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) February 6, 1997
MB Software Corporation
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(Exact name of registrant as specified in its charter)
Colorado 0-11808 59-2219994
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(State or other jurisdiction (Commission File (IRS Employer
incorporation) Number) Identification No.)
2225 E. Randol Mill Road Suite 305, Arlington, Texas 76011
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 817-633-9400
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Item 2. Acquisition or Disposition of Assets
a) Acquisition of Assets. On February 6, 1997, MB Software Corporation,
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through its subsidiary MB Data Corporation, a Delaware corporation
("Purchaser"), acquired certain assets and business of Acorn CORF I Inc., a
Nevada corporation, and Riverside CORF Inc., a Delaware corporation
("Seller"), by means of a Bill of Sale, Purchase Agreement, and an
Assignment and Assumption Agreement between the Purchaser and Seller and
shareholder, Oak Tree Medical Systems, Inc.
b) Assets and "Business" Involved in the Acquisition. Seller sold, transferred
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and conveyed to Purchaser certain assets, rights, benefits, contracts,
agreements and leases, etc. These assets include software source code and
libraries owed or licensed by Seller, medical equipment, computer
equipment, furniture, customer and prospect lists and accounts receivable
as of February 6, 1997. Such assets will be used by Purchaser in the
business for much the same purposes as previously utilized by the Seller.
c) Consideration and Sources of Funds. Consideration for the above transaction
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was as follows: 1) payment of $200,000 to Seller in three installments, 2)
assumption of an obligation through the purchase of the obligor, Oak Tree
receivables, Inc., to SAM Fund I, L.P. in the form of a loan of $1.62
million and certain other liabilities of Seller. Purchaser intends to
satisfy the above listed financial requirements and obligations from
internally generated funds from its MB Software Corporation medical
receivables collections business and funds generated by the CORF business
during the payment periods involved. If necessary, additional funds would
be sought from loans and/or equity funding.
The consideration paid for the assets and business of the Seller was mainly
based on Seller's existing debt obligations and the revenue generating
nature of the business and size of the customer base, as opposed to
Seller's history of financial performance.
Item 7. Financial Statements and Exhibits.
It is impracticable to provide the required financial statements for the
acquired business at the time this report on Form 8-K is filed. Such
financial statements will be filed as soon as practicable.
a. Exhibits.
The following is a list of exhibits filed as part of this Current
Report on Form 8-K.
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Exhibit
Number Description of Exhibit
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2.1 Purchase Agreement dated as of February 6, 1997, by and between Acorn
CORF I Inc., a Nevada corporation, Riverside CORF I, Inc., a Florida
corporation, Oak Tree Medical Systems, Inc., a Delaware corporation
and MB Data Corporation, a Delaware corporation.
2.2 Press Release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MB Software Corporation
Date: February 11, 1997
By: /s/ Scott A. Haire
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Its: Chairman of the Board
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INDEX TO EXHIBITS
Exhibit
Number Description of Exhibit
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2.1 Asset Purchase Agreement dated as of February 6, 1997, by and between
Acorn CORF I, Inc., a Nevada corporation, Riverside CORF I, Inc., Oak
Tree Medical Systems, Inc., and MB Data Corporation , a Delaware
corporation.
2.2 Press Release
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NEWS BULLETIN RE: MB Software Corporation
2225 E.Randol Mill Road
Suite 305
Arlington, Texas 76011
From: MB Software Corporation
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For Further Information:
AT THE COMPANY
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Scott A. Haire Lucy J. Singleton
Chief Executive Officer Shareholder Relations
(817) 633-9400 (817) 633-9400
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FOR IMMEDIATE RELEASE
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February 14, 1997
MB SOFTWARE CORPORATION ANNOUNCES ACQUISITION OF THREE (3) HEALTHCARE OPERATING
COMPANIES.
Arlington, Texas (February 14, 1997) - MB Software Corporation (OTC: MBSC)
MB Software Corporation announced the acquisition of three (3) complementary
healthcare businesses consistent with its long range strategy for structured
growth. Acquired were the assets of Riverside CORF, Inc. and First Coast
Rehabilitation, Inc., both located in Jacksonville, Florida and the stock of
Oaktree Receivables Inc., and Color Country Health Express, Inc., a Utah
corporation.
"We continue roll-out of our strategic plan aimed at identifying complementary
businesses in healthcare that are able to provide reciprocal benefits and
economies of scale on a financial and operational basis," stated Scott A. Haire,
CEO, MB Software Corporation.
"Prior to proceeding with these acquisitions, each entity was measured for its
fit into our strategic horizon. Given the healthcare industry's growing
population in the geriatric sector, we believe that our software and operational
experience lend themselves favorably to strengthening acquired operations and
making their performance even better."
"As we move into 1997, MB Software is excited about the prospects of our
business expansion and the stability of our Santiago SDS, Inc. core entity. Our
goal is to maximize profit margins through careful consolidation of functions
and effective cost management. Thereafter, we intend to focus on increasing our
revenue base and regional market share." Indications from Mr. Haire also stated
that the Company would like to make other acquisitions, but added that in the
near future, the Company has not entered into any definitive agreements or
letters of intent.
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The Company's long range goal remains to increase net profit yearly, and to
continue to leverage its software and technology, thereby decreasing expense and
maximizing profits through strategically-related acquisitions. Mr. Haire added,
"This is just the beginning."
The purchase prices were undisclosed.
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PURCHASE AGREEMENT
This Purchase Agreement (this "Agreement"), dated to be effective as of
February 6, 1997, is among ACORN CORF it Inc., a Nevada corporation ("Acorn"),
Riverside CORF, Inc., a Florida corporation ("Riverside"), Oak Tree Medical
Systems Inc., a Delaware corporation that owns all of the outstanding capital
stock of Acorn ("Oak Tree") and MB Data Corporation, a Delaware corporation
("Purchaser"),
WITNESSETH:
WHEREAS, Oak Tree is the owner of all of the outstanding common stock of
Oak Tree Receivables, Inc., a Florida corporation ("Receivables"); and
WHEREAS, Oak Tree desires to sell, and Purchaser desires to purchase, all
of the issued and outstanding common stock of Receivables; and
WHEREAS, Acorn and Riverside desire to sell, and Purchaser desires to
purchase, certain of the assets of Acorn and Riverside;
NOW, THEREFORE, in consideration of the mutual representations1 warranties
and covenants herein contained, and on the terms and subject to the conditions
herein set forth, the parties hereto hereby agree as follows:
ARTICLE I
Purchase and Sale
Section I.1. Purchase and Sale of Assets. Subject to and upon the terms and
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conditions contained herein, at the Closing (as defined below), Acorn and
Riverside shall sell, transfer, assign, convey and deliver to Purchaser, free
and clear of all seurity interests, liens, claims and encumbrances except as
contemplated herein, and Purchaser shall purchase, accept and acquire from Acorn
and Riverside, the physical assets located at Acorn and Riverside's facilities
at Orange Park, Florida and Jacksonville, Florida and the storage facilities at
Jacksonville (except for four computers and a power box located at the
Jacksonville facility as mutually agreed to among the parties), the CORF license
relating to the Orange Park and Jacksonville facilities, the right to use the
names Riverside CORF and 1st Coast Rehabilitation and the accounts receivable
listed on Schedule 1.1 hereto (collectively, the "Assets"). The physical assets
are generally but not accurately listed on Schedule 1.1.
The parties agree and acknowledge that Purchaser shall acquire no interest
in any of Acorn's St Augustine operations (except for certain accounts
receivable specifically listed on Schedule 1.1) or, except as specifically
provided herein, in any of Oak Tree's other affiliates, or any of their
directors, officers or employees.
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Section I.2. Purchase and Sale of Shares. Subject to and upon the terms and
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conditions contained herein, at the Closing, Oak Tree shall sell, transfer,
assign, convey and deliver to Purchaser, free and clear of all seeurity
interests, liens, claims and encumbrances, and Purchaser shall purchase, accept
and acquire from Oak Tree, all of the issued and outstanding capital stock of
Receivables (the "Shares").
Section I.3. Purchase Price. The total purchase price for the Assets and
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the Shares, in the aggregate, shall be $200,000, payable $100,000 concurrent
with the execution of this Agreement as set forth in Section 1.5 hereof, $50,000
on the 60th day following the date hereof, and $50,000 on the 90th day following
the date hereof (the "Purchase Price").
Section I.4. Assumption of Uabilities. Purchaser shall assume the foregoing
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liabilities of Acorn and Riverside, and except for such foregoing liabilities
(the "Assumed Liabilities"), Purchaser shall not assume or agree to pay, perform
or discharge any liabilities or obligations of Acorn or Riverside, whether
accrued, absolute1 contingent or otherwise:
(a) the obligations under the accounts payable of Acorn or Receivables, as
the case may be, specifically listed on Schedule lA hereof; and
(b) all obligations under the leases related to 1950 Miller Street in
Orange Park, Florida and 9143 Philips Highway in Jacksonville, Florida
(collectively, the "Leases").
Section I.5. SAM Fund Loan. Receivables is party to that certain Health
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Care Receivables Loan and Security Agreement dated as of September 16, 1996 (the
"Loan AgreemenV') among Receivables, SAM FUND it LP. ("Lender") and SAM PM, LP.
("Program Manager"). Lender and Program Manager have agreed to consent to the
transfer of Receivables to Purchaser pursuant to the terms of that certain
Consent Agreement dated February 5, 1997 among Purchaser, Lender, Receivables,
Oak Tree and Program Manager (the "Consent Agreement"). Acorn, Riverside and Oak
Tree agree that the $100,000 portion of the Purchase Price otherwise payable to
them at Closing shall instead be paid by Purchaser to Receivables concurrent
with the Closing, which sum shall then be paid to Lender as provided in the
Consent Agreement
Section I.6. Employment Matters. Purchaser shall enter into an employment
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agreement with Dr. Ronald W. Dennie, M.D. ("Dennie"), which employment agreement
shall be in a form mutually agreeable to Purchaser and Dennie. Oak Tree,
Riverside, Acorn and Dennie agree to terminate any existing employment or other
agreement between Dennie on the one hand and Oak Tree, Acorn or Riverside on the
other hand, and any such employment agreement shall be null and void and of no
further force and effect following execution of this Agreement except for any
obligations of confidentiality set forth in any such employment agreement, and
Dennie on the one hand and Oak Tree, Acorn and Riverside on the other hand
hereby release each other from all claims against the other with respect
thereto. In addition, as partial inducement to Oak Tree to enter into this
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Agreement and to terminate such employment agreements, concurrently with the
execution of this Agreement Dennie is hereby causing to be returned to Oak Tree
the 400,000 shares of restricted stock of Oak Tree acquired by him in connection
with Oak Tree's acquisition of 1st Coast Physical Medicine, Inc. and affiliated
companies. Dennie hereby represents and warrants (i) that the Ronald W. Dennie
Family Limited Partnership (the "Partnership") is the beneficial and record
owner of good and marketable title to the shares of Oak Tree stock (ji) that the
Partnership is transferring such shares to Oak Tree free and clear of all
security interests, liens, adverse claims, encumbrances, equities, proxies,
options or shareholders' agreements and (jii) that Dennie Holdings, LC is the
sole General Partner of the Partnership and that Dennie is authouzed to approve
and execute all powers of attorney and stock powers on behalf of the General
Partner and the Partnership.
Section I.7. Additional Payments. With respect to accounts receivable owned
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by Receivables (the "Collateral Receivables"), which will be rejected by Lender
and returned to Purchaser, and which total, at the Closing, approximately
$700,000 in face amount (the "Rejected Receivables"), Purchaser shall pay to Oak
Tree an amount equal to 40% of all amounts actually collected with respect to
such Rejected Receivables; provided that Purchaser shall have no obligation to
make any payment with respect to any Rejected Receivable that Purchaser
repledges to Lender or any successor thereto as security pursuant to the Loan
Agreement or any successor agreement thereto.
ARTICLE II
Representations and Warranties of Oak Tree
Oak Tree represents and warrants that the following are true and correct as
of the date hereof:
Section II.1. Organization and Good Standing; Qualification. Each of Acorn,
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Riverside, Receivables and Oak Tree (collectively, the "Corporations") is a
corporation duly organized, validly existing and in good standing under the laws
of its state of incorporation, with all requisite corporate power and authority
to carry on the business in which it is engaged, to own the properties it owns,
to execute and deliver this Agreement and to consummate the transactions
contemplated hereby. Each of Acorn, Riverside and Receivables is duly qualified
to do business as a foreign corporation in each jurisdiction where it is
requrred to be so qualified, except where failure to be so qualified will not
have a material adverse effect on such Corporation.
Section II.2. Authorization and Validity. The execution, delivery and
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performance by each Corporation of this Agreement and the other agreements
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby, have been duly authorized by each Corporation. This
Agreement and each other agreement contemplated hereby have been duly executed
and delivered by each Corporation, as the case may be, and constitute legal,
valid and binding obligations of each Corporation, as the case may be,
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enforceable against such party in accordance with their respective terms, except
as may be limited by applicable banruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
Section II.3. No Violation. Other than the Loan Agreement and any contracts
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being assumed hereunder, neither the execution, delivery or performance of this
Agreement or the other agreements contemplated hereby nor the consummation of
the transactions contemplated hereby or thereby will (i) conflict with, or
result in a violation or breach of the terms, conditions or provisions of, or
constitute a default under, the charter documents of any Corporation or any
agreement, contract, indentuxe or other instrument under which any Corporation
is bound or to which the Shares on any of the Assets are subject, or result in
the creation or imposition of any security interest, lien, charge or encumbrance
upon the Shares or any of the Assets or (ii) violate or conflict with any
judgment, decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurssdiction over the Shares or
the Assets.
Section II.4. Consents. Except for Lender, no consent, authorization,
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approval, permit or license of, or filing with, any governmental or public body
or authority, any lender or lessor or any other person or entity is required to
authorize, or is required in connection with, the execution, delivery and
performance of this Agreement or the agreements contemplated hereby on the part
of any Corporation.
Section II.5. Taxes.
(a) Filing of Tax Returns. Each Corporation has duly and timely filed with
the appropriate governmental agencies all income, exdse, corporate, franchise,
property, sales, use, payroll, tax returns (including information returns) and
reports required to be filed by the United States or any state or any political
subdivision thereof or any foreign jurisdiction. All such tax returns or reports
are complete and accurate and properly reflect the taxes of such Corporation for
the periods covered thereby.
(b) Payment of Taxes. Each Corporation has paid or accrued all taxes,
penalties and interest that have become due with respect to any returns that it
has filed and any assessments of which it is aware. No Corporation is delinquent
in the payment of any tax, assessment or governmental charge.
Section II.6. Compliance with Laws. The Corporations have complied with all
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laws, regulations and licensing requirements and have filed with the proper
authorities all necessary statements and reports. There are no existing
violations by the Corporations of any federal, state or local law or regulation
that could affect the property or business of the Corporations.
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Section II.7 Litigation. There are no legal actions or administrative
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proceedings or investigations instituted, or to the best knowledge of Oak Tree
threatened, against or adversely affecting, or that could adversely affect,
Receivables, the Shares, any of the Assets, or the business of Receivables,
Acorn or Riverside.
Section II.8. Accounts Receivable. Schedule 28 sets forth the accounts
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receivable of Acorn, Riverside and Receivables for services performed as of the
date on which this Agreement is executed and the payments and rights to receive
payments related thereto, which is a complete and accurate listing of all
accounts receivable of such date. All such accounts receivable have arisen from
bona fide fransactions in the ordinary course of business and represent payments
due from patients who have received services from Seller (other than receivables
from offsite representation). Oak Tree makes no representation and warranty with
respect to the collectability of such accounts receivable.
Section II.9. Capitalization. The authorized capital stock Receivables
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consists of (i) 1,000 shares of common stock, par value $0.01 per share, of
which 1,000 shares are issued and outstanding, and no shares of such capital
stock are held in the treasury of Receivables. All of issued and outstanding
Shares are duly authorized, validly issued, fully paid and nonassessable, and
are free and clear of all security interests, liens, claims and encumbrances.
There exist no options, warrants, subscriptions or other rights to purchase, or
securities convertible into or exchangeable for, the capital stock of
Receivables. Neither Receivables nor Oak Tree is partyto or bound by, nor do
they have any knowledge of, any agreement, instrument, arrangement, contract,
obligation, commitment or understanding of any character, whether written or
oral, express or implied, relating to the sale, assignment, encumbrance,
conveyance, transfer or delivery of any capital stock of Receivables. No shares
of capital stock of Receivables have been issued or disposed of in violation of
the preemptive rights of any of Receivables' shareholders. All accrued dividends
on the capital stock of Receivables, whether or not declared, have been paid in
full.
Section II.10. Ownership of the Stock. Oak Tree owns, beneficially and of
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record, good and marketable title to the Shares, which constitutes all of the
issued and outstanding capital stock of Receivables, free and clear of all
security interests, liens, adverse claims, encumbrances, equities, proxies,
options or shareholders' agreements. At the Closing, Oak Tree will convey to
Purchaser good and marketable title to all of the issued and outstanding capital
stock of Receivables, free and clear of any security interests, liens, adverse
claims, encumbrances, equities, proxies, options, shareholders' agreements or
restrictions.
Section II.11. Assets. Each of Riverside and Acorn owns good and marketable
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title to all of the Assets (other than the Collateral Receivables), which are
being sold to Purchaser free and clear of all securiW interests, liens, claims
and encumbrances, except for liens granted with respect to equipment leases.
Receivables owns good and marketable title to the Collateral Receivables, free
and clear of all security interests, liens, claims and encumbrances, other than
those granted pursuant to the Loan Agreement
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ARTICLE III
Representations and Warranties of Purchaser
Section III.1. Organization and Good Standing. Purchaser is a corporation
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duly organnnl, validly existing and in good standing under the laws of the state
of its incorporation, with all requisite corporate power and authority to carry
on the business in which it is engaged, to own the properties it owns, to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
Section III.2 Authorization and Validity. The execution, delivery and
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performance by Purchaser of this Agreement and the other agreements contemplated
hereby, and the consummation of the transactions contemplated hereby and
thereby, have been duly authorized by Purchaser. This Agreement and each other
agreement contemplated hereby have been duly executed and delivered by Purchaser
and constitute legal, valid and binding obligations of Purchaser, enforceable
against Purchaser in accordance with their respective terms, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting creditors
rights generally or the availability of equitable remedies.
Section III.3. No Violation. Neither the execution, delivery or performance
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of this Agreement or the other agreements contemplated hereby nor the
consummation of the transactions contemplated hereby or thereby will (i)
conflict with, or result in a violation or breach of the terms, conditions and
provisions of, or constitute a default under, the Articles of Incorporation or
Bylaws of Purchaser or any agreement, indenture or other instrument under which
Purchaser is bound or (ii) violate or conflict with any judgment, decree, order,
statute, rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over Purchaser or the properties
or assets of Purchaser.
ARTICLE IV
Closing Deliveries
Section IV.1. Deliveries of Acorn and Riverside. The closing of the
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transactions contemplated herein (the "Closing") shall take place simultaneously
with execution of this Agreement Acorn and Riverside are hereby delivering to
Purchaser the following:
(a) a bill of sale conveying the Assets that are personal property to
Purchaser;
(b) an assignment of the Leases, assigning the interest of Acorn or
Riverside therein, as appropriate, to Purchaser;
(c) an Assignment and Assumption Agreement (the "Assignment and Assumption
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Agreement) with respect to all rights and obligations of Acorn and Riverside, as
appropriate, under the assigned contracts and Purchaser's assumption of the
Assumed Liabilities.
Section IV.2 Deliveries of Oak Tree. Oak Tree is hereby delivering to
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Purchaser the following:
(a) a certificate representing all of the issued and outstanding shares of
Common Stock of Receivables duly endorsed for transfer;
(b) certificates from the Secretary of State of the State of Florida (or
other appropriate party) certifying that Receivables is a corporation duly
existing and in good standing in the State of Florida;
(c) certificates or other evidence reasonably satisfactory to Purchaser
that each of Acorn and Receivables has paid all payroll, withholding and sales
taxes when due; and
(d) resignations of all directors and officers of Receivables.
Section IV.3. Deliveries of Purchaser. Purchaser is hereby delivering the
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Assignment and Assumption Agreement to Acorn and Riverside.
Section IV.4. Deliveries of Dennie. Dennie is hereby delivering
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certificates representing the shares of common stock of Oak Tree to be returned
to Oak Tree pursuant to Section 1.6 above.
ARTICLE V
Post Closing Matters
Section V.1. Further Instruments of Transfer; Further Payments. Following
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the Closing, at the request of any party, the parties shall deliver any further
instruments of transfer and take all reasonable action as may be necessary or
appropriate to vest in Purchaser good and marketable title to the Assets or to
assign the Assumed Liabilities or the Shares to Purchaser. To the extent that
any Corporation has received or receives payment on any account receivable
purchased by Purchaser hereunder, such Corporation shall promptly forward such
payment to Purchaser at the address set forth below.
Section V.2. Corporate Names. Following the Closing, Oak Tree and Acorn
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shall take such actions as shall be necessary to change the corporate names of
1st Coast Rehabilitation, Inc. and Riverside CORF, Inc. to names that are
dissimilar from their existing corporate names.
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ARTICLE VI
Remedies
Section VI.1. Indemnification by Oak Tree, Riverside and Acorn. Subject to
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the terms and conditions of this Article, Oak Tree agrees to indeinni, defend
and hold Purchaser and its directors, officers, agents, attorneys and afiates
harmless from and against all losses, claims, obligations, demands, asssments,
penalties, liabilities, costs, damages, attorneys' fees and expenses
(collectively, "Damages"), asserted against or incurred by such indemnitees by
reason of or resulting from:
(a) a breach of any representation, warranty or covenant of Acorn,
Riverside or Oak Tree contained herein, or in any exhibit, schedule, or
certificate delivered hereunder, or in any agreement executed in connection with
the transactions contemplated hereby;
(b) the operations of Acorn, Riverside or Receivables, as the case may be,
prior to and through the Closing and not specifically disclosed herein or on the
Schedules attached hereto;
(c) any failure to comply with any applicable bulk transfer laws; or
(d) any other liability related to Acorn, Riverside or Oak Tree that has
not been expressly assumed by Purchaser.
Notwithstanding the foregoing, the obligations of Oak Tree hereunder shall
not exceed $100,000 in the aggregate.
Subject to the terms and conditions of this Article, each of Riverside and
Acorn (except for Acorn's St Augustine operations), jointly and severally, shall
indemnily, defend and hold Purchaser and its diccctors, officers, agents,
attorneys and affiliates harmless from and against all Damages asserted against
or incurred by such indemnitees by reason of or resulting from any claim by
Medicare or other payor for repayment with respect to past mispayments or
misrepresentations in connection with matters billed prior to the Closing Date;
regardless of whether such claim is in the form of an offset against current
payments or otherwise.
Section VI.2 Indemnification by Purchaser. Subject to the terms and
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conditions of this Article, Purchaser hereby agrees to indeimif, defend and hold
each of Acorn, Riverside and Oak Tree and any of their respective directors,
officers, agents, attorneys and affiliates harmless from and against all Damages
asserted against or incurred by any of such indemnitees by reason of or
resulting from:
(a) a breach by Purchaser of any representation, warranty or covenant of
Purchaser contained herein or in any exhibit, schedule or certificate delivered
hereunder, or
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(b) the use of any of the Assets after the Closing; or
(c) the failure of Purchaser to pay, perform and discharge when due any of
the Assumed Liabilities.
Section VI.3. Conditions of Indemnification. The respective obligations and
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liabilities of Oak Tree, Acorn and Riverside, on the one hand, and Purchaser on
the other hand (the "indemnifying party") to the other (the "party to be
indemnified") under Sections 6.1 and 6.2 with respect to claims resulting from
the assertion of liability by third parties shall be subject to the following
terms and conditions:
(a) Within 20 days (or such earlier time as might be required to avoid
prejudicing the indemnifying party's position) after receipt of notice of
commencement of any action evidenced by service of process or other legal
pleading, the party to be indemnified shall give the indemnifying party written
notice thereof together with a copy of such claim, process or other legal
pleading, and the indemniing party shall have the right to undertake the defense
thereof by representatives of its own choosing and at its own expense; provided
that the party to be indemnified may partidpate in the defense with counsel of
its own choice, the fees and expenses of which counsel shall be paid by the
party to be indemnified unless (i) the indemnifying party has agreed to pay such
fees and expenses, (ii) the indemnifying party has failed to assume the defense
of such action or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnifying party and the party to be
indemnified and the party to be indemilified has been advised by counsel that
there may be one or more legal defenses available to it that are different from
or additional to those available to the indemnifying party (in which case, if
the party to be indemnified informs the indemnifying party in writing that it
elects to employ separate counsel af the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the party to be indemnified, it being understood, however, that the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys at any
time for the party to be indemnified, which firm shall be designated in writing
by the party to be indemnified).
(b) In the event that the indemnifying party, by the 3Oth day after receipt
of notice of any such claim (or, if earlier, by the lOth day preceding the day
on which an answer or other pleading must be served in order to prevent judgment
by default in favor of the person asserting such claim), does not elect to
defend against such claim, the partyto be indemnified will (upon further notice
to the indemnifying party) have the right to undertake the defense, compromise
or settlement of such claim on behalf of and for the account and risk of the
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indemnifying party and at the indemnifying party's expense, subject to the right
of the indemnifying party to assume the defense of such claims at any time prior
to settlement, compromise or final determination thereof.
(c) Notwithstanding the foregoing, the indemnjfying party shall not settle
any Claim without the consent of the party to be indemnified unless such
settlement involves only the payment of money and the claimant provides to the
party to be indemnified a release from all liability in respect of such claim.
If the settlement of the claim involves more than the payment of money, the
indemnifying party shall not settle the claim without the prior consent of the
partyto be indemnified.
(d) The party to be indemnified and the indemnifying party will each
cooperate with all reasonable requests of the other.
Section VI.4. Waiver. No waiver by any party of any default or breach by
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another party of any representation, warranty, covenant or condition contained
in this Agreement, any exhibit or any document, instrument or certificate
contemplated hereby shall be deemed to be a waiver of any subsequent default or
breach by such party of the same or any other representation, warranty, covenant
or condition. No act, delay, omission or course of dealing on the part of any
party in exercising any right, power or remedy under this Agreement or at law or
in equity shall operate as a waiver thereof or otherwise prejudice any of such
party's rights, powers and remedies. All remedies, whether at law or in equity,
shall be cumulative and the election of any one or more shall not constitute a
waiver of the right to pursue other available remedies.
Section VI.5. Remedies Not Exdusive. The remedies provided in this Article
-----------------------------------
shall not be exclusive of any other rights or remedies available to one party
against the other, either at law or in equity.
Section VI.6. Offset. Any and all amounts owing or to be paid by Purchaser
---------------------
to Sellers, hereunder or otherwise, shall be subject to offset and reduction pro
tanto by any amounts that may be owing at any time by Oak Tree to Purchaser in
respect of any obligation under Section 6.1 hereof or any failure or breach of
any representation, warranty or covenant of Oak Tree under or in connection with
this Agreement or any other agreement with Purchaser or any transaction
contemplated hereby or thereby, as reasonably determined by Purchaser. if
Purchaser determines that such offset is appropriate, notice shall be given to
Oak Tree of such determination at least 10 days prior to the due date of the
payment to be reduced. If the conditions upon which the reduction is based are
cured by Oak Tree prior to such due date, as determined by Purchaser, the amount
of such payment shall not be so reduced. In the event Oak Tree disagrees with
respect to the amount to be offset, Purchaser shall, at the time the payment in
question is due, place the disputed funds in escrow with a mutually acceptable
escrow agent The parties shall then work to resolve the dispute and, if they are
unable to do so after 45 days, the dispute shall be referred to a mutually
acceptable arbitrator, whose decision shall be final and binding on the parties.
Purchaser shall pay interest at the rate of prime plus 2% on all overdue amounts
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<PAGE>
owing or to be paid by Purchaser to Oak Tree or to any other Corporation, from
the date due to the date of actual payment, it being understood thai amounts
placed in escrow shall not be considered overdue.
Section VI.7. Costs, Expenses and Legal Fees. Each party hereto shall bear
---------------------------------------------
its own costs and expenses (including attorneys' fees), except that each party
hereto agrees to pay the costs and expenses (including reasonable attorneys'
fees and expenses) incurred by the other parties in successfully (i) enforcing
any of the terms of this Agreement or proving that another party breached any of
the terms of this Agreement
ARTICLE VII
Miscellaneous
Section VII.1. Amendment. This Agreement may be amended, modified or
--------------------------
supplemented only by an instrument in writing executed by all the parties
hereto.
Section VII.2. Assignment. Neither this Agreement nor any right created
---------------------------
hereby or in any agreement entered into in connection with the transactions
contemplated hereby shall be assignable by any party hereto, except by Purchaser
to an affiliate of Purchaser; provided that the affiliate must sign a copy of
this Agreement as Purchaser and Purchasei shall unconditionally guaranty all of
the affiliate's bligations under this Agreement.
Section VII.3. Parlies In Interest; No Third Party Benefidaries. Except as
---------------------------------------------------------------
otherwise provided herein, the terms and conditions of this Agreement shall
inure to thE benefit of and be binding upon the respective heirs, legal
representatives, successors and assigns of the parties hereto. Neither this
Agreement nor any other agreement contemplated hereby shall be deemed to confer
upon any person not a party hereto to thereto any rights or remedies hereunder
or thereunder.
Section VII.4. Entire Agreement. This Agreement and the agreement
----------------------------------
contemplated hereby constitute the entire agreement of the parties regarding the
subject (matter hereof, and supersede all prior agreements and understandings,
both written and oral, among the parties, or any of them, with respect to the
subject matter hereof.
Section VII.5. Severability. If any provision of this Agreement is held to
---------------------------
be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severanc
herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a
provision as similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.
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Section VII.6. Survival of Representations, Wairanties and Covenants. The
---------------------------------------------------------------------
representations, warranties and covenants contained herein shall survive the
Closing and all statements contained in any certificate, exhibit or other
instrument delivered by or on behalf of any party pursuant to this Agreement
shall be deemed to have been representations and warranties by such party, and,
notwithstanding any provision in this Agreement to the contrary, shall survive
the Closing for a period of two years.
Section VII7. Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
----------------------------
OF THE PARTIES HERETO SHALL BE GOVERNED BY ANDCONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE SUBSTANTIVE LAWS (BUT NOT THE RULES GOVERNING CONFLICTS OF
LAWS) OF THE STATE OF FLORIDA.
Section VII.8. Captions. The captions in this Agreement are for convenience
-----------------------
of reference only and shall not limit or otherwise affect any of the terms or
provisions hereof.
Section VII9. Gender and Number. When the context requires, the gender of
-------------------------------
all words used herein shall include the masculine, feminine and neuter and the
number of all words shall include the singular and plural.
Section VII.10. Reference to Agreement. Use of the words "herein",
------------------------------------------
"hereof', "hereto" and the like in this Agreement shall be construed as
references to this Agreement as a whole and not to any particular Article,
Section or provision of this Agreement, unless otherwise noted.
Section VII.11. Notice. Any notice or communication hereunder or in any
-----------------------
agreement entered into in connection with the transactions contemplated hereby
must be in writing and given by depositing the same in the United States mail,
addressed to the party to be notified, postage prepaid and registered or
certified with return receipt requested, or by delivering the same in person.
Such notice shall be deemed received on the date on which it is hand-delivered
or on the third business day following the date on which it is so mailed. For
purposes of notice, the addresses of the parties shall be:
If to Purchaser:
Oak Tree Medical Services, Inc.
2 Gannett Drive, Suite 215
White Plains, NY 10604
Attention: William Kedersha
If to Seller:
MB Software Corporation
2225 E. Randol MIII Rd.
Suite 323
Arlignton, Texas 76011
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with a copy to:
Brad L Whitlock
Jackson & Walker, LL.P.
901 Main Street
Suite 6000
Dallas, Texas 75202
Any party may change its address for notice by written notice given to the other
parties in accordance with this Section.
Section VII.12. Service of Process. Service of any and all process that may
----------------------------------
be served on any party hereto in any suit, action or proceeding arising out of
this Agreement may be made in the manner and to the address set forth in Section
0 and service thus made shall be taken and held to be valid personal service
upon such party by any party hereto on whose behalf such service is made.
Section VII.13. Counterparts. This Agreement may be executed in multiple
------------------------------
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument
MB DATA CORPORATION
By: /s/ Scott A. Haire
-------------------------------
Its: President
-------------------------------
OAK TREE MEDICAL SYSTEMS, INC
By: /s/ William Kedersha
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Its: Chairman of the Board
-------------------------------
RIVERSIDE CORF, INC.
By: /s/ William Kedersha
-------------------------------
Its: Vice President
-------------------------------
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ACORN CORF, INC.
By: /s/ William Kedersha
-------------------------------
Its: Vice President
-------------------------------
/s/ Ronald W. Dennie, M.D.
----------------------------
Ronald W. Dennie, M.D.
14
