SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________________________________________________
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
______________________________________________________
Date of Report (Date of earliest event reported): April 2, 1998
Commission File Number 0-8640
SYNCOR INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 85-0229124
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6464 Canoga Avenue, Woodland Hills, California 91367-2407
(Address of principal executive offices) (Zip Code)
(818) 737-4000
(Registrant's telephone number, including area code)
Item 2. Acquisition of Assets.
On April 2, 1998, Comprehensive Medical Imaging, Inc.,
a Delaware
corporation ("CMI") and a wholly-owned subsidiary of Syncor
International
Corporation, a Delaware corporation ("Syncor"), acquired
substantially all of
the assets (the "Assets") of International Magnetic Imaging, Inc.,
its
subsidiaries and affiliates (collectively, "IMI") pursuant to that
certain
Asset Purchase Agreement dated January 28, 1998. Prior to the
acquisition, IMI
operated ten outpatient diagnostic imaging centers, an imaging
referral
network and related services. CMI intends to continue those
operations. The assets acquired included, among other things,
cash, accounts receivable, real
property and equipment. The purchase price was $44,357,207,
consisting of $20,350,000 cash and $24,007,207 liabilities assumed
or satisfied. The source of the funds was a credit line from First
Chicago National Bank.
The purchase price was based on a discounted cash flow
analysis
of IMI's business. The valuation assumed normal growth in the
diagnostic
imaging industry that would result in a corresponding growth in
demand for magnetic resonance imaging and related services.
Prior to the consummation of the transaction, Syncor,
as a
vendee, had a limited relationship with Physician Outpatient
Diagnostic Center, Ltd., one of the affiliates included in IMI, as
a vendor.
Item 7. Financial Statements and Exhibits.
1. Asset purchase agreement dated January 28, 1998, as amended
on February 17, 1998 and March 31, 1998, by and among CMI and IMI
(submitted herewith).
2. Financial Statements
It is impracticable for Syncor to provide with this report the
financial statements required under this Item. Syncor will amend this
report to include such financial statements as soon as practicable, but in
any event not later than 60 days after the date this report is required to be
filed with the Commission.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities
Exchange Act of 1934, the Registrant has duly caused this report
to be signed
on its behalf by the undersigned, thereunto duly authorized.
SYNCOR INTERNATIONAL
CORPORATION
By: /s/ Haig Bagerdjian
_________________________________
Haig S. Bagerdjian
Senior Vice President,
Secretary
and General Counsel
Date: April 17, 1998
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (the "Agreement") is entered into
this 28th day
of January 1998, by and among Comprehensive Medical Imaging, Inc.,
a Delaware
corporation ("Buyer"), and International Magnetic Imaging, Inc., a
Delaware
corporation ("IMI of Delaware"), International Magnetic Imaging,
Inc., a
Florida corporation ("IMI of Florida"), Magnetic Resonance
Institute of North
Miami Beach, Ltd., a Florida limited partnership ("MRI of Miami"),
Oakland
Magnetic Resonance Institute, Ltd., a Florida limited partnership
("MRI of
Oakland"), Magnetic Resonance Institute of Boca Raton, Ltd., a
Florida limited
partnership ("MRI of Boca Raton"), Magnetic Resonance Institute of
South Dade,
Ltd., a Florida limited partnership ("MRI of South Dade"), Pine
Island
Magnetic Resonance Imaging Center, Ltd., a Florida limited
partnership ("MRI
of Pine Island"), Physicians Outpatient Diagnostic Center, Ltd., a
Florida
limited partnership ("PODC"), Magnetic Resonance Institute of
Orlando, Ltd., a
Florida limited partnership ("MRI of Orlando"), IMI Acquisition of
Arlington
Corp., a Virginia corporation ("IMI of Arlington"), IMI Acquisition
of Puerto
Rico Corporation, a Puerto Rico corporation ("IMI of Puerto Rico"),
IMI
Acquisition of Kansas Corporation, a Kansas corporation (IMI of
Kansas"),
MRI-NET, INC., a Florida corporation ("MRI-NET"), KAP-NET, CORP.,
a Florida
corporation ("Kap Net") and Caribbean Network Services, Inc., a
Puerto Rico
corporation ("CNS"), (each of which entities are sometimes
hereinafter
individually referred to as a "Seller" and all of which are
sometimes
hereinafter collectively referred to as "Sellers").
RECITALS
WHEREAS, IMI of Delaware owns all of the outstanding capital
stock of
seven acquisition entities which own the sole general partnership
interest in
the following seven Florida limited partnerships: MRI of Miami,
MRI of
Oakland, MRI of Boca Raton, MRI of South Dade, MRI of Pine Island,
PODC and
MRI of Orlando, sometimes hereinafter collectively referred to as
the "Florida
Limited Partnerships;"
WHEREAS, IMI of Delaware also owns all of the outstanding
capital stock
of seven additional acquisition entities which own the sole limited
partnership interest in the Florida Limited Partnerships;
WHEREAS, six of the Florida Limited Partnerships own all of
the assets of
six Florida diagnostic imaging centers and one of the Florida
Limited
Partnerships owns a 50% interest in a diagnostic imaging center
located in
Orlando, Florida;
WHEREAS, IMI of Delaware owns all of the outstanding capital
stock of the
following three corporations, each of which owns a diagnostic
imaging center:
IMI Acquisition of Arlington, IMI Acquisition of Puerto Rico and
IMI
Acquisition of Kansas;
WHEREAS, IMI of Delaware owns all of the outstanding capital
stock of
MRI-NET, a corporation which operates a diagnostic imaging
referral network
in approximately 35 states;
WHEREAS, IMI of Delaware owns all of the outstanding capital
stock of Kap
Net, a recently formed corporation organized to hold "capitated"
and "fee for
service"contracts;
WHEREAS, IMI of Delaware owns all of the outstanding capital
stock of IMI
of Florida , a corporation which owns certain non-revenue producing
assets
relating to the Centers;
WHEREAS, IMI of Delaware owns all of the outstanding capital
stock of CNS, a corporation recently formed for the purpose of
developing a diagnostic
imaging referral network in Puerto Rico, Santo Domingo, Guatemala,
Honduras,
Nicaragua, Haiti, Colombia and Venezuela;
WHEREAS, IMI of Delaware, the Florida Limited Partnerships,
IMI
Acquisition of Arlington, IMI Acquisition of Puerto Rico and IMI
Acquisition
of Kansas operate and own all of the assets relating to ten (10)
outpatient
diagnostic imaging centers in the United States and Puerto Rico
(the
"Centers") and MRI-NET, Kap Net, IMI of Florida and CNS own certain
non-
revenue producing assets and/or conduct or propose to conduct
certain
activities relating to the Centers.
WHEREAS, activities of the Centers, together with the business
or
proposed business of the aforementioned subsidiaries of IMI of
Delaware, are
herein referred to collectively as the "Business";
WHEREAS, Buyer and IMI of Delaware on behalf of all of the
Sellers
entered into a Letter of Intent, dated September 7, 1997 ("Letter
of Intent"),
the subject of which was the transactions contemplated hereby; and
WHEREAS, Sellers desire to sell, and Buyer desires to
purchase,
substantially all of the assets related to the Business, in
accordance with
the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual
promises
and covenants hereinafter set forth and other good and valuable
consideration,
the receipt and sufficiency of which is hereby acknowledged, the
parties
hereto agree as follows:
1. Definitions.
1.1 Agreement shall mean this Asset Purchase Agreement,
together with
all schedules and exhibits referenced herein.
1.2 Assets shall have the meaning ascribed to it in Section
2.1 of the
Agreement.
1.3 Assigned Contracts shall have the meaning ascribed to it
in Section
3.15 of the Agreement.
1.4 Intentionally Omitted.
1.5 Assumed Liabilities shall mean those liabilities set
forth on
Exhibit A hereto.
1.6 Bill of Sale, Assignment and Assumption Agreement shall
mean the
agreement in the form attached hereto as Exhibit B.
1.7 Break-Up Fee shall have the meaning ascribed to it in
Section 10.4
of the Agreement.
1.8 Business shall have the meaning ascribed to it in the
tenth
paragraph of the Recitals of the Agreement.
1.9 Cash Portion of the Purchase Price shall have the meaning
ascribed
to it in Section 2.2(a) hereof.
1.10 Closing shall mean the consummation of the purchase and
sale of the
Assets as provided herein.
1.11 Closing Date shall mean 10:00 am Pacific Standard Time
on March 13,
1998 at the offices of Buyer, or at such other time or place as the
parties
hereto may mutually agree upon, subject to extension (a) as
provided in
Sections 6.6 or 8.8 or (b) to allow for the expiration of any cure
period
described in Section 3.30 or 4.9.
1.12 Consolidated shall mean Consolidated Technology Group
Ltd., a New
York corporation.
1.13 Consulting Agreement shall mean the agreement in the
form attached
hereto as Exhibit C.
1.14 ERISA shall mean the Employee Retirement Income Security
Act of
1974, as amended.
1.15 Excluded Assets shall mean (I) all corporate and
financial books
and records of Sellers (including, but not limited to, tax returns,
checkbooks
and bank statements), a copy of which shall be provided to Buyer at
or prior
to the Closing Date, (ii) all claims, counterclaims and rights to
proceeds
with respect to all pending litigation to which Sellers are a party
and which
Buyer decides, within six months following the Closing as to
litigation which
is then still pending, not to pursue, (iii) all tax deferred assets
and
deferred loan costs of Sellers, (iv) all rights to any pro-rated
refunds of
insurance premiums paid by Sellers prior to Closing with respect to
insurance
policies of Sellers canceled by Sellers prior to or as of the
Closing Date,
and (v) all intercompany accounts receivable.
1.16 Financial Statements shall have the meaning ascribed to
it in
Section 3.6 of the Agreement.
1.17 Hazardous Material shall mean any hazardous or toxic
substance,
material, waste or similar item which is regulated by local
authorities, the
state authorities, the federal government, the Nuclear Regulatory
Commission,
the Environmental Protection Agency, related state or local
governmental
agencies or their designees, including, but not limited to, any
material,
substance, waste or similar item which is defined by any of the
following
laws, amendments thereto and related regulations and amendments
thereto:
1.17.1 hazardous material as defined under the laws of
any state
in which the Real Property is located;
1.17.2 hazardous substance as defined under Section 311
of the
Federal Water Pollution Control Act (33 U.S.C. Section 1317);
1.17.3 hazardous water as defined under Section 1004 of
the
Federal Resource Conservation and Recovery Act (42 U.S.C. Section
6901 et
seq.);
1.17.4 hazardous waste substance as defined under
Section 101 of
the Comprehensive Environmental Response, Compensation and
Liability Act (42
U.S.C. Section 9601 et seq.);
1.17.5 hazardous waste or toxic substance, waste,
material,
radioactive material, or any similar term in any rules and
regulations, which
are adopted by any administrative agency including, but not limited
to the
Environmental Protection Agency, the Occupational Safety and Health
Administration, the Nuclear Regulatory Commission and any such
similar
federal, state or local agency having jurisdiction over the Real
Property,
personal property or the Assets, whether or not such rules and
regulations
have the force of law; or
1.17.6 hazardous or toxic waste, substance, material or
similar
item in any statute, regulation, rule or law enacted by local
authorities,
state authorities, and/or the federal government.
1.18 Indemnified Party shall have the meaning ascribed to it
in Section
9.3 of the Agreement.
1.19 Indemnifying Party shall have the meaning ascribed to it
in Section
9.3 of the Agreement.
1.20 Laws shall mean any law, (whether statutory or
otherwise), rule,
regulation, ordinance, or decree of any governmental authority
(federal,
state, local or otherwise), including, without limitation, the Food
and Drug
Administration, the Environmental Protection Agency, U.S.
Occupational Safety
and Health Administration, the Department of Transportation and the
Nuclear
Regulatory Commission.
1.21 Leased Property shall mean all real property in which
each Seller
has a leasehold or other non-ownership interest, which are
identified on
Schedule 3.11.
1.22 Liability shall mean an obligation, known or unknown, to
a third
party which will require a payment of money, or an obligation,
known or
unknown, which should be reflected in accordance with generally
accepted
accounting principles on the financial statements of Sellers, as
the case may
be, or their successors or assigns.
1.23 Liquid Assets shall have the meaning ascribed to it in
Section 2.4
hereof.
1.24 Net Liabilities shall have the meaning ascribed to it in
Section
2.4 of the Agreement.
1.25 Permits shall have the meaning ascribed to it in Section
3.20 of
the Agreement.
1.26 Purchase Price shall have the meaning ascribed to it in
Section 2.2
of the Agreement.
1.27 Real Property shall consist of land with improvements
thereon and
buildings owned by each Seller, which are identified on Schedule
3.13.
1.28 Related Documents shall have the meaning ascribed to it
in Section
3.3 of the Agreement.
1.29 Related Transactions shall have the meaning ascribed to
it in
Section 3.23 of the Agreement.
1.30 Sellers shall have the meaning ascribed to it in the
introductory
paragraph of the Agreement.
1.31 Syncor shall mean Syncor International Corporation,
Buyer's parent.
1.32 Termination Date shall mean the date on which the
Agreement is
terminated pursuant to Section 10 hereof.
2. Purchase and Sale of Assets.
2.1 Upon the terms and subject to the conditions set forth
in this
Agreement and in reliance upon the representations and warranties
made herein
by each party, on the Closing Date, Sellers agree to sell, grant,
convey, assign, transfer and deliver to Buyer, and Buyer agrees to
purchase and
acquire from Sellers, all of the assets of every kind and nature of
Sellers
used or useful in the Business (the "Assets"), including, but not
limited to
those assets more particularly described in this Section 2.1, and
wherever
located, except for the Excluded Assets.
2.1.1 All equipment, furniture, furnishings and
fixtures owned or
used by Sellers in the conduct of the Business, including, without
limitation,
that which is listed on Schedule 2.1.1 attached hereto;
2.1.2 All inventories, supplies, spare parts and tools
owned or
used by Sellers in the conduct of the Business, including, without
limitation,
that which is listed on the schedule to be delivered by Sellers at
Closing
pursuant to Section 8.18;
2.1.3 All cash and accounts receivable owned by
Sellers,
including, without limitation, all of such cash and accounts
receivable which
are listed on Schedule 2.1.3;
2.1.4 All goodwill and other intangible property,
including
customer lists and other useful customer information, including,
without
limitation, all of those payors and referring physicians with which
Sellers
have written contracts and which comprise part of such customer
lists which
are listed on Schedule 3.15;
2.1.5 All contracts and agreements with any suppliers
that Sellers
or any of Sellers' stockholders, directors, officers, employees or
affiliates
are a party that relate, in whole or in part, to the Business or
Assets, all
of which written agreements are listed on Schedule 3.15;
2.1.6 All contracts and agreements with any customers,
including,
without limitation, patients, hospitals and managed care
organizations, that
Sellers or any of Sellers' stockholders, directors, officers,
employees or
affiliates are a party that relate, in whole or in part, to the
Business or
Assets, all of which, if written, are listed on Schedule 3.15;
2.1.7 All property or equipment leases, rental
agreements or
facility rental agreements, and any property or equipment
maintenance
agreements associated therewith, and all security deposits
thereunder, all of
which are listed on Schedule 3.15;
2.1.8 All licenses (including, without limitation,
radioactive
materials licenses and medical licenses), permits, all corporate
names and
fictitious business names, patents and trade and service marks,
trade names,
and copyrights, and all applications therefor, as well as all other
intellectual property rights granted to or owned by Sellers, all of
which are
listed on either Schedule 2.1.8 or 3.15;
2.1.9 All purchase orders for machinery and equipment,
if any;
2.1.10 Any and all Assigned Contracts not listed on any
other
schedule hereto, including, without limitation, any agreements with
radiologists, all of which are listed on Schedule 3.15, except for
customer
and supplier contracts entered into in the normal course of
business;
2.1.11 All drawings, blueprints, specifications, designs
and data,
if any;
2.1.12 All catalogues, brochures, sales literature, and
promotional
materials, if any;
2.1.13 All legal, accounting and financial files,
records, books
and other documents;
2.1.14 Those certain Secured Promissory Notes of Stephen
A.
Schulman to International Magnetic Imaging, Inc., each dated
December 26, 1995
in the principal amounts of $247,254.95 and $52,745.05,
respectively,
including all accrued interest thereon (the "Notes"); and
2.1.15 All other assets and rights of every kind and
nature, real
or personal, tangible or intangible, which are in any way related
to the
Business and owned by Sellers.
2.2 Purchase Price. On the Closing Date, upon the terms and
subject to
the conditions set forth in this Agreement, and in consideration of
the sale,
conveyance, assignment, transfer and delivery of the Assets to
Buyer, Buyer
agrees to pay to Sellers the following which, for purposes of this
Agreement,
shall be referred to herein as the "Purchase Price":
(a)$20,500,000, subject to adjustment as provided in
subparagraph 2.4
hereof (the "Cash Portion of the Purchase Price"); and
(b)The assumption of the Assumed Liabilities.
2.3 Payment Terms. The Purchase Price shall be paid by Buyer
to Sellers
at the Closing, as follows:
(a) The Cash Portion of the Purchase Price shall be paid
to each
Seller (or its designees, including the payment of Sellers'
finder's fee as
provided in Paragraph 3.24 hereof), in the respective amounts set
forth on
Schedule 2.3(a) hereto, by wire transfer of immediately available
funds to a
bank account(s) designated by each Seller.
(b) By Buyer's execution of the Bill of Sale, Assignment
and
Assumption Agreement.
2.4 Adjustment.
2.4.1 On the day immediately prior to the Closing Date,
IMI of
Delaware shall deliver to Buyer a Schedule 2.4 certified by its
Chief
Financial Officer, setting forth, as of the close of business on
the last
business day immediately preceding the Closing Date, (a) the amount
of each
Assumed Liability, and (b) the amount of cash on hand (for these
purposes, to
include all cash security deposits and prepaid expenses) and
accounts
receivable of Sellers (the "Liquid Assets"). If the difference
between the
Assumed Liabilities and the Liquid Assets, all as set forth on such
Schedule
(the "Net Liabilities") exceeds $12,500,000, the Cash Portion of
the Purchase
Price shall be reduced by an amount equal to the amount of any such
excess.
If the Net Liabilities set forth on such Schedule are $12,500,000
or less,
there shall be no adjustment in the Cash Portion of the Purchase
Price. If
the Net Liabilities set forth on such Schedule are in excess of
$13,500,000,
Sellers or Buyer may elect to terminate this Agreement.
2.4.2 The Purchase Price shall be adjusted on the
Closing Date to
reflect a reduction thereof in an amount equal to the legal fees
and
disbursements of Buyer's bankruptcy counsel which were incurred in
connection
with proceedings relating to certain involuntary bankruptcy
petitions filed
against certain affiliates of Sellers on October 22, 1998 in the
U.S.
Bankruptcy Court, Southern District of Florida, subject to Buyer's
delivery to
Sellers on or prior to the Closing Date of copies of bills and/or
statements
therefor.
2.5 Taxes; Proration.
2.5.1 Sellers shall be responsible for the payment of
any and all
federal, state, local or foreign income, franchise, sales and other
similar
taxes, liabilities or deficiencies of Sellers (including, without
limitation,
any penalties and/or interest thereon) which are based upon
Sellers' receipt
of the proceeds from the sale of the Assets hereunder regardless of
the period
to which such liabilities, deficiencies, penalties and/or interest
relate.
2.5.2 All applicable taxes, utility charges, insurance
and other
payments made by Sellers with respect to the Real Property prior to
the
Closing Date and all rental payments made by Sellers with respect
to the
Leased Property prior to the Closing Date shall be pro-rated
between the Buyer
and Sellers as of the Closing Date, solely to the extent prepaid by
Sellers
prior to the Closing Date and as set forth on Schedule 2.5.2 to be
delivered
to Buyer on or prior to the Closing Date. All security deposits
with respect
to the Leased Property shall be transferred to Buyer by Sellers on
the Closing
Date.
2.6 Liabilities and Obligations Not Assumed. Notwithstanding
any other
term of this Agreement to the contrary, Sellers shall retain
liability and be
responsible for, and Buyer shall have no liability for, any and all
liabilities of Sellers, other than the Assumed Liabilities or
liabilities in
connection with agreements which are assigned to Buyer under this
Agreement or
as otherwise expressly provided for in this Agreement, including,
but not
limited to:
2.6.1 Taxes. Any and all taxes referred to in Section
2.5 hereof.
2.6.2 Subordinated Debt. Any subordinated debt of
Sellers,
including all accrued interest thereon.
2.6.3 Amounts Due Affiliates. Any amounts due from
Sellers to
Sellers' parents, subsidiaries or other entities owned or
controlled by
Sellers, or officers, directors, shareholders, agents or employees
thereof.
2.6.4 Obligations to Employees. Any and all obligations
of Sellers
to their officers, directors, employees and/or agents, whether for
compensation, fringe benefits, employee benefit or retirement
plans, severance
compensation, or any other reason, including, without limiting the
generality
of the foregoing, any obligation of Sellers to any employee
retirement or
benefit plan or to any governmental entity for amounts relating to
payroll
withholding, other than obligations to any of such individuals
arising out of
the employment or engagement of such individuals by Buyer, or the
transfer to
and assumption by Buyer of the Plans, on and after the Closing
Date.
2.6.5 Willful Misconduct; Fraud; Crimes. All
liabilities and
obligations of Sellers arising as a result of the willful
misconduct, fraud,
or criminal actions of any of Sellers or their officers, directors,
shareholders, employees, agents or representatives.
2.6.6 Undisclosed Liabilities. Any Liability of Sellers
which is
not disclosed to Buyer, including, but not limited to, Liabilities
relating to
claims with respect to Hazardous Materials, arising out of
circumstances
occurring prior to the Closing and regardless of when such claim is
first
asserted.
2.6.7 Other Expenses. Any legal, accounting, brokerage
or other
expenses of whatsoever kind or nature incurred by Sellers or its
officers,
directors, stockholders, employees or agents, or any parent,
subsidiary or
entity owned or controlled by Sellers, in connection with the
transactions contemplated by this Agreement. Notwithstanding the
foregoing, Buyer shall be
responsible for the payment of all legal fees for general corporate
services
rendered to Sellers which comprise part of the Assumed Liabilities,
including
the amounts thereof which are set forth on Exhibit A and Schedule
2.4 hereto
(which will exclude all legal fees of Sellers incurred in
connection with the
transaction contemplated by this Agreement), which legal fees for
general
corporate services rendered to Sellers shall be paid by Buyer to
the payees
thereof at Closing.
2.7 Assigned Contracts. Set forth on Schedule 3.15 is a list
of the
Assigned Contracts. Schedule 3.15 indicates opposite each Assigned
Contract
set forth thereon, those contracts as to which Seller will not be
required to
obtain consents to the assignment thereof and Sellers make no
representation
or warranty as to the assignability of such contracts.
3.0 Representations and Warranties of Sellers. Sellers
represent and
warrant to Buyer as follows:
3.1 Formation, Capacity. Each Seller has been validly formed
under the
laws and regulations of the state of its formation. Except with
respect to
MRI-NET, each Seller is duly licensed or qualified to do business
as a foreign
corporation and is in good standing under the laws of any other
jurisdictions
in which the character of the properties owned or leased by it
therein or in
which the transaction of its business makes such qualification
necessary,
except for those jurisdictions where failure to be so qualified,
individually
or in the aggregate, would not have a material adverse effect on
the Business.
Each Seller has all requisite corporate power and authority to own
its
properties related to the Business and to carry on the Business as
now
conducted. None of the Sellers is in default with respect to any
order of any
court, governmental authority or arbitration board or tribunal
related to the
Business to which such Seller is a party or is subject, nor is any
Seller,
except MRI-NET, in violation of any laws, ordinances, governmental
rules or
regulations which would have a material adverse effect on the
Business.
3.2 Good Standing. Each Seller, except MRI-NET, is in
compliance with
all local, state and federal laws, regulations, statutes and
ordinances in
every jurisdiction in which it does business. Specifically, each
Seller,
except MRI-NET, is licensed and qualified to do business as a
foreign
corporation or foreign limited partnership as required. Moreover,
no Seller,
except MRI-NET, is in default with respect to any order of any
court,
governmental authority or arbitration board or tribunal, and each
Seller is in
compliance with the rules and regulations of all local, state and
federal
governmental agencies which regulate any aspect of the Business.
3.3 Authorization, Validity and Effect of Agreements. The
execution and
delivery by each Seller of this Agreement and all agreements and
documents
contemplated hereby (the "Related Documents"), and the consummation
by them of
the transactions contemplated hereby and thereby have been duly
authorized by
all requisite corporate actions, including stockholder approval.
This
Agreement constitutes, and all Related Documents when executed and
delivered
by each Seller and Buyer pursuant to this Agreement for value
received will
constitute, valid and legally binding obligations of Sellers
enforceable in
accordance with their terms, except as enforceability may be
limited by
equitable principles and applicable bankruptcy, insolvency,
reorganization,
fraudulent transfer, moratorium, bulk sales, preference, equitable
subordination, marshaling or other similar laws of general
application now or
hereafter in effect relating to the enforcement of creditors'
rights
generally.
3.4 Consents and Approvals. Except as set forth in Section
3.3 above or
on Schedule 3.4 or Schedule 3.15 hereto, there is no authorization,
consent,
order or approval of, or notice to or filing with, any individual,
entity or
federal or state authority required to be obtained or given in
order for each
Seller to consummate the transactions contemplated hereby and fully
perform
its obligations hereunder, excluding, however, any authorization,
consent,
order, approval, notice or filing which Buyer is required to obtain
or give.
3.5 Absence of Conflicts. Except as set forth on Schedule 3.5
or
Schedule 3.15 hereto, the execution, delivery and performance by
each Seller
of this Agreement and the Related Documents, and the consummation
by each
Seller of the transactions contemplated hereby and thereby will
not, with or
without the giving of notice or lapse of time, or both, (i) to the
best of
Sellers' knowledge, violate any provision of law, statute, rule or
regulation
to which such Seller is subject, (ii) violate any order, judgment
or decree
applicable to such Seller, (iii) conflict with or result in a
breach or
default under any term or condition of any of the formation
documents of such
Seller, or any agreement or other instrument to which such Seller
is a party
or by which it is bound, or to which any of the Assets are subject,
(iv)
result in the creation or imposition of any lien, pledge, claim,
security interest or encumbrance of any nature whatsoever on the
Assets, or
(v) cause, or give any person grounds to cause, the maturity of any
Liability
to be accelerated, or increase any Liability.
3.6 Financial Statements. Sellers have previously delivered
to Buyer
true, complete and correct copies of their combined audited balance
sheets as
of December 31, 1996 and the related combined audited statements of
income,
statements of stockholders' equity and statements of changes in
financial
position for the period ending on such date, and their respective
combined
unaudited balance sheets as of December 31, 1997 (the "Financial
Statement
Date"), and the related combined unaudited statements of income,
statements of
stockholders' equity and statements of changes in financial
position for the
periods ending on such date (collectively, including the footnotes
thereto,
the "Financial Statements"). Sellers represent and warrant that
the Financial
Statements fully and fairly set forth the financial condition of
Sellers as of
the dates indicated, and the results of its operations for the
periods
indicated, all on a combined basis in accordance with generally
accepted
accounting principles consistently applied, except as otherwise
stated
therein. Further, the Financial Statements contain no material
misstatements
or omissions that would be required to be disclosed for financial
reporting
purposes.
Except as set forth on Schedule 3.8, all accounts and notes
receivable of
each Seller reflected on the Financial Statements (other than
Excluded
Assets) are, and all accounts receivable subsequently accruing to
the Closing
Date will be, (a) valid and genuine and generated from the
provision of
services by Sellers in the normal course of business, (b) to the
best of each
Sellers' knowledge, subject to no known defenses, set-offs or
counterclaims
(except customary reserves and allowances consistent with past
practices).
Sellers have no notes receivable, other than intercompany notes
receivable
which are not included in the Assets and the Secured Promissory
Notes dated
December 26, 1995, in the principal amounts of $247,254.95 and
$52,745.05,
respectively, including all accrued interest thereon, of Dr.
Stephen A.
Schulman to IMI of Delaware. Sellers have not changed the
accounting
treatment with respect to their accounts receivable as set forth on
the
Financial Statements subsequent to the Financial Statement Date.
3.7 Absence of Undisclosed Liabilities.
3.7.1 The Sellers have no liabilities or obligations
whatsoever
related to the Business for which the Buyer will be liable in
accordance with
the terms hereof, either accrued, absolute, contingent or
otherwise, which are
not reflected or provided for in the Financial Statements, or those
arising
after the Financial Statement Date which are in the ordinary course
of
business, in each case in normal amounts and none of which would
have a
material adverse affect on any Seller or the Business.
3.7.2 Except as otherwise disclosed in this Agreement or
in any
schedule hereto, as of the Closing Date, no Seller knows of any
basis for the
assertion against any Seller of any claim or Liability relating to
the Assets
and/or Business, or is aware of any occurrence or fact that has or
might
adversely affect any of the Assets or the Business.
3.8 Current Liabilities/Receivables. Except as set forth on
Schedule
3.8, or in the Financial Statements, the accounts receivable and
trade
accounts payable of each Seller as of the Financial Statement Date,
and those
incurred between the Financial Statement Date and the Closing Date
are or will
be incurred or realized in the ordinary course of business and are
or will be
in amounts consistent with historical levels of accounts receivable
and trade
accounts payable of each Seller.
3.9 Absence of Certain Changes or Events. Except as
contemplated by
this Agreement or as set forth in Schedule 3.9 or any other
schedule hereto,
since the Financial Statement Date, there has not been (a) any
material
damage, destruction or casualty loss to the properties or assets of
any Seller
which has not been repaired, replaced or corrected (whether or not
covered by
insurance); (b) any material adverse change in the business,
assets,
properties, operations, prospects or financial condition of any
Seller, or, to
Sellers' knowledge, any fact or condition which could cause such a
change; (c)
any entry into any transaction, commitment or agreement (including,
without
limitation, any borrowing) material to any Seller, or outside the
ordinary
course of business; (d) any increase in the rate or terms of
compensation
payable or to become payable by any Seller to any directors,
officers or
employees, or any increase in the rate or change in the terms of
any
employment agreement or compensatory arrangement, or any bonus,
pension,
insurance or other employee benefit plan, or any payment or benefit
made to or
for any such director, officer or employee, except for any of the
foregoing
which are in the ordinary course of business and excluding, for
these
purposes, Lewis Schiller, Stephen A. Schulman and George Mahoney;
(e) any
sale, transfer or other disposition of any asset of any Seller to
any party,
except for any of the foregoing in the ordinary course of business
consistent
with past practices; (f) any termination or waiver of any rights of
material
value to any of the businesses of each Seller; (g) any material
failure by any
Seller to pay its accounts payable or other obligations in the
ordinary
course of business consistent with past practices; (h) any capital
expenditure
for additions to property or equipment by any Seller in excess of
$50,000
other than in the ordinary course of business; (i) any pledge of
any of the
Assets of any Seller or, to the best of Sellers' knowledge, any
action or
inaction which would subject any such Asset to any lien, security
interest,
mortgage, pledge, claim, charge or other encumbrance; (j) the
incurrence of
any material Liability or obligation by any Seller, except for
liabilities
incurred in the ordinary course of business and consistent with
past
practices; (k) any actual, or to each Seller's knowledge
threatened,
termination or cancellation of, or modification or change in, any
business
relationship with any customer or customers of any Seller or other
agreement
or arrangement involving or related to the Assets of any Seller
where such
event would have a material, adverse effect on the business of such
Seller;
(l) any cancellation of a debt due to or a claim of any Seller,
other than by
payment or other satisfaction; (m) any material failure of any
Seller to
perform, or any default by any Seller under, any material
agreement,
obligation or covenant to which it is or was bound; (n)any material
change in
any method of accounting or accounting practice, principle or
procedure; (o)
any action or inaction which might cause any Seller to incur any
material tax
liability out of the ordinary course of business; or (p) any
agreement,
whether in writing or otherwise, to take any action described in
this Section.
3.9 For purposes of this Section (other than (h) above), the
word
"material" shall mean any matter which could create a single claim,
obligation
or encumbrance on the Assets of any Seller in excess of $50,000 or,
when
aggregated with any other damage or loss sustained by Buyer from
any breach or
default of this Section 3, does not exceed $100,000.
3.10 Taxes. Each Seller has: (i) duly and timely filed or
caused to be
filed all federal, state, local and foreign tax returns (including,
without
limitation, consolidated and/or combined tax returns) required to
be filed by
it prior to the date of this Agreement which relate to each Seller,
or with
respect to which each Seller or the Assets are liable or otherwise
in any way
subject; (ii) paid or fully accrued for all taxes shown to be due
and payable
on such returns (which taxes are all the taxes due and payable
under the laws
and regulations pursuant to which such returns were filed); and
(iii) properly
reserved on the Financial Statements for all such taxes accrued in
respect of
each Seller or the Assets for periods subsequent to the periods
covered by
such returns to the extent required by generally accepted
accounting
principles. No notice of deficiency in payment of taxes for any
period has
been received by any Seller from any taxing body and remains
unsettled as of
the date of this Agreement. Copies of all federal, state, local
and foreign
income (or franchise) tax returns of each Seller have been made
available for
inspection by Buyer.
3.11 Title to the Assets. Each Seller has good and
marketable title to
the Assets, free and clear of all security interests, mortgages,
encumbrances,
liens, charges or adverse claims of any kind or character, except
as
specifically listed on Schedule 3.11. Except as indicated in
Schedule 3.11,
none of the Assets is held under any lease or conditional sales
contract. All
machinery and equipment transferred to Buyer at the Closing as part
of the
Assets will be in good operating order and condition, free of all
material
defects, will have been properly maintained in accordance with all
service and
maintenance agreements relating thereto and will be fit for
operation in the
ordinary course of business.
3.12 Property. The Assets constitute all of the assets owned
by the
Sellers and/or utilized by Sellers to conduct their Business as
presently
conducted, including, without limitation, all real and personal
property of
any kind or character, all machinery, equipment, furniture,
fixtures and
supplies, all intangible property, and all accounts receivable of
Sellers. In
accordance with Section 8.19, each Seller agrees to provide Buyer
with a list
of fixed assets setting forth the book value of same as of the last
day of the
month prior to the Closing, and, if available, the original
purchase price
therefor. Except as set forth in this Agreement or on any Schedule
hereto,
there exists no condition, restriction, reservation or encumbrance
known to
Sellers affecting the title to the Assets which would prevent Buyer
from
utilizing the Assets, or any part thereof, after the Closing, to
the same full
extent that any Seller utilized the same prior to the sale and
transfer
contemplated hereby.
3.13 Real Estate. Schedule 3.13 contains a list and accurate
description of all Real Property and any lien, charge or
encumbrance
thereupon. To the best knowledge of Sellers, the improvements upon
such
properties owned by Sellers and the use thereof by each Seller
conforms in all
material respects, to all applicable public and private covenants,
conditions
and restrictions, zoning ordinances, conditional use permits,
building codes
and other state, federal and local ordinances, including without
limitation
environmental laws, ordinances and regulations. Except as set
forth on
Schedule 3.13 hereto, no claims, charges or notice of violations
have been
filed, served, made, or to the best of each Seller's knowledge,
threatened,
orally or in writing, against or relating to any such property or
any of the
operations conducted at any such property (currently or in the
past) as a
result of (i) any violation or alleged violation of any applicable
ordinances,
requirements, regulations, zoning laws, restrictive covenants,
conditions or
restrictions, or (ii) as a result of any encroachment on the
property of
others. Each Seller has good and marketable title to, and is in
possession of
or has control over, all of its real and personal property, none of
which is
held under or subject to any mortgage, pledge, lien, lease,
encumbrance,
conditional sales contract or other security arrangement except to
the extent
described in Schedule 3.11 hereto. No condemnation or eminent
domain
proceedings are pending, or, to the best knowledge of Seller, are
threatened
with respect to any Real Property.
3.14 Insurance. Attached hereto as Schedule 3.1 is a
schedule of
insurance maintained by Sellers as of the date hereof. Each Seller
keeps all
of its businesses, operations and properties insured against loss
or damage,
to the extent of insurance currently in effect, with insurers
believed by
Sellers to be financially responsible.
3.15 Contracts and Commitments.
3.15.1 Other than customer and supplier contracts
entered into in
the ordinary course of business, and except as set forth on any
other schedule
hereto including Schedule 3.15, no Seller is a party to any
material
agreements, contracts, guarantees, commitments, restrictions or
instruments of
any kind ("Contracts"). Those Contracts being assigned to and
assumed by
Buyer at the Closing are set forth on Schedule 3.15 (the "Assigned
Contracts"). True and correct copies of all Assigned Contracts
listed on such
schedules hereto have been delivered to Buyer. Each Assigned
Contract to
which a Seller is a party is a valid and binding obligation of such
Seller,
enforceable in accordance with its respective terms, except that
enforceability may be limited by equitable principles and
applicable
bankruptcy, insolvency, reorganization, fraudulent transfer,
moratorium, bulk
sales, preference, equitable subordination, marshaling or other
similar laws
of general application now or hereafter in effect relating to the
enforcement
of creditors' rights generally, and is in full force and effect;
and each
Seller is in compliance with all material terms of the Assigned
Contracts.
Assuming full performance by the parties consistent with past
practice, none
of the Assigned Contracts, either individually or in the aggregate,
have, or
may have to the best of Sellers' knowledge, a material, adverse
effect on the
Assets. Except as set forth on Schedule 3.15, no allegation or
notice of
default of any Assigned Contract has been received by any Seller,
and to the
best of each Seller's knowledge, no other party to any of the
Assigned
Contracts is in default or breach thereof in any material respect.
3.15.2 No Seller has given any power of attorney
(whether revocable
or irrevocable) to any individual or entity which is currently in
force and
effect.
3.15.3 Except as set forth on Schedule 3.15, no Seller
is in
default in any material respect, and to the best of Sellers'
knowledge, there
is no basis for any valid claim of default, in any respect under
any of the
Assigned Contracts. No Seller has any knowledge that the other
parties to
such contracts will not fulfill their obligations under such
contracts in all
material respects or are threatened with insolvency.
3.15.4 Other than as may be provided by applicable law,
there are
no express or implied warranties (excluding third party
manufacturer's
warranties) outstanding with respect to any services provided to
patients by
any of the Sellers.
3.16 Labor Controversies. Except as set forth on Schedule
3.16, (a) no
Seller is a party to any collective bargaining agreement which
relates in any
way to the Business; (b) no controversies exist between any Seller
and any of
their employees which if adversely determined, might reasonably be
expected to
materially adversely affect the conduct of the Business, and there
are no
unresolved labor union grievances or unfair labor practice or labor
arbitration proceedings pending or, to the best of Sellers'
knowledge,
threatened relating to the Business, and to the best of Sellers'
knowledge, no
organizational efforts are presently being made or threatened
involving any of
the Sellers' employees, and no Seller has received notice of any
claim
that such Seller has not complied with any laws relating to the
employment of
labor, including any provisions relating to wages, hours,
collective
bargaining, the payment of social security and similar taxes, equal
employment
opportunity, employment discrimination and employment safety, or
that such
Seller is liable for any arrears of wages or any taxes or penalties
for
failure to comply with any of the foregoing.
3.17 Litigation. Except as set forth in Schedule 3.17, there
is no
single action, suit or proceeding with respect to any Seller
involving claims
by or against any Seller or the Assets in excess of $50,000 or,
when
aggregated with any other damage or loss sustained by Buyer from
any breach or
default of this Section 3, does not exceed $100,000. which are
pending or, to
the best of Sellers' knowledge, threatened, at law or in equity, or
before or
by any federal, state, municipal or other governmental department,
commission,
board, bureau, agency or instrumentality and, to the best of
Sellers'
knowledge, no basis for any such action, suit or proceeding exists.
3.18 Compliance with Laws. Except as set forth on Schedule
3.18, to the
best of Sellers' knowledge, each Seller is in compliance with all
applicable
Laws in respect of its operations, Real Property, machinery,
equipment, all
other property, practices and all other aspects of the Business.
No Seller
has received any notification of any asserted present failure of it
to comply
with any Law.
3.19 Employee Benefits. With respect to employee benefit
plans adopted
by each Seller, including without limitation plans which are
"employee pension
benefit plans" or "employee welfare benefit" plans within the
meaning of
Sections 3(1) and 3(2), respectively, of ERISA (the "Plans"), all
of which
are set forth on Schedule 3.15, no Seller, nor any entity
affiliated with any
Seller, has failed to make any required contribution or other
required payment
to any such Plan, including any such failure pursuant to which a
lien may
arise by operation of law against the Assets of any Seller,
including without
limitation liens arising under Sections 302(f)(4) or 4068(b) of
ERISA.
3.20 Licenses and Permits. Each Seller, except MRI-NET, has
all
governmental licenses and permits and other governmental
authorizations and
approvals currently required for the conduct of its businesses as
presently
conducted ("Permits"). Schedule 2.1.8 hereto includes a list of
all Permits.
Notwithstanding any provision in this Agreement to the contrary,
Sellers make
no representation or warranty as to whether MRI-NET has obtained
all necessary
Permits or operates its business in compliance with all applicable
laws, rules
and regulations. However, the foregoing exclusion shall not limit
or reduce
in any way Sellers' obligations under Section 9 below.
3.21 Relations With Suppliers and Customers. No Seller is
required to
provide any bonding or other financial security arrangements in
connection
with any transaction with any customer or supplier. To the best of
each
Seller's knowledge, no supplier of any Seller will cease to do
business with
it after the consummation of the transactions contemplated hereby,
to the
extent that the failure to continue such business would have a
material,
adverse effect on the Business of any Seller as currently
conducted, either
individually or taken as a whole; and no payor or referring
physician has
notified any Seller that it will cease to do business with such
Seller after
the consummation of the transactions contemplated hereby, to the
extent that
the failure to continue such business would have a material adverse
effect on
the Business of any Seller as currently conducted, either
individually or
taken as a whole. While each Seller knows of no supplier who will
cease to do
business with such Seller, following consummation of the Closing,
it is
possible that some of such suppliers may cease to do business with
Buyer on
the grounds that Buyer is a competitor of such supplier, or
otherwise.
3.22 Employment Matters. All written employment contracts
and all
written pension, bonus, profit sharing, stock option, life, health,
retirement
welfare, or other agreements or arrangements providing for employee
remuneration or benefits to which any Seller is a party or by which
it is
bound are in full force and effect and have previously been
disclosed to
Buyer. There are no oral contracts or arrangements of the type
described in
the preceding sentence with respect to Sellers' employees, which
have not
previously been disclosed to Buyer. There have been no claims of
defaults,
and to the best of any Seller's knowledge, there are no facts or
conditions
which if continued, or with the giving of notice, will result in a
default
under these contracts or arrangements (excluding, for these
purposes,
employment agreements between Sellers and Lewis Schiller, Stephen
A. Schulman
and George Mahoney). Sellers have delivered to Buyer a copy of
its employee
manual.
3.23 Related Transactions. Except as reflected in the
Financial
Statements and except as set forth on Schedule 3.23, no Seller has
made or
entered into any contract, lease, commitment, arrangement or
understanding
with any of its officers, directors, employees, shareholders or
partners or
with any affiliate or associate of any of the foregoing, under
which any
Seller has continuing obligations except for existing compensation
arrangements (including bonuses) with each of Sellers' officers
("Related
Transactions").
3.24 Brokers and Finders. Sellers shall pay any and all
brokerage fees,
commissions or finders' fees charged by any broker, finder or
investment
banker employed or engaged by Sellers in connection with this
Agreement or
the transactions contemplated hereby. By separate agreement
between Sellers
and George W. Mahoney ("Mahoney"), Sellers have agreed to pay
Mahoney a
finder's fee in connection with this transaction and will advise
Buyer, in
writing prior to the Closing, of the amount to be deducted from the
Purchase
Price and paid directly to Mahoney at Closing.
3.25 Patents, Trademarks, Licenses Etc. Except for normal
usage
licenses associated with Sellers' equipment and software and as
otherwise set
forth on Schedule 2.1.8 hereto, there are no domestic and foreign
patents,
trademarks, service marks, trademark registrations, logos, trade
names,
assumed names, copyrights and copyright registrations or
applications
therefor, or license agreements presently owned or held by any
Seller or under
which any Seller owns or holds any license, or in which any Seller
owns or
holds any material direct or indirect interest; and Sellers do not
believe
that there are any others necessary for the conduct of the business
of any
Seller as currently conducted. Upon consummation of the
transactions
contemplated hereby, Buyer will acquire the rights held by each
Seller in each
item described in Schedule 2.18. Schedule 2.18 also includes all
names and
logos of Sellers to be transferred hereunder. Except as set forth
on Schedule
2.18, no Seller has any registered logos, trade names or assumed
names.
3.26 Books and Records. The books and records of each Seller
have been
maintained in accordance with generally accepted accounting
principles and
consistent with past practices, and accurately reflect in all
material
respects the business, assets, properties, rights, obligations,
liabilities
and operations of each Seller.
3.27 Full Disclosure. Each Seller has disclosed pursuant to
this
Agreement all facts material to the business, operations, assets or
condition
(financial or otherwise) of each Seller. No representation or
warranty to
Buyer contained in this Agreement, and no statement contained in
the
disclosure schedules to this Agreement, any certificate, list or
other writing
furnished to Buyer pursuant to the provisions hereof, contains any
untrue
statement of a material fact or omits to state a material fact
necessary in
order to make the statements herein or therein not misleading.
3.28 Effect of Certificates. All certificates of the Sellers
and their
officers delivered hereunder shall be deemed to be additional
representations
and warranties of the Sellers.
3.29 Hazardous Materials. Except as set forth on Schedule
3.29 and in
the ordinary course of business consistent with past practice and
in full
compliance with all environmental laws, regulations, and
ordinances, to
Sellers' best knowledge: (I) there has been no Hazardous Material
placed or
released on or within the Real Property, whether such Hazardous
Material was
placed by generation, spill, release, discharge, treatment,
disposal or
storage, and (ii) no Hazardous Material has penetrated or otherwise
contaminated any soils or waters including, but not limited to,
streams
crossing or abutting the Real Property or the aquifer underlying
the Real
Property.
3.30 Notice and Cure. Prior to Sellers being deemed to be in
breach or
default of any of their foregoing representations and warranties,
Sellers
shall be entitled to receive notice of any claimed breach or
default thereof,
which notice will specify with particularity the basis for any such
claimed
breach or default, and the opportunity to cure the same within
thirty (30)
days after the receipt of any such notice (or within such longer
period of
time as may be necessary to cure any such claimed breach or
default, provided
that Sellers have commenced to attempt to cure such claimed breach
or default
within such thirty (30) day period and are diligently prosecuting
such cure).
3.31 Materiality Standard. All of Sellers' representations
and
warranties contained in this Section 3 shall be subject to the
following
materiality standard. Sellers shall not be deemed to be in breach
or default
of any of such representations or warranties unless Buyer sustains
damage or
loss therefrom in an amount in excess of $50,000 in the case of any
single
representation or warranty or $100,000 in the aggregate.
4. Representations and Warranties of Buyer. Buyer represents and
warrants to
each Seller as follows:
4.1 Corporate Capacity. Buyer is a corporation duly
incorporated,
validly existing and in good standing under the laws of its
jurisdiction of
incorporation, and has all the requisite corporate power and
authority to
enter into this Agreement.
4.2 Effect of Agreement. The execution and delivery by Buyer
of this
Agreement and all Related Documents, and the consummation by it of
the
transactions contemplated hereby and thereby have been duly
authorized by all
requisite corporate actions. This Agreement and all Related
Documents when
executed and delivered by each Seller and Buyer pursuant to this
Agreement for
value received will constitute valid and legally binding
obligations of Buyer
enforceable in accordance with their terms, except that
enforceability may be
limited by equitable principles and applicable bankruptcy,
insolvency,
reorganization, fraudulent transfer, moratorium, bulk sales,
preference,
equitable subordination, marshaling or other similar laws of
general
application now or hereafter in effect relating to the enforcement
of
creditors' rights generally.
4.3 Consents and Approvals. Except as set forth in Section
4.2 above or
on Schedule 4.3 hereto, there is no authorization, consent, order
or approval
of, or notice to or filing with, any individual or entity required
to be
obtained or given in order for Buyer to consummate the transactions
contemplated hereby and fully perform its obligations hereunder,
excluding,
however, any authorization, consent, order, approval or filing
which any
Seller is required to obtain or give.
4.4 Absence of Conflicts. The execution, delivery and
performance by
Buyer of this Agreement and the consummation by Buyer of the
transactions
contemplated hereby will not, with or without the giving of notice
or the
lapse of time, or both, (I) violate any provision of law, statute,
rule or
regulation to which Buyer is subject, (ii) violate any order,
judgment or
decree applicable to Buyer or (iii) conflict with, or result in a
breach or
default under, any term or condition of the Certificate of
Incorporation or
By-Laws of Buyer or any agreement or other instrument to which
Buyer is a
party or by which Buyer is bound.
4.5 Litigation and Administrative Proceedings. There is no
claim,
action, suit, proceeding or investigation in any court or before
any
governmental or regulatory authority pending, or to the best of
Buyer's
knowledge threatened, at law or in equity, against or affecting
Buyer which
seeks to enjoin or obtain damages in respect of the transactions
contemplated
hereby. To the best of Buyer's knowledge, there is no basis for
any such
claim, action, suit, proceeding or investigation.
4.6 Brokers and Finders. Neither Buyer nor its officers,
directors,
employees, affiliates or associates has employed any broker, finder
or
investment banker, or incurred any liability for any brokerage
fees,
commissions or finders' fees in connection with this Agreement or
the
transactions contemplated by this Agreement.
4.7 Full Disclosure. Buyer has disclosed pursuant to this
Agreement all
facts material to the business, operations, assets or condition
(financial or
otherwise) of Buyer. No representation or warranty to Sellers
contained in
this Agreement, and no statement contained in the disclosure
schedules to this
Agreement, any certificate, list or other writing furnished to
Sellers
pursuant to the provisions hereof, contains any untrue statement of
a material
fact or omits to state a material fact necessary in order to make
the
statements herein or therein not misleading.
4.8 Effect of Certificates. All certificates of Buyer and
its officers
delivered hereunder shall be deemed to be additional
representations and
warranties of Buyer.
4.9 Notice and Cure. Prior to Buyer being deemed to be in
breach or
default of any of its foregoing representations and warranties,
Buyer shall be
entitled to receive notice of any claimed breach or default
thereof, which
notice will specify with particularity the basis for any such
claimed breach
or default, and the opportunity to cure the same within thirty (30)
days after
the receipt of any such notice (or within such longer period of
time as may be
necessary to cure any such claimed breach or default, provided that
Buyer has
commenced to attempt to cure such claimed breach or default within
such thirty
(30) day period and are diligently prosecuring such cure).
4.10 Employees. Buyer acknowledges that Sellers have made no
representation or warranty with respect to Buyer's ability to
employ any of
Sellers' employees on and after the Closing Date or, if employed,
the terms of
employment thereof.
5. Covenants of Sellers. From the date hereof to Closing, each
Seller will:
5.1 conduct its Business only in the ordinary and usual
course making
all payments, other than those specifically prohibited hereunder,
as and when
the same become due and payable, consistent with past practice;
5.2 use all reasonable efforts to keep intact its business
organizations and goodwill;
5.3 unless otherwise agreed to in writing, use its best
efforts to keep
available the services of its employees and maintain good
relationships with
suppliers, lenders, creditors, distributors, employees, customers,
and others
having any business or financial relationship with Seller. Buyer
acknowledges
that Sellers are currently in litigation with their Chief Executive
Officer
and, notwithstanding any term or provision of this Agreement to the
contrary,
Sellers make no representation or warranty as to whether Buyer will
be able to
retain such individual on and after the Closing Date;
5.4 continue to properly and to promptly file when due all
federal,
state, local, foreign, and other tax returns, reports, and
declarations
required to be filed by it, and will pay, or make full and adequate
provision
for the payment of, all taxes and governmental charges due from or
payable by
each Seller, unless disputed by Sellers;
5.5 comply with all laws and regulations applicable to it
and its
operations;
5.6 maintain in full force and effect the insurance
coverages presently
in effect;
5.7 not enter into any material contract, agreement,
commitment, or
understanding material to any Seller, outside the ordinary course
of business
or terminate any Assigned Contract except in the ordinary course of
business
consistent with past practice (it being understood, however, that
the
employment agreement between IMI of Delaware and its current Chief
Executive
Officer may be terminated);
5.8 not incur any material obligation or Liability (fixed or
contingent), except normal trade or business obligations incurred
in the
ordinary course of business and consistent with past practice or
with respect
to obligations or liabilities which are not Assumed Liabilities,
none of which
will be materially adverse to the Business, and except in
connection with this
Agreement and the transactions contemplated herein;
5.9 as to any Assumed Liabilities, not discharge or satisfy
any lien,
security interest or encumbrance or not pay any obligation or
Liability (fixed
or contingent), other than in the ordinary course of business and
consistent
with past practice;
5.10 not mortgage, pledge or subject to any lien, security
interest or
other encumbrance, any of the Assets (other than mechanic's,
materialman's and
similar statutory liens arising in the ordinary course of
business);
5.11 not transfer, lease or not otherwise dispose of any of
the Assets
except for a fair consideration in the ordinary course of business
and
consistent with past practice or, except in the ordinary course of
business
and consistent with past practice, acquire any assets or
properties, unless
any such transfer, lease, disposition or acquisition does not
materially
adversely affect the operation of the Business;
5.12 as to the Assumed Liabilities, not cancel or not
compromise any
material debt or claim, except in the ordinary course of business
and
consistent with past practice;
5.13 not waive or not release any rights of material value
with respect
to the Assets or the Assumed Liabilities;
5.14 except pursuant to those contracts which are not being
signed or
transferred to Buyer, not transfer or not grant any rights under
any
contracts, concessions, leases, permits, licenses, intellectual
property, or
proprietary information or know-how, except in the normal course of
business
consistent with past practice;
5.15 not make or grant any wage or salary increase
applicable to any
group or classification of employees generally, enter into any
employment
contract with, or make any loan to, or enter into any material
transaction of
any other nature with any officers or employees of Sellers, except
in the
ordinary course of business consistent with past practice.
Notwithstanding
the foregoing, Sellers shall not be prohibited from entering into
any
agreement or arrangement with any officer or employee with respect
to bonus
compensation payable from the proceeds of the Purchase Price or
from making
payments to its Chief Executive Officer in settlement of presently
pending
disputes with him.
5.16 not enter into any transaction, contract or commitment
outside the
ordinary course of business, except this Agreement and the
transactions
contemplated hereby, and those necessary or desirable to carry out
the
intentions of this Agreement;
5.17 not cause any casualty loss or damage (whether or not
such loss or
damage is covered by insurance) which materially affects such
Seller;
5.18 not amend its formation documents other than to change
its
corporate name on or before the Closing Date and shall not use,
after the
Closing Date, the name "International Magnetic Imaging, Inc.", or
any other
name currently being used by Sellers. Notwithstanding the
foregoing, (a)
Sellers shall be permitted to use the names currently being used by
them for a
period of thirty (30) days after the Closing Date for Sellers' bank
accounts,
and (b) to the extent requested by Buyer, not change or cancel any
Permit;
5.19 not split, combine, or reclassify any of its
outstanding
securities, or declare, set aside, or pay any dividend or other
distribution
on, or make or agree or commit to make any exchange for or
redemption of any
such securities payable in cash, stock or property, in each case in
a manner
which would, impair the consummation of the transactions
contemplated by this
Agreement. Notwithstanding the foregoing, Sellers shall not be
precluded from
making any payments on existing indebtedness to their parents or
affiliates,
in the normal course of business and consistent with past practice,
nor will
Sellers be prevented from making any payments with respect to their
outstanding securities from the proceeds of the sale of the Assets;
5.20 not issue or agree to issue any additional shares of,
or rights of
any kind to acquire any shares of, its capital stock of any class,
and not
enter into any contract, agreement, commitment, or arrangement with
respect to
any of the foregoing, in each case in a manner which would, impair
the
consummation of the transactions contemplated by this Agreement;
5.21 not create, incur, or assume any long-term or
short-term
indebtedness for money borrowed with respect to the Assets, or make
any
capital expenditures or commitment for capital expenditures in an
amount
exceeding $100,000 in the aggregate;
5.22 not adopt, enter into, or amend any bonus, profit
sharing,
compensation, stock option, warrant, pension, retirement, deferred
compensation, employment, severance, termination, or any other
employee
benefit plan, agreement, trust fund, or arrangement for the benefit
or welfare
of any officer, director, or employee, or agree to any material
(in relation
to historical compensation) increase in the compensation payable or
to become
payable to, or any increase in the contractual term of employment
of, any
employee except, with respect to employees who are not officers or
directors,
in the ordinary course of business in accordance with past
practice, and in
each case except for agreements which would provide for payments
made from the
proceeds of the sale contemplated by this Agreement, to any Seller
after the
consummation of the transactions contemplated by this Agreement, or
to any of
Lewis Schiller, Stephen A. Schulman or George Mahoney;
5.23 not assign, sell, lease, mortgage, encumber, or
otherwise dispose
of or grant or enter into any agreement to, or negotiate with any
third party
with respect to granting, any interest in any of the Assets except
for sales,
encumbrances, and other dispositions or grants of or with respect
to the
Assets in the ordinary course of business and consistent with past
practice,
and, except for liens for taxes not yet due or liens or
encumbrances that are
not material in amount or effect and do not impair the use of the
Assets;
5.24 not enter into any agreement, commitment, or
understanding,
whether in writing or otherwise, in breach of any of the matters
referred to
in subsections 5.1 through 5.23 above;
5.25 not hold any meetings of its Board of Directors, or any
committee
thereof, or of its stockholders, without having invited a
representative
selected by Buyer to attend the same;
5.26 not make any payments, whether on account of previously
incurred
liabilities or otherwise, to any affiliated entity or individual
other than
payments to SIS Capital Corp. with respect to existing indebtedness
in a
manner consistent with past practice and for salary, bonus and
benefits to
officers, directors and employees which, with respect to each such
officer,
director or employee, shall not be outside the ordinary course of
any Seller's
business;
5.27 each Seller shall: (I) afford to Buyer and to its
officers,
employees, accountants, counsel and other authorized
representatives
reasonable access, throughout the period prior to the earlier of
the Closing
Date or the Termination Date, to its facilities, properties, books
and
records; (ii) use its best efforts to cause its representatives to
furnish to
Buyer and to its authorized representatives such additional
financial and
operating data and other information as to its respective
businesses and
properties as Buyer or its duly authorized representatives may from
time to
time reasonably request; and (iii) afford Buyer and its
representatives
reasonable access, during normal business hours and on reasonable
prior
notice, throughout the period prior to the earlier of the Closing
Date or the
Termination Date, to its present and potential customers, and Buyer
and its
authorized representatives shall have the right to contact such
customers
solely for the purpose of conducting such due diligence
investigation relating
to customer relations as Buyer deems reasonably necessary or
appropriate.
5.28 Between the date of this Agreement and the Closing,
each Seller
represents and warrants that it shall not, without the prior
written consent
of Buyer, contravene in whole or part this Section 5.
6. Mutual Covenants.
6.1 Public Announcements. Except with respect to jointly
issued or
approved press releases or other public announcements and except as
otherwise
provided below, the terms and conditions contained herein shall be
held in
strict confidence by the parties hereto. In addition, reference is
hereby
made to that certain Confidentiality and Non-Disclosure Agreement
dated August
1, 1997 between First Lawrence Capital Corp., as financial advisor
to IMI of
Delaware, and Syncor with respect to the due diligence
investigation of
Sellers, the Assets and the Business, the terms of which are hereby
incorporated herein by reference thereto. Buyer hereby agrees to
be bound by
the terms of such Confidentiality Agreement as if a party thereto.
Such
agreement by both Buyer and Syncor shall survive any termination of
this
Agreement. None of Sellers or Buyer shall furnish any written
communication
to their shareholders, customers, creditors or to the public
generally, if the
subject matter thereof contains a disclosure of the transactions
contemplated
by this Agreement without the prior approval of the other parties
as to the
content thereof provided, however, that the foregoing shall not be
deemed to
prohibit (I) any disclosure required by any applicable law or by
any
governmental authority having jurisdiction over such matters, (ii)
any
disclosure required by Sellers to enable Sellers to perform or
comply with
their obligations under this Agreement, (iii) any disclosure to the
officers,
directors, shareholders, employees or agents of Buyer or Sellers on
a
need-to-know basis in connection with the transactions contemplated
by this
Agreement,
or (iv) any disclosure required under or in connection with any
agreement or
any action or proceeding.
6.2 Notification of Certain Matters. Each Seller shall give
prompt
notice to Buyer, and Buyer shall give prompt notice to such Seller,
of: (I)
the occurrence, or failure to occur, of any matter or circumstance
which would
be likely to cause any representation or warranty of such party
contained in
this Agreement to be untrue or inaccurate in any material respect
at any time
from the date of this Agreement to the Closing Date; (ii) any
material failure
of such Seller or of Buyer, as the case may be, or of any officer,
director,
employee or agent thereof, to comply with or satisfy, in any
material respect,
any covenant, condition or agreement to be complied with or
satisfied by it
under this Agreement and (iii) in the case of Sellers, any material
breach or
default by any third party of any Assigned Contract that Sellers
become aware
of prior to the Closing. For purposes hereof, "material" shall
have the same
meaning as set forth in Section 3.31 hereof.
6.3 Best Efforts. Each Seller and Buyer shall use its best
efforts to
take, or cause to be taken, all actions, and to do, or cause to be
done, all
things reasonably necessary, proper or advisable to consummate and
make
effective the transactions contemplated by this Agreement,
including, without
limitation, obtaining all authorizations, consents, waivers and
approvals as
may be required by the applicable provisions of this Agreement and,
in the
case of Buyer, providing the guaranty of Buyer's parent of the
Assigned
Contracts (solely to the extent requested by any third party), in
connection
with the assignment of those contracts, agreements, licenses,
leases, purchase
orders and other commitments to be assumed by Buyer pursuant to
this
Agreement.
6.4 Execution of Additional Documents. Each Seller and Buyer
will at
any time, and from time to time after the Closing Date, upon the
reasonable
request of the other party, execute, acknowledge and deliver all
such further
deeds, assignments, transfers, conveyances, powers of attorney and
assurances,
and take all such further action, as may be reasonably required to
carry out
the intent of this Agreement, and to transfer and vest title to any
Asset
being transferred to Buyer, provided, however, that this Agreement
will remain
effective regardless of whether any such additional documents are
executed.
The Consulting Agreement attached hereto as Exhibit C shall be
executed by the
parties thereto on the Closing Date.
6.5 Licenses and Permits. Buyer shall have the right to
utilize all
licenses and permits which are registered in Sellers' name on and
after the
Closing Date. Sellers will cooperate with Buyer in all respects in
either
transferring such licenses and permits to Buyer after the Closing
Date or in
assisting Buyer with applying for new licenses or permits. In
addition,
Sellers will cooperate and assist Buyer after the Closing Date with
obtaining
consents to the assignments of all of the Assigned Contracts for
which
consents to the assignment thereof have not been obtained as of the
Closing
Date, to the extent that such contracts are assignable.
6.6 Hart-Scott-Rodino Notification. Each of Buyer and IMI of
Delaware
shall complete, fully and accurately, FTC Form C4, Notification and
Report
Form for Certain Mergers and Acquisitions under 16CFR Part 803 -
Appendix,
promulgated under Section 201 of the Hart-Scott-Rodino Anti-Trust
Improvement
Act of 1976 (the "Form"). The Forms prepared by each of Buyer and
IMI of
Delaware shall be jointly filed contemporaneously with the
execution hereof,
with a request for early termination of the thirty (30) day
statutory waiting
period. In the event that the Forms are not filed on or before
such date and
the thirty day statutory waiting period has not expired prior to
the Closing
Date or early termination of such waiting period has not been
granted on or
before the Closing Date, the Closing Date shall be extended until
the earlier
of the day immediately following the date (a) on which such waiting
period
expires or (b) early termination of such waiting period has been
granted.
Notwithstanding the provisions of Section 10.3 hereof, if this
Agreement is
terminated as a result of any action or inaction of the Federal
Trade
Commission or Department of Justice in connection with the
Hart-Scott-Rodino
Notification, the provisions of such Section 10.3 shall not apply.
6.7 Indemnification in Lieu of Bulk Sales Compliance. Each
of Buyer,
Sellers and Consolidated agree to waive compliance with the
provisions of the
(a) Virginia Commercial Code Title 8.6A on Bulk Sales and (b)
Puerto Rico Code
title 10 on Sales in Fraud of Creditors. Consolidated agrees to
indemnify and
hold Buyer harmless against and in respect of any and all claims
assessed
against Buyer (and not expressly assumed under this Agreement by
Buyer) on the
grounds that Sellers have made a bulk transfer to Buyer to which
the above
described Titles on Bulk Transfers apply.
6.8 Transfer to Buyer of the Plans. On the Closing Date,
Sellers will
assign and transfer the Plans to Buyer. Buyer shall not assume any
obligations under the Plans for periods prior to the Closing Date.
Specifically, Sellers shall be responsible for providing health
care
continuation coverage under Sections 601 et seq. of ERISA under the
Plans for
any former employees of any Seller and their respective eligible
dependents,
who have elected, or are entitled to elect, such coverage prior to
the Closing
or who become entitled to elect such coverage as a consequence of
the Closing,
provided that such former employees and/or their eligible
dependents pay the
applicable premiums for such coverage. Buyer shall, however,
assume
responsibility for all obligations under the Plans for periods
after the
Closing Date with respect to all employees of Seller employed by
Buyer after
the Closing Date.
6.9 Escrow Letter Agreement. On the date hereof, IMI of
Delaware and
Buyer shall execute a certain letter agreement, the form of which
is attached
hereto as Exhibit I, with respect to the payment of accrued
vacation and
severance compensation to those employees of Sellers who are
employed by Buyer
on the Closing Date (the "Escrow Letter"), which agreement will
survive the
Closing.
7. Non-Competition.
7.1 Upon the terms and subject to the conditions set forth in
this
Section, each Seller covenants and agrees that, as a material
consideration
for Buyer's payment of the Purchase Price hereunder, for a period
of three
(3) years from and after the Closing Date, no Seller, nor Mr. Lewis
Schiller,
shall engage in or carry on, directly or indirectly, either for
itself or as a
member of a partnership or as an employee, stockholder, investor,
agent,
associate or consultant of any person, partnership or corporation
((I) other
than Buyer or a subsidiary or affiliate of Buyer, or (ii) as an
owner of less
than 5% of the outstanding shares or other equity interests of a
publicly
owned company) which is in competition with the Business as
currently
conducted by Sellers, but only for as long as such Business is
carried on by
Buyer or any subsidiary or affiliate of Buyer in such manner. The
parties
intend that the covenants contained in this Section are deemed to
be a series
of separate covenants, one for each county in each state of the
United States,
and for each country and political subdivision of the world in each
instance
where Buyer conducts, or will during such period conduct, the
Business, and,
except for geographic coverage, each such separate covenant must be
identical
in terms to the other covenants in this Section. Each Seller
further
covenants and agrees that for a period of three (3) years from and
after the
Closing Date, each Seller will not recruit, assist others in
recruiting or
hiring, discuss employment with, or refer to others concerning
employment, of
any employee of Buyer who is, or within the twelve-month period
immediately
prior to the Closing Date was, an employee of such Seller unless
such person
shall have been terminated due to Buyer's default or without cause
or cease to
have been employed by Buyer for a period of 12 months after the
Closing.
7.2 The term of the covenants contained in Section 7.1 shall
be tolled
for the period commencing on the date any action is filed by Buyer
for
injunctive relief or damages arising out of a breach by any Seller
of Section
7.1, and ending upon final adjudication (including appeals) of such
action,
provided that Buyer is successful in obtaining the relief sought in
such
action.
7.3 If, in any judicial proceeding brought under this
Section, the court
shall refuse to enforce all of the separate covenants contained in
Section 7.1
because the time limit is too long, it is expressly understood and
agreed
between the parties hereto that for purposes of such proceeding,
such time
limitation shall be deemed reduced to the extent necessary to
permit
enforcement of such covenants. If, in any such judicial
proceeding, the court
refuses to enforce all of the separate covenants contained in
Section 7.1
because such covenants are more extensive (whether as to geographic
area,
scope of business or otherwise) than necessary to protect the
business and
goodwill of Buyer, it is expressly understood and agreed between
the parties
hereto that for purposes of such proceeding, the geographic area,
scope of
business or other aspect thereof shall be deemed reduced to the
extent
necessary to permit enforcement of such covenants.
7.4 Each Seller acknowledges that a breach of Section 7.1 may
cause
irreparable damage to Buyer, and in the event of any Seller's
actual or
threatened breach of the provisions of Section 7.1, Buyer shall be
entitled to
seek a temporary restraining order and an injunction restraining
such Seller
from breaching such covenants without the necessity of posting bond
or proving
irreparable harm, such being conclusively admitted by such Seller.
Nothing
may be construed as prohibiting Buyer from pursuing any other
available
remedies for such breach or threatened breach, including the
recovery of
damages from Seller. Each Seller acknowledges that the
restrictions set forth
in this Agreement are reasonable in scope and duration, given the
nature of
the business of Buyer.
8. Conditions to Closing and Closing Deliveries. The following
deliveries
and conditions shall be made or satisfied at the Closing unless
waived in
writing or subject to a separate written agreement signed by the
party to be
bound thereby;
8.1 Legal Opinion. Each Seller shall have delivered to Buyer
the
written opinion, dated the Closing Date, of counsel to such Seller,
substantially in the form attached hereto as Exhibit D. Each
Seller shall
also deliver to Buyer the written legal opinions, dated the Closing
Date, of
its local or special counsel relating to Seller's activities as
presently
conducted not being violative of applicable law prohibiting the
practice of
medicine, in customary form reasonably acceptable to Buyer. Buyer
shall have
delivered to each Seller the written opinion dated the closing
Date, of
counsel to Buyer, substantially in the form attached hereto as
Exhibit E.
8.2 Consents. Each Seller shall have delivered to Buyer all
consents
and approvals required by the terms of this Agreement and the
Related
Documents. Notwithstanding any provision of this Agreement to the
contrary,
if Sellers are required to make any payment to DVI Financial
Services, Inc.,
or its affiliates ("DVI"), in connection with obtaining DVI's
consent to the
transaction contemplated by this Agreement, other than payment of
DVI's
counsel fees, Sellers shall have the right to terminate this
Agreement on or
prior the Closing.
8.3 Closing Certificates. Each Seller shall have delivered,
or caused
to be delivered, to Buyer certificates of the officers of each
Seller with
respect to Sellers' representations and warranties herein and
incumbency, in
customary form and satisfactory to Buyer. Sellers and Buyer will
deliver to
each other certificates of their respective officers as to the
accuracy and
completeness of the information relating to each of them which has
been
included in the Form.
8.4 Instruments of Transfer. Each Seller shall have
delivered the
following bills of sale and other instruments of conveyance,
evidencing the
transfer and assignment of the Assets:
8.4.1 Bills of sale for all tangible personal property
included in
the Assets in the form attached hereto as Exhibit B;
8.4.2 Assignments of leases and/or subleases, if any,
for the real
property in which each Seller has a leasehold interest (as landlord
or
tenant);
8.4.3 Landlord consents, if any, required from
landlords and/or
sublandlords with respect to the assignments referred to in 8.4.2
above;
8.4.4 Assignments of all certificates, and other
material Permits,
that are assignable;
8.4.5 Assignments of all intangible property, if any;
8.4.6 Assignments of all Assigned Contracts;
8.4.7 An indemnification agreement in the form attached
hereto as
Exhibit F, executed by each of Consolidated and Syncor;
8.4.8 A non-competition agreement in the form attached
hereto as
Exhibit G, executed by Mr. Lewis Schiller; and
8.4.9 Such other instruments of conveyance, transfer
and
assignment as may be reasonably required to vest in Buyer all of
the Sellers'
right, title and interest in and to the Assets.
8.5 Certificates of Incorporation; Good Standing
Certificates. Each
Seller shall have caused to be delivered to Buyer copies of their
formation
documents, as amended prior to the Closing Date, certified by the
necessary
authority of the state of its organization. The change of
corporate names
acquired by Buyer pursuant to this Agreement shall be completed by
amendments
to Sellers' formation documents to be delivered by Sellers at
Closing and be
filed by Buyer after the Closing (the filing fees therefor to be
paid by
Sellers).
8.6 Performance. The parties hereto shall have performed in
all
material respects all covenants and agreements required by this
Agreement and
the Related Documents to be performed by them on or before the
Closing Date.
8.7 Filings; Consents; Waiting Periods. All Permits,
filings, notices,
consents, approvals, and other actions listed on Schedules 3.4 and
4.3 hereto,
shall have been made or obtained and all applicable waiting periods
shall have
expired or been terminated.
8.8 No Litigation. No action, suit or proceeding shall have
been
instituted and pending by any person or entity, or threatened by
any
governmental agency or body, before a court or governmental body,
to restrain
or prevent the consummation of the transactions contemplated by, or
the
performance by any Seller or Buyer, or either of them, of their
respective
obligations under, this Agreement or which could reasonably be
expected to
have a materially adverse effect on the Business or the Assets. At
the
Closing Date, there shall be no injunction, restraining order or
decree of any
nature of any court or governmental agency or body in effect which
restrains
or prohibits the consummation of the transactions contemplated by
this
Agreement. In the event that the foregoing conditions cannot be
satisfied at
the Closing (or are not waived by Buyer) as a result of any of the
foregoing
matters, Sellers shall be entitled to a reasonable adjournment of
the Closing
Date, not to exceed 30 days, in order to satisfy the conditions of
this
subsection.
8.9 Purchase Price. Buyer shall have paid the Purchase Price
as
provided in Section 2.2 hereof and the professional fees provided
for by
Section 2.6.7 and the adjustments and prorated items (if any)
referred to in
Sections 2.4 and 2.5 shall be made between Buyer and Sellers.
8.10 Consulting Agreement. The consulting agreement in the
form
attached hereto as Exhibit C shall be executed by the parties
thereto.
8.11 Bill of Sale, Assignment and Assumption Agreement.
Buyer shall
have executed the Bill of Sale, Assignment and Assumption Agreement
in the
form attached hereto as Exhibit B.
8.12 Deeds. The Sellers specified below shall have executed
and
delivered to Buyer deeds for Real Property owned by them in the
forms
specified below, together with all documents and certificates
relating thereto
which may be required to transfer title to such Real Property to
Buyer at the
Closing, as follows:
IMI of Boca Raton - Warranty Deed
MRI of Pine Island - Warranty Deed
IMI of Kansas - Kansas Special Warranty Deed
IMI of Puerto Rico - Deed of Conveyance of Real
Property and Assumption of Mortgage
8.13 Certification of Nonforeign Status. The Sellers of Real
Property
shall have executed and delivered to Buyer Certifications of
Nonforeign Status
in the forms attached hereto as Exhibits H-1, H-2 and H-3.
8.14 Estoppel Certificates, Title Policies and Consents to
Transfer of
Real Property. The applicable Sellers shall have delivered to
Buyer each of
the following:
8.14.1 with respect to each Leased Property, an estoppel
certificate executed by the fee owner thereof confirming (a) that
the lease
thereof (including any amendments thereto) is in the form delivered
to Buyer
pursuant to this Agreement, is in full force and effect, and has
not been
modified or amended except as set forth therein, (b) that, to the
best of such
lessor's knowledge, no uncured breach thereof by Seller currently
exists or is
anticipated thereunder, and that such lessor has given all
requisite
consent to Seller's assignment of such lease to Buyer; and
8.14.2 with respect to each deed of trust or mortgage
against any
Real Property, a written consent from the beneficiary or mortgagee
thereof,
confirming its consent to the transfer of such Real Property from
Seller to
Buyer.
8.15 Casualty Loss. Sellers shall not have suffered any
uninsured loss
to the Assets in the aggregate amount of $100,000 on or prior to
the Closing
Date.
8.16 Bankruptcy. An order dismissing the Involuntary Chapter
7
Bankruptcy Petitions filed on October 22, 1997 in the United States
Bankruptcy
Court, Southern District of Florida against IMI Acquisition of Boca
Raton
Corporation, IMI Acquisition of Pine Island Corporation, IMI
Acquisition of
North Miami Beach Corporation, IMI Acquisition of Kansas
Corporation, IMI
Acquisition of Orlando Corporation, PODC Corporation, MD
Acquisition
Corporation and MD Ltd. Partner Acquisition Corporation shall have
been
entered and said order of dismissal shall not be subject to a stay,
or Sellers
will have received an order of the United States Bankruptcy Court,
Southern
District of Florida permitting the Involuntary Debtors to take such
actions as
are necessary to consummate the transactions contemplated by this
Agreement.
Sellers shall be entitled to the benefit of the adjournment
provision of
Section 8.8 hereof in the event that either of the foregoing
Bankruptcy Court
orders have not been obtained as of the Closing Date.
8.17 Books and Records. Copies of Sellers' corporate books
and records
pursuant to Section 1.15.
8.18 Sellers' Schedule 2.1.2. Sellers will deliver to Buyer
a schedule
dated as of the day immediately preceding the Closing Date, setting
forth the
approximate quantities on hand of film and contrast agents.
8.19 Fixed Asset Schedule. Sellers will deliver to Buyer the
list of
fixed assets required by Section 3.12 hereof.
8.20 Buyer's Legal Bills. Buyer will deliver copies of the
legal bills
or statements referred to in Paragraph 2.4(b) hereof.
8.21 Sellers' Schedule of Prepaid Items. If applicable,
Sellers will
deliver the schedule of prepaid items referred to in Paragraph
2.5.2.
8.22 Sellers' Escrow Payment. Seller will deliver to the
escrow agent
under the Escrow Letter, the sums required thereunder (or may
instruct Buyer,
in writing, to deduct such sums from the Purchase Price and deliver
same to
the escrow agent and will deliver to Buyer an updated Exhibit B
thereto).
8.23 The Notes. Sellers will deliver the original Notes.
8.24 Additional Documentation. Sellers and Buyer shall have
delivered
to each other such additional documents, consistent with the
provisions of
this Agreement, as may be requested of them at or prior to the
Closing.
9. Indemnification.
9.1 Each Seller's Indemnification. Each Seller shall
indemnify Buyer
(and its parent and their respective officers, directors,
stockholders,
employees and agents) (the "Buyer Indemnitees"), and hold Buyer
Indemnitees
harmless from and against any and all damages, losses, costs,
liabilities and
expenses (including reasonable attorneys' fees and disbursements)
resulting
from or arising out of any uncured breach of any of the
representations,
warranties, covenants and agreements made by such Seller herein or
in any
exhibit or schedule hereto or in any certificate or other document
delivered
by Sellers pursuant hereto or from the conduct of the Business
prior to the
Closing. Consolidated hereby guarantees the obligations of Sellers
to
indemnify Buyer hereunder, and in the event any Seller is unable to
fulfill
its indemnification obligations, Consolidated shall fulfill such
obligations
as if it were primarily liable.
9.2 Buyer's Indemnification. Buyer shall indemnify Sellers
(and their
parents and their respective officers, directors, stockholders,
employees and
agents) (the "Seller Indemnitees") and hold Seller Indemnitees
harmless from
and against any and all damages, losses, costs, liabilities and
expenses
(including reasonable attorneys' fees and disbursements), resulting
from or
arising out of any uncured breach of any of the representations,
warranties,
covenants or agreements made by Buyer herein or in any exhibit or
schedule
hereto or in any certificate or other document delivered by Buyer
pursuant
hereto or from the conduct of the Business after the Closing.
Syncor hereby
guarantees the obligations of Buyer to indemnify Sellers hereunder,
and in the
event that Buyer is unable to fulfill its indemnification
obligations, Syncor
shall fulfill such obligations as if it were primarily liable.
9.3 Notice; Right to Contest.
9.3.1 If any claim against which indemnification is
provided
hereunder ("Claim") shall be asserted against a person entitled to
indemnification hereunder ("Indemnified Party") in respect to which
it
proposes to demand indemnification, the Indemnified Party shall
notify the
entity obligated to provide indemnification hereunder
("Indemnifying Party")
thereof. Such notice shall specify in detail the nature of and
basis for the
Claim and amount thereof. Subject to rights of or duties to any
insurer or
other third person having liability therefor, the Indemnifying
Party shall
have the right promptly after receipt of such notice to assume the
control of
the defense, compromise or settlement of any such Claim, including,
at its own
expense, employment of counsel. Notwithstanding the preceding
sentence, in
the defense, compromise or settlement of such Claim, the
Indemnified Party
shall have the right to retain its own separate counsel, but the
fees and
expenses of such counsel shall be at the Indemnified Party's
expense unless
(a) the Indemnifying Party has failed within a reasonable time to
retain
counsel reasonably satisfactory to the Indemnified Party, or (b)
the named
party in any such proceeding (including any impleaded parties)
includes both
the Indemnified Party and the Indemnifying Party and representation
of both
parties by the same counsel would be inappropriate due to actual or
potential
differing interests between them. In any matter described above
where the
Indemnified Party has obtained counsel to represent it in addition
to counsel
obtained by the Indemnifying Party, counsel selected by the
Indemnifying Party
shall be required to cooperate fully with counsel selected by the
Indemnified
Party in such matter. So long as the Indemnifying Party is
defending in good
faith any Claim for which indemnification is sought, the
Indemnifying Party
shall not be liable for any Claim settled without its consent,
which consent
may not be unreasonably withheld. In the event that a claim for
indemnification is made by an Indemnified Party, which claim is
unrelated to a
third party's Claim against the Indemnified Party, which is
contested by an
Indemnifying Party and such dispute is finally resolved by a final,
nonappealable order of a court of competent jurisdiction, the
losing party
shall pay the prevailing party the reasonable fees and
disbursements of
counsel incurred in connection with the prosecution or defense of
such Claim;
provided, however, that if the Indemnifying Party is the losing
party and
prior to such resolution, the losing Indemnifying Party shall have
made a
written offer to settle the Claim for an amount one and one half
times the
amount which the Indemnified Party recovers on the Claim, then the
Indemnified
Party shall pay the Indemnifying Party's reasonable attorneys' fees
and
disbursements incurred after the date the Indemnified Party
rejected the
Indemnifying Party's offer of settlement.
9.3.2 Consolidated and Sellers shall be jointly and
severally
liable to Buyer, and Syncor and Buyer shall be jointly and
severally liable
to Sellers, for indemnification pursuant to the provisions of
subsections 9.1
and 9.2 above. Accordingly, in any action commenced by Buyer or
Sellers (or
any other Indemnified Party) for indemnification thereunder, the
Indemnified
Party may commence such action against Consolidated or Syncor, as
the case may
be, without having to commence such action against Sellers or
Buyer, as the
case may be.
9.4 Sole and Exclusive Remedy. Except as otherwise provided
in this
Agreement, subsequent to Closing, the right to indemnification of
each Seller
and Buyer hereunder shall constitute the sole and exclusive remedy
of the
Indemnified Party with respect to the matters covered by this
Section.
Termination.
9.5 Reasons for Termination. Anything herein or elsewhere to
the
contrary notwithstanding, this Agreement may be terminated at any
time after
the date of this Agreement but not later than the Closing Date:
9.5.1 by the mutual consent of IMI of Delaware and
Buyer; or
9.5.2 by Buyer or Sellers, as applicable, on the Closing
Date, if,
by that date, the conditions to closing and closing deliveries set
forth in
Section 8 of this Agreement have not been fulfilled or waived; or
9.5.3 by Buyer or by Sellers if there is any statute,
rule or
regulation enacted or promulgated after the date hereof by any
governmental
agency in the United States of America which is applicable to the
transactions
contemplated by this Agreement and that, in the reasonable judgment
of Buyer
or of any Seller, might: (I) result in a significant delay in the
ability of
the parties to consummate the transactions contemplated hereby:
(ii) render
the parties unable to consummate the transactions contemplated
hereby; (iii)
make such consummation illegal; or (iv) otherwise materially
adversely affect
the Business. The expense reimbursement provisions of Section 10.3
will not
apply to any termination under this Section 10.1.3; or
9.5.4 by Buyer or Sellers if there is any uncured breach
or default
of any representation, warranty or covenant of such parties under
this
Agreement; or
9.5.5 by Buyer or Sellers pursuant to the provisions of
Section 2.4
of this Agreement.
9.6 Procedure Upon and Effect of Termination. In the event
of any
termination pursuant to this Section 10, written notice thereof
must forthwith
be given to the other party and the transactions contemplated by
this
Agreement will thereupon be terminated, without further action by
Buyer or any
Seller and Buyer and Sellers shall have no further rights or
obligations under
this Agreement (except pursuant to the provisions of Sections
6.1,10.3 and
10.4 of this Agreement).
9.7 Expense Reimbursement. In the event that this Agreement
is
terminated by Buyer or Seller, as applicable, as a result of any
breach or
default of any of Buyer's or Sellers' representations, warranties,
covenants
or obligations under this Agreement or the failure of any condition
to Buyer's
or Sellers' obligations provided for in Section 8 of this Agreement
(except as
otherwise provided in this Agreement), then Buyer or Sellers shall
reimburse
the other, as applicable (not later than one day after submission
of
statements therefor) for all reasonable out-of-pocket expenses and
fees
(including, without limitation, fees and expenses paid to all
banks,
investment banking firms and other financial institutions and their
respective
agents and counsel, for arranging or providing any financing
relating hereto
and the fees of counsel, accountants, experts and consultants to
Sellers or
Buyer) which are actually incurred by them or on their behalf in
connection
with the negotiation, preparation, execution and delivery of this
Agreement
(collectively, the "Expenses"), up to a maximum of $250,000.
9.8 Break-Up Fee. In the event of the termination of this
Agreement by
Buyer or Sellers pursuant to Section 10.3 hereof, the payment of
the Expenses
shall be Buyer's or Sellers', as the case may be, sole and
exclusive remedy
against the other for any such termination and thereafter, Buyer
and/or
Sellers shall have no further rights or obligations under this
Agreement,
unless any such termination is solely the result of any intentional
or willful
refusal to consummate this Agreement. In the event that this
Agreement is
terminated solely as a result of an intentional and willful refusal
by Buyer
or Sellers to consummate this Agreement, the non-breaching party
shall be
entitled to receive the Expenses from the breaching party and, as
liquidated
damages and not as a penalty therefor, the sum of $1,000,000.
9.9 Equitable Remedy. Notwithstanding any provision in this
Agreement
to the contrary, in the event of Buyer's or Sellers intentional or
willful
refusal to consummate this Agreement, Buyer and Sellers agree and
acknowledge
that any such intentional and willful default may cause irreparable
harm and
damage to Buyer or Sellers, as the case may be, and may not be
remediable by
an action at law for damages and the Buyer or Sellers, as the case
may be,
shall, therefore, be entitled to seek all equitable remedies
therefor,
including, without limitation, declaratory judgment, temporary or
permanent
injunction, or specific performance of the provisions of this
Agreement,
without the necessity of posting a bond therefor, establishing any
actual
damages, or establishing that money damages would not provide an
adequate
remedy at law. In the event specific performance is granted, such
equitable
remedy shall be an exclusive remedy for any such intentional or
willful
default and, if elected by Buyer or Sellers as such remedy, shall
be in lieu
of the liquidated damages set forth in Sections 10.3 and 10.4
above.
9.10 Other Costs and Expenses. Except as otherwise
specifically
provided in this Agreement, all costs and expenses incurred in
connection with
this Agreement and the transactions contemplated hereby must be
paid by the
party incurring such costs and expenses.
10. Miscellaneous.
10.1 Notices. Any notice, consent, approval, request, demand
or other
communication required or permitted hereunder must be in writing to
be
effective and shall be deemed delivered and received: (I) if
personally
delivered or if delivered by facsimile with electronic confirmation
when
actually received by the party to whom sent; or (ii) if delivered
by mail
(whether actually received or not), at the close of business on the
third
business day next following the day when placed in the federal
mail, postage
prepaid, certified or registered mail, return receipt requested,
addressed as
follows:
if to Buyer: Comprehensive Medical Imaging, Inc.
6464 Canoga Avenue
Woodland Hills, CA 91367
Attention: General Counsel
Fax: 818/737-4606
if to Sellers: International Magnetic Imaging, Inc.
2424 North Federal Highway, Suite 410
Boca Raton, FL 33431
Attention: George W. Mahoney, Chief
Financial Officer
Fax: 561/347-5352
with a copy to: Robert L. Blessey, Esq.
51 Lyon Ridge Road
Katonah, NY 10536
Fax: 914/232-0647
or to such other address as any party specifies by written notice
so given.
10.2 Binding Effect; Benefits. This Agreement is binding
upon and shall
inure to the benefit of the parties hereto and their respective
successors and
permitted assigns. Notwithstanding anything contained in this
Agreement to
the contrary, nothing in this Agreement, expressed or implied, is
intended to
confer on any person other than the parties hereto or their
respective
successors and permitted assigns any rights, remedies, obligations
or
liabilities under or by reason of this Agreement.
10.3 Entire Agreement. This Agreement, together with the
exhibits,
schedules other documents contemplated hereby, and any other
documents
incorporated by reference herein, constitutes the sole and entire
agreement
between the parties hereto with respect to the subject matter
hereof, and is a
complete and exclusive statement of the terms thereof. This
Agreement
supersedes all prior agreements, understandings and negotiations
between the
parties hereto concerning the matters specified herein. Any
representations,
promises, warranties or statements made by any party that are not
contained in
this Agreement, and the exhibits, schedules and other documents
contemplated
hereby, have no force or effect. The parties specifically
represent, each to
the other, that there are no additional or supplemental agreements
between
them related in any way to the matters herein contained unless
specifically
included or referred to herein. No addition to, or modification of
any
provision of this Agreement will be binding upon any party unless
made in
writing and signed by the party to be bound thereby.
10.4 Governing Law. This Agreement, and all questions
relating to its
validity, interpretation, performance and enforcement (including,
without
limitation, provisions concerning limitations of action), is
governed by and
construed in accordance with the substantive and procedural laws of
the State
of California (exclusive of the conflicts of law provisions
thereof)
applicable to agreements made and to be performed entirely within
such state.
Any action or proceeding to enforce the provisions of this
Agreement may be
brought in a federal or state court located in Los Angeles County,
California
or Palm Beach County, Florida. By their execution hereof, the
parties hereto
hereby consent to the personal jurisdiction of such courts for
purposes of any
such action or proceeding.
10.5 Survival. All of the warranties and representations
contained in
this Agreement shall survive the Closing for a period of two years
therefrom.
10.6 Counterparts. This Agreement may be executed in any
number of
counterparts, each of which is an original but all of which
constitute one and
the same instrument. It is not necessary that each party hereto
execute the
same counterpart, so long as identical counterparts are executed by
all
parties.
10.7 Headings. Headings of the Sections of this Agreement
are for the
convenience of the parties only, and have no substantive or
interpretive
effect whatsoever.
10.8 Waivers. Any party hereto may, by a written instrument
signed by
the party to be bound thereby: (I) extend the time for the
performance of any
of the obligations or other actions of the other party under this
Agreement;
(ii) waive any inaccuracies in the representations or warranties of
the other
party contained in this Agreement or in any document delivered
pursuant to
this Agreement; (iii) waive compliance with any of the conditions
or covenants
of the other party contained in this Agreement; or (iv) waive
performance of
any of the obligations of the other party under this Agreement.
Except as
provided in the preceding sentence, no action taken pursuant to
this
Agreement, including without limitation any investigation by or on
behalf of
any party, shall constitute a waiver by the party taking such
action, of the
other party's non-compliance with any of its representations,
warranties,
covenants or agreements contained in this Agreement. The waiver by
any party
hereto of a breach of any provision hereunder will not operate and
must not be
construed as a waiver of any prior or subsequent breach of the same
or any
other provision hereunder unless the instrument of waiver so
provides.
10.9 Merger of Documents. This Agreement and all agreements
and
documents contemplated hereby constitute one agreement.
10.10 Incorporation of Exhibits and Schedules. All exhibits
and
schedules attached hereto or referred to herein are by this
reference
incorporated herein and made a part hereof for all purposes as if
fully set
forth herein.
10.11 Severability. If for any reason whatsoever, any one
or more of
the provisions of this Agreement is held or deemed to be illegal,
inoperative,
unenforceable or invalid as applied to any particular case or in
all cases,
such circumstances will not have the effect of rendering such
provision
illegal, inoperative, unenforceable or invalid in any other case or
of
rendering any of the other provisions of this Agreement illegal,
inoperative,
unenforceable or invalid. Furthermore, in lieu of each illegal,
invalid,
unenforceable or inoperative provision, there shall be added
automatically, as
part of this Agreement a provision similar in terms of such
illegal, invalid,
unenforceable or inoperative provision to the extent such
replacement shall be
possible, and any such replacement shall be legal, valid,
enforceable and
operative.
10.12 Assignability. Neither this Agreement nor any of the
parties'
rights hereunder is assignable by any party hereto without the
prior written
consent of the other party hereto; provided, however, that Buyer's
rights
hereunder may, upon notice to Sellers, be assigned or otherwise
transferred,
in whole or in part, without any Seller's consent: (I) to any
successor by
merger or consolidation; (ii) to any bank or other financial
institution, or
to any individual, partnership, corporation or other entity which
provides any
financing to Buyer, its successors or assigns; or (iii) to any
individual,
partnership, corporation or other entity deriving title from Buyer
or its
successors or assigns to all or substantially all of the Assets as
constituted
on the date of any such transfer, provided that any such assignee
executes and
delivers to Sellers an instrument pursuant to which such assignee
agrees to be
bound by the provisions of this Agreement.
10.13 Drafting. The parties acknowledge and confirm that
each of their
respective attorneys have participated jointly in the preparation,
review and
revision of this Agreement and that it has not been prepared solely
by counsel
for one party. The parties hereto therefore stipulate and agree
that the rule
of construction to the effect that any ambiguities are to be or may
be
resolved against the drafting party is not to be employed in the
interpretation of this Agreement to favor any party against
another.
10.14 Schedules. Any disclosure made or contained on any
Schedule
hereto by Buyer or Sellers shall be deemed made on all other
applicable
Schedules without the requirement of Buyer or Sellers having to
repeat such
disclosure.
IN WITNESS WHEREOF, the parties have executed this Agreement
and caused
the same to be duly delivered on their behalf on the day and year
hereinabove
first set forth.
Comprehensive Medical Imaging, Inc.
By: ___________________________________
Robert G. Funari
President and Chief Executive Officer
International Magnetic Imaging, Inc. (Delaware)
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller
Chairman of the Board &
Principal Executive Officer
International Magnetic Imaging, Inc. (Florida)
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
Magnetic Resonance Institute of North Miami Beach, Ltd.
By: IMI Acquisition of North Miami Beach Corporation
General Partner
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
Oakland Magnetic Resonance Institute, Ltd.
By: IMI Acquisition of Oakland Park Corporation
General Partner
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
Magnetic Resonance Institute of Boca Raton, Ltd.
By: IMI Acquisition of Boca Raton Corporation
General Partner
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
Magnetic Resonance Institute of South Dade, Ltd.
By: IMI Acquisition of South Dade Corporation
General Partner
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
Pine Island Magnetic Resonance Imaging Center, Ltd.
By: IMI Acquisition of Pine Island Corporation
General Partner
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
Physicians Outpatient Diagnostic Center, Ltd.
By: PODC Acquisition Corporation
General Partner
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
Magnetic Resonance Institute of Orlando, Ltd.
By: IMI Acquisition of Orlando Corporation
General Partner
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
IMI Acquisition of Arlington Corp.
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
IMI Acquisition of Puerto Rico Corporation
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
IMI Acquisition of Kansas Corporation
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
MRI-NET, INC.
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
KAP-NET CORP.
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
Caribbean Network Services, Inc.
/s/ Lewis S. Schiller
By: ___________________________________
Lewis S. Schiller, President
AGREED TO AND ACCEPTED ONLY AS TO
SECTIONS 6.7, 9.1, 9.3.2 AND 11
HEREOF
CONSOLIDATED TECHNOLOGY GROUP LTD.
/s/ Lewis S. Schiller
By:________________________________
Lewis S. Schiller
Chief Executive Officer and
Chairman of the Board
AGREED TO AND ACCEPTED ONLY AS TO
SECTIONS 2.2, 5.27, 9.2, 9.3.2,
10.3,
AND 11 HEREOF
SYNCOR INTERNATIONAL CORPORATION
/s/ Robert G. Funari
By:__________________________________
Robert G. Funari
President and Chief
Executive Officer
LIST OF EXHIBITS AND SCHEDULES
Exhibit A
Assumed Liabilities
Exhibit B
Bill of Sale, Assignment and Assumption Agreement
Exhibit C
Consulting Agreement
Exhibit D
Opinion of Sellers' Counsel
Exhibit E
Opinion of Buyer's Counsel
Exhibit F
Indemnification Agreement
Exhibit G
Schiller Non-Competition Agreement
Exhibit H-1
Certification for Nonforeign Status for
Pine Island Magnetic Resonance Imaging Center, Ltd.
Exhibit H-2
Certification for Nonforeign Status for
Magnetic Resonance Institute of Boca Raton, Ltd.
Exhibit H-3
Certification for Nonforeign Status for
IMI Acquisition of Kansas Corporation
Exhibit I
Escrow Letter
Schedule 2.1.1
Equipment & Furniture
Schedule 2.1.2
Quantities on Hand of Film and Contrast Agents
Schedule 2.1.3
Cash and Accounts Receivable
Schedule 2.1.8
Licenses, Permits & Intellectual Property
Schedule 2.3(a)
Allocation of the Purchase Price
Schedule 2.4
Net Liabilities (certified by IMI of Delaware's CFO)
Schedule 2.5.2
Prepaid taxes, utility charges, insurance and other payments
Schedule 3.4
Consents and Approvals required from Sellers
Schedule 3.5
Absence of Conflicts
Schedule 3.8
Accounts Receivable and Trade Accounts Payable
Schedule 3.9
Certain Changes or Events
Schedule 3.11
Security Interests, Mortgages, Liens, Encumbrances, Etc.
Schedule 3.12
List of Fixed Assets
Schedule 3.13
List of Real Property
Schedule 3.14
Insurance
Schedule 3.15
Sellers' Contracts
Schedule 3.16
Labor Controversies
Schedule 3.17
Litigation Related to the Business or Assets
Schedule 3.18
Non-Compliance with Laws
Schedule 3.23
Related Transactions
Schedule 3.29
Hazardous Materials
Schedule 4.3
Consents and Approvals required from Buyer
AMENDMENT NO. 1 TO ASSET PURCHASE AGREEMENT
Reference is made to that certain asset purchase agreement
dated January
28, 1998 by and among COMPREHENSIVE MEDICAL IMAGING, INC. and
INTERNATIONAL
MAGNETIC IMAGING, INC. (a Delaware corporation), INTERNATIONAL
MAGNETIC
IMAGING, INC. (a Florida corporation), MAGNETIC RESONANCE INSTITUTE
OF NORTH
MIAMI BEACH, LTD., OAKLAND MAGNETIC RESONANCE INSTITUTE, LTD.,
MAGNETIC
RESONANCE INSTITUTE OF BOCA RATON, LTD., MAGNETIC RESONANCE
INSTITUTE OF SOUTH
DADE, LTD., PINE ISLAND MAGNETIC RESONANCE IMAGING CENTER, LTD.,
PHYSICIANS
OUTPATIENT DIAGNOSTIC CENTER, LTD., MAGNETIC RESONANCE INSTITUTE OF
ORLANDO,
LTD., IMI ACQUISITION OF ORLANDO CORP., IMI ACQUISITION OF PUERTO
RICO
CORPORATION, IMI ACQUISITION OF KANSAS CORPORATION, MRI NET, INC.,
KAP-NET
CORP., and CARIBBEAN NETWORK SERVICES, INC. (The "Asset Purchase
Agreement").
The Asset Purchase Agreement is hereby amended as follows:
A new Paragraph 6.10 is hereby added to the Asset
Purchase Agreement
and shall read as follows:
"6.10 MANAGEMENT TRANSITION. Between the date hereof and
the
Closing Date (THE "TRANSITION PERIOD") CMI shall have the right to
notify
Sellers of an individual engaged by CMI to act on CMI's behalf as
its
representative during the Transition Period (THE "MANAGEMENT
REPRESENTATIVE")
for the purpose of familiarizing CMI with all aspects of IMI's
operations and
activities in order to ensure an expeditious and efficient
transition to CMI
of the operations and business of Sellers on and after the Closing
Date. IMI
will, upon receipt of any such notification of CMI's Management
Representative, notify in writing all executive officers and such
other IMI
personnel as shall be specified by CMI that (I) such individuals
are to
cooperate fully with and report directly to the Management
Representative with
respect to all operations and activities of Sellers, in addition to
reporting
to IMI of Delaware's Board of Directors, Principal Executive
Officer and Chief
Financial Officer and (ii) such individuals are to comply with all
of the
covenants of Sellers set forth in Paragraph 5 of the Asset Purchase
Agreement
as to Sellers' operations during the Transition Period, including,
without
limitation, the provisions of Paragraphs 5.1, 5.2, 5.7, 5.14, 5.16
and 5.27.
CMI shall confirm in writing to Sellers that, upon CMI's
appointment of a
Management Representative, such Management Representative will (a)
comply with
and agree to be bound by that certain Confidentiality and
Non-Disclosure
Agreement dated August 1, 1997 between First Lawrence Capital Corp.
And Syncor
International Corporation, (b) not have any authority to bind
Sellers to any
obligation or commitment without the written consent of either
Lewis S.
Schiller or George W. Mahoney, and regularly inform George W.
Mahoney of
his or her activities during the Transition Period. CMI shall be
solely
responsible for all compensation payable to and costs incurred by
its
Management Representative."
Except as set forth in the immediately preceding Paragraph,
none of the
other terms of provisions of the Asset Purchase Agreement are
amended hereby,
all of which remain in full force and effect in accordance with
their terms.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands and
seals this 17(th) day of February, 1998.
COMPREHENSIVE MEDICAL IMAGING INC.
/s/ Lewis S. Schiller
By: _____________________________
Robert G. Funari
President and Chief Executive Officer
INTERNATIONAL MAGNETIC IMAGING, INC.
(A Delaware corporation)
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
Principal Executive Officer and
Chairman of the Board
INTERNATIONAL MAGNETIC IMAGING, INC.
(A Florida corporation)
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
Principal Executive Officer and
Chairman of the Board
MAGNETIC RESONANCE INSTITUTE OF NORTH
MIAMI BEACH LIMITED
By: IMI ACQUISITION OF NORTH MIAMI
BEACH CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
OAKLAND MAGNETIC RESONANCE INSTITUTE, LTD.
By: IMI ACQUISITION OF OAKLAND PARK
BEACH CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
MAGNETIC RESONANCE INSTITUTE OF NORTH
BOCA RATON, LTD.
By: IMI ACQUISITION OF BOCA RATON
CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
MAGNETIC RESONANCE INSTITUTE OF SOUTH
DADE, LTD.
By: IMI ACQUISITION OF SOUTH DADE
CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
PINE ISLAND MAGNETIC RESONANCE IMAGING
CENTER, LTD.
By: IMI ACQUISITION OF PINE ISLAND
CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
PHYSICIANS OUTPATIENT DIAGNOSTIC CENTER, LTD.
By: PODC ACQUISITION CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
MAGNETIC RESONANCE INSTITUTE OF ORLANDO,
LTD.
By: IMI ACQUISITION OF ORLANDO
CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
IMI ACQUISITION OF ARLINGTON CORP.
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
IMI ACQUISITION OF PUERTO RICO
CORPORATION
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
IMI ACQUISITION OF KANSAS CORPORATION
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
MRI NET, INC.
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
KAP-NET CORP.
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
CARIBBEAN NETWORK SERVICES, INC.
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
AMENDMENT NO.2 TO ASSET PURCHASE AGREEMENT
Reference is made to that certain asset purchase agreement
dated January
28, 1998, as amended, by and among COMPREHENSIVE MEDICAL IMAGING,
INC. and
INTERNATIONAL MAGNETIC IMAGING, INC. (a Delaware corporation),
INTERNATIONAL
MAGNETIC IMAGING, INC. (a Florida corporation), MAGNETIC RESONANCE
INSTITUTE
OF NORTH MIAMI BEACH, LTD., OAKLAND MAGNETIC RESONANCE INSTITUTE,
LTD.,
MAGNETIC RESONANCE INSTITUTE OF BOCA RATON, LTD., MAGNETIC
RESONANCE
INSTITUTE OF SOUTH DADE, LTD., PINE ISLAND MAGNETIC RESONANCE
IMAGING CENTER,
LTD., PHYSICIANS OUTPATIENT DIAGNOSTIC CENTER, LTD., MAGNETIC
RESONANCE
INSTITUTE OF ORLANDO, LTD., IMI ACQUISITION OF ORLANDO CORP., IMI
ACQUISITION
OF PUERTO RICO CORPORATION, IMI ACQUISITION OF KANSAS CORPORATION,
MRI NET,
INC., KAP-NET CORP., and CARIBBEAN NETWORK SERVICES, INC. (the
"Asset Purchase
Agreement").
All capitalized terms which are used but not defined herein
shall have
the meanings ascribed to them in the Asset Purchase Agreement.
The Asset Purchase Agreement is hereby amended as follows:
1. Subsequent to January 28, 1998, International Magnetic
Imaging, Inc.,
a Florida corporation, changed its name to IMI-Florida, Inc.
Accordingly, all
references in the Asset Purchase Agreement to IMI of Florida shall
mean
IMI-Florida, Inc.
2. Section 1.1 of the Asset Purchase Agreement is hereby
amended to
change the Closing Date from March 13, 1998 to March 31, 1998 and
to provide
that the Closing shall take place at the offices of Sellers, or
their counsel,
in Boca Raton, Florida.
3. Subparagraph (a) of Section 2.2 of the Asset Purchase
Agreement is
hereby amended to read as follows:
"(a) $20,100,000, subject to adjustment as provided in
subparagraph
2.4 hereof (the "Cash Portion of the Purchase Price"); and"
4. Sellers will pay Buyer's bankruptcy counsel, on or prior
to the
Closing Date, the legal fees and disbursements of such counsel as
referred to
in Paragraph 2.4.2 of the Asset Purchase Agreement. Accordingly,
Paragraph
2.4.2 is hereby amended to provide that the Purchase Price will not
be
adjusted on the Closing Date for such amounts.
5. Section 2.6.4 of the Asset Purchase Agreement is hereby
amended to
read as follows:
"2.6.4. Obligations to Employees. Any and all
obligations of
Sellers to their officers, directors, employees and/or agents,
whether for
compensation, fringe benefits, employee benefits or retirement
plans,
severance compensation, or any other reason, including, without
limiting the
generality of the foregoing, any obligation of Sellers to any
employee
retirement or benefit plan or to any governmental entity for
amounts relating
to payroll withholding, other than obligations to any such
individuals arising
out of (I) the employment or engagement of such individuals by
Buyer, or (ii)
the transfer to and assumption by Buyer of certain of the Plans (as
that term
is defined in Section 3.19), on and after the Closing Date, in
accordance with
Section 6.8."
6. Section 3.19 of the Asset Purchase Agreement is hereby
amended to
read as follows:
"3.19. Employee Benefits. With respect to employee
benefit plans
adopted by each Seller, including, without limitation, plans which
are
"employee pension benefit plans" or "employee welfare benefit
plans" within
the meaning of Sections 3(1) and 3(2), respectively, of ERISA (the
"Plans"),
all of which are set forth in Schedule 3.15, no Seller, nor any
entity
affiliated with any Seller, has failed to make any required
contribution or
other required payment to any such Plan, including any such failure
pursuant
to which a lien may arise by operation of law against the Assets of
any
Seller, including, without limitation, liens arising under Sections
3.02(f)(4)
or 4068(b) of ERISA. As to each Plan which is to be assigned and
transferred
to and assumed by Buyer pursuant to Section 6.8, Sellers have
administered
such Plan in all respects in accordance with applicable law, and
the written
instrument or instruments setting forth the terms and conditions of
such Plan,
and to the best of Seller's knowledge, there are no claims pending
or
threatened against such Plan or against Sellers, other than for
benefits in
the ordinary course."
7. Section 6.8 of the Asset Purchase Agreement is hereby
amended to read
as follows:
"6.8. Transfer to Buyer of Certain of the Plans. On the
Closing
Date, Sellers will assign and transfer the Plans to Buyer. Buyer
shall not
assume any obligations under the Plans for periods prior to the
Closing Date.
Specifically, Sellers shall be responsible for providing health
care
continuation coverage under Sections 601, et seq. of ERISA under
the Plans for
any former employees of any Seller and their respective eligible
dependents,
who have elected, or are entitled to elect, such coverage prior to
the
Closing, or who become entitled to elect such coverage as a
consequence of
the Closing, provided that such former employees and/or their
eligible
dependents pay the applicable premiums for such coverage. Buyer
shall,
however, assume responsibility for all obligations under the Plans
for periods
after the Closing Date with respect to all employees of Seller
employed by
Buyer after the Closing Date. Notwithstanding the preceding
sentence of this
6.8, or any other provision of this Agreement to the contrary
(including any
Exhibit or Schedule hereto), there shall be no assignment, transfer
and
assumption of the IMI Acquisition Corporation Savings and
Retirement Plan."
8. Section 8.14.2 is hereby amended to delete all references
in the
Asset Purchase Agreement to consents from the beneficiaries or
mortgagees of
the deeds of trust or mortgages with respect to Seller's real
property located
in Boca Raton and Plantation, Florida.
9. Section 10.1 is hereby amended with respect to notices to
Buyer under
the Asset Purchase Agreement to read as follows:
"If to Buyer:
Comprehensive Medical Imaging, Inc.
3396 Willow Lane, Suite 201
Westlake Village, CA 91361
Attn: General Counsel
Fax: 805-379-3102"
10. On March 25, 1998, Kap-Net Corp. notified FPA Medical
Management of
Florida, Inc. ("FPA"), of FPA's breach of that certain
Participating Provider
Services Agreement dated June 1, 1997 between FPA and Kap-Net Corp.
(the
"Agreement"). The aforementioned notice was based upon FPA's
failure to pay,
when due, approximately $473,484.82 to Kap-Net Corp. for services
rendered
under the Agreement through March 18, 1998. Accordingly, the Asset
Purchase
Agreement is hereby amended to reflect the following: (I) To add
Kap-Net
Corp.'s claim with respect to such breach to Schedule 3.17; (ii) to
disclaim,
notwithstanding any representation or warranty to the contrary in
the Asset
Purchase Agreement or in any Exhibit or Schedule thereto, the
collectibility
of the aforementioned $473,484.82; and (iii) to delete any
requirement under
the Asset Purchase Agreement for Sellers to deliver to Buyer at the
Closing
any consent from FPA to the assignment to the Agreement.
11. Exhibit "C" to the Asset Purchase Agreement is hereby
amended.
Attached hereto as Exhibit "A" is a copy of the form of Consulting
Agreement
which supersedes and replaces the prior Exhibit "C" to the Asset
Purchase
Agreement.
12. Schedule 2.1.8 attached hereto as Exhibit "B" supersedes
and
replaces the prior Schedule 2.1.8.
13. Schedule 2.3(a) attached hereto as Exhibit "C" supersedes
and
replaces the prior Schedule 2.3(a).
14. Schedule 3.15 attached hereto as Exhibit "D" supersedes
and replaces
the prior Schedule 3.15.
a. Schedule 3.17 attached hereto as Exhibit "E"
supersedes and
replaces the prior Schedule 3.17.
b. Item 1. under the caption "Pending Claims" of Schedule
3.17 to the Asset Purchase Agreement is hereby amended to read as
follows:
"1. Claims of Vanguard, Ltd. As set forth in that
certain
letter, dated March 31, 1998, from Shukat Arrow Hafer & Weber,
L.L.P., as
counsel to Vanguard, Ltd., to Consolidated Technology Group, Ltd.,
Comprehensive Medical Imaging, Inc. and International Magnetic
Imaging, Inc.
with respect to certain claimed compensation resulting from a
purported 1994
introduction of IMJ to the prior owners of the term diagnostic
imaging centers
acquired by IMI in September 1994."
17. Schedule 3.15 is hereby amended to delete, under the
caption
"Employment Agreements," that agreement dated January 1, 1997
between
International Magnetic Imaging, Inc. and Trevor Klein as an
agreement which
will be assigned by International Magnetic Imaging, Inc. to Buyer
and,
accordingly, an agreement as to which a consent to assignment will
be
delivered.
18. Sellers will bill for all Medicare/Medicaid services
performed by
them on or before March 31, 1998. All payments received by Sellers
after the
date hereof for Medicare/Medicade services or any other services
performed by
them on or before March 31, 1998 (the "Receivables") will be
received and
held by Sellers in trust and for the benefit of Buyer. IMI shall
remit all
collected amounts (and any interest thereon, if any) for such
services to
Buyer on the 1st and the 15th of each month commencing April 15,
1998. Sellers
will provide Buyer with all remittance records, billing records,
and other
information pertaining to such services necessary to permit Buyer
to
accurately account for such payments. In the event Sellers fail to
collect the
Receivables by September 30, 1998, the Net Liabilities and the
Purchase Price
will be adjusted pursuant to Section 2.4.1 of the Asset Purchase
Agreement to
the extent, if any, that such adjustment will be required pursuant
to such
Section.
19. The Cash Portion of the Purchase Price shall be reduced
by $150,000.
20. IMI does hereby confirm to CMI that IMI is prepared to
offer to
Stephen A. Schulman approximately 400,000, consisting of $75,000 in
cash and
forgiveness of the Notes in the aggregate amount of $300,000 plus
accrued
interest on such Notes in exchange for (a) termination of the
Schulman
Employment Agreement, and (b) execution and delivery by Schulman of
a Non-Competition Agreement in favor of Buyer containing a
restricted period of
three years and covering a geographical area of 15 miles from each
Center
currently operated by the Sellers and those currently planned
centers of
Sellers, subject to documentation with respect to the foregoing
that is
satisfactory in form and substance to IMI and its counsel. This
offer by IMI
shall be valid for such period as Buyer has the right to retain any
of the
Notes pursuant to the Asset Purchase Agreement. Notwithstanding the
foregoing,
the Seller shall have the right to withdraw any such proposal in
the event
that any claim against IMI and/or its affiliates is made by
Schulman, Ashley
Kaye or James H. Sternberg or any spouse or affiliate of any of
them or any
entity owned or controlled by any affiliate of any of them.
21. Sellers will pay any Florida Intangible Revenue Taxes due
and
payable, but unpaid, if any, for periods prior to March 31, 1998.
Except as set forth in Paragraphs 1 through 21 above,
none of the
other terms or provisions of the Asset Purchase Agreement are
amended hereby,
all of which shall remain in full force and effect in accordance
with their
terms.
By the execution of this Amendment by Buyer's President
and Chief
Executive Officer and Vice President and Assistant Secretary, Buyer
is deemed
to have ratified the Asset Purchase Agreement, the Escrow Letter
and that
certain Agreement dated January 28, 1998 between Buyer and IMI of
Delaware
relating to the Notes. Likewise, by the execution of this
Amendment by the
Principal Executive Officer and Chairman of the Board and Secretary
of IMI of
Delaware, the President and Secretary of each of the corporate
Sellers and the
President and Secretary of each of the corporate general partners
of each of
the Partnership Sellers, Sellers are deemed to have ratified the
Asset
Purchase Agreement, the Escrow Letter and that certain Agreement
dated January
28, 1998 between Buyer and IMI of Delaware relating to the Notes.
This Amendment shall be governed by and construed in
accordance with
the internal laws of the State of California. This Amendment may
be executed
in any number of counterparts, each of which shall be an original
and all of
which, when taken together, shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands and
seals this 31st day of March, 1998.
COMPREHENSIVE MEDICAL IMAGING INC.
/s/ Lewis S. Schiller
By: _____________________________
Robert G. Funari
President and Chief Executive Officer
/s/ Peter C. van der Wal
By: _____________________________
Peter C. van der Wal
Vice President, IMI Operations and
Assistant Secretary
INTERNATIONAL MAGNETIC IMAGING, INC.
(A Delaware corporation)
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
Principal Executive Officer and
Chairman of the Board
INTERNATIONAL MAGNETIC IMAGING, INC.
(A Florida corporation)
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
Principal Executive Officer and
Chairman of the Board
MAGNETIC RESONANCE INSTITUTE OF NORTH
MIAMI BEACH LIMITED
By: IMI ACQUISITION OF NORTH MIAMI
BEACH CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
OAKLAND MAGNETIC RESONANCE INSTITUTE, LTD.
By: IMI ACQUISITION OF OAKLAND PARK
BEACH CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
MAGNETIC RESONANCE INSTITUTE OF NORTH
BOCA RATON, LTD.
By: IMI ACQUISITION OF BOCA RATON
CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
MAGNETIC RESONANCE INSTITUTE OF SOUTH
DADE, LTD.
By: IMI ACQUISITION OF SOUTH DADE
CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
PINE ISLAND MAGNETIC RESONANCE IMAGING
CENTER, LTD.
By: IMI ACQUISITION OF PINE ISLAND
CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
PHYSICIANS OUTPATIENT DIAGNOSTIC CENTER, LTD.
By: PODC ACQUISITION CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
MAGNETIC RESONANCE INSTITUTE OF ORLANDO,
LTD.
By: IMI ACQUISITION OF ORLANDO
CORPORATION
General Partner
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
IMI ACQUISITION OF ARLINGTON CORP.
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
IMI ACQUISITION OF PUERTO RICO
CORPORATION
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
IMI ACQUISITION OF KANSAS CORPORATION
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
MRI NET, INC.
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
KAP-NET CORP.
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
CARIBBEAN NETWORK SERVICES, INC.
/s/ Lewis S. Schiller
By: ______________________________
Lewis S. Schiller
President
