conducted with the
Info/Cure Group. To the knowledge of the Management
of ISI, the consummation of the transactions
contemplated herein will not have a material adverse
effect on the business relationships with any of the
customers listed on Section 3.3(a)(iii) of the
Disclosure Schedule.
(c) No licensee of the Software or Licensed Software by
the Info/Cure Group is an Affiliate of ISI.
(d) Section 3.3(d) of the Disclosure Schedule sets forth
a list of licensees of the Software and Licensed
Software from ISI or the Info/Cure Group for which
ISI or the Info/Cure Group has any warranty or other
unfulfilled obligation under the applicable License
Agreement and a description of the unfulfilled
obligation and the agreement under which it arises.
ISI is not in breach of its obligations thereunder.
3.4 ABSENCE OF CERTAIN FINANCE AND BUSINESS CHANGES
(a) Since June 30, 1996, there has not been any event or
events which will have a material adverse effect
taken as a whole on the financial condition of the
Business of the Info/Cure Group (including software
and service revenues) except as set forth in Section
3.4(a) of the Disclosure Schedule.
(b) Since June 30, 1996, no material loss, damage or
destruction of the Assets has occurred, whether or
not covered by insurance.
(c) Since June 30, 1996, the Business has been conducted
substantially in the manner heretofore conducted
consistent with past practices, including with
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respect to the fees charged and the terms and
conditions of the license agreements and maintenance
agreements entered into, and no waiver or release of
any right was granted except of an immaterial value
and in the ordinary course of business consistent
with past practices.
3.5 GUARANTIES/LIENS
ISI has no commitment to guarantee any of the obligations
which would be assumed by AMC upon the consummation of the transactions
contemplated herein, and is not currently granting and ISI has no commitment to
grant to anyone an interest in any of the Assets to secure the obligations of
ISI or another except as set forth in Section 3.5 of the Disclosure Schedule.
3.6 NO UNDISCLOSED LIABILITIES
The Info/Cure Group has no liabilities, absolute or
contingent, known or unknown, except those shown on the Financial Statements or
incurred in the ordinary course of business of the Info/Cure Group since June
30, 1996, all of which are recorded on the financial books and records of the
Info/Cure Group, are consistent with past practices and are not in the aggregate
materially adverse to the financial condition or prospects of the Info/Cure
Group.
3.7 ACCOUNTS RECEIVABLE
The accounts receivable of the Info/Cure Group, billed and
unbilled, as of the Closing will be valid and enforceable obligations of third
parties and will be collectible in full, without offset or fulfillment of any
condition, within three (3) months of their due date without the engagement of
any collection agency or attorney or the commencement of any action, except to
the extent any reserves for bad debts and doubtful accounts established on its
financial books
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and records as of the Closing, which reserves have been established in a manner
which is consistent with past practices.
3.8 OWNERSHIP OF INTELLECTUAL PROPERTY
(a) Software. ISI is the sole and exclusive owner
throughout the world of the Software, including (i)
the software and software code developed or being
developed by or on behalf of or at the request of ISI
or the Info/Cure Group (regardless of the state of
the development of the software and whether it has
been released); and (ii) all software used and/or
licensed in the conduct of the business of the
Info/Cure Group, except for the Licensed Software and
the other software ("Supplier Software") listed in
Section 3.8(a) of the Disclosure Schedule.
(b) Other Intellectual Property Rights Relating to the
Software. ISI is the sole and exclusive owner
throughout the United States of (i) all Copyrights,
whether or not registered, including but not limited
to the moral rights; (ii) all other Intellectual
Property rights, including, without limitation, trade
secrets, know-how, inventions (patented and
unpatented), and discoveries embodied in or used in
the development of the Software, or any part thereof,
and the screen displays generated by the Software;
and (iii) all Documentation; except with respect to
the Licensed Software and Supplier Software used in
the development of the Software listed on Section
3.8(b)(i) of the Disclosure Schedule or as otherwise
provided in Section 3.8(a) of the Disclosure
Schedule. Section 3.8(b)(ii) of the Disclosure
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Schedule contains a correct and complete list of all
registered Copyrights, the date of registration and
jurisdiction of such registrations. ISI has not filed
any patent applications and does not hold any patents
applicable to the business of the Info/Cure Group.
(c) Trademarks. The Info/Cure Group is the sole and
exclusive owner of the Trademarks which include all
identifying names and marks which are associated with
the Software or the Licensed Software or which are
otherwise used in the Business conducted by the
Info/Cure Group. A complete and correct list of all
the Trademarks is set forth in Section 1.03 of the
Disclosure Schedule. Section 1.03 of the Disclosure
Schedule also lists the date of registration,
registration number, and jurisdiction of such
registration of each Trademark or date of application
if the trademark application is pending.
(d) Software Developers. Section 3.8(d) of the Disclosure
Schedule sets forth the list of all persons and
entities (other than full time employees) that have
assisted at any time, directly or indirectly, in the
design, development, correction, improvement,
modification, and/or enhancement of the Software,
Copyrights and/or Trademarks. Section 3.8(d) of the
Disclosure Schedule also identifies the written
agreements and describes all oral agreements pursuant
to which each such person or entity assigned or
licensed its rights in such intellectual property to
ISI or acknowledged ISI's ownership rights therein.
Correct and complete copies of each such
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agreement or assignment has been furnished to AMC.
The employees and former employees of ISI do not have
any right, title or interest in the Software, ISI
Software, Licensed Software, Copyrights, Trademarks,
or other Intellectual Property. Section 3.8(d) of the
Disclosure Schedule sets forth the current form of
the standard ISI agreements with its employees.
(e) Rights of Licensees. The ownership rights of ISI in
Intellectual Property and Software set forth above
are subject only to the non-exclusive licenses
granted to end users and distributors by ISI as
described in Paragraph 3.10 of this Agreement.
(f) No Infringements. The Software, Licensed Software,
ISI Software, Documentation, Copyrights, Trademarks,
and other Intellectual Property do not, and did not
at any time, violate or infringe any copyright,
patent, trade secrets, know-how, trademarks or other
intellectual property rights of any third party, are
not in the public domain, have not been licensed
and/or permitted to be duplicated except as disclosed
in this Agreement or provided by law and, to the
knowledge of the Management of ISI, have not been
duplicated except as permitted under the applicable
licenses and law, have not been reverse compiled or
engineered and there are no claims or actions pending
or threatened or which have been brought asserting
such violation or infringement or that any Software,
Licensed Software, ISI Software, Documentation,
Copyrights, Trademarks, or other Intellectual
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Property used in the Business of the Info/Cure Group
is in the public domain.
(g) Licensed Software. ISI has the exclusive rights to
use, market, distribute, copy, sublicense, modify,
update, and service the Licensed Software and has not
granted any rights to use, market, distribute, copy,
sublicense, modify, update, and service the Licensed
Software to anyone except (i) licenses to end users
heretofore entered into to use and copy the Licensed
Software and (ii) the rights heretofore granted to
Distributors (as hereinafter defined). The entire
rights and obligations of ISI with respect to the
Licensed Software with the owner of certain code
included in the Licensed Software are set forth in
the License and Exclusive Distributorship Agreement
dated June 5, 1986 between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
("Licensor") and ISI, as licensee, and the Security
Agreement dated as of June 5, 1986 between Licensor
and ISI (collectively "Licensed Software
Agreements"). Neither ISI nor, to the knowledge of
ISI Management, Licensor is in default of its
obligations under the Licensed Software Agreements.
Pursuant to the Licensed Software Agreements, ISI has
the right, power and authority to grant to AMC the
exclusive rights set forth in the distributor
agreement ("Distributor Agreement") set forth in
Exhibit C hereto without royalty subject to the
rights heretofore granted to Distributors. Upon the
execution and delivery of the Distributor Agreement,
such agreement will constitute a valid and binding
agreement
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of ISI enforceable in accordance with its terms. ISI
will promptly disclose the Distributor Agreement to
Licensor as required under the Licensed Software
Agreements. A correct and complete copy of the
Licensed Software Agreements have been previously
provided to AMC.
(h) ISI Software. ISI is the exclusive owner of the
software described in Section 3.8(h) of the
Disclosure Schedule ("ISI Software") and has the
power and authority to enter into and to grant to AMC
the royalty free non-exclusive license and right to
use, market, distribute, copy, sublicense, modify,
update, and service the ISI Software in the health
care industry as set forth in Exhibit D and such
grant upon execution and delivery constitutes a valid
and binding agreement of ISI enforceable in
accordance with its terms.
(i) Supplier Software. ISI licenses and has licensed as
licensee for use in the conduct of the Business of
the Info/Cure Group as currently conducted only the
Supplier Software and the Licensed Software,
including class libraries and tools, solely for the
purposes set forth therein, and the Supplier Software
and the Licensed Software is the only software of
others used by the Info/Cure Group or used in the
conduct of the Business as currently conducted.
(j) Confidentiality. ISI has taken reasonable commercial
efforts and has required its employees, consultants,
and licensees to take reasonable
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commercial efforts to maintain the confidentiality of
the Intellectual Property, Software, Licensed
Software, and ISI Software.
(k) Source Code Escrow Agreements. ISI has not entered
into any source code escrow agreements. ISI has
granted non-exclusive licenses of the source code of
the Software and Licensed Software only for use by
end users for the support and maintenance of the
Software or Licensed Software licensed to such end
users.
(l) Clear Title. On the Closing Date, the right, title
and ownership of ISI in the Software, Documentation,
Intellectual Property, and all other Assets will be
free and clear of all mortgages, liens, restrictions,
security interests and rights of others.
3.9 PROPERTY AND EQUIPMENT
(a) No leases of fixed assets are being assumed by AMC.
(b) To the knowledge of the Management of ISI, the Fixed
Assets are generally in good operating condition and
repair, reasonable wear and tear excepted.
3.10 LICENSE AGREEMENTS
(a) ISI has not sold to others or leased or licensed
others to use the Software, Licensed Software,
Documentation, Copyrights, Trademarks, or other
Intellectual Property, or any part thereof, except
the granting of a non-exclusive right (i) to end
users to use released software products in the
ordinary course of the Business pursuant to end user
license agreements;
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and (ii) to distributors, dealers, OEM's and other
remarketers (collectively "Distributors") to use and
sublease the Software, Licensed Software and
Documentation. Section 3.10(a) of the Disclosure
Schedule contains a list of such Distributors. A
correct and complete copy of all written agreements
with Distributors currently outstanding has been
previously furnished to AMC. To the extent any
agreement is not in writing, a complete description
of the understanding is set forth in Section 3.10(a)
of the Disclosure Schedule.
(b) Section 3.10(b) of the Disclosure Schedule includes
all unfilled commitments to sell, lease or license
any products or services of the Info/Cure Group
hereafter. Section 3.10(b) of the Disclosure Schedule
shall be supplemented as of the Closing.
(c) The standard form of end user license agreement
currently used by ISI to license the Software is
listed in Section 3.10(c) of the Disclosure Schedule.
(d) Section 3.10(d) of the Disclosure Schedule contains a
list of all unfilled License Agreements, which list
shall be updated as of the Closing.
(e) The ISI is not in default of its obligations under
any License Agreement or agreement with any
Distributor and, to the knowledge of the Management
of ISI, the licensees are not in default under such
agreements.
3.11 CONSULTING AND DEVELOPMENT AGREEMENTS
Except for the Licensed Software Agreements, there are no
consulting and software development agreements, written and oral, entered into
by ISI pursuant to which others
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performed or are performing services as a consultant or in a similar capacity or
are developing software (regardless of the party who is to hold title to the
software) for ISI or the Info/Cure Group for use or license by the Info/Cure
Group.
3.12 MAINTENANCE/COMMITMENTS
(a) Section 3.3 of the Disclosure Schedule sets forth a
complete description of all commitments of ISI
outstanding to provide services, or support and/or
maintenance services, including to provide patches,
corrections, improvements, modifications and
enhancements of the Software or Licensed Software
(collectively "Maintenance Agreements"). A copy of
all written Maintenance Agreements has been made
available to AMC and, to the extent the Maintenance
Agreements are not in writing, a complete description
of the understanding is set forth in Section 3.12(a)
of the Disclosure Schedule.
(b) Section 3.12(b) of the Disclosure Schedule sets forth
all commitments of the Info/Cure Group to develop any
special feature or function or to port any software
not otherwise disclosed pursuant to this Agreement. A
correct and complete copy of the agreements has been
furnished to AMC. To the extent any such agreement or
commitment, whether legally binding or not, is oral,
a summary thereof is set forth in Section 3.12(b) of
the Disclosure Schedule.
(c) The Info/Cure Group has substantially complied with
its obligations under the Maintenance Agreements and
there is no basis for any claim against or
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default by the Info/Cure Group by any party arising
under the Maintenance Agreements.
3.13 ALL INTANGIBLE ASSETS USED IN THE BUSINESS
The Assets, Licensed Software, ISI Software, Supplier
Software, Copyrights, Trademarks, and other Intellectual Property constitute all
of the intangible assets used in the conduct of the Business as current being
conducted.
3.14 EMPLOYEES/CONSULTANTS/DIRECTORS
(a) Section 3.14(a) of the Disclosure Schedule sets forth
a list of all current employees and consultants
engaged by the Info/Cure Group or serving in such
capacity as of October 31, 1996 and their
compensation. Section 3.14(a) of the Disclosure
Schedule will be updated as of the Closing Date.
(b) Such employees are not represented by any collective
bargaining agreement or otherwise organized.
3.15 ASSUMED AGREEMENTS
(a) Sections 3.10 and 3.15(a) of the Disclosure Schedule
together list all unfilled commitments of ISI
relating to the Business as of October 31, 1996.
Section 3.15(a) shall be updated as of the Closing
Date. Such commitments represent all of the
then-outstanding obligations of the Business and, to
the knowledge of the Management of ISI, can be fully
fulfilled without a financial loss to the Info/Cure
Group and in a timely manner.
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(b) Except as set forth in Section 3.15(b) of the
Disclosure Schedule, ISI is not in default of any
term or condition under any unfilled agreements
listed on Sections 3.10 and 3.15(a) of the Disclosure
Schedule and there are no basis for any claim against
or default by ISI by any party arising under any such
agreement, and no event has occurred which under any
such agreement could constitute a default which would
give the other party the right to terminate the
contract or to demand money damages.
(c) ISI has not waived any of its rights under any of
such agreements listed on Section 3.10 or Section
3.15(a) of the Disclosure Schedule nor, to the
knowledge of Management of ISI, is the other party to
any such agreement in default in any respect under
any such agreement.
(d) Correct and complete copies of the agreements listed
in Section 3.15(a) of the Disclosure Agreement have
been made available to AMC.
3.16 LITIGATION AND ADVERSE EVENTS
There are no known investigations, suits, actions,
administrative, arbitration or other proceedings or other occurrences pending,
or, to the knowledge of the Management of ISI, threatened against ISI or the
Info/Cure Group arising out of the conduct of the Business.
3.17 COMPLIANCE WITH APPLICABLE LAW
ISI, in the conduct of the Business, is in substantial
compliance with all applicable laws, statutes, ordinances, permits and
regulations, including all such laws, statutes, ordinances and regulations
relating to wages, tax withholdings, hours, equal pay, equal opportunity, and
pollution of the environment, and there are no violations which, if enforced,
would materially
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adversely affect the Business or prospects of the Business after the Closing or
the value of the Assets; and no proceeding alleging any such violation is
pending or, to the knowledge of the managers of the Info/Cure Group, is
threatened.
3.18 TAXES AND TAX RETURNS
ISI has timely filed with the appropriate governmental
agencies all tax returns and reports required to be filed by it (or obtained
extensions in which to file). ISI has paid all taxes and withholdings of any
kind presently due and owing.
3.19 CONSENTS
No consents or approvals are required to effect the
transactions contemplated herein, except as set forth in Section 3.19 of the
Disclosure Schedule.
3.20 BROKERS AND FINDERS
Neither ISI nor any of its officers, directors, employees or agents
have employed any broker or finder or incurred any liability for any brokerage
fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement which is payable directly or indirectly, by AMC
or the successor of the Business.
3.21 NO UNTRUE STATEMENTS
No statements (including representations and warranties)
contained in this Agreement (including in the Disclosure Schedule hereto and
documents described as having been provided to AMC herein and therein), contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein contained not misleading.
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3.22 REPRESENTATIONS REGARDING NOTE
(a) ISI is acquiring the Note for the account of ISI (and
not for others) and for investment purposes only and
not with a view to distribution, as such is defined
by the Securities Act of 1933, as amended ("Act"), or
any rule or regulation thereunder ("Rules"), in
violation of the Act or any of the Rules;
(b) ISI has such knowledge and experience in financial
and business matters that ISI is capable of
evaluating the merit and economic risks of this
particular investment and acknowledges that an
investment in the Note involves risks;
(c) ISI has considered the risks associated with the
acceptance of the Note;
(d) In making this decision to acquire the Note, ISI has
been given the opportunity to discuss the business,
management and financial affairs of AMC and its
subsidiaries with officers of AMC and has had the
opportunity to ask questions of, and to receive
answers from, such officers and to obtain additional
information necessary to verify the accuracy of the
information received and to evaluate AMC and ISI
desires no further information for such evaluation;
(e) ISI acknowledges that (i) ISI has heretofore been
furnished with the audited consolidated balance
sheets of AMC and subsidiaries as of January 31, 1996
and 1995, and the related consolidated statements of
operations, shareholders' equity and cash flows for
the years then ended and unaudited consolidated
condensed balance sheets as of July 31, 1996 and
1995, and
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the related consolidated condensed statements of
operations and cash flows for the fiscal quarters
then ended, including the annual report of AMC on
Form 10-KSB for the fiscal year ended January 31,
1996 and the quarterly reports on Form 10-QSB for the
periods ended April 30, 1996 and July 31, 1996; (ii)
ISI has been advised that AMC continues to operate at
a loss; and (iii) that no representations are or were
made by AMC to ISI with respect to the business or
financial affairs of AMC and its subsidiaries except
as set forth in the financial and other statements of
AMC as referenced in the preceding clause.
(f) ISI acknowledges that no representations were made by
AMC to ISI with respect to the business, management
or financial affairs of AMC and its subsidiaries
except that AMC is negotiating with several companies
the purchase of their businesses by AMC or an
affiliated company and the financing of such
purchases through a public offering. There can be no
assurances that such other acquisitions will be
effected or that such financing will occur or will be
sufficient to meet the obligations of AMC and its
subsidiaries, including its obligations pursuant to
this Agreement and the Note.
SECTION IV.
REPRESENTATIONS AND WARRANTIES OF AMC
AMC hereby represents and warrants to ISI on the date hereof and on the
date of the Closing as follows:
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4.1 ORGANIZATION AND STANDING OF AMC
AMC is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware; has full corporate power
and authority to conduct the business of developing, distributing and marketing
software including through its subsidiaries, and to purchase the Assets and has
full right, power and authority to issue the Note, as contemplated by this
Agreement.
4.2 AUTHORIZATION - AMC
(a) The execution, delivery and performance of this
Agreement and the purchase of the Assets by AMC,
including the issuance of the Note has been duly
authorized by all requisite corporate action on the
part of AMC. A duly certified copy of the resolutions
of the Board of Directors has been delivered to ISI.
This Agreement has been duly executed and delivered
by AMC and constitutes the legal, valid and binding
obligation of AMC enforceable against it in
accordance with its terms.
(b) The execution of this Agreement, and the consummation
by AMC of the transactions contemplated herein on the
Closing, will not violate, or result in a default
under, any of the provisions of the Certificate of
Incorporation or By-Laws of AMC, any mortgage,
indenture, contract, agreement, license, permit,
instrument, judgment, decree, order, statute,
regulation or ruling of any court or governmental
authority to which AMC is a party or by which it is
bound.
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4.3 BROKERS AND FINDERS
Neither AMC nor any of its officers, directors, employees or
agents have employed any broker or finder or incurred any liability for any
brokerage fees, commissions or finders' fees in connection with the transactions
contemplated by this Agreement which is payable directly or indirectly by ISI.
4.4 NO UNTRUE STATEMENTS
No statements (including representations) by AMC contained in
this Agreement, and no written statements furnished by AMC to ISI pursuant to
this Agreement, contain any untrue statement of a material fact, or omit to
state a material fact necessary in order to make the statements therein
contained not misleading.
SECTION V.
CONDITIONS TO THE OBLIGATIONS OF AMC
Each and every obligation of AMC under this Agreement to be performed
on or prior to the Closing Date shall be subject to the satisfaction on or prior
to the Closing Date of each of the following conditions, any of which condition
may be waived in writing by AMC, but such waiver shall not waive any
representation, warranty or covenant of ISI.
5.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE
The representations and warranties made by ISI herein shall be
true and correct in all material respects on the date of this Agreement and on
the Closing Date with the same effect as though made on the Closing Date; ISI
shall have performed and complied with all agreements, covenants and conditions
required by this Agreement to be performed and complied with by it prior to or
on the Closing Date; and ISI shall have delivered to AMC a certificate of an
officer of
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ISI in substantially the form attached hereto as Exhibit E, dated the Closing
Date, certifying as to the fulfillment of the foregoing conditions.
5.2 THIRD PARTY CONSENTS
All consents, approvals or authorizations from third parties
or government agencies required to consummate the transactions contemplated
hereby and contemplated by this Agreement, including the consents set forth
pursuant to paragraph 3.19 except that no consents shall be required for the
transfer of the Maintenance Agreements and of the Supplier Software, except for
the IBM SC/400 response line software.
5.3 OPINION OF ISI'S COUNSEL
An opinion of counsel to ISI dated the Closing and addressed
to AMC reasonably satisfactory in all respects to AMC.
5.4 AUTHORIZATION
Evidence that all actions required to be taken by ISI pursuant
to this Agreement, including the execution and delivery thereof, has been taken
to authorize and consummate the transactions contemplated herein, including
copies of the articles of incorporation, bylaws, and board resolutions certified
by the secretary or assistant secretary of ISI.
5.5 ▇▇▇▇ OF SALE
▇▇▇▇ of sale and such other documents assigning and
transferring the Assets to AMC duly executed on behalf of ISI and delivery of
possession of the Assets, including the source and object code of the Software,
Licensed Software and ISI Software and the object code of Supplier Software to
the extent it is assignable.
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5.6 MANAGEMENT AGREEMENT
Management Agreement in the form of Exhibit F is duly executed
by ISI and delivered by ISI to AMC.
5.7 DISTRIBUTOR AGREEMENT
Distributor Agreement in the form of Exhibit C is duly
executed by ISI and delivered by ISI to AMC.
5.8 ISI SOFTWARE LICENSE AGREEMENT
ISI Software License Agreement in the form of Exhibit D is
duly executed and delivered by ISI to AMC.
5.9 UPDATE DISCLOSURE SCHEDULE
ISI shall have updated the Disclosure Schedule as herein
provided.
SECTION VI.
CONDITIONS TO THE OBLIGATIONS OF ISI
Each and every obligation of ISI under this Agreement to be performed
on or prior to the Closing Date shall be subject to the satisfaction on or prior
to the Closing Date of each of the following conditions, any of which conditions
may be waived in writing by ISI, but such waiver shall not waive any
representation, warranty, or covenant of AMC:
6.1 REPRESENTATIONS AND WARRANTIES; PERFORMANCE
The representations and warranties made by AMC herein shall be
true and correct in all material respects on the date of this Agreement and on
the Closing Date with the same effect as though made on the Closing Date; AMC
shall have performed and complied with all agreements, covenants and conditions
required by this Agreement to be performed and complied
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with by it on or prior to the Closing Date; and AMC shall have delivered to ISI
a certificate of an officer of AMC in substantially the form attached hereto as
Exhibit G, dated the Closing Date, certifying as to the fulfillment of the
foregoing conditions.
6.2 OPINION OF COUNSEL TO AMC
An opinion of Glass, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, counsel
to AMC, dated the Closing, reasonably satisfactory in all respects to ISI.
6.3 NOTE
Note in the form of Exhibit A is duly executed by AMC and
delivered by AMC to ISI.
6.4 AUTHORIZATION
Evidence that all actions required to be taken by AMC pursuant
to this Agreement, including its execution and delivery and the issuance of the
Note has been duly authorized, including copies of the articles of
incorporation, bylaws, and board resolutions certified by the secretary or
assistant secretary of AMC.
6.5 ASSUMPTION AGREEMENT
An agreement by AMC assuming the Assumed Obligations as of the
Closing Date in the form of Exhibit H.
6.6 MANAGEMENT AGREEMENT
Management Agreement in the form of Exhibit F is duly executed
by AMC and delivered by AMC to ISI.
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6.7 DISTRIBUTOR AGREEMENT
Distributor Agreement in the form of Exhibit C is duly
executed by AMC and delivered by AMC to ISI.
6.8 ISI SOFTWARE LICENSE AGREEMENT
The ISI Software License Agreement in the form of Exhibit D is
duly executed by AMC and delivered by AMC to ISI.
6.9 FINANCING STATEMENT
UCC-1 financing statement listing the Assets as collateral to
secure amounts payable by AMC pursuant to the Note and/or this Agreement duly
executed by AMC and delivered by AMC to ISI.
SECTION VII.
CONDUCT OF BUSINESS
7.1 CONDUCT OF BUSINESS Since the date hereof to the Closing, except as
otherwise consented to or approved by AMC in writing, ISI hereby covenants and
agrees that:
(a) Maintain Corporate Existence, Etc. ISI shall (i)
conduct the Business in a manner consistent with past
management practices, including maintaining adequate
personnel to maintain and service the Software, ISI
Software and Licensed Software and paying payables in
the normal course of business consistent with past
practices; (ii) continue to maintain the Software,
ISI Software, and Licensed Software consistent with
current management practices; (iii) market and
license the Software and ISI Software to end users,
and with the written consent of AMC, to distributors;
and (iv) grant
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non-exclusive licenses of the Software and ISI
Software to end users pursuant to its standard end
user license agreement at its standard fees.
(b) Disposition of Assets. ISI will not sell or otherwise
dispose of any Asset except for the granting of
non-exclusive licenses as permitted pursuant to
paragraph 7.1(a).
(c) Full Access. ISI shall have afforded to AMC, and to
AMC's counsel, accountants and other authorized
representatives, full access to the facilities,
contracts, books, records, Software, Licensed
Software, ISI Software, Supplier Software, key
personnel and public accountants of ISI relating to
the Business during normal business hours upon
reasonable prior notice; and ISI shall cause its
officers and employees to promptly furnish such
additional financial and operating data and other
information as AMC, its authorized representatives
shall from time to time reasonably request regarding
the Business.
SECTION VIII.
CONFIDENTIALITY AND SECURITY
8.1 CONFIDENTIALITY
(a) The parties acknowledge that information, documents
and materials have been exchanged since August 1,
1996. Such disclosures have been made under a
confidentiality understanding. The provisions of this
Section VIII reflect the understanding with respect
to all such exchanges and the permitted use and
disclosure by a party hereafter of any confidential
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information and proprietary property of the other
party regardless of when acquired. Each party hereto
hereby agrees that all information, documents and
materials the party ("Recipient") received heretofore
and receives hereafter from any other party ("Owner")
shall be considered valuable assets of such
disclosing party and are at all times to be treated
by the parties and their officers, directors,
employees and agents as confidential information or
trade secrets of the Owner if so identified as such
or which under the circumstances surrounding
disclosure ought to be treated as confidential
information or trade secrets. All financial
information of ISI or of the Info/Cure Group shall be
considered to be confidential information. Each party
agrees that it shall not hereafter (and shall use
commercially reasonable efforts to ensure that its
officers, directors, employees and consultants do
not) in any manner, directly or indirectly (i)
transmit, disclose or otherwise communicate or make
available any such confidential information or trade
secrets to any third party, or (ii) use the same for
its own account or for the benefit of any third
party, other than as permitted by this Agreement; or
(iii) make any copies of any such confidential
information or trade secrets except as is necessary
to perform its obligations or exercise its rights
hereunder. The parties each agree not to reverse
engineer or reverse compile the computer software of
any other party except to the extent permitted by
law.
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(b) Each party hereafter shall take all commercially
reasonable actions necessary or desirable, including
with respect to its officers, directors, employees
and all other persons having access to the
Intellectual Property, to satisfy its obligations to
protect and maintain the confidentiality and security
of the Intellectual Property, including the source
code of the Software.
(c) It is recognized and acknowledged between the parties
hereto that the covenants respecting confidentiality
set forth in this Section VIII hereof are essential
elements of this Agreement and shall continue after
the Closing or the termination of this Agreement for
any reason. Each party further acknowledges that
Owner of confidential information and trade secrets
may have no adequate remedy at law if the Recipient
shall violate the terms thereof. In such event, the
Owner shall have the right, in addition to any other
rights and remedies it may have, to obtain in any
court of competent jurisdiction injunctive relief to
restrain any breach or threatened breach thereof or
otherwise specifically enforce the provisions of this
Agreement.
(d) The parties each agree as follows:
(i) Confidential information or trade secret
that is disclosed shall not be disclosed to others, except to
directors, officers, employees and consultants of the
Recipient having a need to know in connection with the
consideration and/or consummation of the transactions
contemplated herein.
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(ii) The Recipient, when receiving such
confidential information or trade secrets from the Owner,
shall protect such confidential information with the same
degree of care that Recipient regularly employs to safeguard
its own confidential information or trade secret of like
importance from unauthorized use or disclosure.
(iii) The rights and obligations of the
parties with respect to all such confidential information that
is disclosed and subject to this Agreement shall survive
termination of this Agreement and shall remain in effect for a
period of five (5) years from the date of this Agreement. The
expiration of the above five (5) years shall not effect any
rights of the parties with respect to patents, trademarks,
copyrights and trade secrets. Trade secrets shall be so
protected as long as they may be legally protected or
constitute a trade secret.
(iv) Any portion of such confidential information or
trade secret that:
(A) is rightfully received from a third
party without accompanying markings or disclosure restrictions;
(B) is independently developed by employees
of the receiving party who have not had access to such confidential information
or trade secret;
(C) is or becomes publicly available through
no wrongful act of the receiving party;
(D) is already known by the receiving party
as evidenced by documentation bearing a date prior to the date of disclosure; or
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(E) is approved for release in writing by an
authorized representative of the Owner;
is not entitled to the protection provided herein, except patents, trademarks
and copyrights.
(e) Confidential information and trade secrets of the
Info/Cure Group have been and will be used by AMC
only in connection with its evaluation of the
Info/Cure Group and the decision of AMC to purchase
the Info/Cure Group and by ISI only in furtherance of
the business of the Info/Cure Group prior to the
Closing.
(f) Notwithstanding the foregoing, nothing herein shall
restrict the right of either party to disclose such
confidential information or trade secret that is
disclosed pursuant to a judicial order, but only to
the extent so ordered, provided, however, that the
party receiving such order shall notify the other
party of such order in sufficient time to permit such
other party to intervene in response to such order,
and provided that the confidential or proprietary
markings remain on the information disclosed.
(g) All such confidential information and trade secrets
and copies thereof shall remain the property of the
Owner. All such written confidential information and
trade secrets, and any copies thereof, shall be
promptly returned to the Owner upon written request,
or destroyed at the Owner's options. All reports and
other documents prepared by a recipient containing
any such confidential information or trade secrets
shall be destroyed at the Owner's written request and
the recipient shall so certify to
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Owner upon Owner's request that it has been
destroyed. The restrictions on disclosure and use
shall survive the return and destruction of such
written confidential information and trade secrets,
reports and other documents and the Closing.
(h) Upon the Closing, all trade secrets and confidential
information owned by ISI and sold or otherwise
transferred to AMC shall be deemed to be owned by AMC
as of the Closing for purposes of this Agreement,
including this Section VIII, and ISI shall deliver or
cause to be delivered all tangible evidence of such
confidential information or trade secrets to AMC.
SECTION IX.
INDEMNIFICATION
9.1 INDEMNIFICATION BY ISI
(a) ISI hereby agrees to indemnify and hold AMC,
including the successor of the Business (collectively
"Purchaser" for purposes of this Section IX only)
harmless at all times from and after the Closing,
against and in respect of the following:
(i) All losses, liabilities, costs and
damages, including without limitation, interest, penalties and
fines, resulting from any (a) breach of a representation or
warranty of ISI set forth herein or (b) non-fulfillment of any
agreement or covenant, on the part of ISI set forth herein.
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(ii) All expenses, including reasonable
attorney fees, arising from or incurred in connection with
suits, proceedings, decrees or judgments incident to any of
the foregoing.
All losses, liabilities, costs, damages and expenses for which indemnification
is provided herein are collectively referred to as "AMC Losses".
(b) The period during which Purchaser must give notice in
writing to ISI of claims for indemnification
hereunder shall expire eighteen (18) months after the
Closing except that such period shall be extended to
the applicable statute of limitations plus thirty
(30) days with respect to claims for unpaid taxes and
failure to file required tax reports, including
related interest, penalties and fines ("Tax Claims").
(c) Interest at the rate payable on the Note shall accrue
on all amounts to be indemnified from the date of the
Closing to the date of payment by ISI, or if payment
of an AMC Loss is made after the Closing by
Purchaser, from the date of such payment by Purchaser
to the date of indemnification by ISI.
(d) The total liability of ISI under this Section IX
shall not exceed the consideration received by ISI
pursuant to Section II less $150,000. ISI may make
such payment by reducing the amounts payable pursuant
to the Note.
(e) In the event that any third party asserts an action
or claim as to which Purchaser is entitled to
indemnification hereunder, Purchaser shall notify
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ISI in writing of any such asserted liability with
reasonable promptness, and ISI shall have a right to
compromise or defend any such matter involving such
asserted liability, through counsel of its own
choosing who shall be subject to the approval of the
Purchaser, which approval will not be unreasonably
withheld, at the expense of ISI; provided, however,
that ISI shall indemnify Purchaser against any costs
and damages resulting from the failure of ISI to
defend or pay such claims. In the event ISI shall
notify Purchaser in writing promptly of the intention
of ISI to do so, Purchaser shall cooperate with ISI
and its counsel in the compromising of or the
defending against any such liabilities or claims, at
the expense of ISI and provide ISI with reasonable
access to the books and records of the Info/Cure
Group to the extent necessary for the compliance with
any document request and the reasonable defense of
such claim.
(f) Purchaser shall be entitled to payment hereunder with
respect to AMC Losses for which ISI has agreed to
indemnify pursuant to paragraph 9.1(a)(i)(a) only if
and to the extent the aggregate of such AMC Losses
under this Agreement exceed Fifteen Thousand Dollars
($15,000).
(g) ISI shall not be deemed to have breached any
warranty, representations or covenant by reason of a
change after the Closing in the law or in generally
accepted accounting principles.
(h) The amount of any AMC Loss shall be reduced by
amounts received by the Purchaser under any policy of
insurance maintained by ISI prior to the
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Closing. Amounts received from any such policy of
insurance after the receipt of payment of any AMC
Loss from ISI shall be promptly reimbursed to ISI.
(i) Any payment by ISI to AMC under this Section IX or
otherwise in respect of the warranties,
representations and covenants set out herein shall be
treated as a reduction of the consideration due to
ISI under this Agreement.
9.2 INDEMNIFICATION BY AMC
(a) AMC hereby agrees to indemnify and hold ISI harmless
at all times from and after the Closing, against and
in respect of the following:
(i) All losses, liabilities,
costs and damages, including without limitation, interest,
penalties and fines, resulting from any (a) breach of a
representation or warranty of AMC set forth herein or (b)
non-fulfillment of any agreement or covenant, on the part of
AMC set forth herein or of any condition precedent to Closing
set forth in Section VI under this Agreement.
(ii) All expenses, including
reasonable attorney fees, arising from or incurred in
connection with suits, proceedings, decrees or judgments
incident to any of the foregoing.
All losses, liabilities, costs, damages and expenses for which indemnification
is provided herein are collectively referred to as "ISI Losses".
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(b) The period during which ISI must give notice in
writing to AMC of claims for indemnification
hereunder shall expire on the second anniversary of
the Closing.
(c) Interest at the rate payable on the Note shall accrue
on all amounts to be indemnified from the date of the
Closing to the date of payment by AMC, or if payment
of an ISI Loss is made after the Closing by ISI, from
the date of such payment by ISI to the date of
indemnification by AMC.
(d) The total liability of AMC under this Section IX
shall not exceed the consideration received or to be
received by ISI pursuant to Section II. AMC may make
such payment by increasing the amounts payable
pursuant to the Note.
(e) In the event that any third party asserts an action
or claim as to which ISI is entitled to
indemnification hereunder, ISI shall notify AMC in
writing of any such asserted liability with
reasonable promptness, and AMC shall have a right to
compromise or defend any such matter involving such
asserted liability, through counsel of its own
choosing who shall be subject to the approval of ISI,
which approval will not be unreasonably withheld, at
the expense of AMC; provided, however, that AMC shall
indemnify ISI against any costs and damages resulting
from the failure of AMC to defend or pay such claims.
In the event AMC shall notify ISI in writing promptly
of the intention of AMC to do so, ISI shall cooperate
with AMC and its counsel in the compromising of or
the defending against any such liabilities or
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claims, at the expense of AMC and provide AMC with
reasonable access to the books and records of the
Info/Cure Group to the extent necessary for the
compliance with any document request and the
reasonable defense of such claim.
(f) ISI shall be entitled to payment hereunder with
respect to ISI Losses for which AMC has agreed to
indemnify pursuant to paragraph 9.2(a)(i)(a) only if
and to the extent the aggregate of such ISI Losses
under this Agreement exceed Fifteen Thousand Dollars
($15,000).
(g) AMC shall not be deemed to have breached any
warranty, representations or covenant by reason of a
change after the Closing in the law or in generally
accepted accounting principles.
(h) The amount of any ISI Loss shall be reduced by
amounts received by ISI under any policy of insurance
maintained by AMC prior to the Closing. Amounts
received from any such policy of insurance after the
receipt of payment of any ISI Loss from AMC shall be
promptly reimbursed to AMC.
(i) Any payment by AMC to ISI under this Section IX or
otherwise in respect of the warranties,
representations and covenants set out herein shall be
treated as an increase of the consideration due to
ISI under this Agreement.
9.3 REIMBURSEMENT
Purchaser or ISI, as the case may be, shall be reimbursed
promptly for any ISI or AMC Losses for which it is to be indemnified under
paragraph 9.1 or 9.2. Purchaser and ISI shall have the right to set off and
deduct any AMC Loss or ISI Loss, as the case may be, against the
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amount of any obligation of such person however arising to the other person,
including amounts payable by AMC pursuant to the Note. In the event of any
dispute as to the right to set off or deduction of any amount or the amount of
the AMC or ISI Loss, the dispute shall be resolved as provided in paragraph 9.5.
If ISI reimburses Purchaser for a breach of the warranties and representations
set forth in paragraph 3.7, Purchaser shall assign all uncollected receivables
to ISI without further consideration.
9.4 CLAIMS
Should any claim be made by a person not a party to this
Agreement with respect to any matter to which the foregoing indemnity relates
for which the indemnifying party has not elected to compromise or defend as set
forth in paragraph 9.1(e) or 9.2(e), the party to be indemnified, on not less
than fifteen (15) days' notice to the other, may make settlement of such claim,
and such settlement shall be binding on ISI and Purchaser for the purposes of
this Section IX; provided, however, that if within said fifteen (15) day period
the indemnifying party shall have requested the other party to contest any such
claim at the expense of the indemnifying party and has provided reasonable
assurances of the ability of the indemnifying party to pay such expenses and
other losses should such occur, the indemnified party will promptly comply and
the indemnifying party shall have the right to defend on its own behalf with
counsel of its own choosing at its expense. Any payment or settlement resulting
from such contest, together with the total expense thereof, shall be binding on
ISI and Purchaser for the purposes of this Section IX. Failure to give notice
shall not constitute a defense, in whole or in part, to any claim by the
indemnified party except and only to the extent that such failure to do so shall
result in material prejudice to the indemnifying party.
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9.5 RESOLUTION OF DISPUTES
In the event of any dispute between Purchaser and ISI over any
claim by or on behalf of Purchaser or ISI for indemnification under this Section
IX and the parties are unable to resolve such dispute, either party may submit
the dispute to binding arbitration as hereinafter provided. The arbitration
shall be in accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA") then in effect. The arbitration shall be held
before three arbitrators, unless the amount in dispute is less than One Hundred
Thousand Dollars ($100,000), in which event the arbitration shall be held before
one arbitrator. In the event the arbitration is to be held before three
arbitrators, ISI and AMC shall each appoint one arbitrator within thirty (30)
days of the receipt of notice by the party commencing the arbitration which
includes a copy of the petition filed with the AAA. The arbitrators shall select
the third arbitrator. In the event the two arbitrators fail to do so within
fifteen (15) days of their appointment or in the event a party hereto fails to
designate an arbitrator or in the event only one arbitrator is to be appointed,
such arbitrator(s) shall be appointed by the AAA. The arbitrator(s) shall be
knowledgeable in the business of software development and distribution. All
decisions shall be by majority vote of the arbitrators. The award of the
arbitrator(s) shall be binding on the parties hereto and such awards may be
entered in any applicable court. Arbitration and all hearings in connection
therewith shall be held in Atlanta or Norcross, Georgia if ISI submits the
dispute to binding arbitration and in Charlotte, North Carolina if Purchaser
submits the dispute to binding arbitration. The arbitrator shall have no
authority to award punitive damages or any other awards other than as herein
contemplated. Notwithstanding the foregoing, the parties hereto may seek in a
court proceeding a restraining order, or a preliminary or permanent injunction
as permitted by
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law or equity whenever applicable to enjoin the unauthorized use of the
confidential information or trade secret of a party hereto. All parties hereto
agree to service by mail in any such proceedings.
SECTION X.
COVENANT NOT TO COMPETE
(a) For a period of five (5) years following the Closing
Date, ISI agrees that it will not, directly or
indirectly, including through an Affiliate, own,
manage, operate, control, be engaged in, or
participate in the ownership, management, operation,
or control of or be connected in any manner or have
any other direct or indirect financial interest in
any business, firm, person, partnership, corporation,
or concern which is engaged in any business of the
type and character which is competitive with the
Business which is being purchased by AMC in the
United States. ISI acknowledges that the Business was
conducted throughout the United States.
(b) Notwithstanding the covenants contained in
subparagraph (a), ISI shall not be prohibited from
owning less than 5% of any class of equity securities
of a company which is listed on a recognized stock
exchange or for which prices are quoted on the
National Association of Securities Dealers Automated
Quotation System.
(c) During the non-compete period set forth in
subparagraph (a), ISI will not suggest, urge or
persuade any user of the Software or Licensed
Software
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or ISI Software not to purchase or not to do business
with AMC or the successor of the Business.
(d) Each state of the United States and each month of
time covered by this covenant not to compete shall be
deemed a severable unit, and should any court
determine that the inclusion of all such states or
months would render any such undertaking unreasonable
or unenforceable for any reason, those units which
are necessary in the judgment of the court to be
deleted in order to render such undertaking
reasonable and enforceable shall be deemed free of
such non-compete undertaking but such undertaking
shall remain in full force and effect as to each
other unit of territory or time.
(e) ISI agrees that in addition to any other rights and
remedies available to AMC for any breach by ISI of
its obligations under this Section X, AMC shall be
entitled to enforcement of ISI's obligations
hereunder by court injunction or other equitable
remedy and ISI in such proceeding will not take the
position that AMC has an adequate remedy at law.
SECTION XI.
TERMINATION AND ABANDONMENT
11.1 TERMINATION AND ABANDONMENT
This Agreement may be terminated at any time and the purchase
of the Assets as herein contemplated abandoned at any time prior to the Closing
without liability of any party to any other party, except for breaches of
warrants, representations, and covenants set forth in this
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Agreement which are within the control of the defaulting or non-performing
party, under the following circumstances:
(a) The mutual written agreement of AMC and ISI;
(b) By AMC if the Closing has not occurred before
December 15, 1996 because all conditions to the
obligations of AMC have not been satisfied or waived
or because ISI has not made all required deliveries
pursuant to Section V;
(c) By ISI if the Closing has not occurred before
December 15, 1996 because all conditions to ISI's
obligations have not been satisfied or waived or
because AMC has not made all required deliveries
pursuant to Section VI; and
(d) Any party may terminate by written notice to the
other if any action or proceeding shall have been
instituted before any court or other governmental
body or, to the knowledge of the party giving such
notice, shall have been threatened formally in
writing by any public authority with requisite
jurisdiction, to restrain or prohibit the
transactions contemplated by this Agreement or to
subject one or more of the parties or their directors
or their officers to liability on the grounds that it
or they have breached any law or regulation or
otherwise acted improperly in connection with such
proposed transactions ("Governmental Objection"), and
such action or proceeding shall not have been
dismissed or such written threat shall not have been
withdrawn or rescinded before November 30, 1996.
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11.2 RIGHTS AND OBLIGATIONS ON TERMINATION
If this Agreement is terminated and abandoned as provided in
this Section XI, each party will, at the request of the other, return all
documents, work papers, and other material of the requesting party, including
all copies thereof, relating to the transactions contemplated by this Agreement,
whether so obtained before or after the execution of this Agreement, to the
party furnishing the same, and all information received by any party to this
Agreement with respect to the business of any other party shall not at any time
be used for the advantage of, or disclosed to third parties by, such party to
the detriment of the party furnishing such information except as may be required
by law; provided, however, that this shall not apply to any document, work
paper, material, or any other information which is a matter published in any
publication for public distribution or filed as public information with any
governmental authority or is otherwise in the public domain.
SECTION XII.
MISCELLANEOUS PROVISIONS
12.1 INVESTIGATIONS; SURVIVAL OF WARRANTIES
The respective representations, warranties and covenants of
ISI and AMC contained herein or in any certificates or other documents delivered
prior to or on the Closing shall not be deemed waived or otherwise affected by
any investigations made by any party hereto. Each and every representation,
warranty and covenant of ISI and AMC and the indemnification provisions set
forth in Section IX hereof, shall survive the Closing and remain operative in
full force and effect as provided in Section IX.
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12.2 HEADINGS
The paragraph captions and other headings contained in this
Agreement are for reference purposes only and shall not be deemed to be part of
this Agreement or to affect its meaning or interpretation.
12.3 FURTHER ASSURANCES
The parties hereto shall do and perform or cause to be done
and performed all such further acts and things and shall execute and deliver all
such other agreements, certificates, instruments and documents as the other
party hereto may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement, including requests made after the
Closing.
12.4 FORCE MAJEURE
Neither party hereto shall be liable for failure or delay in
performing any of its obligations hereunder if such failure or delay is
occasioned by compliance with any governmental regulation, request or order, or
by circumstances beyond the reasonable control of the party so failing or
delaying, including, but not limited to, Acts of God, war, insurrection, fire,
flood, accident, labor strikes, or inability to obtain materials, supplies,
power or equipment necessary to enable such party to perform its obligations
hereunder. Each party shall (a) promptly notify the other in writing of any such
event of force majeure, the expected duration thereof and its anticipated effect
on the ability of such party to perform its obligations hereunder, and (b) make
reasonable efforts to remedy any such event of force majeure.
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12.5 CUMULATIVE REMEDIES
Except as herein provided and subject to any applicable
limitation herein provided, the parties shall have all remedies for breaches of
this Agreement available to them provided by law or equity.
12.6 ENTIRE AGREEMENT
This Agreement embodies the entire agreement between the
parties hereto regarding the sale of the Assets and related matters. No
representations or agreements, whether written or oral, other than those
contained or referenced herein, shall be binding on the parties.
12.7 SPECIFIC PERFORMANCE
This Agreement may be specifically enforceable in accordance
with applicable principles of law and equity. The parties hereby acknowledge
that it is impossible to measure the monetary damages which would result from a
party's failure to perform any obligation imposed upon such party by this
Agreement. Therefore, if any party hereto should institute an action or
proceeding to enforce the provisions hereof, any other party against whom such
action or proceeding is thereby brought hereby waives the claim or defense that
such party has an adequate remedy at law, and such person shall not urge in any
action or proceeding the claim or defense that an adequate remedy at law exists.
12.8 NOTICES
All notices or other communications required or permitted to
be given hereunder shall be given in writing to the last authorized
address/telecopier number of the intended recipient, provided in writing to the
party giving such notice and shall be deemed to have been duly given on (i) the
date of receipt if personally delivered or delivered by overnight courier, (ii)
five (5)
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business days after posting if transmitted by postage prepaid registered or
certified mail (return receipt requested), or (iii) the date of transmission if
transmitted by telecopy (with postage prepaid registered or certified mail
confirmation) to the party to whom such notice or communication is being given.
Any party hereto may change such party's address or the person to whom notice is
given for purposes hereof by written notice to the other parties. Such notices
are effective only upon receipt.
12.9 NON-WAIVER OF DEFAULT
Any failure by any party hereto at any time or from time to
time to enforce and/or require strict compliance with any term or condition of
this Agreement shall not constitute a waiver of such term or condition. All
waivers hereunder must be in writing executed by the party waiving the right.
The consummation of the transactions with knowledge of a breach of a warranty,
representation or covenant shall not constitute a waiver of any such warranty,
representation or covenant.
12.10 PARTIAL INVALIDITY
If any term or provision of this Agreement, not essential to
the basic purposes of the transactions contemplated herein, shall be held to be
illegal, invalid or unenforceable by a court or arbitrator of competent
jurisdiction, it is the intention of the parties hereto that (i) the remaining
terms hereof shall constitute the agreement with respect to the subject matter
hereof, (ii) all such remaining terms shall remain in full force and effect and
shall be deemed to constitute the entirety of this Agreement as though such
illegal, invalid or unenforceable provision had never been part hereof, and
(iii) such illegal, invalid, or unenforceable provision shall be construed as
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closely as possible to the parties' original intent in order to render such
provision legal, valid, or enforceable, as applicable.
12.11 DUPLICATE ORIGINALS
For the convenience of the parties hereto, any number of
counterparts hereof may be executed, and such counterparts, taken together,
shall be deemed one and the same original.
12.12 ASSIGNMENT
This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of ISI and AMC and their successors and
assigns. AMC may on or prior to the Closing designate a subsidiary as the
purchaser of the Assets; provided, however, AMC shall remain liable to ISI for
any breach of its warranties, representations and covenants contained herein and
shall guaranty payment of all amounts due under the Note.
12.13 FEES AND EXPENSES
Each party hereto shall pay all expenses it has incurred,
including attorneys' and accountants' fees, in connection with this Agreement
and the transactions contemplated hereby. ISI shall pay all sales and use taxes
payable, if any, upon the transfer of the Assets.
12.14 GOVERNING LAW
This Agreement shall be governed by the laws of the State of
Georgia (regardless of the laws that might be applicable under principles of
conflicts of law) as to all matters, including, but not limited to, matters of
validity, construction, effect and performance.
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12.15 COUNTERPARTS AND EXHIBITS
This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. The Disclosure Schedule is made a part
of this Agreement.
12.16 PUBLICITY
ISI shall make no public announcement of the entering into of
this Agreement or the terms and conditions hereof without the prior written
consent of AMC thereto. ISI acknowledges that AMC, as a publicly-held company,
may be required or deem it desirable to make such public disclosure of the
execution of this Agreement and the terms and conditions hereof at any time
hereafter. With respect to any disclosure prior to the Closing, AMC shall
provide ISI with a copy of any such disclosure promptly after it is made and, to
the extent practical, will review any proposed press release with ISI before it
is released. After the Closing, the parties shall have no obligations to the
other under this paragraph 12.16.
INFO SYSTEMS OF NORTH CAROLINA, INC.
By: /S/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
ADDRESS FOR NOTICE:
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
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AMERICAN MEDCARE CORPORATION
By: /S/ ▇▇▇▇▇▇▇▇▇ ▇. Fine
--------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇. Fine
Title: President
ADDRESS FOR NOTICE:
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy No.: 404/636-7525
Attention: President
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EXHIBIT B
The total consideration for the Assets plus the Assumed Obligation
shall be allocated to Assets of the Company in the following manner:
ACCOUNTS RECEIVABLE: Face value less reasonable reserve for doubtful
accounts
SOFTWARE - FAIR MARKET VALUE
EQUIPMENT: At fair market value as the parties agree
PREPAID EXPENSES AND OTHER CURRENT ASSETS: At values consistent with
financial statements of prior periods
ASSUMED OBLIGATIONS: In accordance with generally accepted accounting
principles
RESIDUAL: Allocated to going concern, or goodwill as agreed by the
parties.
The payment in cash of $150,000 of the Purchase Price on the Closing
shall be allocated to the value of the Accounts Receivable.