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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):
November 25, 1996
MEDICAL RESOURCES, INC.
(Exact name of registrant as specified in its charter)
Delaware 0-20440 13-3584552
(State or other (Commission (I.R.S.Employer
jurisdiction) File Number) Identification No.)
155 State Street, Hackensack, New Jersey 07601
(Address of principal executive offices) (Zip Code)
(201) 488-6230
Registrant's telephone number, including area code
N/A
Former name and former address, if changed since last report)
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Item 5. Other Events
On November 25, 1996, Medical Resources, Inc. (the
"Company"), through its wholly-owned subsidiary, Smith Garden
Resources, Inc. ("Sub"), consummated the acquisition (the
"Acquisition") of the business assets of Belle-Meade MRI Imaging
Corp., 1101 Imaging Corp. and RGB Management Corp. (collectively,
the "Corporations") consisting primarily of two diagnostic imaging
centers located in East Setauket and Garden City, New York (Long
Island). The Acquisition was consummated pursuant to an Asset
Purchase Agreement (the "Agreement") dated as of November 13, 1996
by and among the Company, Sub, the Corporations and the controlling
stockholders of the Corporations. Pursuant to the Agreement, Sub
acquired substantially all of the business assets of the
Corporations for a combination of $1,900,000 cash and a $4,500,000
convertible promissory note due January 9, 1997 (the "Note"). The
Note is automatically convertible in accordance with its terms into
shares of the Company's Common Stock at a conversion price of
$8.44.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Ex. No. Description
2(a) Asset Purchase Agreement, dated as of November 13,
1996, by and among Belle-Meade MRI Imaging Corp.,
1101 Imaging Corp., RGB Management Corp., Mr. Jim
Brower, Mr. Chase Riley, and Mr. Michael Griffin,
on one hand, and Smith Garden Resources, Inc. and
Medical Resources, Inc.
99(a) Press Release issued November 26, 1996.
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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.
MEDICAL RESOURCES, INC.
By:/s/ Stephen M. Davis
Name: Stephen M. Davis
Title: Secretary
Dated: December 6, 1996
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<ex. 2(a)>
MEDICAL
RESOURCES INC.
ASSET PURCHASE AGREEMENT
AGREEMENT, dated as of November 13, 1996, by and among Belle-
Meade MRI Imaging Corp., a New York corporation ("Belle-Meade"),
1101 Imaging Corp., a New York corporation ("1101") and RGB
Management Corp., a New York corporation ("RGB", and together with
Belle-Meade and 1101, the "Corporations"), Mr. Jim Brower
("Brower"), Mr. Chase Riley ("Riley"), and Mr. Michael Griffin
("Griffin"; and together with Brower and Riley, the "Sellers"),
each of which are individuals residing in the State of New York, on
one hand, and Smith Garden Resources, Inc., a Delaware corporation,
with a mailing address at 155 State Street, Hackensack, New Jersey
07601 ("Buyer") and, solely with respect to the Closing Shares (as
herein defined) and Sections 1.3, 1.5(b), 1.8 and 3.1 through 3.4,
Medical Resources, Inc. ("MRI").
W I T N E S S E T H:
WHEREAS, Belle-Meade owns a diagnostic imaging facility
operating as OPEN-MRI of Smithaven located in Smithaven, New York
and 1101 owns a diagnostic imaging facility operating as OPEN-MRI
of Garden City located in Garden City, New York (collectively, the
"Centers"), and RGB has contracted with Belle-Meade and 1101 to
manage the Centers and the Corporations own or have the right to
use certain of the assets, properties, business and goodwill
relating thereto (the "Business"); and
WHEREAS, Buyer desires to acquire and the Corporations desire
to sell the Business upon the terms and subject to the conditions
hereinafter set forth;
WHEREAS, the Sellers own all of the outstanding common stock
of the Corporations and would each derive substantial benefit from
the consummation of transactions contemplated by this Agreement,
which, among other things, includes their agreement not to compete
with the Business or the Buyer as set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the Corporations, Sellers and
Buyer agree as follows:
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ARTICLE 1
SALE OF ASSETS AND PURCHASE PRICE
1.1 Sale and Purchase of Assets. On the basis of the
representations, warranties, covenants and agreements contained in
this Agreement and subject to the terms and conditions set forth in
this Agreement, on the Closing Date (as defined in Section 1.2
hereof), the Corporations shall sell, assign, transfer and deliver
to Buyer, and Buyer shall purchase and acquire from the
Corporation, free and clear of all Liens (as defined in Section
2.6(b) hereof) except as otherwise contemplated by Section 2.6
hereof, all of the assets of the Business associated with the
Centers, other than the assets listed on Schedule 1.1 (the
"Excluded Assets"), including, without limitation, all machinery,
equipment, supplies and furnishings used or held for use in the
Business, as set forth on Schedule 2.6(A) hereto (all of the
foregoing, excepting only the Excluded Assets, being hereinafter
referred to as the "Purchased Assets"). As used herein, the term
"Purchased Assets" shall also include, without limitation of the
foregoing:
(a) all of the Corporations' accounts receivable
recorded as of the close of business on the date immediately
preceding the Closing Date (as hereinafter defined) (including any
related claims in respect of the collection thereof, collectively,
the "Accounts Receivable");
(b) all leasehold improvements and tangible assets
and properties of the Corporations, including machinery and
equipment, tooling, tools, furniture, office equipment, furnishings
and fixtures;
(c) all inventories, including finished products,
work-in-process, materials, parts, accessories and supplies of the
Corporations;
(d) all rights of the Corporations arising from, in
and to all Contracts (as defined in Section 2.8) listed in Schedule
1.4(B) as Contracts to be assumed by Buyer (the "Assumed
Contracts").
(e) all other assets reflected in the Balance
Sheets (as defined in Section 2.4) and all assets acquired since
the date of the Balance Sheets, but excluding assets disposed of in
the ordinary course of business since the date of the Balance
Sheets and cash distributed to stockholders of the Corporations, or
assets which have been abandoned by the Corporations since the date
of the Balance Sheets, which assets are not, individually or in the
aggregate, material to the operation of the Business;<PAGE>
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(f) all security deposits and prepaid expenses of
the Corporations;
(g) all warranties and claims or potential claims
against the Corporations' suppliers or lessors with respect to any
assets included in the Purchased Assets to the extent said
warranties and claims may be assignable; and
(h) all names (including the tradenames set forth
in Schedule 2.6(D)), Proprietary Rights (as defined in Section
10.13), contractual rights, telephone numbers, Licenses (as defined
in Section 2.7) which are capable of being transferred pursuant to
applicable law, books and records, business and goodwill of the
Corporations relating to the Business and the Purchased Assets.
1.2 Closing Date. The purchase and sale of the Business
and Purchased Assets (the "Closing") shall take place on November
25, 1996 at the offices of Werbel & Carnelutti, 711 Fifth Avenue,
New York, New York 10022 at 10:00 a.m., New York City time, or as
soon thereafter as all of the conditions specified in Articles 5
and 6 of this Agreement shall be satisfied or waived, or at such
other place or time or on such other date as the Corporations and
Buyer may agree upon in writing (such date and time being
hereinafter called the "Closing Date").
1.3 Purchase Price. (a) As consideration for the
Purchased Assets and subject to the terms and provisions of this
Agreement, Buyer shall pay to the Corporations an aggregate of
$6,400,000 (the "Purchase Price") (subject to adjustment pursuant
to clause (b) below) in the form and manner as follows, as follows:
(i) Buyer shall pay for the assets of Belle-Meade
an aggregate of $600,000 by certified check on the Closing Date,
less one-third of any deposit previously paid by Buyer which shall
be credited to such amount;
(ii) Buyer shall pay for the assets of 1101 an
aggregate of $400,000 by certified check on the Closing Date, less
one-third of any deposit previously paid by Buyer which shall be
credited to such amount;
(iii) Buyer shall pay for the assets of RGB (A)
an aggregate of $900,000 by certified check on the Closing Date,
less one-third of any deposit previously paid by Buyer which shall
be credited to such amount (such cash amounts payable to Belle-
Meade, 1101 and RGB, the "Closing Date Amounts") and (B) a
promissory note of MRI in the aggregate amount of $4,500,000 (the
"Threshold Amount") in the form attached hereto as Exhibit A (the
"Closing Note"), which Closing Note shall be convertible into the
aggregate number of shares (the "Closing Shares") of common stock<PAGE>
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(the "MRI Common Stock"), par value $.01 per share, of MRI which
equals the quotient obtained by dividing the Threshold Amount by
the conversion price of $8.44 (as adjusted pursuant to the terms of
Closing Note, the "Conversion Price").
(b) Post Closing Adjustment if Closing Shares
Registered By January 7, 1997. In the event that the Effective
Date (as defined in Section 1.8) occurs by the close of business on
January 7, 1997 and the Market Value of the MRI Common Stock as of
the Effective Date (the "Effective Date Price") is less than the
Conversion Price, MRI, at its option, shall either:
(i) issue to RGB promptly following the
Effective Date such additional number of shares ("Additional
Shares") of MRI Common Stock (rounded to the nearest whole number)
registered pursuant to the Securities Act of 1933 as shall equal a
fraction, the numerator of which is an amount (the "Deficiency
Amount") equal to the difference between (1) the Threshold Amount
and (2) the product obtained by multiplying the Effective Date
Price by the number of Closing Shares issuable upon conversion of
the Closing Note, and the denominator of which is the Effective
Date Price, or
(ii) deliver to RGB a promissory note of MRI in
the form attached hereto as Exhibit B (the "Adjustment Note") in
the aggregate principal amount equal to the Deficiency Amount;
provided however, that if the Deficiency Amount exceeds $250,000
(such difference, the "Shortfall"), MRI may deliver an Adjustment
Note in the aggregate principal amount of not more than $250,000
and either Additional Shares or a certified check equal to such
Shortfall; or
(iii) deliver to RGB a certified check in the
aggregate amount equal to the Deficiency Amount.
(c) Draw Under Letter of Credit if Closing Shares
Not Registered By January 7, 1997. To secure the payment
obligations of MRI under the Closing Note, on or prior to the
Closing Date, MRI shall deliver to RGB a clean irrevocable stand-by
letter of credit, in the form set forth as Exhibit C (the "Letter
of Credit"), drawn on Citibank in New York or other comparable
financial institution reasonably acceptable to RGB in favor of RGB
in an original face amount equal to the Threshold Amount. The
Letter of Credit shall have an expiry date not earlier than January
15, 1997. In the event the Closing Note is converted or paid by
MRI in accordance with its terms, RGB agrees to promptly return the
Letter of Credit to MRI for cancellation.
(d) Allocation of Purchase Price. The Corporations
and the Buyer agree to allocate the Purchase Price in accordance<PAGE>
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with IRC Section 1060. Buyer and the Corporations shall use
reasonably diligent efforts to agree to such allocation by the
Closing and, in any event, such allocation shall be agreed to by
the Corporations and the Buyer within 30 days of the Closing Date.
In addition, the Corporations and the Buyer hereby agree to file
timely any information that may be required to be filed pursuant to
Treasury Regulations promulgated under IRC Section 1060.
1.4 Liabilities. Buyer shall not assume or be bound by
any duties, responsibilities, obligations or liabilities of the
Corporations, the Business or the Centers of any kind or nature,
known, unknown, contingent or otherwise (including, without
limitation, any benefit plan maintained by the Corporations, any
professional fees or any liabilities set forth on Schedule 1.4(A)),
except as specifically set forth on Schedule 1.4(B) annexed hereto
(the "Assumed Liabilities"). All liabilities and obligations
retained by the Corporations are referred to herein as "Retained
Liabilities."
1.5 Additional Closing Date Deliveries and Actions.
(a) On the Closing Date, the Corporations shall (i) deliver, or
execute and deliver, to Buyer (w) a Bill of Sale, Assignment and
Assumption Agreement in substantially the form annexed hereto as
Exhibit D with respect to the Purchased Assets, including the
Assumed Contracts, (x) all evidences of consents, waivers or
approvals obtained by the Corporations in respect of the
consummation of the transactions contemplated by this Agreement,
(y) all of the documents, instruments and opinions contemplated to
be delivered by the Corporations to Buyer on the Closing Date
pursuant to Article 5 hereof and (z) all such other bills of sale,
assignments and other instruments of transfer or conveyances as
Buyer may reasonably request or as may otherwise be necessary to
evidence and effect the transactions contemplated hereby and (ii)
take all steps and actions as Buyer may reasonably request or as
may otherwise be necessary to put Buyer in actual possession and
control of the Purchased Assets at the locations where such
Purchased Assets are held or maintained prior to Closing. All of
the documents described in (w) through (z) hereof are hereinafter
referred to as "Sellers' Closing Documents".
(b) On the Closing Date, Buyer shall (i) deliver,
or execute and deliver, to the Corporations (w) a Bill of Sale,
Assignment and Assumption Agreement in substantially the form
annexed hereto as Exhibit D with respect to the Purchased Assets,
including the Assumed Contracts, (x) the Closing Date Amounts, (y)
the Closing Note and (z) all of the documents, instruments and
opinions contemplated to be delivered by Buyer to the Corporations
on the Closing Date pursuant to Article 6 hereof, and (ii) take all
steps and actions as may be reasonably necessary to effectuate the
transactions contemplated hereby. All of the documents described<PAGE>
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in (w) through (z) hereof are hereinafter referred to as "Buyer's
Closing Documents" and, collectively with Sellers' Closing
Documents, the "Closing Documents".
(c) On the Closing Date, Buyer and Seller shall
apportion expenses, such as payroll, equipment lease payments and
office lease payments, for the month in which the Closing Date
occurs based upon the number of days elapsed in such month up to
the Closing Date. Buyer shall pay to the Corporations on a pro
rata basis any net credit owed to the Corporations and Buyer shall
deduct on a pro rata basis from the Purchase Price payable to the
Corporations any net credit owed to the Buyer.
1.6 Consents, Waivers and Further Assurances. From time
to time following the Closing, the Corporations and Sellers shall
execute and deliver, or cause to be executed and delivered, to
Buyer such other instruments of assignment, conveyance and transfer
as Buyer may reasonably request or as may be otherwise necessary to
effect the transactions contemplated hereby.
1.7 Termination. Anything contained in this Agreement
to the contrary notwithstanding, this Agreement may be terminated
and the transactions contemplated herein abandoned at any time
prior to the Closing Date (a) by the mutual written agreement of
Buyer and the Corporations; (b) by Buyer or the Corporations in the
event of any material breach by the other party of any of its
agreements, representations or warranties contained herein; or (c)
by either Buyer or the Corporations, if the Closing has not
occurred on or before January 2, 1997 (provided, however, that if
the party seeking to terminate this Agreement pursuant to this
clause has failed to use good faith and best efforts to bring about
the Closing, or is in breach of a representation, warranty or
covenant contained herein beyond any applicable grace period, that
party shall not have the right to terminate the Agreement pursuant
to this clause), or such later date as may be agreed upon in
writing by the Corporations and Buyer (the "Termination Date").
Notwithstanding any such termination, the provisions of Section 8.1
of this Agreement shall remain in full force and effect and no such
termination shall be deemed to constitute a release or waiver by
either party of any claim against the other party hereto based on
any breach by such party of its agreements or its representations
and warranties contained herein.
1.8 Registration of MRI Common Stock. (a) MRI agrees
to prepare and file with, and use its best efforts to cause to be
declared effective by, the Securities and Exchange Commission (the
"SEC"), as soon as practicable following the Closing Date, a
registration statement under the Securities Act of 1933, as amended
(the "Securities Act"), covering the resale by the Sellers in a
public distribution of the Closing Shares. The date such<PAGE>
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registration statement is declared effective by the SEC is referred
to herein as the "Effective Date." MRI shall also use its best
efforts to keep any such registration statement, and the
accompanying prospectus, effective and current under the Securities
Act at its expense for a period ending on the earlier to occur of
six months from the Effective Date or the date on which Sellers
have completed their disposition of such shares pursuant to the
registration statement, provided that such six-month period shall
be extended for a period equal to the number of days during such
six-month period with respect to which trading in the MRI Common
Stock is suspended on The Nasdaq Stock Market or such registration
statement is not effective and current other than as a result of
any action or inaction by Sellers.
(b) In connection with the registration of the
Closing Shares and pursuant to subsection (a) above:
(i) The Sellers will cooperate in furnishing
promptly to MRI in writing any information reasonably requested by
MRI in connection with the preparation, filing and processing of
such registration statement, provided the Corporations and the
Sellers shall not be required to prepare or bear the expense of an
audit of the Corporations' financial statements;
(ii) Prior to filing a registration statement or
prospectus or any amendments or supplements thereto, MRI will
furnish to Sellers copies of such documents proposed to be filed in
advance of filing and provide Sellers with a reasonable opportunity
to review such documents and comment thereon;
(iii) MRI shall use reasonably diligent efforts to
have the Closing Shares qualified for listing on The Nasdaq Stock
Market;
(iv) MRI will prepare and file with the SEC such
amendments and supplements to such registration statement and the
prospectus used in connection therewith as may be necessary to keep
such registration statement effective and current for the period
required herein and use reasonably diligent efforts to comply with
the provisions of the Securities Act and the rules and regulations
of the SEC with respect to the sale or disposition of shares
covered by such registration statement;
(v) MRI will furnish to the Sellers such number of
prospectuses or other documents incident to such registration as
may from time to time be reasonably requested, and cause its shares
to be qualified under the blue-sky laws of those states reasonably
requested by the Sellers (provided that MRI will not be required to
(A) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify, (B) subject itself to<PAGE>
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taxation in any such jurisdiction or (C) consent to general service
of process in any such jurisdiction);
(vi) MRI shall notify Sellers, at any time when a
prospectus relating to the Closing Shares or Additional Shares is
required to be delivered under the Securities Act, of the happening
of any event as a result of which the prospectus included in the
registration statement contains an untrue statement of material
fact or omits any fact necessary to make the statements therein not
misleading and MRI shall take such steps at it shall deem necessary
to correct such prospectus;
(vii) MRI shall use reasonably diligent efforts to
obtain the withdrawal of any order suspending the effectiveness of
the registration statement, suspending or preventing the use of any
related prospectus or suspending the qualification in any
jurisdiction in which the sale of the Closing Shares has been
qualified;
(viii) Except as set forth in subsection (ix) below,
MRI shall bear all costs and expenses incident to any registration
pursuant to this Section 1.8; and
(ix) The Sellers shall pay any and all brokerage
fees and transfer taxes incident to the sale of any share of MRI
Common Stock sold by the Sellers pursuant to the registration
effected pursuant to this Section 1.8, and shall pay the fees and
expenses of any special attorneys or accountants retained by it.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE CORPORATIONS AND SELLERS
As an inducement to Buyer to enter into this
Agreement and to consummate the transactions contemplated hereby,
the Corporations and Sellers, jointly and severally, represent and
warrant to Buyer and agree as follows:
2.1 Organization and Qualification. Each of the
Corporations is a corporation duly organized, validly existing and
in good standing under the laws of the State of New York, and is
duly qualified as a foreign corporation in all jurisdictions where
the ownership of its property or conduct of its business require it
to so qualify. The Corporations have all requisite corporate power
and authority to own or lease their properties and the Purchased
Assets and to conduct their business as presently conducted.
Sellers are the sole voting shareholders of the Corporations.
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2.2 Authority to Effect Transactions. (a) Each of the
Corporations and Sellers has all requisite power and authority to
execute, deliver and perform this Agreement and all of Sellers'
Closing Documents. All necessary corporate action on the part of
the Corporations has been or will be prior to the Closing Date duly
taken to authorize the execution, delivery and performance by the
Corporations of this Agreement and all of Sellers' Closing
Documents. This Agreement has been duly authorized, executed and
delivered by the Corporations, has been duly executed and delivered
by Sellers, and is the legal, valid and binding obligation of each
of the Corporations and Sellers, enforceable against each of the
Corporations and Sellers in accordance with its terms except (x) as
such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally, and (y) to the
extent that such enforceability is subject to general principles of
equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law). Each of Sellers' Closing
Documents has been duly authorized by the Corporations or the
Sellers, as appropriate, and, upon execution and delivery by the
Corporations and Sellers, as contemplated hereby, will be the
legal, valid and binding obligations of each of the Corporations
and Sellers, enforceable against each of the Corporations and
Sellers in accordance with its terms except (x) as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally, and (y) to the extent
that such enforceability is subject to general principles of equity
(regardless of whether such enforcement is considered in a
proceeding in equity or at law).
(b) Except as set forth in Schedule 2.2(B) hereto,
(i) no consent, authorization, approval, order, license, certifi-
cate, permit or act of or from, or declaration or filing with, any
foreign, federal, state, local or other governmental authority or
regulatory body or any court or other tribunal or any party to any
contract, agreement, instrument, lease or License (as defined in
Section 2.7) to which any of the Corporations or Sellers is a party
or by which any of the Corporations or Sellers is bound or to which
any of the Purchased Assets is subject, is required for the
execution, delivery or performance by the Corporations or Sellers
of this Agreement or any of Sellers' Closing Documents or the
consummation of the transactions contemplated hereby or thereby and
(ii) neither the execution, delivery or performance of this
Agreement or any of Sellers' Closing Documents nor the consummation
of the transactions contemplated hereby or thereby (v) conflicts
with or will conflict with, or (with or without the giving of
notice or the passage of time or both) results or will result in a
breach of the terms, conditions or provisions of, (w) constitutes
or will constitute a default under, (x) results or will result in<PAGE>
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the creation of any Lien upon any of the Purchased Assets pursuant
to, (y) constitutes or will constitute an event creating rights of
acceleration, termination or cancellation, or loss of rights under,
or (z) results or will result in a violation of, (A) the
Corporations' organizational documents and agreements, each as
amended to date, (B) any law, statute, rule, regulation, order,
award, judgment or decree to which the Corporations, Sellers or any
of the Purchased Assets is subject or (C) any contract, agreement,
instrument, lease or License to which any of the Corporations or
Sellers is a party or by which it is bound.
2.3 Subsidiaries. The Corporations have no
subsidiaries. The Corporations own no interest, directly or
indirectly, and have no commitment to purchase any interest, direct
or indirect, in any other corporation, partnership or enterprise.
2.4 Financial Statements and Liabilities. (a) The
Corporations have delivered to Buyer true and correct copies of the
following: unaudited balance sheets of the Corporations as of
December 31, 1995 (the "Balance Sheets") and unaudited statements
of operations (the "Statements of Operations"; the Balance Sheets
and Statements of Operations are herein referred to as the
"Financial Statements") of the Corporations. The Balance Sheets
present fairly, on a cash basis, the financial condition, assets,
liabilities and stockholder's equity of the Corporations as of
their dates; the Statements of Operations present fairly, on a cash
basis, the results of operations of the Corporations for the period
indicated and present fairly the information purported to be shown
therein. The Financial Statements are correct and complete in all
material respects and are in accordance with the books and records
of the Corporations on a cash basis.
(b) Except as set forth in Schedule 2.4(B) hereto,
the Corporations are not subject to any liability (including,
without limitation, unasserted claims, whether known or unknown,
and liabilities for federal, state or local income tax), whether
absolute, contingent, accrued or otherwise, with respect to the
Purchased Assets, the Business or the Centers which is not shown or
which is in excess of the amount shown or reserved for on the
Balance Sheets, other than liabilities of the same class or
category as those set forth on the face of the Balance Sheets which
were reasonably incurred in the ordinary course of business of the
Corporations consistent with past practice after the Balance Sheet
Date (as defined below). Schedule 2.4(B) hereto also sets forth a
true and accurate list of all accounts payable and accrued
liabilities existing as of the date hereof and specifying any
obligations required to be paid during the next three months in the
amount of $10,000 or greater, singularly or in the aggregate.
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2.5 Absence of Certain Developments. Except as
contemplated by this Agreement, or as otherwise set forth on
Schedule 2.5 hereto, since December 31, 1995 (the "Balance Sheet
Date"), the Business has been conducted in all material respects
only in the ordinary course of business consistent with past
practice. Except as set forth on Schedule 2.5 hereto, since the
Balance Sheet Date, there has been (a) no material adverse change
in the Purchased Assets, the Business, the liabilities, operations,
profits, condition (financial or otherwise) or prospects of the
Centers, and, to the best of the Corporations' and Sellers'
knowledge, no fact or condition exists relating specifically to the
Corporation (except for market and industry conditions affecting
providers of diagnostic imaging services generally) or is
contemplated or threatened which might reasonably be expected to
cause such a change in the future, and (b) no damage, destruction,
loss or claim or condemnation or other taking materially and
adversely affecting the Purchased Assets.
2.6 Tangible Personal Property; Title and Liens. (a)
Set forth on Schedule 2.6(A) hereto is a list of all of the
tangible personal property included in the Purchased Assets.
(b) The Corporations have good and marketable title
to all of the Purchased Assets free and clear of all mortgages,
liens, security interests, easements, encumbrances, equities,
claims and obligations to other Persons (as such term and all other
defined terms used herein and not otherwise defined are defined in
Section 10.13) of every kind and character (any of the foregoing,
a "Lien"), other than as set forth on Schedule 2.6(B) hereto (each
Lien expressly set forth on such Schedule is a "Permitted Lien").
Upon delivery to Buyer on the Closing Date of the instruments of
assignment and transfer contemplated by this Agreement, the
Corporations will thereby transfer to and vest in Buyer good and
marketable title to the Purchased Assets, free and clear of all
Liens other than Permitted Liens. The Corporations shall discharge
and indemnify Buyer from and against any and all claims, suits,
actions, proceedings (formal and informal), investigations,
judgments, deficiencies, damages, settlements, liabilities, losses,
costs and legal and other expenses resulting or arising from any
and all Liens existing on the Closing Date (whether inchoate, or
not, and whether perfected or not) on or with respect to any
Purchased Assets, except Permitted Liens. Except as set forth on
Schedule 1.1 hereto, the Purchased Assets constitute all assets and
properties presently used in the operation of the Business as it is
currently being operated.
(c) The real property owned or leased by the
Corporations which is used in the conduct of the Business is set
forth on Schedule 2.6(C). No default or event of default on the
part of the Corporations, and no event which with the giving of<PAGE>
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notice or the passage of time would constitute a default, with
respect to such leases, has occurred and is continuing unremedied
or unwaived.
(d) (i) The Corporations have the right to use
each Proprietary Right listed in Schedule 2.6(D) in the manner and
location now used, and except as otherwise set forth therein, all
of such Proprietary Rights are, and will be on the Closing Date,
free and clear of all royalty obligations and Liens. There are no
claims pending, or, to the Sellers' or Corporations' best
knowledge, threatened against the Corporations that their use of
any of the Proprietary Rights listed on Schedule 2.6(D) infringes
the rights of any Person. The Corporations and the Sellers have no
knowledge of any conflicting use of any of such Proprietary Rights.
(ii) The Corporations have no trade name, service
mark, patent, copyright or trademark related to its Business,
except those which are set forth in Schedule 2.6(D), which are all
those necessary for the operation of the Business as presently
conducted.
(iii) The Corporations are not a party in any
capacity to any franchise, license or royalty agreement respecting
any Proprietary Rights and, there is no conflict with the rights of
others in respect to the Proprietary Rights now used in the conduct
of the Business and the Corporations and the Sellers are unaware of
any facts of circumstances which might give rise to the foregoing.
2.7 Licenses and Authorizations. The Corporations own,
hold or possess all foreign, federal, state or local governmental
licenses, franchises, permits, privileges, approvals and other
authorizations and licenses which are necessary to entitle them to
own or lease the Purchased Assets to conduct and carry on the
Business substantially as presently conducted (the "Licenses"),
except for such Licenses which if not maintained would not have a
material adverse effect on the continuing operation of the Business
at any Center. Set forth on Schedule 2.7 hereto is a list and
brief description of each of the Licenses. Each of the Licenses is
valid and in full force and effect, and will continue in full force
and effect, without default or forfeiture of any rights thereunder
after the consummation of the transactions contemplated hereby. No
notice of cancellation, default or breach of or any dispute
concerning any of the Licenses owned, possessed or held by the
Corporations or of any event or condition or state of facts
described in the next following sentence has been received by the
Corporations or Sellers with respect to any of such Licenses.
There is not now pending, or to the knowledge of the Corporations
or Sellers threatened, any action to revoke, cancel, rescind,
modify or refuse to renew in the ordinary course any of the
Licenses. The Corporations and Sellers have performed and<PAGE>
<PAGE>
fulfilled in all material respects all of their respective obliga-
tions under each of the Licenses, and none of the Corporations or
the Sellers is aware of any event or condition or state of facts
which constitutes or, after notice or lapse of time or both, would
constitute a breach or default under any of such Licenses or which
permits or, after notice or lapse of time or both, would permit
revocation or termination of any of such Licenses or which would
materially adversely affect any of the rights of the Corporations
thereunder.
2.8 Contracts and Other Instruments; Bank Accounts
(a) Schedule 2.8 hereto sets forth a list of all
contracts, agreements, instruments and leases to which the
Corporations or Sellers, on behalf or for the benefit of the
Corporations, are a party or by which they are bound, relating to
the Business or to which any of the Purchased Assets are subject
(collectively, together with any contracts, agreements, instruments
and leases entered into by the Corporations or Sellers with respect
to the Business between the date hereof and the Closing Date
consistent with the terms of this Agreement, being herein called
the "Contracts"). The Corporations and Sellers have provided Buyer
with a true and complete copy of each Contract.
(b) Each of the Contracts constitutes the valid and
binding obligation of the Corporations and/or Sellers and, to the
best of the Corporations' and Sellers' knowledge, the other party
thereto, is in full force and effect. The Corporations and/or
Sellers have performed and fulfilled all of their material
obligations under each of such Contracts required to be performed
as of the date hereof, are not in default or breach thereunder,
and, to the knowledge of the Corporations and Sellers, no other
party is in default or breach thereunder.
2.9 Employees.
(a) Schedule 2.9(A) hereto contains (i) a list of
the names and relationships with the Corporations of all employees
of the Corporations as of the date hereof, (ii) a description of
all agreements (oral or written) with such employees, (iii) the
dates on which such employees commenced working for the
Corporations, (iv) any increase in such employee's compensation
since January 1, 1996, and (v) the compensation of such employees.
Except as set forth on Schedule 2.9(B) hereto, the Corporations are
not a party to any collective bargaining agreement, employment
agreement, retirement plans (whether qualified or non-qualified),
deferred compensation or severance agreement, consulting or
advisory agreement, confidentiality agreement or covenant not to
compete (except as set forth in this Agreement) relating to the
employees or otherwise relating to the Business.<PAGE>
<PAGE>
(b) The Corporations have complied in all material
respects with all applicable laws, rules and regulations affecting
the employment of labor, including, but not limited to, those
relating to wages, hours, discrimination and the payment of social
security, withholding and similar taxes, and is not liable for any
arrears of wages or any penalties for failure to comply with any of
the foregoing. There are no controversies pending, or, to the best
of the Sellers' or Corporations' knowledge, threatened between the
Corporations and any of its employees, or any labor unions or
collective bargaining unit representing or purporting to represent
any of its employees.
2.10 Compliance with Laws; Litigation. The Purchased
Assets and their uses comply with, and the Corporations with
respect to the Purchased Assets and Business are in compliance
with, all applicable laws, regulations, rules, or ordinances of,
and all applicable judgments, writs, decrees, injunctions and
orders of, any foreign, federal, state, local or other governments
or court or governmental departments, commissions, bureaus,
agencies or instrumentalities, including but not limited to, all
healthcare and environmental laws, except where noncompliance would
not have a material adverse effect on the continuing operation of
the Business at any Center. The Corporations are not, with respect
to the Business, the Centers or the Purchased Assets subject to any
judgments, writs, decrees, injunctions or orders of any foreign,
federal, state or local government or court or governmental
department, commission, bureau, agency or instrumentality. Except
as set forth on Schedule 2.10 hereto, there is no suit, action,
administrative proceeding, arbitration or other proceeding or
governmental investigation involving the Corporations or Sellers
pending or, to the best knowledge of the Corporations and Sellers,
threatened against the Corporations or Sellers with respect to the
Business or the Purchased Assets (including, without limitation,
any claim for medical malpractice), nor, to the best knowledge of
Sellers or Corporations, is there any reasonable basis for any of
the same, nor has there been any at any time during the last five
years, and there are no suits, actions, administrative proceedings,
arbitrations or other proceedings or investigations pending in
which the Corporations or Sellers is the plaintiff or claimant
relating to the Purchased Assets. There is no suit, action,
administrative proceeding, arbitration or governmental
investigation involving the Corporations or Sellers, pending or, to
the best knowledge of the Corporations and Sellers, threatened,
which questions the legality, validity or propriety of the
transactions contemplated by this Agreement.
2.11 Machinery, Equipment and Supplies. All machinery,
equipment and supplies of the Corporations included in the
Purchased Assets are in good and usable condition, ordinary wear
and tear excepted.<PAGE>
<PAGE>
2.12 Insurance. Schedule 2.12 hereto sets forth a list
of all policies of insurance in force with respect to the Purchased
Assets, the Centers or the Business. The Corporations have
received no notices of any pending or threatened terminations with
respect to such policies and the Corporations are in compliance
with all material conditions contained therein. All such policies
are valid and enforceable and in full force and effect and are
sufficient for all applicable requirements of law. All such
policies will remain in full force and effect through the Closing
Date.
2.13 Tax and Other Returns and Reports. There are no
pending questions, nor claims asserted for, ad valorem taxes or
assessments upon the Purchased Assets nor are there any tax Liens
outstanding against any of the Purchased Assets. The Corporations
have paid or caused to be paid to Federal, state and local
authorities all amounts required to be paid by Federal, state and
local law or regulations with respect to withholding from the wages
of the Corporations' employees.
2.14 Accounts Receivable; Accounts Payable.
(a) The Corporations have good title, free and
clear of all Liens except Permitted Liens, to the receivables
reflected on their balance sheets ("Accounts Receivable"). The
Accounts Receivable have arisen from bona fide transactions entered
into in the ordinary course of business (provided, however, that
neither the Corporations nor the Sellers guarantees collection
thereof) and are not in dispute or subject to defense, counterclaim
or set-off.
(b) All of the Corporations' trade and lender
accounts payable and any other obligation relating to the Business
are, and shall be at the Closing Date, current in accordance with
their terms.
2.15 Environmental Matters. To the best of
Corporations' knowledge after due inquiry by the Corporations,
there has been:
(a) no release or threatened release of any
hazardous substance, pollutant or contaminant as each such term
presently is defined by the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, resulting from any
activity by or on behalf of the Corporations or any predecessor in
interest, including but not limited to, the generation, handling,
storage, treatment, transportation or disposal of any hazardous
substance, pollutant or contaminant at the premises on which the
Centers are located (the "Premises");<PAGE>
<PAGE>
(b) past or future action taken or to be taken by
any federal, state or local entity or by any private party under
any federal, state or local statute, rule, regulation or guideline
concerning the release of any hazardous substance, pollutant or
contaminant into the soil, air, surface or subsurface waters or the
environment in general from the Premises; and
(c) claims or actions brought or which may be
brought by any third party for damages occurring at or outside of
the Premises resulting from the alleged release or threatened
release of any hazardous substance, pollutant or contaminant by the
Corporations or any predecessor in interest, including but not
limited to, claims for health effects to persons, property damage
and/or damage to natural resources; nor do the Corporations have
any knowledge of any basis for any of the foregoing.
2.16 Brokers. Neither the Corporations, Sellers nor any
Affiliate of the Corporations or Sellers has incurred any liability
or obligation to any broker, finder or agent for any brokerage
fees, finder's fees or commissions with respect to the transactions
contemplated by this Agreement.
2.17 Disclosure. No representation or warranty by the
Corporations or Sellers contain, or on the Closing Date will
contain, any untrue statement of material fact or omits, or on the
Closing Date will omit to state, a material fact necessary to make
the statements not misleading.
2.18 Investment Intent. The Corporations and the Sellers
are acquiring the Closing Shares which are issuable under this
Agreement for investment for their own account, not as a nominee or
agent, and not with the view to, or for resale in connection with,
any distribution thereof and understands that the Closing Shares
are being offered under an exemption in Section 4(2) of the
Securities Act upon reliance on such representation. Each
Corporation and Seller is an "accredited investor" as such term is
defined in Rule 501(a) under the Securities Act. Each Corporation
and Seller understands that the Closing Shares which are issuable
hereunder, have not been, and will not as of the Closing Date be,
registered under the Securities Act. Each Corporation and Seller
acknowledges that the Closing Shares which are issuable hereunder
must be held indefinitely until subsequently registered under the
Securities Act or unless an exemption from such registration is
available. Each Corporation and Seller is aware of the provisions
of Rule 144 promulgated under the Securities Act which permit
limited resale of shares subject to the satisfaction of the
requirements set forth therein.
<PAGE>
<PAGE>
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER AND MRI
As an inducement to the Corporations and the Sellers
to enter into this Agreement and to consummate the transactions
contemplated hereby, Buyer and MRI jointly and severally represent
and warrant to the Corporations and the Sellers and agree as
follows:
3.1 Organization. Each of Buyer and MRI is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of Buyer and MRI has
all requisite corporate power and authority to own or lease its
properties and assets and to conduct its business as presently
conducted. Buyer is a wholly owned subsidiary of MRI.
3.2 Authority to Effect Transactions. (a) Each of
Buyer and MRI has all requisite corporate power and authority to
execute, deliver and perform this Agreement and Buyer's Closing
Documents. All necessary corporate action on the part of Buyer and
MRI has been duly taken to authorize the execution, delivery and
performance of this Agreement and Buyer's Closing Documents. This
Agreement has been duly authorized, executed and delivered by Buyer
and MRI, and is the legal, valid and binding obligation of Buyer
and MRI enforceable against Buyer and MRI in accordance with its
terms. Buyer's Closing Documents have been duly authorized by
Buyer and, upon execution and delivery by Buyer as contemplated
hereby, will be the legal, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with their terms.
(b) (i) No consent, authorization, approval, order,
license, certificate or permit of or from, or declaration or filing
with, any foreign, federal, state, local or other governmental
authority or regulating body or any court or other tribunal or any
party to any contract, agreement, instrument, lease or license to
which Buyer or MRI is a party or by which it is bound, is required
for the execution, delivery or performance by Buyer or MRI of this
Agreement or any of Buyer's Closing Documents or in connection
therewith or for consummation of the transactions contemplated
hereby or thereby and (ii) neither the execution, delivery or
performance by Buyer or MRI of this Agreement or any of Buyer's
Closing Documents, nor the consummation of the transactions contem-
plated hereby or thereby (w) conflicts with or will conflict with
or (with or without the giving of notice or the passage of time or
both) results or will result in a breach of the terms, conditions
or provisions of, (x) constitutes or will constitute a default
under, (y) constitutes or will constitute an event creating rights
of acceleration, termination or cancellation, or loss of rights<PAGE>
<PAGE>
under, or (z) results or will result in a violation of, (A) the
certificate of incorporation or by-laws, each as amended to date,
of Buyer or MRI, (B) any law, statute, rule, regulation, order,
award, judgment or decree to which Buyer or MRI is subject, or (c)
any contract, agreement, instrument, lease or license to which
Buyer or MRI is a party or by which it is bound.
3.3 Litigation. There is no suit, action,
administrative proceeding, arbitration or other proceeding or
governmental investigation (including by the SEC or The Nasdaq
Stock Market) pending or, to the best knowledge of Buyer or MRI,
threatened against Buyer or any MRI Group Entity, which questions
the legality, validity or propriety of the transactions
contemplated by this Agreement, which would reasonably be expected
to have a material adverse effect on the business of MRI and its
subsidiaries taken as whole, which would suspend or disqualify
trading of the MRI Common Stock on The Nasdaq Stock Market or which
would cause the SEC to refuse to review the registration statement
to be filed pursuant to Section 1.8.
3.4 SEC Reports. Since September 1, 1995, MRI and its
subsidiaries have timely filed (i) all forms, reports, statements
and other documents required to be filed with (A) the SEC,
including, without limitation (1) all Annual Reports on Form 10-K,
(2) all Quarterly Reports on Form 10-Q, (3) all proxy statements
relating to meetings of stockholders (whether annual or special),
(4) all Current Reports on Form 8-K, (5) all other reports or
registration statements and (6) all amendments and supplements to
all such reports and registration statements (collectively, the
"SEC Reports"), (B) The Nasdaq Stock Market and (C) any other
applicable state securities authorities and (ii) all forms,
reports, statements and other documents required to be filed with
any other applicable federal or state regulatory authorities,
except where the failure to file any such forms, reports,
statements or other documents would not have an material adverse
effect on MRI's or Buyer's ability to perform the transactions
contemplated hereby (all such forms, reports, statements and other
documents in clauses (i) and (ii) of this Section 3.4 being
referred to herein, collectively, as the "Reports"). The Reports,
including all Reports filed after the date of this Agreement and
prior to the Closing Date (x) were or will be prepared in all
material respects in accordance with the requirements of applicable
law (including, with respect to the SEC Reports, the Securities Act
and the Securities Exchange Act of 1934, as the case may be, and
the rules and regulations of the SEC thereunder applicable to such
SEC Reports) and (y) did not at the time they were filed, or will
not at the time they are filed, contain any untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were<PAGE>
<PAGE>
made, not misleading. MRI agrees to file in a timely manner all
Reports after the date of this Agreement and prior to the date the
registration statement pursuant to Section 1.8 is no longer
required to remain effective. The outstanding shares of MRI Common
Stock are duly qualified for listing on The Nasdaq Stock Market.
ARTICLE 4
CONDUCT OF BUSINESS AND TRANSACTIONS PRIOR TO CLOSING
Between the date hereof and the Closing Date:
4.1 Access. The Corporations shall (a) afford to the
officers, stockholders, employees, consultants, attorneys, agents,
engineers, accountants and other representatives ("Agents") of
Buyer and of any prospective lenders or to investors in Buyer or
its Affiliates (the "Buyer's Lenders and Investors") free and full
access to the properties, assets, books and records of the
Corporations relating to the Purchased Assets, (b) permit them to
make extracts from and copies of such books and records and (c)
from time to time furnish to Buyer, Buyer's Agents or Buyer's
Lenders and Investors such financial and operating data and other
information concerning the results of operations of the Centers and
the Business as Buyer may reasonably request including all interim
financial statements with respect to the Centers. No investigation
by or on behalf of Buyer shall affect the representations and
warranties of Sellers and the Corporations hereunder.
4.2 Conduct of Business. The Corporations, Sellers,
Buyer and MRI shall refrain from taking any action which would
render any of their respective representations and warranties
inaccurate in any material respect as of the Closing Date, except
for changes therein permitted by this Agreement or resulting from
transactions carried out pursuant to this Agreement. Each party
shall promptly notify the other of any action, suit, proceeding or
investigation that may be threatened, brought, asserted or
commenced of which it becomes aware that would have been required
to be disclosed hereunder or listed, in the case of the
Corporations or the Sellers, on Schedule 2.10 hereto, if such
action, suit, proceeding or investigation had arisen or were in
existence on or prior to the date hereof. The Corporations and
Sellers shall act diligently and reasonably (a) to preserve the
Purchased Assets, (b) to keep available, if so requested by Buyer,
the services of the present personnel of the Centers, (c) to
preserve the goodwill of suppliers and customers of the Centers and
others having business relations therewith, (d) to comply with all
applicable laws, rules and regulations and (e) to prepare and file
all tax returns required to be filed. Except as otherwise contem-
plated by this Agreement or consented to in writing by Buyer, the
Corporations shall conduct the Business and operations of the<PAGE>
<PAGE>
Centers in all material respects only in the ordinary course and
substantially as presently operated. Notwithstanding the
foregoing, except as otherwise contemplated by this Agreement or
consented to in writing by Buyer, neither Corporation shall, (i)
except in the ordinary course of business, sell, lease, transfer or
otherwise dispose of (including transfers to any Affiliates of the
Corporations), or mortgage or pledge, or impose or suffer to be
imposed any Lien on, any Purchased Assets, or enter into any
arrangement to do any of the foregoing; (ii) increase the
compensation payable to any employee except raises in the ordinary
course consistent with past practice; (iii) enter into any material
service or equipment contract; (iv) incur any material loss of
customers (defined as any customers, the revenues from which
constituted greater than 5% of the total 1995 revenues of Belle-
Meade or 1101); or (v) take any action or fail to take any action
which would cause any representation made in Article Two not to be
true and correct on the Closing Date. Until January 2, 1997,
Sellers and the Corporations shall not (i) sell, agree or offer to
sell, or negotiate for the purpose of selling, to any person other
than Buyer any material asset of the Corporations, except in the
ordinary course of the Corporations' business, or (ii) enter into
any joint venture, lease or other agreement or transaction not in
the ordinary course of business, or negotiate for the purpose of
entering into any such agreement or transaction, or (iii) take any
action which could have the effect of precluding the consummation
of the transaction contemplated hereby.
4.3 Maintenance. The Corporations shall act reasonably
and in accordance with their prior practice with respect to the
Business to preserve, maintain in good and usable condition and
insure and repair the Purchased Assets in the ordinary course. In
the event of any material loss of, or material damage to, the
Purchased Assets prior to the Closing, the Corporations shall
either pay the lesser of the repair or replacement cost thereof to
Buyer at the Closing or, at the option of Buyer, promptly repair or
replace the lost or damaged assets in order to minimize the
interruption to the Business.
4.4 Consents and Approvals. Sellers and the
Corporations shall act diligently and reasonably to secure the
consents and approvals of any governmental agencies and authorities
and any other Persons, as set forth on Schedule 2.2(B) annexed
hereto, required to be obtained to effect the transactions
contemplated hereby or to otherwise satisfy the conditions set
forth in Sections 5.4 and 5.5 hereof, provided that Sellers and the
Corporations shall not make any agreement or understanding
affecting the Centers or the Business as a condition for obtaining
any such consent or waiver except with the prior written consent of
Buyer and except that Sellers, the Corporation and Buyer shall not
be required to pay any consideration in order to obtain a consent<PAGE>
<PAGE>
or a waiver. Buyer shall act diligently and reasonably to
cooperate with Sellers and the Corporations to obtain the consents
or approvals contemplated by this Section 4.4.
4.5 Renewal of Assumed Contracts. The Corporations and
Sellers shall keep Buyer fully informed of all significant
developments with respect to the renewal of any Assumed Contracts
that are scheduled to expire between the date hereof and the
Termination Date. The Corporations shall use their best efforts to
renew any Assumed Contracts listed on Schedule 1.4(B) hereof that
are scheduled to expire during such period on terms no less
favorable than those currently prevailing.
4.6 Retained Liabilities. The Corporations agree to
pay all Retained Liabilities and to indemnify Buyer from any
liability thereunder.
4.7 Employees. Buyer shall make an offer of
employment to each of the Corporations' employees employed at the
Centers (the "Employees") for employment by Buyer at the Centers
from and after the Closing Date upon such employment terms as Buyer
shall determine in its sole discretion. As to any Employees which
decide not to enter into Buyer's employ on the Closing Date, the
Corporations shall be solely responsible for (i) properly notifying
such Employees of their termination, and (ii) making all severance
and other related payments, including but not limited to payments
for accrued vacation and accrued sick days, if any.
ARTICLE 5
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of Buyer under this Agreement shall
be subject, at the option of Buyer, to the fulfillment of each of
the following conditions as of the Closing Date:
5.1 Accuracy of Representations and Compliance with
Conditions. All representations and warranties of Sellers and the
Corporations contained in this Agreement shall be true and accurate
when made and, except (a) as a result of the taking of any action
contemplated hereby or (b) insofar as any representation or
warranty relates to any specified earlier date, shall be true and
accurate as of the Closing Date, as though such representations and
warranties were then made by Sellers and the Corporations; and
Sellers or the Corporations shall have performed and complied with
all of their covenants and agreements set forth in this Agreement
to be performed or complied with at or before the Closing.<PAGE>
<PAGE>
5.2 No Changes or Destruction of Property. Between the
date hereof and the Closing Date, there shall have been (a) no
material adverse change in the Business or the Purchased Assets;
(b) no damage, destruction, loss or claim or condemnation or other
taking materially adversely affecting the Business or the Purchased
Assets; and (c) no lawsuit, proceeding or claim filed or asserted
against either Sellers or the Corporations that, if adversely
determined, could reasonably be expected to have a material adverse
effect on the Business or the Purchased Assets.
5.3 Opinion of Counsel for Sellers and the Corporations.
Buyer shall have received from counsel to Sellers and the
Corporations, an opinion dated the Closing Date in the form set
forth in Exhibit E hereto.
5.4 Necessary Government Approvals. The parties shall
have received all governmental and regulatory approvals, actions
and consents, if any, necessary to consummate the transactions
contemplated hereby.
5.5 Necessary Consents. The parties shall have received
written consents, in form and substance reasonably satisfactory to
Buyer, to the transactions contemplated hereby from all Persons
whose consent is required therefor, as set forth on Schedule 2.2(B)
or otherwise under any Assumed Contract.
5.6 Review of Proceedings. All actions, proceedings,
instruments and documents required to carry out the transactions
contemplated by this Agreement or any other agreement to be
executed and delivered by any of the parties hereunder or in
connection herewith shall be subject to the reasonable approval of
Buyer's counsel, and Sellers and the Corporations shall have
furnished to such counsel such documents as such counsel may have
reasonably requested for the purpose of enabling such counsel to
pass upon legal matters incidental thereto.
5.7 Threatened or Pending Proceedings. No proceedings
shall have been initiated or threatened by any governmental
department, commission, bureau, board, agency or instrumentality
seeking to enjoin or otherwise restrain the consummation of the
transactions contemplated hereby.
5.8 Deliveries Complete. All documents required to have
been delivered by Sellers and the Corporations to Buyer, including
each of the certificates, instruments and documents listed on
Schedule 5.8 hereto, and all actions required under this Agreement
to have been taken by Sellers or the Corporations, at or prior to
the Closing shall have been delivered or taken.
<PAGE>
<PAGE>
5.9 Accounts Payable. All trade and lender accounts
payable and any other obligation relating to the Business shall, as
of the Closing Date, be current in accordance with their terms.
5.10 Closing Certificate. On the Closing Date, the
Corporations and Sellers shall deliver to Buyer a closing
certificate in the form of Exhibit F signed by the President of
each Corporation and each of the Sellers to the effect that: (a)
all representations and warranties of Sellers and the Corporations
contained in this Agreement are true and correct as if made on and
as of such date, except (i) as a result of the taking of any action
contemplated hereby and (ii) insofar as any such representation or
warranty relates to a specified earlier date; (b) the Sellers and
the Corporations have performed and complied with all of their
covenants and agreements set forth in this Agreement to be
performed or complied with at or before the Closing; and (c) each
of the other conditions precedent to Buyer's obligations to close
under this Agreement has been fulfilled.
5.11 Assumption of Leases. The landlords for the
premises on which the Centers are located shall have agreed to the
assumption by Buyer of the leases for such premises.
ARTICLE 6
CONDITIONS TO OBLIGATIONS OF THE CORPORATIONS AND SELLERS
The obligations of the Corporations and Sellers
under this Agreement shall be subject, at the option of the
Corporations and Sellers, to the fulfillment of each of the
following conditions as of the Closing Date:
6.1 Accuracy of Representations and Compliance with
Conditions. All representations and warranties of Buyer contained
in this Agreement shall be true and accurate when made and, except
(a) as a result of the taking of any action contemplated hereby or
(b) insofar as any representation or warranty relates to any
specified earlier date, shall be true and accurate as of the
Closing Date, as though such representations and warranties were
then made by Buyer; and Buyer shall have performed and complied
with all of its covenants and agreements set forth in this
Agreement to be performed or complied with at or before the
Closing.
6.2 Review of Proceedings. All actions, proceedings,
instruments and documents required to carry out the transactions
contemplated by this Agreement or any other agreement to be
executed and delivered by any of the parties hereunder or in
connection herewith shall be subject to the reasonable approval of
the Corporations' counsel, and Buyer shall have furnished to such<PAGE>
<PAGE>
counsel such documents as such counsel may have reasonably
requested for the purpose of enabling such counsel to pass upon
legal matters incidental thereto.
6.3 Threatened or Pending Proceedings. No proceedings
shall have been initiated or threatened by any governmental
department, commission, bureau, board, agency or instrumentality
seeking to enjoin or otherwise restrain the consummation of the
transactions contemplated hereby.
6.4 Opinion of Counsel to Buyer. Sellers shall have
received from Werbel & Carnelutti, counsel for Buyer, an opinion
dated the Closing Date in the form set forth in Exhibit G hereto.
6.5 Deliveries Complete. All documents required to have
been delivered by Buyer to the Corporations and Sellers, including
each of the certificates, instruments and documents listed on
Schedule 6.5 hereto, and all actions required under this Agreement
to have been taken by Buyer, at or prior to the Closing shall have
been delivered or taken.
6.6 Necessary Government Approvals. The parties shall
have received all governmental and regulatory approvals, actions
and consents necessary to consummate the transactions contemplated
hereby.
6.7 Closing Certificate. On the Closing Date, Buyer and
MRI shall deliver to the Corporations a certificate in the form of
Exhibit H signed by the President (or a Vice President) of Buyer
and MRI to the effect that: (a) all representations and warranties
of Buyer and MRI contained in this Agreement are true and correct
as if made on and as of such date, except (i) as a result of the
taking of any action contemplated hereby and (ii) insofar as any
such representation or warranty relates to a specified earlier
date; (b) Buyer and MRI have performed and complied with all of
their covenants and agreements set forth in this Agreement to be
performed or complied with at or before the Closing; and (c) each
of the other conditions precedent to Sellers' obligations to close
under this Agreement has been fulfilled.
6.8 Necessary Consents. The parties shall have received
written consents from all Persons whose consent is required
therefor for the assignment and assumption of any Assumed Contract
as set forth on Schedule 2.2(B) and the Corporations shall have
obtained releases with respect to such Assumed Contracts.
<PAGE>
<PAGE>
ARTICLE 7
TRANSACTIONS SUBSEQUENT TO CLOSING
7.1 Record Retention; Access. Buyer shall retain the
books and records of the Centers and the Purchased Assets
transferred to Buyer hereunder for a period of not less than four
(4) years; provided, however, that Buyer shall have the right to
dispose of or destroy any such books and records at any earlier
time upon giving the Corporations reasonable notice of such intent
and the right to obtain from Buyer those books and records which it
intends to dispose of or destroy. The Corporations shall have the
right, at the expense of the Corporations,
(i) of reasonable access to and examination of such
records and books for a period of four (4) years from and after the
Closing Date upon reasonable notice to Buyer and during normal
business hours and
(ii) to make copies of such of the books, contracts
and records included in the Purchased Assets as are in Buyer's
possession which relate to any period prior to the Closing. With
the approval of Buyer, which approval shall not be unreasonably
withheld or delayed, the Corporation may remove from Buyer's
possession the originals of such of the books and records included
in the Purchased Assets as the Corporations may require, for use in
litigation, provided that the Corporations shall indemnify Buyer
against losses, expenses, or damages resulting from the loss,
destruction or nonreturn of such books and records.
7.2 Power of Attorney. Effective upon Closing, the
Corporations constitute and appoint the Buyer and its successors
and assigns, the true and lawful attorneys for the Corporations,
with full power of substitution, in the name of the Corporations,
but on behalf of and for the benefit of and at the expense of the
Buyer, to institute and prosecute, in the name of the Corporations
or otherwise, all proceedings which the Buyer may deem proper in
order to collect, assert or enforce any claim, right or title of
any kind in or to the Purchased Assets, to defend and compromise
any and all actions, suits or proceedings in respect of any of such
Purchased Assets, and to do all such acts and things in relation
thereto as the Buyer shall deem advisable. Buyer shall use
reasonably diligent efforts to give the Corporations written notice
of Buyer's exercise of the foregoing power. The foregoing powers
are and shall be coupled with an interest and shall be irrevocable
by the Corporations or by the Corporations' dissolution or in any
manner or for any reason. The Buyer shall retain for its own
account any amounts collected pursuant to the foregoing powers,
including any sums payable in respect thereof, and the Corporations<PAGE>
<PAGE>
shall promptly pay to the Buyer, when received, any amounts which
shall be received by the Corporations in respect of the Purchased
Assets as provided herein.
7.3 Further Actions. At any time and from time to time
after the Closing, each party hereto agrees, at its own expense
(except as otherwise provided herein), to take such actions and to
execute and deliver such documents as may be reasonably necessary
to effectuate the purposes of this Agreement.
ARTICLE 8
CONFIDENTIALITY AND NON-COMPETE
8.1 Confidentiality. (a) Prior to and immediately
after the Closing, no party to this Agreement shall directly or
indirectly make or cause to be made any public announcement or
disclosure, or issue any notice with respect to this Agreement or
the transactions contemplated hereby without the prior consent of
the other parties hereto, except for any disclosure or notice
required, based upon the advice of MRI's counsel, to be made by
MRI, including, but not limited to a press release announcing the
transaction contemplated by this Agreement, which disclosure or
notice Buyer shall make available to Sellers for Sellers' review
and comment and with respect to which Sellers shall respond to in
a timely manner. In the event this Agreement terminates without
the purchase and sale of the Purchased Assets having taken place,
the parties and their respective Affiliates and Agents will (i)
hold in confidence and refrain from using all non-public
information received in connection with the transactions contem-
plated in this Agreement, and (ii) promptly return all such non-
public information and any and all copies thereof to the party to
which such information relates. The Corporations and the Sellers
acknowledge that the common stock of Buyer's parent, MRI, is
publicly traded and agree to refrain from using non-public
information regarding this transaction in connection with the
purchase or sale of such securities.
(b) During the period commencing on the date hereof
and ending five years from the date hereof, neither the
Corporations or Sellers nor any Affiliate of the Corporations or
Sellers shall disclose intentionally to anyone, or use or otherwise
exploit for the Corporations' or Sellers' or any Affiliate of the
Corporations or Sellers benefit, or for the benefit of anyone other
than Buyer or MRI Group Entities, (i) any confidential information
of Buyer or MRI Group Entities relating to the Business or the
Centers, including, without limitation, any trade secrets, customer
lists, details of client or consultant contracts, marketing plans,
product or service development plans, business acquisition plans of<PAGE>
<PAGE>
the Buyer or MRI Group Entities related to the Business, or (ii)
any portion or phase of any technical information, ideas, "know-
how", discoveries, product designs, computer programs (including
source or object codes), processes, procedures, formulae or
improvements relating to the Centers that is valuable, and whether
or not in written or tangible form, and including all memoranda,
notes, plans, reports, records, documents and other evidence
thereof (all such information, documents and materials being
hereinafter called "Confidential Information").
(c) The foregoing notwithstanding, the term
"Confidential Information" does not include, and there shall be no
obligation hereunder with respect to, (i) information that becomes
generally available to the public, other than as a result of a
disclosure by the Corporations or Sellers or any Affiliate of the
Corporations or Sellers or any agent or other representative
thereof, and (ii) business know-how, marketing and development
techniques and technical methods applicable to diagnostic imaging
businesses generally. Neither the Corporations or Sellers nor any
Affiliate of the Corporations or Sellers shall have any obligation
hereunder to keep confidential any Confidential Information if and
to the extent disclosure of any thereof is required by law, and the
Corporations or Sellers or any Affiliate of the Corporations or
Sellers concerned shall provide Buyer with prompt notice of such
requirement, prior to making any disclosure, so that the Buyer may
seek an appropriate protective or restrictive order.
(d) At the request of Buyer, the Corporations and
Sellers agree to deliver to Buyer, at any time during the term of
this Agreement, all Confidential Information which any of them may
possess or control.
8.2 Non-Competition/Noninterference. During the period
commencing on the date hereof and ending five years from the date
hereof, neither the Corporations or Sellers nor any Affiliate of
the Corporations or Sellers shall, directly or indirectly:
(a) anywhere within a fifteen (15) mile radius of
the Centers own, manage, operate, advise (whether or not for
compensation), control, or invest or acquire an interest in any
business, or otherwise engage or participate in, whether as a
proprietor, partner, stockholder, director, officer, Key Employee,
joint venturer, lender, advisor, consultant, investor or other
participant, in any business (a "Competitive Business") which
competes, directly or indirectly, with the Business of the Centers;
provided however that (i) Chase Riley and Michael Griffin shall be
permitted to continue their current occupation of distributing
medical equipment to customers, including customers and physicians
in businesses which may be deemed to be Competitive Businesses and
(ii) Sellers shall be permitted to operate only ultrasound, general<PAGE>
<PAGE>
x-ray and advanced mammography systems equipment (magnetic
resonance imaging unit) at 2001 Marcus Avenue, New Hyde Park, New
York, New York, provided that Sellers shall only be permitted to
use such mammography equipment for magnetic resonance imaging of
the human breast.
(b) solicit, induce or influence any customer,
supplier, or any other person or entity which has a business
relationship with Buyer or any MRI Group Entity to discontinue or
reduce the extent of such relationship with Buyer or any MRI Group
Entity; or
(c) (i) recruit, solicit or otherwise induce or
influence any employee of Buyer or any MRI Group Entity to
discontinue such employment with Buyer or any MRI Group Entity or
any radiologist who, at the time has a business relationship with
Buyer or any MRI Group Entity, from discontinuing such relationship
with Buyer or an MRI Group Entity, or (ii) employ or seek to
employ, or cause any Competitive Business or permit any Competitive
Business to employ or seek to employ, any person who is then (or
was at any time within six months prior to the date any Seller,
Seller's Affiliate or the Competitive Business employs or seeks to
employ such person) employed by Buyer or any MRI Group Entity.
(d) Notwithstanding the foregoing, the provisions
of this Section 8.2 will not be deemed breached because (i) any
Corporation or Seller beneficially owns, in the aggregate, not more
than 5% of the outstanding common stock of a corporation, if, at
the time of its acquisition by such Seller, such stock is listed on
a national securities exchange, is reported on Nasdaq or is
regularly traded in the over-the-counter market by a member of a
national securities exchange or (ii) by virtue of Brower's equity
ownership in Nydic.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnity by the Corporations and Sellers. The
Corporations and Sellers, jointly and severally, agree to indemnify
and hold harmless Buyer and its successors and assigns and its and
their respective officers, directors, controlling Persons (if any),
employees, attorneys, agents, Affiliates, partners and stockhold-
ers, in each case past, present, or as they may exist at any time
after the date of this Agreement (including Buyer, the "Buyer
Indemnitees") against and in respect of any and all:
<PAGE>
<PAGE>
(a) claims, suits, actions, proceedings (formal and
informal), investigations, judgments, deficiencies, damages,
settlements, liabilities, losses, costs and legal and other
expenses arising out of or based upon (i) any breach of any
representation, warranty, covenant or agreement of any Seller or
either Corporation contained in this Agreement or in any other
agreement executed and delivered by any Seller or either
Corporation hereunder or in connection herewith, (ii) all Retained
Liabilities and any other obligation or liability of the
Corporations of any nature, accrued or contingent, not assumed by
Buyer in accordance with Section 1.4 of this Agreement; and
(b) claims, suits, actions and proceedings,
including, but not limited to, professional liability claims of
Persons not a party to this Agreement and related investigations,
judgments, deficiencies, damages, settlements, liabilities, losses,
costs and legal and other expenses arising therefrom and from
events occurring on or prior to the Closing Date relating to the
Purchased Assets or the operation or conduct of the Business other
than the Assumed Liabilities.
Notwithstanding the foregoing, Buyer shall not be
entitled to indemnification for any amounts with respect to which
Buyer is actually reimbursed under an insurance policy.
9.2 Indemnity by Buyer and MRI. Buyer and MRI agree to
indemnify and hold harmless the Corporations and Sellers and their
successors and assigns and its partners, controlling Persons (if
any), employees, attorneys, agents, Affiliates, partners (including
the Corporations and Sellers, the "Seller Indemnitees") against and
in respect of any and all
(a) claims, suits, actions, proceedings (formal and
informal), investigations, judgments, deficiencies, damages,
settlements, liabilities, losses, costs and legal and other
expenses arising out of or based upon (i) any breach of any
representation, warranty, covenant or agreement of Buyer or MRI
contained in this Agreement, or in any other agreement executed and
delivered by Buyer or MRI hereunder or in connection herewith and
(ii) the Assumed Liabilities pursuant to Section 1.4 of this
Agreement; and
(b) claims, suits, actions and proceedings (formal
and informal) of Persons not a party to this Agreement and related
investigations, judgments, deficiencies, damages, settlements, lia-
bilities, losses, costs and legal and other expenses arising from
events occurring after the Closing Date relating to the
Corporations or the operation or conduct of the Business except to<PAGE>
<PAGE>
the extent that same results from the breach of any representation
or warranty of Sellers or the Corporations hereunder.
9.3 Defense of Claims. Any Buyer Indemnitee or Seller
Indemnitee (the "Indemnified Party") seeking indemnification under
this Agreement shall give to the party obligated to provide
indemnification to such Indemnified Party (the "Indemnitor") a
notice (a "Claim Notice") describing in reasonable detail the facts
giving rise to any claim for indemnification hereunder promptly
upon learning of the existence of such claim. Upon receipt by the
Indemnitor of a Claim Notice from an Indemnified Party with respect
to any claim of a third party, such Indemnitor may assume the
defense thereof with counsel reasonably satisfactory to the
Indemnified Party and, in such event, shall agree to pay and
otherwise discharge with the Indemnitor's own assets all judgments,
deficiencies, damages, settlements, liabilities, losses, costs and
legal and other expenses related thereto; and the Indemnified Party
shall cooperate in the defense or prosecution thereof and shall
furnish such records, information and testimony and attend all such
conferences, discovery proceedings, hearings, trials and appeals as
may be reasonably requested in connection therewith. If the
Indemnitor does not assume the defense thereof, the Indemnitor
shall similarly cooperate with the Indemnified Party in such
defense or prosecution. The Indemnified Party shall have the right
to participate in the defense or prosecution of any lawsuit with
respect to which the Indemnitor has assumed the defense and to
employ its own counsel therein, but the fees and expenses of such
counsel shall be at the expense of the Indemnified Party unless (i)
the Indemnitor shall not have promptly employed counsel reasonably
satisfactory to such Indemnified Party to take charge of the
defense of such action or (ii) such Indemnified Party shall have
reasonably concluded that there exists a significant conflict of
interest with respect to the conduct of such Indemnified Party's
defense by the Indemnitor, in either of which events such fees and
expenses shall be borne by the Indemnitor and the Indemnitor shall
not have the right to direct the defense of any such action on
behalf of the Indemnified Party. The Indemnitor shall have the
right, in its sole discretion, to settle any claim solely for
monetary damages for which indemnification has been sought and is
available hereunder, provided that the Indemnitor shall not agree
to the settlement of any claim which constitutes the subject of a
Claim Notice which settlement in the reasonable opinion of the
Indemnified Party would have an adverse continuing effect on the
business of the Indemnified Party without the prior written consent
of the Indemnified Party. The Indemnified Party shall give written
notice to the Indemnitor of any proposed settlement of any suit,
which settlement the Indemnitor may, if it shall have assumed the
defense of the suit, reject in its reasonable judgment within 10
days of receipt of such notice. Notwithstanding the foregoing the
Indemnified Party shall have the right to pay or settle any suit<PAGE>
<PAGE>
for which indemnification has been sought and is available
hereunder, provided that, if the defense of such claim shall have
been assumed by the Indemnitor, the Indemnified Party shall
automatically be deemed to have waived any right to indemnification
hereunder.
9.4 Limits on Recovery. (a) Notwithstanding anything in
Sections 9.1 or 9.2 to the contrary, an Indemnitor shall only be
required to indemnify an Indemnified Party pursuant to such
sections with respect to a particular claim for damages, claims or
other amounts for which the Indemnified Party is entitled to
indemnification pursuant to such sections to the extent the
Indemnified Party delivers to the Indemnitor a Claim Notice
relating to such claim within two (2) years from the Closing Date;
provided, however, that with respect to a claim by an Indemnified
Party involving professional liability or malpractice claims
against the Indemnified Party or liability for taxes, such
Indemnified Party shall be entitled to indemnification pursuant to
Sections 9.1 or 9.2, as the case may be, until the relevant statute
of limitations under applicable law relating to such specific claim
has expired.
(b) Neither the Corporations or Sellers (pursuant
to Section 9.1) nor Buyer or MRI (pursuant to Section 9.2) shall be
required to indemnify the other party pursuant to such sections
unless the aggregate amount of damages, claims or other amounts for
which the Indemnified Party is entitled to indemnification pursuant
to such sections (the "Damages") exceeds $10,000 (the
"Indemnification Threshold"), provided that if such aggregate
amount of Damages exceeds the Indemnification Threshold, the
Indemnitor shall indemnify the Indemnified Party for the entire
amount of Damages and not merely for the amount of Damages which
exceeds $10,000.
ARTICLE 10
MISCELLANEOUS
10.1 Bulk Sales Laws. Buyer waives compliance by the
Corporations with any applicable bulk sales law and Sellers hereby
agree to indemnify Buyer from any liability thereunder.
10.2 Expenses. Each party hereto shall pay its own
expenses incident to the negotiation, preparation and consummation
of this Agreement and all other agreements, instruments and
documents executed and delivered by it hereunder or in connection
herewith, including all fees and expenses of its or their
respective counsel and accountants, whether or not the transactions
contemplated hereby or thereby are consummated.<PAGE>
<PAGE>
10.3 Survival. The representations, warranties,
covenants and agreements contained in or made pursuant to this
Agreement shall survive the Closing, except to the extent that they
relate to a specified earlier date.
10.4 Entire Agreement; Modification. This Agreement
(including the Schedules and Exhibits hereto) sets forth the entire
understanding of the parties with respect to the subject matter
hereof, supersedes all existing agreements among them concerning
such subject matter and may be modified only by a written
instrument duly executed by each party hereto.
10.5 Notices. Any notice given pursuant to this
Agreement to any party hereto shall be deemed to have been duly
given when mailed by registered or certified mail, return receipt
requested, or when hand delivered as follows:
If to any Seller or the Corporations:
6 Bayview Avenue
Northport, New York 11768
with a copy to:
Jim Brower
11 Martin Drive
West Nyack, New York 10994
If to Buyer or MRI:
Smith Garden Resources, Inc.
c/o Medical Resources, Inc.
155 State Street
Hackensack, New Jersey 07601
Attention: Mr. William D. Farrell
with a copy to:
Werbel & Carnelutti
711 Fifth Avenue
New York, New York 10022
Attention: Stephen M. Davis, Esq.
or at such other address as either such party shall from time to
time designate by written notice, in the manner provided herein, to
the other party hereto. All references to days in this Agreement
shall be deemed to refer to calendar days, unless otherwise
specified.
<PAGE>
<PAGE>
10.6 Waiver. Any waiver must be in writing, and any
waiver by any party of a breach of any provision of this Agreement
shall not operate as or be construed to be a waiver of any other
breach of that provision or of any breach of any other provision of
this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement on one or more occasions
will not be considered a waiver or deprive that party of the right
thereafter to insist upon strict adherence to that term or any
other term of this Agreement.
10.7 Binding Effect; Assignment. (a) Neither this
Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by either of the parties hereto without the prior
written consent of the other party, and any purported assignment
without such consent shall be void.
(b) This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their successors and assigns.
10.8 Separability. If any provision of this Agreement is
invalid, illegal or unenforceable, such provision shall be ineffec-
tive to the extent, but only to the extent of, such invalidity,
illegality or unenforceability, without invalidating the remainder
of such provision or the remaining provisions of this Agreement,
unless such a construction would be unreasonable.
10.9 Headings. The headings in this Agreement are solely
for convenience of reference and shall be given no effect in the
construction and interpretation of this Agreement.
10.10 Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the
same instrument.
10.11 Governing Law. This Agreement shall be
construed and enforced in accordance with the laws of the State of
New York, without giving effect to conflict of laws.
10.12 Incorporation by Reference. The Schedules and
Exhibits attached hereto and the letters referred to herein as
having been executed or delivered concurrently with the execution
of this Agreement are an integral part of this Agreement and are
incorporated herein by reference.
10.13 Definitions. As used herein, the following
terms shall have the meanings herein specified unless the context
otherwise requires. Defined terms in this Agreement shall include
in the singular number the plural and in the plural number the
singular.<PAGE>
<PAGE>
"Affiliate" of a Person shall mean any other Person
controlling, controlled by or under common control with such
Person.
"Key Employee" shall mean any person who is employed in
a management, executive, supervisory, marketing or sales capacity
for another person.
"Knowledge of the Corporation" shall mean the knowledge
actually possessed by a person in an executive or management
capacity.
"Market Value" shall mean, with respect to any trading
day, the average of the closing price per share of the MRI Common
Stock on the fifteen consecutive trading days ending on such date.
The closing price for each such day shall be the last sale price
regular way or, in case no such sale takes place on such day, the
average of the closing bid and asked prices of such MRI Common
Stock, in either case on The Nasdaq Stock Market or the principal
securities exchange on which the shares of MRI Common Stock are
listed or admitted to trading.
"MRI" - Medical Resources, Inc., a Delaware corporation.
"MRI Group Entity" - any entity in which the Buyer, MRI,
any direct or indirect subsidiary of MRI, or any such other entity
has a significant direct or indirect equity or financial interest
at any time during the term of this Agreement.
"Person" shall mean and include any individual, partner-
ship, firm, corporation, association, joint venture, trust or other
entity, or any government or political subdivision or agency,
department or instrumentality thereof.
"Proprietary Rights" means any copyrights, trademark,
trade name, service mark, service name, trade secret, know-how,
confidential information or other intellectual property.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first written above.
BELLE-MEADE MRI IMAGING CORP.
By: /s/ Chase Riley
-----------------------------
Name: Chase Riley
Title:
1101 IMAGING CORP.
By: /s/ Chase Riley
-----------------------------
Name: Chase Riley
Title:
RGB MANAGEMENT CORP.
By: /s/ Chase Riley
-----------------------------
Name: Chase Riley
Title:
/s/ Jim Brower
--------------------------------
Seller: Jim Brower
/s/ Chase Riley
--------------------------------
Seller: Chase Riley
/s/ Michael Griffin
--------------------------------
Seller: Michael Griffin
SMITH GARDEN RESOURCES, INC.
By: /s/ William D. Farrell
-----------------------------
Name: William D. Farrell
Title: President<PAGE>
<PAGE>
Solely with respect to the issuance of
the Closing Shares and Sections 1.3, 1.5(b),
1.8 and 3.1 through 3.4 hereof:
MEDICAL RESOURCES, INC.
By: /s/ William D. Farrell
------------------------
86420<PAGE>
<PAGE>
<Ex. 99(a)>
PRESS RELEASE
MEDICAL RESOURCES, INC. COMPLETES NEW YORK
IMAGING CENTER ACQUISITIONS
Hackensack, New Jersey, November 26, 1996-Medical Resources, Inc.
(NASDAQ:MRII) announced today that it has completed the
previously announced acquisition of two magnetic resonance
imaging centers in New York. The company acquired centers
located in Garden City and East Setauket, N.Y. for $6.4 million
payable in a combination of $1.9 million in cash and $4.5 million
of common stock. Medical Resources now operates a total of 38
imaging centers, including 14 in the New York/New Jersey market.
Commenting on the acquisition, William D. Farrell, President and
Chief Operating Officer of Medical Resources, stated, "We are
very pleased to add the OPEN MRI at Garden City and the OPEN MRI
at Smith Haven to our regional concentration of centers in the
New York market. These sites compliment our existing Centereach,
Long Island facility, which was acquired during July. The newly
acquired centers are expected to add approximately $4.4 million
to Medical Resources consolidated annual net revenues and be
accretive to future earnings per share. We are continuing to
pursue other attractive diagnostic imaging acquisition
opportunities."
Medical Resources specializes in the operation and acquisition of
diagnostic imaging centers. The Company currently operates 38
imaging centers in the Northeast (20), Florida (12) and the
Chicago area (6) and provides network management services to
managed care organizations in these regions. Also, through its
subsidiary StarMed Staffing, the Company provides temporary
healthcare staffing to acute and sub-acute care facilities
nationwide.
Medical Resources Contact: Investor Relations Contact:
Contact: William D. Farrell Betsy Brode, Vice President
President and Chief Morgen Walke Associates
Operating Officer (212) 850-5606
Medical Resources,Inc.
(201) 488-6230
155 State Street, Hackensack, NJ 07601
201-488-6230 Fax 201-488-8455
