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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): APRIL 28, 1995
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(APRIL 14, 1995)
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HEALTH IMAGES, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 1-11654 58-1485618
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
8601 DUNWOODY PLACE, BUILDING 200, ATLANTA, GEORGIA 30350
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 587-5084
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NOT APPLICABLE
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(Former name or former address, if changed since last report.)
Page 1 of ___ Pages
Exhibit Index on Page 6
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Pursuant to the Asset Purchase Agreement dated December 21, 1994, as
amended April 6, 1995, and as further amended April 14, 1995 (the "Asset
Purchase Agreement"), by and among Registrant, MedAlliance, Inc. ("MDAL"), a
Tennessee corporation, and certain of MDAL's subsidiaries which are signatories
thereto (MDAL and such subsidiaries shall be referred to collectively as
"Sellers"), Registrant acquired the assets and the business (the "Assets") of
fifteen (15) multi-modality medical diagnostic imaging centers. The
acquisition (the "Acquisition") was consummated on April 14, 1995.
The total consideration paid by Registrant for the Assets was
$64,522,000, comprised of (i) $23,486,000 in cash, (ii) 1,075,133 shares of
Series A Preferred Stock of MDAL and 1,052,375 shares of Series B Preferred
Stock of MDAL, (the "Preferred Stock") valued at approximately $11,254,000;
(iii) all rights to accrued and unpaid dividends on the Preferred Stock as of
the Closing Date, valued at approximately $315,000, (iv) a promissory note (the
"Note") in the original principal amount of $500,000; and (v) the assumption of
approximately $28,967,000 of liabilities and indebtedness. The Note is due and
payable on December 31, 1995, and bears interest at a rate of 8% per annum.
In connection with the closing of the Acquisition, the parties also
entered into an earnout agreement (the "Earnout Agreement"), pursuant to which
Sellers may be entitled to additional consideration of up to $8,250,000 (the
"Earnout Payment"). Under the terms of the Earnout Agreement, the actual
Earnout Payment shall be an amount equal to the product of 3.795 and the
amount, if any, by which the annualized EBITA (as defined in the Earnout
Agreement) for the acquired centers for 1995 exceeds $14,254,000. The Earnout
Payment will be made in cash, or, at the option of Registrant, by delivery of a
promissory note in lieu of a portion or all of the cash payment. In the event
Registrant delivers a note for all or some of the Earnout Payment, such note
shall be due and payable on the first anniversary of the issuance thereof, and
shall bear interest at an annual rate of 10%.
The amount of consideration paid for the Assets was determined by
arm's length negotiations between Registrant and MDAL. The cash portion of the
purchase price was funded by borrowings from certain lenders, pursuant to the
terms of the Amended and Restated Loan and Security Agreement (the "Loan
Agreement") dated March 27, 1995, among The Provident Bank, as Agent,
Registrant, Health Images Texas, Inc., Health Images Pennsylvania, Inc. and
various lenders described therein.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Financial Statements of Business Acquired.
Registrant has determined that it is impracticable to provide
the required financial statements of the acquired business prepared in
accordance with Regulation
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S-X with this Report. Registrant will file the required financial
statement by amendment to this Report as soon as practicable but in no
event later than June 30, 1995.
(b) Pro Forma Financial Information.
Registrant has determined that it is impracticable to provide
the required pro forma financial statements with this Report.
Registrant will file such pro forma financial statement by amendment
to this Report as soon as practicable but in no event later than June
30, 1995.
(c) Exhibits.
1. Asset Purchase Agreement dated December 21, 1994
among Registrant and MedAlliance, Inc. and certain
subsidiaries of MedAlliance, Inc. listed on the
signature pages thereto. The Exhibit contains a list
briefly identifying the contents of the Schedules to
the Asset Purchase Agreement, which have been
omitted. Registrant agrees to furnish supplementally
a copy of any omitted Schedule to the Commission upon
request [Incorporated by reference to Exhibit 1 to
the Current Report on Form 8-K of Health Images, Inc.
dated December 28, 1994 (File No. 1-11654)].
2. Form of Amendment to Asset Purchase Agreement dated
April 6, 1995 among Registrant, MedAlliance, Inc. and
certain subsidiaries of MedAlliance, Inc. which are
signatories thereto.
3. Form of Second Amendment to Asset Purchase Agreement
dated April 14, 1995 among Registrant, MedAlliance,
Inc. and certain subsidiaries of MedAlliance, Inc.
which are signatories thereto.
4. Form of Earnout Agreement among Registrant,
MedAlliance, Inc. and certain subsidiaries of
MedAlliance, Inc. which are signatories thereto
[Attached as Exhibit A to the Asset Purchase
Agreement referenced in Exhibit 1 hereto].
5. Amended and Restated Loan and Security Agreement
dated March 27, 1995, among The Provident Bank, as
Agent, Health Images, Inc., Health Images Texas,
Inc., Health Images Pennsylvania, Inc. and various
lenders which are signatories thereto [Incorporated
by reference to Exhibit 2(c) to the Annual Report on
Form 10-K for fiscal year ended December 31, 1994].
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: April 28, 1995 HEALTH IMAGES, INC.
By: /s/ Robert D. Carl, III
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Robert D. Carl, III
Chairman and Chief Executive Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description Page Number
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1 Asset Purchase Agreement dated December 21, 1994 among Registrant and
MedAlliance, Inc. and certain subsidiaries of MedAlliance, Inc. listed on the
signature pages thereto. The Exhibit contains a list briefly identifying the
contents of the Schedules to the Asset Purchase Agreement, which have been
omitted. Registrant agrees to furnish supplementally a copy of any omitted
Schedule to the Commission upon request [Incorporated by reference to Exhibit 1
to the Current Report on Form 8-K of Health Images, Inc. dated December 28, 1994
(File No. 1-11654)].
2 Form of Amendment to Asset Purchase Agreement dated April 6, 1995 among
Registrant, MedAlliance, Inc. and certain subsidiaries of MedAlliance,
Inc. which are signatories thereto.
3 Form of Second Amendment to Asset Purchase Agreement dated April 14, 1995
among Registrant, MedAlliance, Inc. and certain subsidiaries of
MedAlliance, Inc. which are signatories thereto.
4 Form of Earnout Agreement among Registrant, MedAlliance, Inc. and certain
subsidiaries of MedAlliance, Inc. which are signatories thereto
[Attached as Exhibit A to the Asset Purchase Agreement referenced in
Exhibit 1 hereto].
5 Amended and Restated Loan and Security Agreement dated March 27, 1995, among The
Provident Bank, as Agent, Health Images, Inc., Health Images Texas, Inc., Health
Images
</TABLE>
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Pennsylvania, Inc. and various lenders which are signatories
thereto [Incorporated by reference to Exhibit 2(c) to the Annual
Report on Form 10-K for fiscal year ended December 31, 1994].
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EXHIBIT 2
AMENDMENT TO ASSET PURCHASE AGREEMENT
THIS AMENDMENT made this 6th day of April, 1995 to that certain ASSET
PURCHASE AGREEMENT dated December 21, 1995 by and among MEDALLIANCE, INC., a
Tennessee corporation ("MDAL"), and certain of its subsidiaries which are
signatories thereto (collectively, "Sellers") and HEALTH IMAGES, INC., a
Delaware corporation ("Purchaser"). Capitalized terms used herein and not
otherwise defined shall have the meanings set forth in the Agreement.
W I T N E S S E T H:
WHEREAS, Purchaser and Sellers contemplate closing the acquisition
described in the Purchase Agreement ("Acquisition") on or about April 13, 1995;
WHEREAS, notwithstanding the actual date of the Closing of the
Acquisition, for accounting and other reasons Purchaser and Sellers desire to
make the Closing effective as of the close of business on March 31, 1995
("Effective Date");
WHEREAS, the Purchaser and the Sellers desire to clarify their
respective rights, duties and liabilities under the Purchase Agreement with
respect to the period between the Effective Date and the date of the actual
closing of the Acquisition or the date of termination of this Amendment
("Interim Period") and to make certain provisions for the operation of the
Business during this period;
WHEREAS, Purchaser and the Sellers desire to amend the Purchase
Agreement to reflect their agreements and understandings regarding the
effective time of the Closing and the Interim Period;
NOW, THEREFORE, the parties hereto, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
agree as follows:
1. Effective Date. Provided that the Closing of the Acquisition is
consummated prior to April 30, 1995 and notwithstanding the actual date of the
Closing, the Closing shall be deemed to be effective as of, and the Closing
Date shall be deemed to be, the Effective Date for purposes of, and only of,
Articles 1, 2 and 6 of the Purchase Agreement and Section 5.1.1 of the Purchase
Agreement to the extent it relates to Sections 3.1.7 and 3.1.8 of the Purchase
Agreement.
2. Insurance. Sellers agree to maintain during the Interim Period all
casualty, liability and health care insurance currently in force relating to
the Assets, the Business and the Hired Employees ("Interim Insurance").
Notwithstanding the indemnification provisions of Article 6 of the Purchase
Agreement as amended herein, (i) to the extent that Sellers may have an
indemnifiable claim against Purchaser arising during the Interim Period which
is also covered by Sellers' insurance, the parties agree that Purchaser's
liability therefor shall be limited to any amounts not covered by such
insurance, and (ii) Purchaser shall not be liable to indemnify Sellers for
claims with respect to the Interim Period to the extent such claims arise from
the breach by any of the Sellers of Sellers' covenants in Article 4 of the
Purchase Agreement, unless the failure
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of Sellers to comply with such covenants is caused by Purchaser's breach of the
Purchase Agreement, as amended herein. An appropriate adjustment to the
purchase price shall be made so that Purchaser shall ultimately bear the cost
of maintaining such insurance during the Interim Period.
3. Interim Period. During the Interim Period:
a. MDAL and Purchaser agree to establish a joint bank account
("Bank Account") with NationsBank of Tennessee, N.A. ("Bank").
Sellers agree to deposit all accounts receivable of the Business
received during the Interim Period into the Bank Account. The parties
agree that no withdrawal may be made from such account without the
signature or other authorization acceptable to the Bank of an
authorized officer of each of MDAL and Purchaser. The parties
acknowledge that funds in the Bank Account are cash proceeds of
collateral securing obligations of MDAL to Bank and First Union
National Bank of Tennessee (collectively, "Banks") and that, so long
as such funds are in the Bank Account, are subject to such continuing
security interest and the right of setoff to secure those obligations.
The parties further agree that no funds shall be deposited to the Bank
Account other than proceeds of MDAL's receivables.
b. Purchaser agrees to pay all payables relating to the Business
during the Interim Period that are of the same kind or character as
those that would be Assumed Liabilities if the Closing had occurred
March 31, 1995 ("Payables") in accordance with the customary payment
schedules and policies of the Business; provided, that Purchaser has
received at least 3 business days prior notice and evidence reasonably
acceptable to Purchaser of such Payables. Sellers and Purchaser, as
applicable, agree to provide invoices or other evidence reasonably
satisfactory to the other of existing Payables upon the execution of
this Amendment and thereafter of new Payables immediately upon their
receipt.
c. Purchaser also agrees to pay on behalf of the Sellers the
following actual costs attributable to the Employees (as hereinafter
defined) during the Interim Period: gross payroll, payroll taxes,
employers' matching contributions under MDAL's 401(k) Plan with
respect to salary deferrals made on behalf of Employees, employer's
portion of health care coverage and workers compensation premiums
(collectively, "Payroll"), or to reimburse the Sellers for such
Payroll payments. These costs shall be payable by Purchaser no later
than the dates that the respective components of such costs are
payable by Sellers. Any payments of Payroll made prior to the Closing
shall be based on the assumption that Employees shall include (i) all
those employees of the Business unless, or except to the extent, they
are not engaged in work for the Business during the Interim Period,
and (ii) those certain accounting and operations staff of MDAL who are
engaged in work for the Business during the Interim Period but only to
the extent they are engaged in such work. Purchaser's reimbursement
of Payroll shall be appropriately prorated with respect to any
Employee who is not engaged in the Business full time during the
Interim Period.
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d. Sellers agree to continue to pay all payables of any nature
related to the Business, other than the Payables and the Payroll items
described in Sections 3.b and 3.c, whether or not such payables are
also Assumed Liabilities under the Agreement. Payments of Assumed
Liabilities by Sellers pursuant to this paragraph shall be reimbursed
by Purchaser as set forth in Section 4.c of this Amendment.
e. Sellers agree that Purchaser shall be reimbursed from the Bank
Account for (i) all Payables or items of Payroll paid by Purchaser
during the Interim Period and for which MDAL has received evidence
reasonably acceptable to MDAL that such Payable or Payroll item has
been paid and (ii) all reimbursements received by MDAL for items of
Payroll. Each business day, MDAL and Purchaser shall authorize a wire
transfer or other payment to Purchaser from the Bank Account for any
Payable or item of Payroll payment with respect to which Purchaser is
entitled to reimbursement and which has not previously been
reimbursed. Sellers' obligation to reimburse Purchaser during the
Interim Period shall be limited to the funds available in the Bank
Account, it being the intention that any profit or loss associated
with the Business during the Interim Period shall inure to Purchaser.
4. Closing. If the Closing occurs before April 30, 1995, the parties
agree that:
a. At the Closing, MDAL shall transfer and assign to Purchaser
all of its rights to the Bank Account and Purchaser shall be entitled
to retain any amounts therein;
b. The provisions of Section 3 hereof shall terminate and be of
no further force and effect except for liabilities accrued and unpaid
thereunder;
c. In connection with the delivery of the Closing Balance Sheet,
Sellers shall also deliver to Purchaser an accounting of all Assumed
Liabilities paid by Sellers pursuant to Section 4.d of this Amendment
together with evidence reasonably satisfactory to Purchaser of such
payments and the Purchase Price shall be increased by the amount of
such payments.
5. Termination. If the (i) Closing has not occurred before April 30,
1995, (ii) the Banks exercise any of their rights as secured parties or
otherwise to foreclose on, take possession of, offset against, freeze or deny
Sellers or Purchaser access to, the Bank Account or any portion thereof, or
(iii) either party breaches its agreements hereunder, which breach is uncured 2
business days after receipt of notice thereof from the nonbreaching party, then
the parties agree that at the option of Purchaser in the case of clause (ii)
(provided that such action of the Banks was not caused solely by a breach by
Purchaser of the Purchase Agreement, as amended hereby), at the option of the
non-breaching party in the case of clause (iii), and automatically otherwise:
a. Sellers shall immediately reimburse Purchaser for any Payables
paid by Purchaser or Payroll payments made by Purchaser which have not
been previously reimbursed for any reason, whether or not there are
sufficient funds available in the Bank Account;
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b. After Purchaser has received all amounts due it under Section
5(a) above, Purchaser shall transfer and assign all of its rights to
the Bank Account to MDAL and MDAL shall be entitled to retain any
amounts therein; and
c. The provisions of Sections 1, 2 and 3 hereof shall terminate
and be of no further force and effect except for amounts payable for
liabilities accrued which remain unpaid under such sections.
6. Assumed Liabilities and Indemnification.
a. The parties agree that, notwithstanding the language of
Section 6.6 of the Purchase Agreement, the Deductible shall not apply
to indemnifiable third party claims under the Purchase Agreement (i)
against Purchaser with respect to liabilities which are Assumed
Liabilities, or (ii) against Sellers with respect to liabilities which
are not Assumed Liabilities.
b. The parties acknowledge that in connection with obtaining the
consents to the assumption of certain Assumed Liabilities by
Purchaser, the parties have executed agreements with third parties
that may be inconsistent with the Purchase Agreement with respect to
the extent of Purchaser's assumption of Sellers' liabilities ("Third
Party Agreements"). The parties agree that, notwithstanding any Third
Party Agreement to the contrary, as between Purchaser and Sellers,
such Third Party Agreement shall not vary the terms of the Purchase
Agreement or this Amendment and the Purchaser shall be liable only for
Assumed Liabilities in accordance with the terms of the Purchase
Agreement, and Sellers shall indemnify Purchaser with respect to any
claim by such third party against Purchaser for any liability or
obligation which is not an Assumed Liability in accordance with the
terms of the Purchase Agreement and this Amendment.
c. Section 6.2 of the Purchase Agreement is hereby amended by the
addition of a new paragraph (a)(iii) as follows:
"(iii) any and all liabilities and obligations of
the Business arising after the Closing Date."
d. Notwithstanding anything to the contrary contained in the
Purchase Agreement, Assumed Liabilities shall not include any
liabilities or obligations of Sellers arising prior to the Effective
Date unless, and only to the extent that, the same are accrued or
reserved for on the Closing Balance Sheet.
7. Contents of Amendment; Parties in Interest; etc. This Amendment,
together with the Purchase Agreement, sets forth the entire understanding of
the parties hereto with respect to the transactions contemplated hereby. It
shall not be amended or modified except by written instrument duly executed by
each of the parties hereto. Any and all previous agreements and understandings
between or among the parties regarding the subject matter hereof, whether
written or oral, are superseded by this Amendment.
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8. Assignment and Binding Effect. This Amendment may not be assigned by
any party hereto without the prior written consent of the other parties.
Subject to the foregoing, all of the terms and provisions of this Amendment
shall be binding upon and inure to the benefit of and be enforceable by the
successors and assigns of Sellers and Purchaser.
9. Waiver. Any term or provision of this Amendment may be waived at any
time by the party entitled to the benefit thereof by a written instrument duly
executed by such party.
10. Notices. Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be in
writing and shall be deemed given only if delivered personally or sent by
telegram or by registered or certified mail, postage prepaid, as follows:
If to Purchaser, to:
Health Images, Inc.
8601 Dunwoody Place, Bldg. 200
Atlanta, Georgia 30350
Attention: Legal Department
With a required copy to:
Powell, Goldstein, Frazer & Murphy
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
(404) 572-6600
Attention: Thomas R. McNeill, Esq.
If to Sellers to:
MedAlliance, Inc.
109 Westpark Drive
Suite 420
Brentwood, Tennessee 37027
Attention: Patrick T. Ryan
President and Chief Executive Officer
With a required copy to:
Bass, Berry & Sims
First American Center
Nashville, Tennessee 37238
Attention: Leigh Walton, Esq.
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or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as
of the date so delivered, telegraphed or mailed.
11. Law to Govern. This Amendment shall be governed by and interpreted
and enforced in accordance with the laws of the State of Georgia.
12. Severability. Any provision of this Amendment which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
13. Joint and Several. The obligations and liabilities of Sellers
hereunder are joint and several.
14. Counterparts. This Amendment may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterparts taken together shall constitute but one and the same
instrument. This Amendment shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Amendment or any counterpart hereof to
produce or account for any of the other counterparts.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment on the date first written.
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PURCHASER:
ATTEST: HEALTH IMAGES, INC.
By By
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As its As its
SELLERS:
ATTEST: MEDALLIANCE, INC.
By By
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As its As its
ATTEST: IMAGEAMERICA OF AURORA, INC.
By By
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As its As its
ATTEST: IMAGEAMERICA OF BATON ROUGE, INC.
By By
---------------------------------------------- --------------------------------------------------------
As its As its
ATTEST: IMAGEAMERICA OF BEAUMONT, INC.
By By
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As its As its
ATTEST: TENNESSEE DIAGNOSTIC CENTER, INC.
By By
---------------------------------------------- --------------------------------------------------------
As its As its
</TABLE>
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<TABLE>
[signatures continued from previous page]
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ATTEST: PHYSICIANS ASSOCIATES, INC.
By By
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As its As its
ATTEST: IMAGEAMERICA OF CARROLLTON, INC.
By By
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As its As its
ATTEST: IMAGEAMERICA OF CHATTANOOGA, INC.
By By
---------------------------------------------- --------------------------------------------------------
As its As its
ATTEST: IMAGEAMERICA OF DENVER, INC.
By By
---------------------------------------------- --------------------------------------------------------
As its As its
ATTEST: IMAGEAMERICA GREENVILLE CORP.
By By
---------------------------------------------- --------------------------------------------------------
As its As its
ATTEST: DIAGNOSTIC ASSOCIATES, INC.
By By
---------------------------------------------- --------------------------------------------------------
As its As its
[signatures continued on following page]
</TABLE>
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<TABLE>
[signatures continued from previous page]
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ATTEST: IMAGEAMERICA PDK CORP.
By By
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As its As its
ATTEST: IMAGEAMERICA DAL CORP.
By By
---------------------------------------------- --------------------------------------------------------
As its As its
ATTEST: IMAGEAMERICA OF PORT ARTHUR, INC.
By By
---------------------------------------------- --------------------------------------------------------
As its As its
</TABLE>
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Acknowledgment
The undersigned Banks acknowledge and agree that, unless and until either
Bank has notified Purchaser in writing that the Banks intend to exercise their
rights as secured parties or otherwise to the Bank Account in respect of a
default under any obligation secured thereby, Purchaser shall be entitled to
withdraw and retain funds from the Bank Account free and clear of any interest
of the Banks in such funds.
NATIONSBANK
OF TENNESSEE, N.A.
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FIRST UNION NATIONAL BANK
OF TENNESSEE
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EXHIBIT 3
SECOND AMENDMENT TO ASSET PURCHASE AGREEMENT
This SECOND AMENDMENT made this 14th day of April 1995 to that certain
ASSET PURCHASE AGREEMENT dated December 21, 1995 by and among MEDALLIANCE,
INC., a Tennessee corporation ("MDAL"), and certain of its subsidiaries which
are signatories thereto (collectively, "Sellers") and HEALTH IMAGES, INC., a
Delaware corporation ("Purchaser"), as amended by that certain AMENDMENT TO
ASSET PURCHASE AGREEMENT dated April 6, 1995. Capitalized terms used herein
and not otherwise defined shall have the meanings set forth in the Agreement.
W I T N E S S E T H:
WHEREAS, the parties desire to further amend their covenants and
agreements relating to the transfer of assets and assumption of liabilities
contemplated by the Agreement.
NOW, THEREFORE, the parties hereto, for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
agree as follows:
1. INCLUDED ASSETS. Section 1.1.1(k) of the Agreement is hereby
deleted in its entirety, and the following inserted in lieu thereof:
"(k) Sellers' interest in the joint venture with Chattanooga
Memorial Hospital, and an assignment of 98% of Sellers' economic
rights in joint ventures holding real estate in Knoxville, Tennessee
and Birmingham, Alabama, together with proxies and powers of attorney
permitting Purchaser to exercise certain management rights in
connection therewith."
2. PURCHASE PRICE. The first sentence of Section 1.3 of the
Agreement is hereby amended by the insertion of the phrase ", the delivery of
the Beaumont Replacement Note (as defined below)" after the word "cash." The
introductory language of Section 1.3.l of the Agreement is hereby deleted, and
the following inserted in lieu thereof:
"The portion of the Total Consideration to be paid in cash,
MDAL Preferred Stock and the Beaumont Replacement Note (the "Purchase
Price") shall be an amount equal to:"
Additionally, new subsections (f) and (g) are hereby added to the end of
Section I.3.l of the Agreement to read as follows:
"(f) less $500,000 represented by the principal amount of
the Beaumont Replacement Note; and
(g) less $55,395 (in connection with the interest
differential on the financing with LINC Anthem Corporation)."
3. PAYMENT OF PURCHASE PRICE. An additional element of the
Closing Payment is hereby added in Section 1.3.2 of the Agreement as follows:
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"(iv) a promissory note in the original principal amount of
$500,000 made by Purchaser payable to MDAL in the form as attached to
this Amendment as Exhibit A (the "Beaumont Replacement Note")."
4. GENERAL LEDGER SOFTWARE. Sellers agree to allow Purchaser to
use, for a period not to exceed four months, on a non-exclusive basis, the
general ledger software it licenses under the Facilities Management Agreement
for Management Information Systems dated June 10, 1994 among Access Data, Inc.
and ImageAmerica, Inc.
5. INDEMNIFICATION.
(a) Section 6.1 of the Agreement is hereby amended by
adding new subsections (c) and (d) as follows:
"(c) any and all liabilities, demands, claims, actions,
assessments, losses, deficiencies, costs and expenses, including
without limitation, penalties, reasonable attorneys' fees and
expenses, reasonable technical consultants' fees and expenses and
reasonable accountants' fees and expenses, imposed on or incurred by
Purchaser resulting from emissions, discharges, releases of
pollutants, contaminants, chemicals or hazardous substances or wastes
which Purchaser establishes (i) to have been present or existing on
the Effective Date on the real estate transferred to Purchaser on
which Sellers operated the Digital Diagnostics Center located in Baton
Rouge, Louisiana and (ii) to have arisen from any drilling for oil or
gas or related activities; provided Purchaser shall not have taken any
action following the date hereof to investigate the condition of such
property except in response to a notice, inquiry or direction of a
regulatory authority or a claim by a third party so long as such
notice, inquiry, direction or claim was not instigated directly or
indirectly by or at the behest of Purchaser;
(d) in the event that Tricare Properties-Birmingham, Ltd.
("Bioimaging Landlord") shall terminate the lease dated April 19, 1990
with Birmingham Neuro/Ortho Diagnostic Center, Inc. covering the real
estate located at 200 Montgomery Highway, Suite 100 (the "Bioimaging
Lease") during its original term based solely on the ground that the
leasehold estate was transferred to Purchaser without the consent of
the Bioimaging Landlord pursuant to Section 14.0 of the Bioimaging
Lease, and in the event that the Bioimaging Landlord has the right to
evict Purchaser from the premises on such grounds, Sellers shall
reimburse Purchaser for its costs in moving from such premises, and
shall pay Purchaser the excess it pays, if any, during the period of
time equal to the remainder of the original term of the Bioimaging
Lease for such square footage (not to exceed the square footage under
the Bioimaging Lease) in a comparable quality building in a similar
setting, to the extent that such space is needed for the operations of
Purchaser, but not including any consolidation of the Purchaser's
operations which Purchaser may make with Purchaser's other location in
Birmingham, Alabama, above the rent which would have been paid
pursuant to the Bioimaging Lease, in each case as such expenses are
incurred and documentation relating thereto is provided to
MedAlliance."
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(b) A new subsection (e) shall be added to Section 6.3 of
the Agreement as follows:
(e) Any claim for indemnification under Section 6.1(c)
must be made by Purchaser in writing on or before the fourth (4th)
anniversary of the Effective date of this Agreement.
6. BONUSES. If an Employee listed in Exhibit B provides services
through the applicable transition period listed on Exhibit B, MDAL shall pay
such Employee a Stay Bonus equal to three months' salary for such Employee,
payable over the Bonus period. Purchaser shall reimburse MDAL promptly for any
Stay Bonuses paid.
7. CONTENTS OF AMENDMENT; PARTIES IN INTEREST; ETC. This
Amendment, together with the Asset Purchase Agreement as previously amended
sets forth the entire understanding of the parties hereto with respect to the
transactions contemplated hereby. It shall not be amended or modified except
by written instrument duly executed by each of the parties hereto. Any and all
previous agreements and understanding between or among the parties regarding
the subject matter hereof, whether written or oral, are superseded by the Asset
Purchase Agreement, as amended.
8. ASSIGNMENT AND BINDING EFFECTS. This Amendment may not be
assigned by any party hereto without the prior written consent of the other
parties. Subject to the foregoing, all of the terms and provisions of this
Amendment shall be binding upon and inure to the benefit of and be enforceable
by the successors and assigns of Sellers and Purchaser.
9. WAIVER. Any term or provision of this Amendment may be waived
at any time by the party entitled to the benefit thereof by a written
instrument duly executed by such party.
10. NOTICES. Any notice, request, demand, waiver, consent,
approval or other communication which is required or permitted hereunder shall
be in writing and shall be deemed given only if delivered personally or sent by
telegraph or by registered or certified mail, postage prepaid, as follows:
If to Purchaser, to:
Health Images, Inc.
8601 Dunwoody Place, Building 200
Atlanta, Georgia 30350
Attention: Legal Department
-3-
<PAGE> 4
With a required copy to:
Powell, Goldstein, Frazer & Murphy
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
(404) 572-6600
Attention: Thomas R. McNeill, Esq.
If to Sellers to:
MedAlliance, Inc.
109 Westpark Drive
Suite 420
Brentwood, Tennessee 37027
Attention: Patrick T. Ryan, President
and Chief Executive Officer
With a required copy to:
Bass, Berry & Sims
2700 First American Center
Nashville, Tennessee 37238
Attention: Leigh Walton, Esq.
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as
of the date so delivered, telegraphed or mailed.
11. LAW TO GOVERN. This Amendment shall be governed by and
interpreted and enforced in accordance with the laws of the State of Georgia.
12. SEVERABILITY. Any provisions of this Amendment which is
invalid or unenforceable in any jurisdiction shall be ineffective to the extent
of such invalidity or unenforceable without invalidating or rendering
unenforceable the remaining provisions hereof, and any such invalidity or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
13. JOINT AND SEVERAL. The obligations and liabilities of Sellers
hereunder are joint and several.
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<PAGE> 5
14. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and any party hereto may execute any such counterpart, each of
which when executed and delivered shall be deemed to be an original and all of
which counterpart taken together shall constitute but one and the same
instrument. This Amendment shall become binding when one or more counterparts
taken together shall have been executed and delivered by the parties. It shall
not be necessary in making proof of this Amendment or any counterpart hereof to
produce or account for any of the other counterparts.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment on the date first written.
PURCHASER:
ATTEST: HEALTH IMAGES, INC.
By: By:
----------------------------- -----------------------------
As its As its
SELLERS:
ATTEST: MEDALLIANCE, INC.
By: By:
----------------------------- -----------------------------
As its As its
ATTEST: IMAGEAMERICA OF AURORA, INC.
By: By:
----------------------------- -----------------------------
As its As its
ATTEST: IMAGEAMERICA OF BATON ROUGE, INC.
By: By:
----------------------------- -----------------------------
As its As its
ATTEST: IMAGEAMERICA OF BEAUMONT, INC.
By: By:
----------------------------- -----------------------------
As its As its
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<PAGE> 6
ATTEST: BIOIMAGING DIAGNOSTIC CENTER, INC.
By: By:
--------------------------------- ------------------------------
As its As its
ATTEST: PHYSICIANS ASSOCIATES, INC.
By: By:
--------------------------------- ------------------------------
As its As its
ATTEST: IMAGEAMERICA OF CARROLLTON, INC.
By: By:
--------------------------------- ------------------------------
As its As its
ATTEST: IMAGEAMERICA OF CHATTANOONA, INC.
By: By:
--------------------------------- ------------------------------
As its As its
ATTEST: IMAGEAMERICA OF DENVER, INC.
By: By:
--------------------------------- ------------------------------
As its As its
ATTEST: IMAGEAMERICA GREENVILLE CORP.
By: By:
--------------------------------- ------------------------------
As its As its
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<PAGE> 7
ATTEST: DIAGNOSTIC ASSOCIATES, INC.
By: By:
------------------------- ------------------------------
As its As its
ATTEST: IMAGEAMERICA PDK CORP.
By: By:
------------------------- ------------------------------
As its As its
ATTEST: IMAGEAMERICA DAL CORP.
By: By:
------------------------- ------------------------------
As its As its
ATTEST: IMAGEAMERICA OF PORT ARTHUR, INC.
By: By:
------------------------- ------------------------------
As its As its
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<PAGE> 8
EXHIBIT A
THE SECURITY REPRESENTED HEREBY HAS NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAW AND MAY NOT BE REOFFERED,
RESOLD, CONVERTED, PLEDGED, HYPOTHECATED, CONVEYED OR OTHERWISE TRANSFERRED
UNTIL SUCH SECURITY HAS BEEN REGISTERED UNDER SUCH SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAW.
PROMISSORY NOTE DUE DECEMBER 31,1995
$500,000.00
HEALTH IMAGES, INC., a corporation duly organized under the laws of
the State of Delaware ("Health Images"), for value received, hereby promises to
pay to MedAlliance, Inc., a Tennessee corporation ("MedAlliance"), the
principal sum of Five Hundred Thousand Dollars ($500,000.00) in three equal
quarterly installments of principal, plus accrued interest, on June 30,
September 30, December 31, 1995. This Note shall bear interest commencing
April 1, 1995, at the rate of eight percent (8%) per annum. The entire
principal amount hereof, and all accrued interest, shall be due and payable on
December 31, 1995. Interest shall be computed based upon a year of three
hundred sixty (360) days. Payment of the principal of and interest on this Note
will be made at 109 Westpark Drive, Suite 420, Brentwood, Tennessee.
This note may be prepaid in whole or in part at any time, without
penalty, but if prepaid in part, such prepayment shall be applied to the
installments in inverse order of their maturity.
It is agreed that if any installment of principal or interest is not
paid when due, this Note may be immediately declared due and payable without
notice at the option of the holder hereof. The holder may waive any default
before or after the same has been declared and restore this Note to full force
and effect without impairing the right to declare this Note due for a
subsequent default, this right being a continuing one.
All parties hereto waive demand, notice, presentment, and protest.
In the event this Note is placed in the hands of an attorney for
collection, the undersigned agrees to pay a reasonable attorneys' fees, court
costs and all other expenses reasonably incurred in the collection effort.
This Note shall automatically become due and payable if and to the
extent that the holder of that certain 8% Convertible Subordinated Note due
December 31, 1995 in the original principal amount of $2,000,000 shall convert
said Note into common stock of MedAlliance.
The validity, construction, effect and all terms and conditions of
this Note shall be governed by the substantive law of the State of Tennessee.
HEALTH IMAGES, INC.
By:
----------------------------------
Title:
-------------------------------
<PAGE> 9
EXHIBIT B
<TABLE>
<CAPTION>
Transitional Period
Employee (from Effective Date)
- - --------------------------------------------------------------------------------
<S> <C>
Staff Accountants
- - -----------------
Deborah Denney 60 days
Mary Wilson 60 days
Payroll
- - -------
Tia Ford 30 days
Tammy Mason 30 days
Accounts Payable
- - ----------------
Jennifer Ash 30 days
Mikal Hyatt 30 days
Delana Westmoreland 30 days
</TABLE>
