<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 of 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 31, 1995
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Medical Imaging Centers of America, Inc.
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(Exact name of registrant as specified in its charter)
California 0-12787 95-3643045
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
9444 Farnham Street, Suite 100, San Diego, California 92123
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (619) 560-0110
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Not Applicable
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(Former name or former address, if changed since last report.)
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Item 2. Acquisition or Disposition of Assets.
On July 31, 1995, Medical Imaging Centers of America, Inc.,
through its wholly-owned subsidiary MICA Imaging, Inc. ("MICA" or "the
Company"), sold the assets (exclusive of accounts receivable) of its ultrasound
and nuclear medicine division based in Chicago, Illinois (the "Division") to
Specialized Imaging Services, Inc. ("SIS"), an Illinois corporation and a
wholly-owned subsidiary of Diagnostic Health Services, Inc. ("DHS"), a Delaware
corporation primarily engaged in ultrasound and nuclear imaging services. The
assets of the Division were sold for cash of $3.7 million and the assumption of
certain liabilities totaling $5 million. The sale of assets consists primarily
of ultrasound and nuclear medicine equipment.
Management estimates that the sale of the assets will result
in a net gain of approximately $3.5 million to the Company after an accrual for
alternative minimum taxes due as a result of the sale.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of business acquired.
N/A
(b) Pro Forma Consolidated Financial Information.
Pro Forma Consolidated Financial Statements.
(c) Exhibits.
2.0 Agreement dated as of July 31, 1995 between MICA
Imaging, Inc. and Specialized Imaging Services, Inc.
and its partners.
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 thereunto duly authorized.
MEDICAL IMAGING CENTERS OF AMERICA, INC.
By: /s/ Denise L. Sunseri
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Denise L. Sunseri
Chief Financial Officer
Date: August 11, 1995
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PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
GENERAL DISCUSSION
On July 31, 1995, Medical Imaging Centers of America, Inc., through
its wholly-owned subsidiary MICA Imaging, Inc. ("MICA"), sold the
assets (exlusive of accounts receivable) of its ultrasound and nuclear
medicine division based in Chicago, Illinois (the "Division") to
Specialized Imaging Services, Inc. ("SIS"), an Illinois corporation
and a wholly-owned subsidiary of Diagnostic Health Services, Inc.
("DHS"), a Delaware corporation primarily engaged in ultrasound and
nuclear imaging services. The assets of the Division were sold for
cash of $3.7 million and the assumption of certain liabilities
totaling $5 million. The sale of assets consists primarily of
ultrasound and nuclear medicine equipment.
PRO FORMA CONSOLIDATED BALANCE SHEETS
The following pro forma consolidated balance sheets reflect the sale
of the assets by MICA to SIS at July 31, 1995 as if the transaction
had taken place on June 30, 1995. The assets were sold for cash of
$3.7 million and the assumption of certain liabilities totaling $5
million. In the opinion of management, all adjustments necessary to
state fairly such pro forma data have been made.
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
Year ended December 31, 1994 and six months ended June 30, 1995:
The pro forma consolidated statements of operations reflect the sale
of assets by MICA to SIS as if the transaction had taken place on
January 1, 1994. In the opinion of management, all adjustments
necessary to state fairly such pro forma data have been made.
THE PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS ARE NOT INDICATIVE OF WHAT
THE ACTUAL RESULTS OF OPERATIONS WOULD HAVE BEEN FOR THE PERIODS HAD THE
TRANSACTIONS OCCURRED AT THE DATE INDICATED AND DO NOT PURPORT TO INDICATE THE
RESULTS OF FUTURE OPERATIONS.
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MEDICAL IMAGING CENTERS OF AMERICA, INC.
INDEX TO FINANCIAL STATEMENTS
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Pro Forma Consolidated Financial Information
Pro Forma Consolidated Balance Sheets F-1
Pro Forma Consolidated Statements
of Operations F-2
Notes to Pro Forma Consolidated
Financial Statements F-4
</TABLE>
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PRO FORMA CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
As Reported Pro forma Pro forma
June 30, 1995 Adjustments As Adjusted
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ASSETS:
Current assets:
Cash and cash equivalents (includes restricted cash of $654 in
1995 and $832 in 1994) $ 6,573 $3,746 (a) $10,319
Trade and notes receivable, net of allowance for doubtful accounts
of $5,164 in 1995 and $5,554 in 1994 8,962 8,962
Prepaid expenses and other current assets 963 963
Net assets sold (July 1995) 73 (73)(b) 0
------- ------ -------
Total current assets 16,571 3,673 20,244
Equipment and leasehold improvements, net of accumulated
depreciation and amortization of $29,394 in 1995 and
$28,962 in 1994 21,293 21,293
Equipment held for sale, net of accumulated depreciation
of $1,326 in 1995 and $1,137 in 1994 300 300
Investment in and advances to unconsolidated entities, net of allowance
for doubtful accounts of $1,788 in 1995 and 1994 1,800 1,800
Intangible assets, net of accumulated amortization of
$1,889 in 1995 and $1,606 in 1994 985 985
Other assets 1,224 1,224
------- ------ -------
$42,173 $3,673 $45,846
======= ====== =======
LIABILITIES AND SHAREHOLDERS' EQUITY (NET CAPITAL DEFICIENCY):
Current liabilities:
Current portion long-term debt and capital lease obligations $10,129 $10,129
Current portion convertible subordinated debt 2,800 2,800
Accounts payable 2,223 2,223
Accrued payroll and related taxes 973 973
Other accrued liabilities 2,272 100 (c) 2,372
------- ------ -------
Total current liabilities 18,397 100 18,497
Long-term debt and capital lease obligations 18,469 18,469
Minority interest in consolidated partnerships 1,230 1,230
Convertible subordinated debt 5,400 5,400
Commitments
Shareholders' Equity (Net Capital Deficiency):
Preferred stock, no par value, 5,000,000 shares authorized;
Series B preferred shares, no par value, 300,000 shares
authorized, no shares issued or outstanding --- ---
Common stock, no par value, 30,000,000 shares authorized;
12,210,893 and 12,133,227 shares issued and outstanding at
June 30, 1995 and December 31, 1994, respectively 54,535 54,535
Accumulated deficit (55,858) 3,573 (d) (52,285)
------- ------ -------
Total Liabilities and Shareholders' Equity (Net Capital Deficiency) (1,323) 3,573 2,250
------- ------ -------
$42,173 $3,673 $45,846
======= ====== =======
</TABLE>
See accompanying notes to Pro Forma Consolidated Financial Statements.
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PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS(1)
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE INFORMATION)
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Twelve Months ending December 31, 1994
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As Reported Proforma Proforma
December 31, 1994 Adjustments As Adjusted
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REVENUES:
Medical services $55,440 $(5,608)(e) $49,832
Equipment and medical suite sales 1,866 1,866
------- ------- -------
Total revenues 57,306 (5,608) 51,698
COSTS AND EXPENSES:
Costs of medical services 34,825 (3,659)(f) 31,166
Costs of equipment and medical suite sales 1,749 1,749
Marketing, general and administrative 5,761 5,761
Depreciation and amortization of equipment
and leasehold improvements 12,221 (1,031)(f) 11,190
Amortization of intangibles and deferred costs 501 501
Equity in net income of unconsolidated entities (708) (708)
Interest expense 5,123 (198)(f) 4,925
Interest income (454) (454)
------- ------- -------
Total costs and expenses 59,018 (4,888) 54,130
------- ------- -------
Loss before minority interest (1,712) (2,432)
Minority interest in net income of
consolidated partnerships (98) (98)
------- -------
Loss before extraordinary gain (1,810) (2,530)
Extraordinary gain 1,316 1,316
------- -------
Net loss $ (494) $(1,214)
======= =======
NET INCOME (LOSS) PER COMMON SHARE:
Loss from continuing operations $ (.15) $ (.21)
======= =======
Extraordinary gain $ .11 $ .11
======= =======
Net loss $ (.04) $ (.10)
======= =======
Shares used in per share amounts 12,129 12,129
======= =======
</TABLE>
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(1) The above pro forma consolidated statement of operations does not include
the estimated $3.5 million gain from the sale of assets.
See accompanying Notes to Pro Forma Consolidated Financial Statements.
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PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS(1)
(UNAUDITED)
(IN THOUSANDS EXCEPT PER SHARE INFORMATION)
<TABLE>
<CAPTION>
Six Months ending June 30, 1995
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As Reported Pro forma Pro forma
June 30, 1995 Adjustments As Adjusted
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<S> <C> <C> <C>
REVENUES:
Medical services $23,773 $(2,718)(e) $21,055
Equipment and medical suite sales 2,272 2,272
------- ------- -------
Total revenues 26,045 (2,718) 23,327
COSTS AND EXPENSES:
Costs of medical services 14,956 (1,813)(f) 13,143
Costs of equipment and medical suite sales 1,773 1,773
Marketing, general and administrative 1,493 1,493
Depreciation and amortization of equipment
and leasehold improvements 5,131 (455)(f) 4,676
Amortization of intangibles and deferred costs 307 307
Equity in net income of unconsolidated entities (355) (355)
Interest expense 1,732 (67)(f) 1,665
Interest income (260) (260)
------- ------- -------
Total costs and expenses 24,777 $(2,335) 22,442
------- ------- -------
Income before minority interest 1,268 885
Minority interest in net loss of
consolidated partnerships 207 207
------- -------
Net income $ 1,475 $ 1,092
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NET INCOME PER COMMON SHARE:
Net income $ .11 $ .08
======= =======
Shares used in per share amounts 12,705 12,705
======= =======
</TABLE>
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(1) The above pro forma consolidated statement of operations does not include
the estimated $3.5 million gain from the sale of assets.
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NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(In thousands)
1. HISTORICAL
The historical balances represent the financial position and
results of operations for MICA and were derived from the respective financial
statements for the indicated period.
2. PRO FORMA
On July 31, 1995, MICA sold the assets of its ultrasound and
nuclear medicine division for cash of $3.7 million and the assumption of
certain liabilities totaling $5 million.
The unaudited pro forma consolidated balance sheets have been
prepared to reflect the sale of the assets as if it had occurred on June 30,
1995. The unaudited pro forma consolidated statements of operations have been
prepared to reflect the sale of the assets as if it occurred on January 1,
1994. The following pro forma adjustments are reflected in the unaudited pro
forma consolidated financial statements.
PRO FORMA CONSOLIDATED BALANCE SHEETS
(a) Receipt of cash of $3,746 for the sale of assets.
(b) Elimination of net assets sold (net equipment of
$1,179 less liabilities assumed of $1,106).
(c) Accrual of $100 income tax provision based on
estimate of alternative minimum taxes due as a result
of the sale.
(d) Record of gain from the sale of assets of $3,573
(cash proceeds of $3,746 less net assets sold of $73
less income tax accrual of $100).
PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
(e) Elimination of Medical Services Revenues for the
Division for the six months ended June 30, 1995 and
the year ended December 31, 1994.
(f) Elimination of Costs and Expenses for the Division
for the six months ended June 30, 1995 and the year
ended December 31, 1994.
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EXHIBIT 2.0
ASSET PURCHASE AGREEMENT
BY AND BETWEEN
SPECIALIZED IMAGING SERVICES, INC.
AND
MICA IMAGING, INC.
Dated July 31, 1995
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ASSET PURCHASE AGREEMENT
TABLE OF CONTENTS
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ARTICLE 1
1.1 Defined Terms 1
ARTICLE 2
2.1 Sale of Assets 3
2.2 Purchase Price 3
2.3 Assets 3
2.4 Accounts Receivable 4
2.5 Assumed Liabilities 4
2.6 Transfer Taxes 5
2.7 Prorations 5
2.8 Deposits 5
ARTICLE 3
3.1 Closing 5
3.2 Deliveries at the Closing 5
ARTICLE 4
4.1 Authorization 6
4.2 Absence of Certain Changes or Events 6
4.3 Title to Assets 7
4.4 Condition of Tangible Assets 7
4.5 Contracts and Commitments 7
4.6 No Conflict or Violation 7
4.7 Consents and Approvals 7
4.8 Financial Statements 7
4.9 Litigation 8
4.10 Labor Matters 8
4.11 Compliance with Law 8
4.12 No Brokers 8
4.13 Payments 8
4.14 Tax Matters 9
4.15 Real Estate Lease 9
4.16 Inventories 9
4.17 Insurance Policies 9
4.18 Customers and Suppliers 9
</TABLE>
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Table of Contents, continued
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4.19 Additional Employment and Benefit Matters 9
4.20 Additional Compliance Matters 10
4.21 Intellectual Property 10
4.22 Disclosure and Duty of Inquiry 10
4.23 Material Misstatements or Omissions 10
ARTICLE 5
5.1 Authorization 11
5.2 Consents and Approvals 11
ARTICLE 6
6.1 Consents and Best Efforts 11
6.2 Notification of Certain Matters 11
6.3 Conduct of Business Pending Closing 12
6.4 Access and Due Diligence 12
6.5 Exclusivity 12
ARTICLE 7
7.1 Due Diligence 13
7.2 Financing 13
7.3 Lesser Consents
ARTICLE 8
8.1 General 13
8.2 Effect of Termination 13
ARTICLE 9
9.1 Certificates 14
9.2 Material Changes 14
ARTICLE 10
10.1 Books and Records 14
10.2 Indemnifications 15
10.3 Further Assurances 16
10.4 No Prohibited Assignment; Best Efforts 16
10.5 Restrictive Covenants 16
10.6 Deposits 16
</TABLE>
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Table of Contents, continued
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ARTICLE 11
11.1 Assignment 17
11.2 Notices 17
11.3 Governing Law 18
11.4 Arbitration 19
11.5 Entire Agreement; Modifications and Waivers 19
11.6 Counterparts 19
11.7 Expenses 19
11.8 Invalidity 19
11.9 Titles 19
11.10 Publicity 19
11.11 Confidentiality 19
11.12 Attorneys' Fees 20
</TABLE>
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT, dated as of July 31, 1995, is by
and between MICA Imaging, Inc., an Illinois corporation ("Seller"), and
Specialized Imaging Services, Inc., an Illinois corporation ("Buyer").
RECITALS
A. Seller has a division which engages in the business
of providing ultrasound and nuclear medicine services to patients through use
of the Equipment (as herein defined) (the "Business").
B. Buyer desires to purchase from Seller, and Seller
desires to sell to Buyer, the Assets (as herein defined) of the Business, and
the good will of the Business as a going concern, subject to the terms and
conditions of this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants,
representations, warranties and agreements contained herein, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Defined Terms. As used herein, the terms below shall
have the following meanings:
a. "Books and Records" shall mean the books and records pertaining
to the assets, properties, business, operations, accounts, financial condition,
customers or suppliers of the Business.
b. "Closing Date" shall mean July 31, 1995, or such other date as
Buyer and Seller shall mutually agree, but not later than September 6, 1995.
c. "Contracts" shall mean any of the agreements, contracts,
instruments or commitments to which Seller is a party and that relate to the
provision of services by Seller or
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the leasing of equipment by Seller (as lessor) in the Business, all as
identified on Schedule 1.1(c).
d. "March Financials" shall mean the unaudited profit and loss
statements for the Business as of March 31, 1995, as identified on Schedule 1.1
(d).
e. "Encumbrance" shall mean any lien, pledge, option, adverse
claim, charge, easement, security interest, right-of-way or encumbrance.
f. "Governmental Entity" shall mean any governmental entity,
department, commission, board, agency or instrumentality, whether federal,
state or local, and whether domestic or foreign.
g. "Operating Leases" shall mean all of the operating leases which
relate to the Business, all as listed on Schedule 1.1(g). Schedule 1.1(g)
indicates with respect to each such lease the term, deposits, annual rent,
additional rent, payment on termination and renewal options, if any, and, as
applicable, the type of equipment.
h. "Capital Leases and Financing Leases" shall mean all of the
capital leases which relate to the Business all as listed on Schedule 1.1(h).
Schedule 1.1(h) indicates with respect to each such lease the term, deposits,
annual rent, additional rent, payment on termination and renewal options, if
any, and the type of equipment.
i. "Licenses" shall mean all governmental or regulatory licenses
or permits used in the Business as presently conducted, all as identified or
listed on Schedule 1.1(i).
j. "Material Adverse Effect" shall mean a material adverse effect
upon the business, operations, properties, assets or condition (financial or
otherwise) or projected earnings or cash flows of the Business.
k. "Personnel" shall mean the officers, employees, consultants and
staff personnel associated with the Business.
l. "Representative" shall mean any officer, director, principal,
attorney, agent, employee or other representative.
m. "Securities Act" shall mean the Securities Act of 1933, as
amended.
n. "Taxes" shall mean all taxes, charges, levies or other
assessments, including, without limitation, income, gross receipts, excise,
real and personal property, sales, use, transfer, capital gains, transfer
gains, license, payroll, privilege, and franchise taxes, imposed by any
Governmental Entity and shall include any interest, penalties or additions to
tax attributable to any of the foregoing.
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ARTICLE 2
PURCHASE AND SALE OF ASSETS
2.1 Sale of Assets. Subject to the terms and conditions
of this Agreement, Seller hereby agrees to sell, transfer, assign, convey and
deliver to Buyer, and Buyer hereby agrees to purchase and acquire from Seller,
on the Closing Date, all right, title and interest of Seller in the assets and
rights described in Section 2.3 (all such assets and rights being herein
collectively referred to as the "Assets" and individually referred to as an
"Asset"), all of which shall be transferred to Buyer free and clear of all
liens, security interests and other encumbrances, subject to the Buyer's
assumption of the Assumed Liabilities.
2.2 Purchase Price. Buyer shall pay to Seller in cash
for the sale, transfer, assignment, conveyance and delivery of the Assets to
Buyer, an amount equal to $5,000,000 minus the dollar amount on the Closing
Date (without discount for deferred or future payments) of the Assumed
Liabilities shown on Schedule 2.2, which amount shall be delivered by wire
transfer of funds on the Closing Date pursuant to wire transfer instructions
received from Seller prior to the Closing Date.
2.3 Assets. The "Assets" shall consist of the following
assets of the Business, as same are constituted at the Closing Date:
(a) Equipment. All right, title and interest of
Seller in the equipment (including, without limitation, equipment under Capital
Leases) utilized in the Business, all of which is shown on Schedule 2.3(a)
(the "Equipment").
(b) Fixtures. The furniture, fixtures, supplies
and other tangible personal property used in the Business.
(c) Licenses and Permits. All right, title and
interest of Seller in, to and under all Licenses, permits, authorizations and
other rights of every kind and character relating to the Business under any
federal, state, or local statute, ordinance or regulation.
(d) Intangible Assets. All right, title and
interest of Seller in, to and under all trademarks, technology, know-how, data,
copyrights, tradenames, servicemarks, licenses, rights and privileges used in
the Business.
(e) Contracts and Leases. All right, title and
interest of Seller in, to and under the Contracts and Operating Leases (the
"Assigned Contracts").
(f) Inventories. All of Seller's inventories
insofar as they relate to the Business.
(g) Books and Records. The Books and Records
used in the Business.
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2.4 Accounts Receivable. With respect to the accounts
receivable of the Business which Seller is retaining, Seller shall, on the
Closing Date, deliver a complete schedule thereof to Buyer, and Buyer agrees,
upon request of Seller, to assist Seller in all reasonable respects (but
without incurring any material expense) in its collection efforts with respect
thereto for a six (6) month period following the Closing Date, and payments
received by Buyer in respect of such receivables shall be deposited directly
into an account designated by Seller to Buyer. After the date which is six (6)
months after the Closing Date, Buyer will deliver to Seller a copy of all
records relating to such receivables, and thereafter, Seller shall be solely
responsible for further collection efforts with respect thereto.
In connection with any collections made by Buyer on behalf of Seller hereunder,
all amounts collected by Buyer from account debtors of the Business shall,
unless otherwise directed by the account debtor, be applied to the oldest
outstanding receivable owed by such account debtor to the Business, and Buyer
shall make the aforesaid deposits on a weekly basis within two (2) days after
the close of each calendar week in respect of collections received in good
funds during such calendar week. Nothing herein contained shall be deemed to
prohibit Buyer from establishing its own credit terms with any and all account
debtors, provided that Buyer shall not, in connection therewith, settle or
compromise, for less than the full face amount thereof, any accounts receivable
owed to Seller, without Seller's prior written consent in each instance.
2.5 Assumed Liabilities. Buyer shall, from and after the
Closing Date, assume the following liabilities (the "Assumed Liabilities"):
(a) The obligations and liabilities of Seller that
relate to the Business as identified on Schedule 2.2.
(b) Seller's obligations and liabilities relating
to the period subsequent to the Closing Date under the Assigned Contracts and
the Licenses.
Except for those specific liabilities and obligations specified
in this Section 2.5, Buyer will not assume, and hereby expressly disclaims any
assumption of, any debts, liabilities or obligations (absolute or contingent)
of any kind of Seller or any of its affiliates, including but not limited to
(a) accounts payable, (b) indebtedness for money borrowed, (c) income taxes,
sales taxes, payroll taxes, withholding taxes, franchise taxes, and other
taxes, including but not limited to any taxes which may arise out of or be
assessable in respect of the transactions contemplated by this Agreement (other
than as set forth in Section 2.6 below), (d) claims, litigation, liabilities or
obligations arising out of or relating to the operations of Seller or any of
its affiliates, (e) liabilities or obligations of any kind in respect of any
past or present stockholders, directors, officers, employees or consultants of
Seller, whether under any contract or agreement, pursuant to any pension plan
or employee benefit or welfare plan, or otherwise, (f) liabilities or
obligations relating to recapture of any depreciation deduction or investment
tax credit of Seller, and/or (g) any other liabilities or obligations of or
relating to Seller or any of its affiliates in any manner whatsoever.
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2.6 Transfer Taxes. Buyer shall be responsible for any
documentary transfer taxes and any sales, use or other taxes imposed by reason
of the transfer of the Assets provided hereunder, and any deficiency, interest
or penalty asserted with respect thereto. See purchase price allocation, as
identified on Schedule 2.6.
2.7 Prorations.
(a) Taxes. As of the Closing Date, or as
promptly as practicable following the Closing Date, but in no event later than
sixty (60) days thereafter, the personal property taxes and other ad valorem
taxes, local business or other license fees or taxes, and other similar
periodic charges, in each case relating to the Business or the Assets, shall be
pro rated between Buyer and Seller, with Seller being liable in respect of all
periods on or prior to the Closing Date and Buyer being liable in respect of
all periods after the Closing Date.
(b) Utilities and Rent. On the Closing Date, or
as promptly as practicable thereafter, all rental under any Assumed
Liabilities and the water, gas, electrical and other utilities and other
similar periodic charges pertaining to the Business shall be pro rated between
Buyer and Seller, with Seller being liable in respect of all periods on or
prior to the Closing Date and Buyer being liable in respect of all periods
after the Closing Date.
2.8 Deposits. On the Closing Date, Buyer shall reimburse
Seller for any deposits made by the Seller in connection with any of the
Assumed Liabilities .
ARTICLE 3
CLOSING; POST-CLOSING MATTERS
3.1 Closing. The closing of the transactions
contemplated herein (the "Closing") shall be held at 10:00 a.m. local time on
the Closing Date at the offices of Buyer or its lender or lender's counsel in
Dallas, Texas, unless the parties hereto otherwise agree.
3.2 Deliveries at the Closing:
Of Buyer. To effect the transfer referred to in
Section 2.1 hereof, Seller will, on the Closing Date, execute and deliver to
Buyer:
(a) a General Conveyance, Transfer, Assignment
and Bill of Sale substantially in the form attached hereto as
Exhibit A, conveying the Assets and assigning the Assigned
Contracts;
(b) the documents and certificates set forth in
Article 9 hereof;
(c) such other instruments as shall be reasonably
requested by Buyer
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to vest in Buyer title to the Assets in accordance with the
provisions hereof; and
(d) the Books and Records.
Of Seller. At the Closing, Buyer shall deliver to
Seller the following:
(a) a wire transfer of funds equal to the amount
provided in Section 2.2;
(b) such other instruments as shall be reasonably
requested by Seller to complete the assumption of the Assumed
Liabilities by Buyer.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to Buyer as follows:
4.1 Authorization. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois, and is duly qualified and in good standing as a foreign corporation
in each jurisdiction in which such qualification is necessary. Seller has all
necessary power and authority and has taken all action necessary to authorize
and enter into this Agreement, to consummate the transactions contemplated
hereby and to perform its obligations hereunder. This Agreement has been duly
executed and delivered by Seller and is a legal, valid and binding obligation
of Seller enforceable in accordance with its terms.
4.2 Absence of Certain Changes or Events. Except as set
forth on Schedule 4.2, since March 31, 1995, there has not been any:
(a) sale, assignment or transfer of any of the
assets of the Business, material singly or in the aggregate, other than in the
ordinary course;
(b) amendment, cancellation or termination of any
License, Contract, Capital Lease, Operating Lease or instrument material to the
Business;
(c) failure to operate the Business in the
ordinary course, or to use reasonable efforts to preserve the Business intact,
to keep available to Buyer the services of the Personnel, and to preserve for
Buyer the goodwill of Seller's suppliers, customers and others having business
relations that relate to the Business except where such failure would not have
a Material Adverse Effect on the assets or prospects of the Business or the
transactions contemplated by this Agreement;
(d) material damage, destruction or loss (whether
or not covered by insurance) materially adversely affecting the assets or
prospects of the Business;
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(e) mortgage, pledge or other encumbrance of any
of the assets of the Business, material singly or in the aggregate; or
(f) agreement by Seller to do any of the
foregoing.
4.3 Title to Assets. Except as set forth on Schedule
4.3, Seller has good and marketable title to, or valid leasehold interests in,
all of the assets of the Business, free and clear of all Encumbrances. All
lease payments respecting any leased assets are current, and Seller has
performed all other obligations required to be performed with respect to all
assets leased by Seller for the Business through the date hereof, except where
the failure to perform would not (singly or in the aggregate) have a Material
Adverse Effect.
4.4 Condition of Tangible Assets. Except as set forth on
Schedule 4.4, the Equipment is in good operating condition and repair (except
for ordinary wear and tear), is sufficient for the operation of the Business as
heretofore and presently conducted, and is in conformity in all material
respects with all applicable laws, ordinances, orders, regulations and other
requirements (including applicable zoning, environmental, motor vehicle safety
or standards, occupational safety and health laws and regulations) relating
thereto currently in effect.
4.5 Contracts and Commitments. Seller is not (and, to
the best knowledge of Seller, no other party is) in breach or violation of, or
default under, any of the Contracts, Capital Leases, Operating Leases, Licenses
or other obligations or commitments relating to the Business as respects any
monetary payments thereunder, or otherwise where such breach or violation would
(singly or in the aggregate) have a Material Adverse Effect.
4.6 No Conflict or Violation. Neither the execution and
delivery of this Agreement nor the consummation of the transactions
contemplated hereby will result in (a) a breach of, or a default under, the
Seller's Certificate of Incorporation, any term or provision of any Contract,
Capital Lease, Operating Lease, or License to which Seller is a party and that
relate to the Business or by which any of the assets of the Business are bound
or affected which would result in a Material Adverse Effect, or (b) to the best
of Seller's knowledge, a violation by Seller of any statute, rule, regulation,
ordinance, code, order, judgement, writ, injunction, decree or award applicable
to Seller which would result in a Material Adverse Effect or (c) an imposition
of any Encumbrance, restriction or charge on the Business or on any of the
assets of the Business.
4.7 Consents and Approvals. No consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Entity, or any other person or entity, is required to be made or obtained by
Seller in connection with the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby.
4.8 Financial Statements. Seller has heretofore
delivered to Buyer the March Financials. Such financials are in accordance
with the Books and Records and present fairly the
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results of operations of the Business for the three months then ended. Since
the end of such period, there has been no material adverse change in the
operations, financial condition or prospects of the Business.
Seller has heretofore provided to Buyer the audited consolidated balance sheet
of Seller's corporate parent (Medical Imaging Centers of America, Inc.) as of
December 31, 1994, which balance sheet has been prepared in accordance with
GAAP.
4.9 Litigation. There is no action, order, writ,
injunction, judgement or decree outstanding or claim, suit, litigation,
proceeding, labor dispute (other than routine grievance procedures or routine,
uncontested claims for benefits under any benefit plans for Personnel),
arbitral action, or investigation (collectively, "Actions") pending or, to the
best of Seller's knowledge, threatened or anticipated against, relating to or
affecting (i) the Business or Seller's activities, properties or assets in
connection therewith, (ii) any benefit plan for Personnel or any fiduciary or
administrator thereof or (iii) the transactions contemplated by this Agreement.
Seller is not in default with respect to any judgement, order, writ, injunction
or decree of any court or Governmental Entity, and there are no unsatisfied
judgements against Seller or the Business. To Seller's knowledge, there is no
basis for any claim against or liability of Seller on account of product or
service warranties, express or implied, with respect to the sale or provision
of defective products or services.
4.10 Labor Matters. Seller is not a party to any
collective bargaining agreement or other labor agreement with respect to the
employees utilized for the Business with any labor organization, group or
association, and there are no outstanding employment agreements with any of the
Personnel. Seller is in material compliance with all applicable laws
respecting employment practices, terms and conditions of employment and wages
and hours with respect to such employees.
4.11 Compliance with Law. Seller has in full force and
effect all licenses and permits required for the operation of the Business.
The conduct of the Business to the date hereof has been and is in compliance
with all applicable laws, statutes, ordinances and regulations, whether
federal, state or local and whether foreign or domestic, except where the
failure to comply would not have a Material Adverse Effect.
4.12 No Brokers. Neither Seller nor any affiliate of
Seller has entered into or will enter into any Contract, agreement, arrangement
or understanding with any person or firm, or take any action, which will or
could result in the obligation of the Buyer or any claim against the Buyer to
pay any finder's fee, brokerage commission or similar payment in connection
with the transactions contemplated hereby.
4.13 Payments. Seller has not directly or indirectly paid
or delivered any fee, commission or other sum or item or property, however
characterized, to any finder, government official or other party, in the United
States or any other country, which is in any manner related to the Business,
which Seller knows or has reason to believe to have been illegal under any
federal, state or local laws of the United States or any other country having
jurisdiction.
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4.14 Tax Matters. On the date hereof and on the Closing
Date, (i) all federal, state and local tax returns and tax reports required to
be filed by Seller (or, in the case of consolidated returns, the Seller's
parent entity) on or before the date of this Agreement or the Closing Date, as
the case may be, have been and will have been timely filed with the appropriate
governmental agencies in all jurisdictions in which such returns and reports
are required to be filed; (ii) all federal, state and local income, franchise,
sales, use, property, excise and other taxes (including interest and penalties
and including estimated tax installments where required to be filed and paid)
due from or with respect to Seller as of the date hereof and as of the Closing
Date have been and will have been fully paid, and appropriate accruals shall
have been made on Seller's books for taxes not yet due and payable; (iii) as of
the Closing Date, all taxes and other assessments and levies which the Seller
is required by law to withhold or to collect on or before the Closing Date will
have been duly withheld and collected, and will have been paid over to the
proper governmental authorities to the extent due and payable on or before the
Closing Date; and (iv) there are no outstanding or pending claims, deficiencies
or assessments for taxes, interest or penalties with respect to any taxable
period of Seller.
4.15 Real Estate Lease. Seller neither owns nor has any
interest of any kind (whether ownership, lease or otherwise) in any real
property relating to the Business, except to the extent of Seller's leasehold
interest under the lease for the business premises of the Business, a true and
complete copy of which lease (including all amendments thereto) has heretofore
been provided to Buyer (the "Office Lease"). Seller (and, to the best of
Seller's knowledge, the landlord thereunder) is presently in compliance with
all of its obligations under the Office Lease, and the premises leased
thereunder are in good condition (reasonable wear and tear excepted) and are
adequate for the operation of the Business as presently conducted.
4.16 Inventories. All supplies and other inventories
included in the Assets will consist of items which are of a quality and
quantity which are useable in the ordinary course of the Business. The
inventory on hand in the Business as of the Closing Date will be of a customary
mix and quantity for the Business.
4.17 Insurance Policies. Schedule 4.17 annexed hereto
contains a true and correct schedule and description of all insurance coverages
held by Seller concerning its business and properties (including but not
limited to professional liability insurance).
4.18 Customers and Suppliers. Seller has not received any
written notice of any existing, announced or anticipated changes in the
policies of any material clients, customers, referral sources or suppliers of
Seller which will or might reasonably result in or have a Material Adverse
Effect.
4.19 Additional Employment and Benefit Matters.
(a) Seller has heretofore made available to Buyer all
employee files, payroll records and other books and records relating to the
employees of the Business, all of which books and records fairly reflect the
compensation levels and employee policies that have heretofore been applicable
to the employees of the Business.
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(b) Seller has further made available to Buyer copies of
all benefit plans heretofore applicable or made available to any employees of
the Business; provided, however, that nothing herein contained shall be deemed
to obligate Buyer to provide any comparable benefits or to assume any
liabilities or obligations in respect of any benefits, benefit plans, welfare
plans, or other employment related programs heretofore maintained or offered by
Seller or in respect of which Seller has made any contributions or is in any
manner obligated.
4.20 Additional Compliance Matters.
(a) To the best of Seller's knowledge, Seller has not, at
any time during the three (3) year period prior to the date hereof, (i)
handled, stored, generated, processed or disposed of any hazardous substances
in violation of any federal, state or local environmental laws or regulations,
(ii) otherwise committed any material violation of any federal, state or local
environmental laws or regulations (including, without limitation, the
provisions of the Environmental Protection Act and other applicable
environmental statutes and regulations) or any material violation of the
Occupational Safety and Health Act, or (iii) been in material violation of any
requirements of its insurance carriers from time to time.
(b) Seller has not received any written notice of default
or violation, nor, to the best of Seller's knowledge, is Seller or any of its
directors, officers or employees in default or violation, with respect to any
judgement, order, writ, injunction, decree, demand or assessment issued by any
court or any federal, state, local, municipal or other governmental agency,
board, commission, bureau, instrumentality or department, domestic or foreign,
relating to any aspect of the Business. Neither Seller, nor, to the best of
Seller's knowledge, any of its directors, officers or employees, has received
written notice of, been charged with, or is under investigation with respect
to, any violation of any provision of any federal, state, local, municipal or
other law or administrative rule or regulation, domestic or foreign, relating
to any aspect of the Business, which violation would have a Material Adverse
Effect.
4.21 Intellectual Property. Except for any patents,
trademarks or other intellectual property rights embodied in any of the
equipment utilized in the Business, there are no patents, patent applications,
trademark registrations or applications, copyright registrations or
applications, registered tradenames or other intellectual property (domestic or
foreign) utilized in the Business. To the best of Seller's knowledge, no
asset, business practice or other aspect or element of the Business infringes
upon or has been claimed to infringe upon any intellectual property rights of
any other person.
4.22 Disclosure and Duty of Inquiry. Buyer is not and
will not be required to undertake any independent investigation to determine
the truth, accuracy and completeness of the representations and warranties made
by Seller in this Agreement, and Seller's representations and warranties
hereunder shall not in any manner be affected or impaired by reason of any
investigation made by or on behalf of Buyer.
4.23 Material Misstatements or Omissions. No
representations or warranties by Seller in this Agreement nor any document,
exhibit, certificate or schedule furnished to Buyer
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pursuant hereto, contains or will contain any untrue statement of a material
fact, or omits or will omit to state any material fact necessary to make the
statements or facts contained herein or therein not misleading. The copies of
all documents furnished to Buyer hereunder are true and complete copies of the
originals thereof in all material respects.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents and warrants to Seller as follows:
5.1 Authorization. Buyer has all necessary power and
authority and has taken all action necessary to authorize and enter into this
Agreement and to consummate the transactions contemplated hereby and to perform
its obligations hereunder. This Agreement has been duly executed and delivered
by Buyer and is a legal, valid and binding obligation of Buyer enforceable
against Buyer in accordance with its terms.
5.2 Consents and Approvals. No consent, approval or
authorization of, or declaration, filing or registration with, any Governmental
Entity, or any other person is required to be made or obtained by Buyer in
connection with the execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated hereby.
ARTICLE 6
COVENANTS OF SELLER AND BUYER
Seller, on the one hand, and Buyer, on the other hand, covenant
with each other as follows:
6.1 Consents and Best Efforts. As soon as practicable,
Seller and Buyer will complete all reasonable action required hereunder, and
Seller will cooperate with Buyer as is necessary, to obtain all applicable
consents, approvals and agreements of, and to give all notices and make all
filings with, any third parties as may be necessary to authorize, approve or
permit the full and complete sale, conveyance, assignment or transfer of the
Assets. In addition, subject to the terms and conditions herein provided, each
of the parties hereto covenants and agrees to use its best efforts to take or
cause to be taken all things necessary, proper or advisable under applicable
laws and regulations to consummate and make effective the transactions
contemplated hereby.
6.2 Notification of Certain Matters. Seller shall give
prompt notice to Buyer, and Buyer shall give prompt notice to Seller, of (a)
the occurrence, or failure to occur, of any event which occurrence or failure
would be likely to cause any of his or its representations or warranties made
in or pursuant to this Agreement to be untrue or inaccurate in any material
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respect and (b) any material failure of Seller or Buyer, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by such party hereunder. Each party shall use all reasonable
efforts to remedy any material failure on its part to comply with or be
satisfied by such party hereunder.
6.3 Conduct of Business Pending Closing. Between the
date hereof and the Closing Date, Seller shall operate the Business solely in
the ordinary course of business and consistent with past practice, and Seller
shall not, without the prior written consent of Buyer in each instance, (a)
incur any material indebtedness which would become Assumed Liabilities
hereunder, (b) amend, cancel or modify any agreement that will become an
Assigned Contract hereunder or enter into any material new agreement,
commitment or transaction outside of the ordinary course of the Business, (c)
pay, grant or authorize any salary increases or bonuses for any Personnel
outside of the ordinary course of business and consistent with past practice,
(d) incur any material capital expenditures in the Business which would become
Assumed Liabilities hereunder, (d) dispose of any capital assets which would
otherwise become Assets hereunder, (f) materially change its method of
collection of accounts receivable, or accelerate or slow its customary payment
of accounts payable, (g) subject any assets of the Business to any liens or
Encumbrances, or (h) agree to do or take any action in furtherance of any of
the foregoing. Without limitation of the foregoing, Seller shall consult with
Buyer with respect to any proposed material transactions in the Business
between the date hereof and the Closing Date.
6.4 Access and Due Diligence. Seller shall permit Buyer
and its counsel, accountants and other representatives, upon reasonable advance
notice and during normal business hours, to have reasonable access to all
books, records, assets and information relating to the Business, and Buyer and
its representatives shall also be permitted to freely consult with Seller's
counsel and accountants concerning the Business.
6.5 Exclusivity. From the date hereof through any
termination of this Agreement by Seller in accordance with Section 8.1 below,
Seller shall not (and shall not permit any of its stockholders, officers,
directors or affiliates to) negotiate with or enter into any other commitments,
agreements or understandings with any person, firm or corporation (other than
Buyer and its affiliates) in respect of any sale or disposition of the Business
or any material portion thereof.
ARTICLE 7
CONDITIONS PRECEDENT TO BUYER'S OBLIGATION TO CLOSE
It shall be a condition precedent to Buyer's obligation to
consummate the transactions contemplated hereby that each of the following
conditions shall have been satisfied (or, in Buyer's sole and absolute
discretion, waived) by Buyer on or before the Closing Date:
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7.1 Due Diligence. Buyer shall be satisfied with the
results of its due diligence investigation, including but not limited to its
ability to produce satisfactory audited financial statements of the Business
for periods from and after January 1, 1993.
7.2 Financing. Buyer shall have obtained financing for
the consummation of the transactions contemplated hereby, such financing to be
in amounts and on terms and conditions satisfactory to Buyer in its sole and
absolute discretion.
7.3 Lesser Consents. To the extent required under such
leases, Buyer shall have received the written consent of any and all lessors or
other persons to whom any of the Assumed Liabilities may be owed, without
requirement of posting or furnishing any collateral or agreeing to any material
additional financial obligation.
Buyer represents and warrants that it shall in good faith
attempt to satisfy the conditions set forth in this Article. In the event that
such conditions have not been satisfied at the time set for Closing, Buyer
shall either waive such conditions or notify Seller that the conditions have
not been met. In the event the conditions have not been met or waived at the
time of Closing, this Agreement shall terminate without further recourse by
either party.
ARTICLE 8
TERMINATION OF AGREEMENT
8.1 General. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing: (a) by the mutual written consent of Buyer and Seller, (b) by Buyer,
or by Seller, if: (i) a material breach shall exist with respect to the
written representations and warranties made by the other party, (ii) the other
party shall take any action prohibited by this Agreement, if such actions shall
or may have a material adverse effect on the Business and/or the transactions
contemplated hereby, (iii) the other party shall not have furnished, upon
reasonable notice therefor, such certificates and documents required in
connection with the transactions contemplated hereby and matters incidental
thereto as it shall have agreed to furnish, and it is reasonably unlikely that
the other party will be able to furnish such item(s) prior to the Outside
Closing Date specified below, or (iv) any consent of any third party to the
transactions contemplated hereby (whether or not the necessity of which is
disclosed herein or in any Schedule hereto) is reasonably necessary to prevent
a default under any outstanding material obligation of the Business, and such
consent is not obtainable without material cost or penalty (unless the party or
parties not seeking to terminate this Agreement agrees or agree to pay such
cost or penalty); or (c) by Buyer, or by Seller, at any time on or after
September 6, 1995 (the "Outside Closing Date"), if the transactions
contemplated hereby shall not have been consummated prior thereto, and the
party directing termination shall not then be in breach or default of any
obligations imposed upon such party by this Agreement.
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8.2 Effect of Termination. In the event of termination
of this Agreement pursuant to this Section 8, neither party to this Agreement
shall have any further liability to the other. In the event of termination by
either party as above provided in this Section 8, prompt written notice shall
be given to the other party.
ARTICLE 9
CLOSING DOCUMENTS
On or prior to the Closing Date, Seller shall satisfy each of
the following further conditions:
9.1 Certificates. Seller shall furnish Buyer with such
certificates and corporate resolutions to evidence compliance with the
conditions set forth in this Agreement as may be reasonably requested by Buyer.
Seller shall also, if requested by Buyer's lender(s), cause it's counsel to
issue to Buyer and such lender(s) a legal opinion as to such matters as may
reasonably be requested by such lender(s).
9.2 Material Changes. Seller shall furnish Buyer with a
certificate executed by Seller, to the effect that except as set forth on the
Schedules hereto or as permitted hereby, since March 31, 1995, there has not
been any material adverse change in the condition (financial or otherwise),
assets, liabilities, reserves, business, properties, operations, technology,
employee relations, or customer, supplier or distributor relations of the
Seller in the Business. For the purposes of this Section 8.2, a "material
adverse change" shall include, without limitation, an event or condition which
could result in a Material Adverse Effect and/or any development or discovery
of any material contingent or other liability not in the Schedules hereto,
which might materially adversely affect the business, properties, assets,
operations, technology, or relations with customers, suppliers, distributors or
employees of the Seller in the Business or the prospects of the Business. In
the event of such a change, Buyer's sole remedy hereunder shall be to either
waive such changes or to terminate this Agreement without further recourse by
either party.
ARTICLE 10
ACTIONS BY SELLER AND BUYER AFTER THE CLOSING
10.1 Books and Records. Each party agrees that such party
will cooperate with and make available to the other party, during normal
business hours, all books and records, information and employees (without
substantial disruption of employment) retained and remaining in existence after
the Closing Date which are necessary or useful in connection with any Tax
inquiry, audit, investigation or dispute, any litigation or investigation or
any other matter requiring any such books and records, information or employees
for any reasonable
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business purpose. The party requesting any such books and records, information
or employees shall bear all of the out-of-pocket costs and expenses (including,
without limitation, attorneys' fees, but excluding reimbursement for salaries
and employee benefits) reasonably incurred in connection with providing such
books and records, information or employees.
10.2 Indemnifications.
(a) By Seller. Seller agrees to indemnify, save
and hold harmless Buyer, its affiliates and subsidiaries, and its and their
respective Representatives, from and against any and all costs, losses,
liabilities, damages, lawsuits, deficiencies, adverse claims, Taxes and
expenses (whether or not arising out of third-party claims) including, without
limitation, interest, penalties, reasonable attorneys' fees and all amounts
paid in investigation, defense or settlement of any of the foregoing
(collectively, "Damages"), incurred in connection with or arising out of or
resulting from (i) any breach of any covenant or warranty, or the inaccuracy of
any representation, made by Seller in or pursuant to this Agreement, (ii) any
actual or threatened claim, suit, action or proceeding arising out of or
resulting from the conduct of the Business prior to the Closing Date (other
than matter expressly assumed as Assumed Liabilities), and (iii) any and all
liabilities of Seller other than the Assumed Liabilities. Notwithstanding the
foregoing, Seller shall not be liable for any Damages to Buyer hereunder until
the aggregate amount of all such Damages exceeds $25,000; provided, that such
limitation shall not affect or reduce the amount of any Damages which Buyer may
be entitled to in any action brought for indemnification after the amount of
all Damages of Buyer exceeds $25,000.
(b) By Buyer. Buyer shall indemnify and save and
hold harmless Seller, and its Representatives from any and all Damages incurred
in connection with or arising out of or resulting from any breach of any
covenant or warranty, or the inaccuracy of any representation, made by Buyer in
or pursuant to this Agreement.
(c) Brokers and Finders. Pursuant to the
provisions of this Section 9.3, each of Buyer and Seller shall indemnify, hold
harmless and defend the other party from the payment of any and all broker's
and finder's expenses, commissions, fees or other forms of compensation which
may be due or payable from or by the indemnifying party, or may have been
earned by any third party acting on behalf of the indemnifying party in
connection with the negotiation and execution hereof and the consummation of
the transactions contemplated hereby.
(d) Claims for Indemnity. Whenever a claim shall
arise for which any party shall be entitled to indemnification hereunder, the
indemnified party shall notify the indemnifying party in writing within sixty
(60) days of the indemnified party's first receipt of notice of, or the
indemnified party's obtaining actual knowledge of, such claim, and in any event
within such shorter period as may be necessary for the indemnifying party or
parties to take appropriate action to resist such claim. Such notice shall
specify all facts known to the indemnified party giving rise to such indemnity
rights and shall estimate (to the extent reasonably possible) the amount of
potential liability arising therefrom. If the indemnifying party shall be duly
notified of such dispute, the parties shall attempt to settle and compromise
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the same or may agree to submit the same to arbitration or, if unable or
unwilling to do any of the foregoing, such dispute shall be settled by
appropriate litigation, and any rights of indemnification established by reason
of such settlement, compromise, arbitration or litigation shall promptly
thereafter be paid and satisfied by those indemnifying parties obligated to
make indemnification hereunder.
(e) Right to Defend. If the facts giving rise to
any claim for indemnification shall involve any actual or threatened action or
demand by any third party against the indemnified party or any of its
affiliates, the indemnifying party or parties shall be entitled (without
prejudice to the indemnified party's right to participate at its own expense
through counsel of its own choosing), at their expense and through a single
counsel of their choosing, to defend or prosecute such claim in the name of the
indemnifying party or parties, or any of them, or if necessary, in the name of
the indemnified party. In any event, the indemnified party shall give the
indemnifying party advance written notice of any proposed compromise or
settlement of any such claim. If the remedy sought in any such action or
demand is solely money damages, the indemnifying party shall have fifteen (15)
days after receipt of such notice of settlement to object to the proposed
compromise or settlement, and if it does so object, the indemnifying party
shall be required to undertake, conduct and control, through counsel of its own
choosing and at its sole expense, the settlement or defense thereof, and the
indemnified party shall cooperate with the indemnifying party in connection
therewith.
10.3 Further Assurances. Each party will cooperate in
good faith with the other and will take all appropriate action and execute any
documents, instruments or conveyances of any kind which may be reasonably
necessary or advisable to carry out any of the transactions contemplated
hereunder.
10.4 No Prohibited Assignment; Best Efforts. This
Agreement shall not constitute an agreement to assign any claim, contract,
license, lease, commitment, sales order or purchase order if any attempted
assignment of the same without the consent of the other party thereto would
constitute a breach thereof or in any way affect the rights of Seller
thereunder and such consent has not been obtained. If such consent is not
obtained or if any attempted assignment would be ineffective or would affect
Seller's rights thereunder so that the Buyer would not in fact receive all such
rights, then Seller shall use its best efforts to cause Buyer to be placed in
the same economic position as if such consent or assignment had been effected.
10.5 Restrictive Covenants.
(a) In order to better assure to Buyer the
goodwill of the Business being acquired hereunder, and by reason of Seller's
unique knowledge of the confidential information and business contacts relating
to the Business, Seller hereby agrees that it will not, directly or indirectly,
for itself or through or on behalf of any other person or entity:
(i) at any time, divulge, transmit or
otherwise disclose or cause to be divulged, transmitted or otherwise disclosed,
any business contacts, client or customer
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lists, technology, know-how, trade secrets, marketing techniques, contracts or
other confidential or proprietary information of the Business of whatever
nature existing on or prior to the Closing Date (provided, however, that for
purposes hereof, information shall not be considered to be confidential or
proprietary if (A) it is a matter of common knowledge or public record, (B) it
is generally known in the industry, or (C) Seller can demonstrate that such
information was already known to the recipient thereof other than by reason of
any breach of any obligation under this Agreement or any other confidentiality
or non-disclosure agreement); and/or
(ii) at any time during the period from
Closing Date through and including the fifth (5th) anniversary thereof, engage
in any operations which provide mobile nuclear medicine or ultrasound services
to acute care facilities in the states of Indiana, Illinois or Iowa.
(b) The parties hereby further acknowledge and
agree that any breach by Seller, directly or indirectly, of the foregoing
restrictive covenants will cause Buyer irreparable injury for which there is no
adequate remedy at law. Accordingly, Seller expressly agrees that, in the
event of any such breach or any threatened breach hereunder by Seller, directly
or indirectly, Buyer shall be entitled, in addition to any and all other
remedies available (including but not limited to damages), to seek and obtain
injunctive and/or other equitable relief to require specific performance of or
prevent, restrain and/or enjoin a breach under the provisions of this
Agreement.
10.6 Deposits. In the event and to the extent that Seller
may, from time to time, receive from the lessors or other responsible persons
any of the deposits for which Seller has received payment or reimbursement
pursuant to Section 2.8 hereof, Seller shall promptly turn over such receipt(s)
to Buyer.
ARTICLE 11
MISCELLANEOUS
11.1 Assignment. Neither this Agreement nor any of the
rights or obligations hereunder may be assigned by either party without the
prior written consent of the other party; except that Buyer may, without such
consent, (a) assign all such rights and such obligations to a subsidiary or
affiliate of Buyer or to a successor to the Business which shall assume in
writing all obligations and liabilities hereunder, and/or (b) assign all of its
rights and remedies hereunder (including, without limitation, rights for
indemnification hereunder) to the financial institution(s) or other lender(s)
providing financing in connection with the transactions contemplated hereby.
Subject to the foregoing, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns, and
no other person shall have any right, benefit or obligation hereunder.
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11.2 Notices. Unless otherwise provided herein, any
notice, request, instruction or other document to be given hereunder by either
party to the other party shall be in writing and shall be deemed to have been
given (a) if mailed, at the time when mailed in any general or branch office of
the United States Postal Service, enclosed in a registered or certified
postage-paid envelope, (b) if sent by facsimile transmission, when so sent and
receipt acknowledged by an appropriate telephone or facsimile receipt or (c) if
sent by other means, when actually received by the party to which such notice
has been directed, in each case at the respective address or fax number set
forth below or such other address or fax number as such party may have fixed by
notice:
If to Seller, addressed to:
MICA Imaging, Inc.
9444 Farnham Street, Suite 100
San Diego, CA 92123
Attention: Robert S. Muehlberg
Tel: (619) 560-0110
Fax: (619) 560-0046
With a copy (which shall not constitute notice) to:
Harvey C. Flodin, Esq.
1844 Avocado Road
Oceanside, CA 92054
Tel: (619) 757-2453
Fax: (619) 757-1003
If to Buyer, addressed to:
Diagnostic Health Services, Inc.
2777 Stemmons Freeway, Suite 1525
Dallas, TX 75207
Attention: Max W. Batzer
Tel: (214) 634-0403
Fax: (214) 689-6459
With a copy (which shall not constitute notice) to:
Shahe Sinanian, Esq.
Solomon, Fornari, Weiss & Moskowitz, P.C.
650 Fifth Avenue, 7th Floor
New York, NY 10019
Tel: (212) 265-1200
Fax: (212) 246-2561
18
<PAGE> 23
11.3 Governing Law. This Agreement shall be construed,
interpreted and the rights of the parties determined in accordance with the
laws of the State of Illinois, without reference to the choice of law
provisions thereof.
11.4 Arbitration. Any disagreement, dispute or claim
arising out of or relating to this Agreement, except with respect to the
enforcement of the Covenant Not to Compete contained herein, shall be settled
by arbitration in accordance with the procedures of the American Arbitration
Association in Chicago, Illinois.
11.5 Entire Agreement; Modifications and Waivers. This
Agreement, together with all exhibits and schedules hereto, constitutes the
entire agreements between the parties pertaining to the subject matter hereof
and supersedes all prior agreements, understandings, negotiations and
discussions, whether oral or written, of the parties. No supplement,
modification or waiver of this Agreement shall be binding unless executed in
writing by the party to be bound thereby. No waiver of any of the provisions
of this Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
11.6 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
11.7 Expenses. Except as otherwise specified herein, each
party hereto shall pay its own legal, accounting, out-of-pocket and other
expenses incident to this Agreement and to any action taken by such party in
preparation for carrying this Agreement into effect.
11.8 Invalidity. In the event that any one or more of the
provisions contained in this Agreement or in any other instrument referred to
herein, shall, for any reason, be held to be invalid, illegal or unenforceable
in any respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
11.9 Titles. The titles, captions or headings of the
Articles and Sections herein are for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
11.10 Publicity. Neither party shall issue any press
release or make any public statement regarding the transactions contemplated
hereby, without the prior approval of the other party, except, if after
discussion between the parties or their counsel, in the opinion of any party's
counsel, such party is required under any applicable law or regulation to make
a public statement or announcement, such party shall be permitted to issue the
legally required statement or announcement.
19
<PAGE> 24
11.11 Confidentiality. In the event the transaction which
is the subject of this Agreement is not consummated, each party hereto agrees
that it will return to the other all records and other documents of such other
party then in its possession, and will not itself use or disclose, directly or
indirectly, to any person any confidential information with respect to such
other party learned by it during the period prior to the termination of this
Agreement.
11.12 Attorneys' Fees. In the event of any action at law
or in equity between the parties hereto to enforce any of the provisions
hereof, the unsuccessful party to such litigation shall pay to the successful
party all costs and expenses, including actual attorneys' fees, incurred
therein by such successful party; and if such successful party shall recover
judgement in any such action or proceeding, such costs, expenses and attorneys'
fees may be included in and as part of such judgement. The successful party
shall be the party who is entitled to recover its cost of suit, whether or not
the suit proceeds to final judgement. A party not entitled to recover its
costs shall not recover attorneys' fees.
20
<PAGE> 25
IN WITNESS WHEREOF, the parties hereto have caused this Asset
Purchase Agreement to be duly executed as of the day and year first above
written.
Buyer:
SPECIALIZED IMAGING SERVICES, INC.
By: /s/ Max Batzer
------------------------------
President
Seller:
MICA IMAGING, INC.
By: /s/ Robert S. Muehlberg
------------------------------
21
<PAGE> 26
GUARANTEE
Medical Imaging Centers of America, Inc. hereby unconditional
guarantees to Specialized Imaging Services, Inc. the faithful, prompt and
complete performance by MICA Imaging, Inc. of all of the obligations of MICA
Imaging, Inc. under the above Agreement.
Date:
MEDICAL IMAGING CENTERS OF AMERICA, INC.
a California corporation
By: /s/ Robert S. Muehlberg
------------------------------------
Its: President
22
<PAGE> 27
GUARANTEE
Diagnostic Health Services, Inc. hereby unconditionally guarantees to
MICA Imaging, Inc. the faithful, prompt and complete performance by Specialized
Imaging Services, Inc. of all of the obligations of Specialized Imaging
Services, Inc. under the above Agreement.
Date:
DIAGNOSTIC HEALTH SERVICES, INC.
a Delaware corporation
By: /s/ Max Batzer
-----------------------------------
Its: President
23
<PAGE> 28
DIAGNOSTIC HEALTH SERVICES
2777 Stemmons Freeway, Suite 1525
Dallas, Texas 75207
July 31, 1995
MICA Imaging, Inc.
& Affiliates
9444 Farnham Street
Suite 100
San Diego, CA 92123
Re: Addendum to Asset Purchase Agreement
Dear Sirs:
Reference is made to the Asset Purchase Agreement of even date
herewith by and between Specialized Imaging Services, Inc. and MICA Imaging,
Inc. (the "Asset Purchase Agreement"). All capitalized terms used herein
without definition have the respective meanings ascribed to them in the Asset
Purchase Agreement.
Diagnostic Health Services, Inc. ("DHS"), being the ultimate
parent corporation of the Buyer, hereby confirms and agrees that DHS will,
within sixty (60) days after the Closing Date, cause Seller and its affiliates
(singly and collectively, "MICA") to be relieved and released of all
liabilities and obligations relating to periods subsequent to the Closing Date
under all Capital Leases, Financing Leases and Operating Leases being assumed
by the Buyer pursuant to the Asset Purchase Agreement, as reflected in Schedule
1.1(g) and Schedule 1.1(h) to the Asset Purchase Agreement (collectively, the
"Leases"). Such termination of MICA's post-Closing Date obligations under the
Lease may be accomplished in such manner, as to each Lease, as may be
determined by DHS in its sole and absolute discretion, and may include, without
limitation, (a) procuring a written release in favor of MICA, in form and
substance reasonably satisfactory to MICA, (b) prepaying in full the
post-Closing Date obligations under such lease, and providing reasonably
satisfactory evidence thereof to MICA, (c) negotiating a discounted buyout of
the subject Lease, evidenced by an agreement confirming receipt by the lessor
of an amount satisfactory to such lessor in full satisfaction of all
obligations under such Lease, (d) refinancing the subject Lease pursuant to
written agreements which shall either constitute a full novation of the
underlying Lease obligations with a new obligee, or by means of an assignment
of the existing Lease which shall include an express written release of MICA in
respect of all post-Closing Date obligations under such Lease, or (e) any other
transaction or series of transactions, so long as MICA is assured in writing or
by operation of law of the termination of any and all liability under such
Lease in respect of obligations relating to periods subsequent to the Closing
Date.
<PAGE> 29
This addendum is in addition to, and not in lieu of, the
representations, warranties and covenants contained in the Asset Purchase
Agreement, and the general guarantee executed by DHS in favor of the Seller
with respect to the faithful, prompt and complete performance by the Buyer of
its obligations under the Asset Purchase Agreement. Nothing herein contained
shall be deemed to alter or amend in any manner the parties' representations,
guaranties and covenants pursuant to the Asset Purchase Agreement, it being
intended that this addendum shall constitute an additional commitment,
undertaking and agreement of DHS in respect of the transactions contemplated by
the Asset Purchase Agreement.
Upon execution and delivery hereof by DHS, the Buyer and the
Seller, this addendum shall become a part of the Asset Purchase Agreement as if
expressly contained therein, and be deemed to be executed and delivered
simultaneously therewith.
Very truly yours
DIAGNOSTIC HEALTH SERVICES, INC.
By: /s/ MAX BATZER
____________________________________
Acknowledged and Confirmed:
SPECIALIZED IMAGING SERVICES, INC.
By: /s/ MAX BATZER President
____________________________________
(Title)
MICA IMAGING, INC.
By: /s/ ROBERT S. MUEHLBERG President
____________________________________
(Title)
<PAGE> 30
SCHEDULE 1.1(C)-(1 of 2)
<TABLE>
<CAPTION>
Contracts
Unit # Customer Name Special Terms
------ ------------- -------------
<S> <C> <C>
US108-1 Mercy Hospital & Medical Center
Blue Island Medical Center
* Med. & Surg. Dr. Wolfson No charge for Medicaid patients.
Caleel & Associates
* Dr. Kitapci
Oak Park Diagnostics
US108-2 Suburban Hospital Contract expires 7/31/95
US123-1 Mendota Community Hospital Hospital has purchase options
US123-2 Sandwich Community Hospital
Perry Memorial Hospital
US125 Imaging Clinic No contract: PRN
Norwegian American Hospital
St. Bernard's Hospital No contract: PRN
St. Joseph Hospital - Belv.
US127 Rochelle Community Hospital
Highland Hospital
Morrison Community Hospital
Vencor Hospital - Sycamore
US128 * Kishwaukee Medical Associates, Ltd.
Harvard Community Hospital
* Cherry Valley Medical Clinic
Dr. Rivers
LaGrange Medical Center
* Center for Cardiovascular Diseases/Dr. Kutom
Dr. Strnad
Dr. Desai
Fox Valley
US134 Central Community Hospital
Gibson Community Hospital
John Warner Hospital
Dwight Correctional Institution
Tri-County Health Services, Inc.
US139 Oak Forest
US160 Sara Culberton Memorial Hospital No contract: PRN
PS603 Dr. Jabamoni No contract: PRN
</TABLE>
*- Medicare patients billed by Physician Service Center.
NOTE: The above contracts may have been serviced by more than one unit during
any given month. Many contracts have 30 day termination clauses.
<PAGE> 31
SCHEDULE 1.1(C)-(2 of 2)
<TABLE>
<CAPTION>
Contracts
Unit # Customer Name Special Terms
------ ------------- -------------
<S> <C> <C>
NM201-1 Gottlieb Memorial Hospital
NM201-2 Gottlieb Memorial Hospital
NM201-3 Gottlieb Memorial Hospital
NM203 Memorial Medical Center - Woodstock
NM205 Oak Forest Hospital
NM206 Suburban Hospital
NM207-1 Sandwich Community Hospital
NM207-2 Idle
NM207-3 Mendota Community Hospital
NM207-4 Rochelle Community Hospital
NM208 Perry Memorial Hospital
NM209-1 Carlinville Area Hospital
NM209-2 Pana Community Hospital
NM209-3 Hillsboro Community Hospital
NM209-4 Utlaut Memorial Hospital
NM209-6 Stanton Community Hospital Hospital has option to exchange equipment @ 3 years.
NM210-1 Cameron Memorial Community Hospital
NM210-2 Vencor Hospital - LaGrange
NM210-3 Paulding Community Hospital
NM210-4 Wells Community Hospital
NM213 Greene County General Hospital Hospital has option to exchange equipment @ 3 years.
NM215 Mason District Hospital Hospital has option to exchange equipment @ 5 years.
NM216 Washington County Hospital
NM218 Kosciusko Community Hospital Hospital has option to buy equipment @ FMV.
Hospital has option to relocate unit.
NM219 Kewanee Hospital
NM220-1 Brookdale Hospital Medical Center $1 buyout on Sopha DSX & DS7 on 6/30/96.
NM220-2 Brookdale Hospital Medical Center
NM224 Kiswaukee Community Hospital (A)
NM225 Palmyra Park Hospital may purchase Sopha DS7 on 9/1/96.
Buyout requested on 7/25/95.
NM226 Rankin Medical Center Hospital may purchase Sopha DS7 for $1 on 12/31/96.
NM227 St. Joseph's Mercy Hospital
NM228-1 Michigan Heart Institute
NM228-2 Michigan Heart Institute
NM256 St. Luke's Hospital
</TABLE>
(A)-Hospital signed contract under condition that James Doran remain the
primary tech and Ashwin Patel remains the representative-change of either may
affect contract term.
<PAGE> 32
SCHEDULE 1.1(D)
PROFIT AND LOSS STATEMENT (UNAUDITED)
3 MONTHS ENDED MARCH 31, 1995
<TABLE>
<S> <C>
Revenue 1,387,469 (A)
Cost of Medical Services 1,032,340 (B)
---------
Direct Margin 355,129
---------
Overhead - NM 110,903
- US 77,576
---------
Net Income 166,650
=========
</TABLE>
<TABLE>
<CAPTION>
Cost of
Revenues Medical Services
-------- ----------------
<S> <C> <C>
Ultrasound 488,370 315,547
Nuclear Medicine 828,990 658,753
Professional Staffing 70,109 58,040
--------- ---------
1,387,469 (A) 1,032,340 (B)
</TABLE>
<PAGE> 33
SCHEDULE 1.1(G)
OPERATING LEASES
<TABLE>
<CAPTION>
Equipment Financing Lease Monthly Payment on Renewal
Unit # Description Source Lease # Termination Deposits Rent(B) Termination Option
------ ----------- --------- ------- ----------- -------- ------- ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
NM201-1 GE 400 AT/Star GE Medical 8502624-001 Jun-95 -- 5,830 -- (A)
NM225 Sopha DS7 Norwest Financial 405-0070900-001 Oct-96 -- 5,325 -- (C)
NM225 Stress Test Equipment Norwest Financial 405-0070900-003 Oct-96 -- 597 -- (C)
NM226 Sopha DS7 Norwest Financial 405-0070900-002 Oct-96 -- 5,442 -- (C)
</TABLE>
(A) At June 30, 1995, FMV buyout per discussion with GE is $68,000 plus tax.
Lease on month-to-month in July 1995 at $5,830.
(B) Includes tax if applicable.
(C) October 1996, FMV buyout option available or Unit can be returned.
FMV not to exceed 22.5% of original equipment cost.
<PAGE> 34
SCHEDULE 1.1(h)
CAPITAL LEASES AND FINANCING LEASES
<TABLE>
<CAPTION>
Equipment Financing Lease Monthly Payment on Renewal
Unit # Description Source Lease # Termination Deposits Rent Termination Option
------ ----------- --------- ------- ----------- -------- ------ ----------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
US108-1 Acuson 128 Banc of Boston 01353-018 Sep-95 -- 4,145 -- (A)
US108-1 Acuson XP-10 Upgrade Acuson 9715301-002 Sep-96 -- 1347 1.00 (B)
US123-1 Acuson XP-10 Upgrade Acuson 9715301-003 Sep-96 -- 1,862 1.00 (B)
US123-2 Acuson XP-10 Upgrade Acuson 9715301-001 Feb-96 -- 3,137 1.00 (B)
US134 ATL UM9 Digital Plus Heller Financial 0110575-001 Jun-97 (C) 3,731 *3,731 -- (A)
US139 ATL UM9 Digital Plus Heller Financial 0110575-001 Jun-97 (C) 3,661 *3,661 -- (A)
US160 HP 1000 Hewlett Packard 4126-43128 Jun-97 -- 3,542 -- (A)
NM201-2 Sopha DSX US CONCORD 01353-924 Jul-96 -- 7,464 -- (A)
NM219 Sopha DS7 US CONCORD 01353-934 Oct-96 -- 6,185 -- (A)
NM220-1/-2 Sopha DSX/Sopha DS7 US CONCORD 01353-930 Oct-96 -- 13,755 -- (A)
NM224 Sopha DSX US CONCORD 01353-932 Oct-96 -- 7,150 -- (A)
NM228-1 Siemens Orbitor 37 Heller Financial 0110575-001 Jun-97 (C) 6,425 *6,425 -- (A)
NM228-2 Siemens Orbitor 75 Siemens 0001008-000 Jan-98 -- 5,611 1.00 (B)
------
13,817
</TABLE>
* Total Payments: $13,817
(A) Note - Own equipment at end of term
(B) Purchase option - $1.00
(C) Last month's deposit of $13,817
<PAGE> 35
SCHEDULE 1.1(i)
LICENSES
<TABLE>
<CAPTION>
License Expiration
Unit # Customer Name State License Number Date
------ ------------- ----- ------- ------- ----------
<S> <C> <C> <C> <C>
NM201-1 Gottlieb IL (A)
NM201-2 Gottlieb IL (A)
NM201-3 Gottlieb IL (A)
NM203 Memorial Hospital IL (A)
NM205 Oak Forest Hospital IL (A)
NM206 Suburban Hospital IL (A)
NM207-1 Sandwich Comm Hosp IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM207-2 Idle IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM207-3 Mendota Comm Hosp IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM207-4 Rochelle Comm Hosp IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM208-1 Perry Memorial Hosp IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM209-1 Carlinville Hospital IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM209-2 Pana Community IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM209-3 Hillsboro Community IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM209-4 Utlaut Memorial IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM209-6 Community Mem of Stanton IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM210-1 Cameron Mem Comm Hosp IN US Nuclear Regulatory Comm. 12-13568-02 7/31/97
IN State Department of Health R0026-76 3/6/97
NM210-2 Vencor-LaGrange IN US Nuclear Regulatory Comm. 12-13568-02 7/31/97
IN State Department of Health R0563-44 3/6/97
NM210-3 Paulding County Hosp OH US Nuclear Regulatory Comm. 12-13568-02 7/31/97
OH State Department of Health 56-B-00093-01 9/30/96
NM210-4 Wells Comm Hosp IN US Nuclear Regulatory Comm. 12-13568-02 7/31/97
IN State Department of Health R0332-90 3/6/97
NM213 Green County Gen Hosp IN (A)
NM215 Mason District Hosp IL (A)
NM216 Washington County Hosp IL (A)
NM218 Kosciusko Comm Hosp IN US Nuclear Regulatory Comm. 12-13568-02 7/31/97
IN State Department of Health R0230-43 3/6/97
NM219 Kewanee Comm IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM220-1 & 2 Brookdale Hosp Med Ctr NY (A)
NM224 Kishwaukee Comm Hosp IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
NM225 Palmyra Park GA (A)
NM226 Rankin Med Ctr MS (A)
NM227 St. Joseph's Mercy Hosp IA (A)
NM228-1 Michigan Heart Institute MI (A)
NM228-2 Michigan Heart Institute MI (A)
NM256 St. Luke's Hospital KS (A)
</TABLE>
<TABLE>
<CAPTION>
Storage Facilities
------------------
<S> <C> <C> <C> <C>
J & L Storage, Unit #1 IN IN State Department of Health R0481-17 3/6/97
Mica Lab-Warsaw IN IN State Department of Health R0159-43 3/6/97
Mica Lab-Kiswaukee IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
Mica Lab-Sycamore IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
Mica Lab-Princeton IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
Mica Lab-Greenville IL IL Dept. of Nuclear Safety IL-01819-01 4/30/97
</TABLE>
(A) Hospital is responsible for its own license.
<PAGE> 36
SCHEDULE 2.2-(1 of 2)
ASSUMED LIABILITIES
Operating Leases
----------------
<TABLE>
<CAPTION>
Amount
Equipment Financing Lease Remaining Monthly Outstanding
Unit # Description Source Lease # Termination Months Rent @7/31/95
------ ----------- --------- ------- ----------- --------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
NM201-1 GE 400 AT/Star GE 8502624-001 Jun-95 -- 5,830 (A)
NM225 Sopha DS7 Norwest Financial 405-0070900-001 Oct-96 14 5,325 74,550
NM225 Stress Test Equipment Norwest Financial 405-0070900-003 Oct-96 14 597 8,358
NM226 Sopha DS7 Norwest Financial 405-0070900-002 Oct-96 14 5,442 76,188
-------
Total 159,096
=======
</TABLE>
(A)-At June 30, 1995, FMV buyout per discussion with GE is $68,000 plus tax.
Lease on month-to-month beginning July 1995 at $5,830.
Capital Leases & Financing Leases
---------------------------------
<TABLE>
<CAPTION>
Amount
Equipment Financing Lease Remaining Monthly Outstanding
Unit # Description Source Lease # Termination Months Rent @7/31/95
------ ----------- --------- ------- ----------- --------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
US108-1 Acuson 128 Banc Boston Leasing 0353-018 Sep-95 2 4,145 8,290
US108-1 Acuson XP-10 Upgrade Acuson 9715301-002 Sep-96 14 1,268 17,752
US123-1 Acuson XP-10 Upgrade Acuson 9715301-003 Sep-96 14 1,753 24,542
US123-2 Acuson XP-10 Upgrade Acuson 9715301-001 Feb-96 7 2,952 20,664
US134 ATL UM9 Digital Plus Heller Financial 0110575-001 Jun-97 22 3,731 82,082
US139 ATL UM9 Digital Plus Heller Financial 0110575-001 Jun-97 22 3,661 80,542
US160 HP 1000 Hewlett Packard 4126-43128 Jun-97 23 3,541 81,443
NM201-2 Sopha DSX Marine Midland Bank 01353-024 Jul-96 12 7,464 89,568
NM219 Sopha DS7 Marine Midland Bank 01353-034 Oct-96 15 6,185 92,775
NM220-1/-2 Sopha DSX, DS7 Marine Midland Bank 01353-030 Oct-96 15 13,755 206,325
NM224 Sopha DSX Marine Midland Bank 01353-032 Oct-96 15 7,150 107,250
NM228-1 Siemens Orbitor 37 Heller Financial 0110575-001 Jun-97 22 6,425 141,350
NM228-2 Siemens Orbitor 75 Siemens Credit Corp 0001008-000 Jan-98 30 5,293 158,790
---------
Total 1,111,373
=========
</TABLE>
<PAGE> 37
SCHEDULE 2.2-(2 OF 2)
<TABLE>
<CAPTION>
Real Estate Lease Amount
Lease Remaining Monthly Outstanding
Description Location Termination Months Rent @7/31/95
----------- -------- ----------- --------- ------- -----------
<S> <C> <C> <C> <C> <C>
Building Lease 4 N 370 84th Court
Bartlett, IL 60103 4/30/96 9 1,950 17,550
</TABLE>
<TABLE>
<CAPTION>
Storage Facilities
------------------
Lease Monthly
Description Location Description Termination Rent
----------- -------- ----------- ----------- ------
<S> <C> <C> <C> <C>
J & L Storage, Unit # 1 2235 County Road 48 Radioactive materials (B) 104
Auburn, IN 46706 receipt and storage
lab
Mica Lab: Warsaw 401 Argonne Road Radioactive materials (B) 175
(Charles Koser) Warsaw, IN 46808 receipt and storage
lab
Mica Lab: Kiswaukee Kiswaukee Community Radioactive materials No monthly rent.
Hospital receipt and storage
Bethany Rd & Route 23 lab
Dekalb, IL 60115
Mica Lab: Sycamore Coltenville Rd & Route 23 Radioactive materials (B) 62
(R & P Mini Warehouse, Sycamore, IL 60178 receipt and storage
Unit #45) lab
Mica Lab: Princeton 680 W. Peru St. Radioactive materials (B) 63
(Beck's Mini Storage) Princeton, IL receipt and storage
lab
Mica Lab: Greenville Utlaut Memorial Hospital Radioactive materials No monthly rent.
Healthcare Drive receipt and storage
Greenville, IL 62246 lab
</TABLE>
<TABLE>
<CAPTION>
Other
-----
<S> <C> <C> <C> <C>
GTE-TCX-128 Phone system Bartlett, IL Phone system (C) 180.56
GTD-Add to HK system Bartlett, IL Phone system (C) 108.63
Pitney Bowes Bartlett, IL Postage meter rental (D)
</TABLE>
(B)-Annual leases with 30 day cancellation notice
(C)-Month to month leases with 30 day cancellation notice
(D)-Qtrly amt of $101.25
<PAGE> 38
SCHEDULE 2.3(a)-(1 OF 2)
EQUIPMENT
<TABLE>
<CAPTION>
Equipment
Unit # Description (A) Customer
------ --------------- --------
<S> <C> <C>
NM201-1 400 AT/Star Gottlieb Memorial Hospital
NM201-2 Sopha DSX Gottlieb Memorial Hospital
NM201-3 Star Cam Gottlieb Memorial Hospital
NM203 400AT/Nuc Max Comp Memorial Medical Center-Woodstock
NM205 Max 37 Oak Forest Hospital
NM206 400AT/Star Comp Suburban Hospital
NM207-1 Maxi II Sandwich Comm Hosp
NM207-2 400 AT SPECT Idle
NM207-3 Maxi 61 Mendota Comm Hosp
NM207-4 Maxi 37 Rochelle Comm Hosp
NM208-1 Maxi 61/Star Perry Memorial Hosp
NM209-1 Maxi 37 Carlinville Area Hospital
NM209-2 Maxi 37 Pana Community Hospital
NM209-3 Maxi 37 Hillsboro Community
NM209-4 Maxi 37 Utlaut Memorial Hospital
NM209-6 Maxi II Stanton Community Hospital
NM210-1 Maxi 61 Star Cameron Mem Comm Hosp
NM210-2 Maxi 37 Star Vencor Hospital-LaGrange
NM210-3 Maxi 61 Paulding County Hosp
NM210-4 Maxi 61 Wells Comm Hosp
NM213 Maxi 37 Green County Gen Hosp
NM215 400 AT Spect Mason District Hosp
NM216 Maxi II Washington County Hosp
NM218 Star Cam Kosciusko Comm Hosp
NM219 Sopha DS7 Kewanee Comm
NM220-1 & 2 Sopha DSX & Sopha DS7 Brookdale Hosp Med Ctr
NM224 Sopha DSX Kiswaukee Comm Hosp
NM225 Sopha DS7 Palmyra Park
NM226 Sopha DS7 Rankin Med Ctr
NM227 GE Maxi II St. Joseph's Mercy Hosp
NM228-1 Siemens Orbitor 37 Michigan Heart Institute
NM228-2 Siemens Orbitor 75 Michigan Heart Institute
NM256 Siemens PGIV St. Luke's Hospital
US108-1 Acuson 128 Mobile
US108-2 Acuson XP-10/Cardiac Suburban
US123-1 Acuson XP-10 Mendota
US123-2 Acuson XP-10/Cardiac Mobile
US123-3 Acuson 128 IDLE
US125 Diasonics DRF400/Parks PV Mobile
US127 Acuson XP-10/Cardiac Mobile
US128 Acuson 128 Color Mobile
US134 ATL UM9 Digital Plus Mobile
US139 ATL UM9 Digital Plus Oakforest
US160 HP 1000 Sara Culberton Memorial Hospital
</TABLE>
(A)- Equipment includes various peripherals.
<PAGE> 39
SCHEDULE 2.3(A)-(2 of 2)
EQUIPMENT
Other
Automobiles
<TABLE>
<CAPTION>
Equipment
VIN # Description Location
----- ----------- --------
<S> <C> <C>
1FTEE14N3RHB31859 1994 Ford Van Rochelle, IL
1FTEE14N7RHA61928 1994 Ford Van Fisher, IL
1Y1SK5147HZ071068 1987 Chevy Nova Bartlett, IL
1GCEG25H9K7105917 1989 Chevy Van Bartlett, IL
1GCEG25H1K7106320 1989 Chevy Van Chicago, IL
1GCDG15H9K7145436 1989 Chevy Van Bartlett, IL
1GCDG15H4L7145232 1989 Chevy Van Hinsdale, IL
2GCEG25HXK4155785 1989 Chevy Van Hanover Park, IL
1GCEG25H8K7106153 1989 Chevy Van Sandwich, IL
1GCDG15H8K7146061 1989 Chevy Van Springfield, IL
1GILT54W9KY170709 1989 Chevy Corsica Bartlett, IL
1G1JC54GXLJ193538 1990 Chevy Cavalier Princeton, IL
1G1JC84G6LJ191013 1990 Chevy Cavalier Bartlett, IL
1G1JC54G9LJ176553 1990 Chevy Cavalier Bartlett, IL
1G1JC14G7MJ192888 1990 Chevy Cavalier Greenville, IL
JT2EL43AXM0082178 1991 Toyota Tercel Bartlett, IL
JT2EL43A8M0073673 1991 Toyota Tercel Dekalb, IL
1GCEG25H4L7103249 1990 Chevy Van Hinsdale, IL
</TABLE>
<PAGE> 40
SCHEDULE 4.2
CERTAIN CHANGES OR
EVENTS SINCE
MARCH 31, 1995
<TABLE>
<CAPTION>
Contract(s) Change or Event
----------- ---------------
<S> <C>
Chicago Osteopathic Hospital Termination of Professional Staffing contract
effective 7/26/95.
Hillsboro Area Hospital Termination of echo-cardio and vascular
US service effective 7/1/95.
St. Francis Termination of US service effective 4/3/95.
Midwest Physician Termination of US service effective 7/1/95.
Suburban Termination of US service effective 7/31/95.
Edward Health Center Termination of US service effective 6/30/95.
Oak Forest Contract renewal of NM service;
Contract No. 94-74-1175. Rebid-36 months.
Oak Forest Contract renewal of US service;
Contract No. 94-74-1174. Rebid-36 months.
Kosciusko Community Contract being renegotiated-(Terms may be
retroactive to January 1, 1995 to secure 36
month contract).
</TABLE>
<TABLE>
<CAPTION>
Operating Leases
----------------
Unit #/Equipment Description Change or Event
---------------------------- ---------------
<S> <C>
NM201 - GE 400 AT/Star Operating lease ended 6/30/95.
Now on month-to-month payments.
</TABLE>
Capital Leases & Financing Leases
---------------------------------
None
Real Estate Lease
-----------------
None
Licenses
--------
None
<PAGE> 41
SCHEDULE 4.3
TITLE TO ASSETS
<TABLE>
<CAPTION>
Equipment Description Vehicle ID #
--------------------- ------------
<S> <C>
1990 Chevrolet Van 1GCEG25H4L7103249
</TABLE>
Note: Mica does not have the title to the above van.
Unit is inoperable in Hinsdale, IL.
<PAGE> 42
SCHEDULE 4.4
CONDITION OF
TANGIBLE ASSETS
<TABLE>
<CAPTION>
Equipment
Unit # Description Condition
------ ----------- ---------
<S> <C> <C>
NONE.
</TABLE>
<PAGE> 43
SCHEDULE 4.17
INSURANCE POLICIES
Schedule and Description of Policy
All policies are issued by St. Paul.
Effective date: 10-1-94 to 10-1-95.
Commercial:
Blanket mobile medical equipment: $43,617,000
Deductible: $25,000
Any location: $10,000,000
Any item: $3,500,000
General Liability:
Each occurence: $1,000,000
Aggregate limit: $1,000,000
Deductible: $25,000
Aggregate: $75,000
Automobile:
Liability limit: $1,000,000
Comprehensive deductible: $250
Collision deductible: $1,000
Comprehensive limit: $35,000
Collision limit: $35,000
Umbrella:
Each occurence: $10,000,000
Aggregate: $10,000,000
Deductible: $10,000
Professional Liability:
Each Person: $1,000,000
Aggregate: $1,000,000
Deductible: $25,000
Aggregate Deductible: $75,000
<PAGE> 44
CERTIFICATE OF SECRETARY OF
MICA IMAGING, INC.
The undersigned hereby certifies that she is the duly elected
secretary of MICA IMAGING, INC. and that attached hereto are copies of true and
correct minutes enacted by the Board of Directors of the Company on July 31,
1995, which minutes have not been revoked or rescinded and remain in effect.
Executed this 31st day of July, 1995.
/s/ Denise L. Sunseri
-------------------------------------
Denise L. Sunseri
Secretary
<PAGE> 45
RESOLVED: THAT the Asset Purchase Agreement by and between
Specialized Imaging Services, Inc. and MICA Imaging, Inc., pursuant to which
MICA Imaging, Inc. is selling to Specialized Services Imaging, Inc. certain of
the assets and properties relating to the Seller's ultrasound and nuclear
medicine service business, substantially in the form presented to this meeting
and attached hereto, is hereby authorized and approved.
RESOLVED FURTHER: THAT the officers of the Corporation, and each of
them, are hereby authorized and directed to execute and deliver said Agreement,
substantially in the form attached hereto, together with any such revisions and
modifications as they may deem necessary or desirable in their discretion; and
RESOLVED FURTHER: THAT the officers of the Corporation, and each of
them, are hereby authorized and directed to execute such further documents and
to take such further action as they in their discretion deem necessary or
desirable to implement the aforesaid resolutions.
<PAGE> 46
CERTIFICATE OF SECRETARY OF
MEDICAL IMAGING CENTERS OF AMERICA, INC.
The undersigned hereby certifies that she is the duly elected
secretary of Medical Imaging Centers of America, Inc. and that attached hereto
are copies of true and correct minutes enacted by the Board of Directors of the
Company on July 31, 1995, which minutes have not been revoked or rescinded and
remain in effect.
Executed this 31st day of July, 1995.
/s/ Denise L. Sunseri
---------------------------------------
Denise L. Sunseri
Secretary
<PAGE> 47
RESOLVED: THAT the Asset Purchase Agreement by and between
Specialized Imaging Services, Inc. and the Corporation, pursuant to which the
Corporation is selling to Specialized Services Imaging, Inc. certain of the
assets and properties relating to the Corporation's ultrasound and nuclear
medicine service business, substantially in the form presented to this meeting
and attached hereto, is hereby authorized and approved.
RESOLVED FURTHER: THAT the officers of the Corporation, and each of
them, are hereby authorized and directed to execute and deliver said Agreement,
substantially in the form attached hereto, together with any such revisions and
modifications as they may deem necessary or desirable in their discretion; and
RESOLVED FURTHER: THAT the officers of the Corporation, and each of
them, are hereby authorized and directed to execute such further documents and
to take such further action as they in their discretion deem necessary or
desirable to implement the aforesaid resolutions.
<PAGE> 48
WRITTEN CONSENT OF SOLE DIRECTOR OF
MICA IMAGING, INC.
The undersigned, being the sole director of MICA IMAGING, INC., an
Illinois corporation, ("the Corporation"), does hereby adopt the following
resolutions with the same force and effect as though at a meeting duly held.
RESOLVED: THAT the Asset Purchase Agreement by and between
Specialized Imaging Services, Inc. and the Corporation, pursuant to which the
Corporation is selling to Specialized Services Imaging, Inc. certain of the
assets and properties relating to the Corporation's ultrasound and nuclear
medicine service business, substantially in the form presented to this meeting
and attached hereto, is hereby authorized and approved.
RESOLVED FURTHER: THAT the officers of the Corporation, and each of
them, are hereby authorized and directed to execute and deliver said Agreement,
substantially in the form attached hereto, together with any such revisions and
modifications as they may deem necessary or desirable in their discretion; and
RESOLVED FURTHER: THAT the officers of the Corporation, and each of
them, are hereby authorized and directed to execute such further documents and
to take such further action as they in their discretion deem necessary or
desirable to implement the aforesaid resolutions.
IN WITNESS WHEREOF, the undersigned sole director has executed this written
consent as of July 31, 1995.
/s/ Robert S. Muehlberg
------------------------
Robert S. Muehlberg
President and
Chief Executive Officer
<PAGE> 49
CLOSING CERTIFICATE
(Section 9.1 & 9.2)
The undersigned, being the Vice President, Chief Financial Officer and
Secretary of MICA IMAGING, INC. (the "COMPANY"), hereby supplies this
Certificate pursuant to Sections 9.1 and 9.2 of that certain Asset Purchase
Agreement by and between Specialized Imaging Services, Inc. and MICA Imaging,
Inc. dated July 31, 1995.
I hereby certify that except as set forth on the Schedules to said Agreement or
permitted by the Agreement, since March 31, 1995 there have not been any
material adverse changes in the condition (financial or otherwise), assets,
liabilities, reserves, business, properties, operations, technology, employee
relations, or customer, supplier or distributor relations of the Company, and
that the Company is in compliance with the conditions set forth in the
Agreement as they apply to the Company.
For the purposes of this Certificate, a "material adverse change", includes
without limitation, an event or condition which could result in a Material
Adverse Effect and/or any development or discovery of any material contingent
or other liability not in the Schedules to the Agreement which might materially
adversely affect the business, properties, assets, operations, technology or
relations with customers, suppliers, distributors or employees of the Company
in the Business or the prospects of the Business.
/s/ Denise L. Sunseri
---------------------------------------------------
Denise L. Sunseri
Vice President, Chief Financial Officer & Secretary
