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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 31, 1997
Transworld HealthCare, Inc.
(Exact name of Registrant as specified in its charter)
New York
(State or other jurisdiction of incorporation)
1-11570 13-3098275
(Commission File Number) (I.R.S. Employer Identification No.)
555 Madison Avenue, New York, New York 10022
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 750-0064
(Former name or former address, if changed since last report.)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 31, 1997 Transworld HealthCare, Inc. (the "Company") sold
all of the issued and outstanding capital stock of its Radamerica,
Inc. subsidiary ("Radamerica") to Parkway Ventures, Inc., a
subsidiary of Helix Health Inc. for $12,100,000, subject to
adjustment as provided in the definitive purchase agreement.
Radamerica operates five radiation therapy centers in the Baltimore,
Maryland area.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
Stock Purchase Agreement between Transworld HealthCare, Inc.,
Radamerica, Inc. and Parkway Ventures, Inc. dated as of
July 31, 1997.
Certain statements contained herein are forward-looking statements
that have been made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements involve known and unknown risks and uncertainties which
may cause the actual results in the future periods or plans for
future periods to differ materially from those described herein as
anticipated, believed or estimated.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Transworld HealthCare, Inc.
(Registrant)
Date: August 8, 1997 By: /s/ Wayne A. Palladino
------------------------------------
Wayne A. Palladino
Senior Vice President and
Chief Financial Officer
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EXHIBIT INDEX
Exhibit No. Description
99 Stock Purchase Agreement between Transworld HealthCare, Inc.,
Radamerica, Inc. and Parkway Ventures, Inc. dated as of
July 31, 1997.
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "AGREEMENT"), is dated as of July 31,
1997, and is by and among Parkway Ventures, Inc., a Maryland corporation (the
"BUYER"), RADAMERICA, Inc., a Maryland corporation (the "COMPANY"), and
Transworld HealthCare, Inc., a New York corporation (the "TRANSWORLD").
W I T N E S S E T H:
Transworld owns all of the issued and outstanding shares of the capital
stock of the Company, par value $1.00 per share (the "COMPANY SHARES").
Transworld desires to sell to the Buyer, and the Buyer desires to purchase
from Transworld, all of the Company Shares pursuant to the terms and conditions
of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth in this
Agreement, the parties intending to be legally bound, hereto agree as follows:
1. DEFINITIONS.
For convenience and brevity, certain terms used in this Agreement are
listed in alphabetical order and defined or referred to below. Each defined term
used in this Agreement has been identified by capitalizing the first letter in
such term.
"ASSETS" means all of the Company's tangible and intangible, real and
personal assets used in connection with the ownership and operation of the
Business, including, but not limited to: (i) all leasehold improvements,
furniture, and fixtures; (ii) the radiation therapy equipment and all other
office and medical equipment; (iii) all inventory and supplies; (iv) all
accounts receivable of the Business; (v) all rights of the Company under all
leases, contracts and other agreements including, but not limited to, space
leases and managed care contracts; (vi) all licenses, permits, approvals, and
authorizations; (vii) all patient lists, charts, medical records, inventory and
supply records, files, patient billing records and all other books and records,
relating to the operation of the Business; (viii) all trademarks, trade names,
service marks, applications, or agreements for any of the foregoing, lists of
suppliers, covenant not-to-compete agreements from ROAM, referral lists,
goodwill, marketing literature, electronic systems and databases, and the
telephone numbers for the Centers. All of the Assets with a fair market value of
more than $1,000.00 are listed on SCHEDULE 5.9.
"BUSINESS" means the existing operations, medical records, and patient and
payor relations and other Assets of the Company, including without limitation,
those relating to the Company's radiation therapy and support services
businesses.
"BUSINESS DAY" means any calendar day that is not a Saturday, Sunday or
public holiday under the laws of the State of Maryland.
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"CENTERS" means Good Samaritan, Franklin Square, Mercy Medical, North
Arundel and St. Joseph, collectively.
"CLOSING" means the consummation of the transactions contemplated herein.
"CLOSING DATE" means July 31, 1997 or such other date as may be agreed
upon in writing by the parties.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder.
"COMPANY CERTIFICATES" means the stock certificates representing the
Company Shares.
"COMPANY LEASES" has the meaning provided in Section 5.31.
"COMPANY SHARES" means three (3) shares of the Company's Common Stock,
$___ par value per share, which constitute all of the issued and outstanding
shares of capital stock of the Company.
"COMPANY EMPLOYEE BENEFIT PLANS" means Employee Benefit Plans and any
other employee benefit arrangements or payroll practices, including, without
limitation, employment agreements, severance agreements, executive compensation
arrangements, incentive programs or arrangements, sick leave, vacation pay,
severance pay policies, plant closing benefits, salary continuation for
disability, consulting or other compensation arrangements, workers'
compensation, retirement, deferred compensation, bonus, stock purchase,
hospitalization, medical insurance, life insurance, tuition reimbursement or
scholarship programs, any plans providing benefits or payments in the event of a
change of control, change in ownership, or sale of a substantial portion
(including all or substantially all) of the assets of the Company, maintained by
the Company or an ERISA Affiliate or to which the Company or an ERISA Affiliate
has contributed or is or was obligated to make payments, excluding any
Multiemployer Plan, in each case with respect to any current or former employees
or directors of the Company or an ERISA Affiliate.
"COMPANY EMPLOYEE PENSION PLANS" means Company Employee Benefit Plans
which constitute "employee pension benefit plans" as defined in Section 3(2) of
ERISA.
"COMPANY EMPLOYEE WELFARE PLANS" means Company Employee Benefit Plans
which constitute "employee welfare benefit plans" within the meaning of Section
3(1) of ERISA.
"CONTRACT" means any written or oral contract, agreement, lease, plan,
instrument or other document, commitment, arrangement, undertaking, practice or
authorization that is or may be binding on any person or its property under
applicable law, including, without limitation, Third Party Payor Contracts.
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"COURT ORDER" means any judgment, decree, order or decision of any
federal, state or local court or governmental agency or authority that is
binding on any person or its property under applicable law.
"DEFAULT" means (a) a breach of or default under any Contract, or (b) the
occurrence of an event that with the passage of time or the giving of notice or
both would constitute a material breach of or default under any Contract.
"DUE DILIGENCE EXAMINATION" has the meaning provided in Section 7.4
hereof.
"EMPLOYEE BENEFIT PLAN" has the meaning ascribed to such term by Section
3(3) of ERISA.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA AFFILIATE" means any trade or business, whether or not
incorporated, under common control with the Company within the meaning of
Section 414(b), (c), (m) or (o) of the Code.
"EXHIBIT" means an exhibit attached hereto and incorporated into this
Agreement.
"FINANCIAL STATEMENTS" has the meaning provided in Section 5.20 hereof.
"FRANKLIN SQUARE" means the radiation therapy and support services center
of the Company located at Franklin Square Radiation Oncology Center, White
Square Professional Building, 9105 Franklin Square Drive, Baltimore, Maryland
21237 (including the Company's headquarters).
"GAAP" means generally accepted accounting principles.
"GOOD SAMARITAN" means the radiation therapy and support services center
of the Company located at Good Samaritan Radiation Oncology Center, 5601 Loch
Raven Boulevard, Baltimore, Maryland 21239.
"HAZARDOUS MATERIALS" means (a) "hazardous materials" as that term is
defined in the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601 et. seq., (b) "hazardous substances" as that term
is defined in the Environment Article of the Annotated Code of Maryland, (c)
"medical waste," including wastes regulated under COMAR 26.13.11, cultures and
pathological waste, human and animal blood specimens and blood products,
anatomical materials, blood, blood soiled articles, blood contaminated
materials, micro-biological laboratory waste, sharps, chemical waste, infectious
waste, chemotherapeutic waste, and low or high level radioactive waste, (d)
hydrocarbons, (e) asbestos and radon gas, (g) polychlorinated biphenyls
("PCBs"), (h) urea formaldehyde foam insulation, or (i) any other material the
presence of which causes or threatens to cause a nuisance or poses or threatens
to pose a hazard to health or the environment.
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"IBNRS" refers to services covered under the health benefits program
sponsored by Transworld which have been incurred by a Company employee or his or
her dependent but for which a claim is not made prior to the Closing.
"LIABILITY(IES)" has the meaning provided in Section 5.22 hereof.
"LIEN" means any mortgage, lien, security interest, pledge, encumbrance,
restriction on transferability, defect of title, charge or claim of any nature
whatsoever on any property or property interest.
"MERCY MEDICAL" means the radiation therapy and support services center of
the Company located at the Mercy Medical Center, Department of Radiation
Oncology, 301 Saint Paul Place, Baltimore, Maryland 21202.
"MULTIEMPLOYER PLAN" means any multiemployer plan as defined in Section
3(37) of ERISA to which the Company or an ERISA Affiliate has contributed or is
or was obligated to make payments, in each case with respect to any employees or
former employees of the Company or an ERISA Affiliate.
"MULTIPLE EMPLOYER PLAN" means any Company Employee Benefit Plan that
constitutes a multiple employer plan subject to Sections 4063 and 4064 of ERISA
or Section 413(c) of the Code.
"NORTH ARUNDEL" means the radiation therapy and support services center of
the Company located at North Arundel Radiation Oncology Center, 203 Hospital
Drive, Glen Burnie, Maryland 21061.
"PBGC" means the Pension Benefit Guaranty Corporation.
"PAYOR" means any third party payors for medical services, such as
intermediaries, insurance companies, and/or HMOs.
"PERMITTED LIENS" means Liens for taxes not yet due and payable.
"PHYSICIAN" means any physician who performs professional medical services
for the Company, either by direct agreement with the Company or through
employment or independent contractor relationships with ROAM.
"PURCHASE PRICE" has the meaning provided in Section 2.2.
"REGULATION" means any statute, law, ordinance, rule or regulation of any
federal, state, local or other governmental agency or body, including (without
limitation) those covering delivery of and payment for health care services,
occupational safety, zoning, anti-discrimination, antitrust, employee benefit,
wage and hour, and price and wage control matters.
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"ROAM" means Radiation Oncology Affiliates of Maryland, P.A., a Maryland
professional corporation.
"SDAT" means the Maryland State Department of Assessments and Taxation.
"SECTION" means a section of this Agreement, unless the context indicates
otherwise.
"SCHEDULE" means a schedule attached hereto or incorporated into this
Agreement.
"ST. JOSEPH" means the radiation therapy and support services center of
the Company located at St. Joseph Radiation Oncology Center, 7605 Osler Drive,
Towson, Maryland 21204.
"THIRD PARTY PAYOR CONTRACTS" means all Contracts between the Company and
third party payors for the delivery of radiation therapy and support, including,
without limitation, all contracts with governmental and private insurers, health
maintenance organizations, and preferred provider organizations.
2. SALE AND PURCHASE OF COMPANY SHARES.
2.1 Purchase of Shares. At the Closing on the Closing Date, subject
to the terms and conditions of this Agreement and in reliance upon the
representations, warranties and agreements set forth in this Agreement,
Transworld shall sell, assign, transfer and deliver to the Buyer, and the Buyer
shall Purchase and accept from Transworld, all of the Company Shares. The
Company Shares shall be conveyed free and clear of Liens.
2.2 Purchase Price. In consideration of Transworld's sale,
assignment, transfer and delivery of the Company Shares to the Buyer, the Buyer
shall pay Transworld aggregate consideration in the amount of Twelve Million One
Hundred Thousand Dollars and Zero Cents ($12,100,000), plus an amount equal to
those accounts receivable of the Company existing on the Closing Date (as
reflected in SCHEDULE 5.8) (the "COMPANY ACCOUNTS") which are actually collected
by the Company ("COLLECTED A/R") during the 90-day period following the Closing
Date (collectively, the "PURCHASE PRICE"). The Purchase Price is subject to
adjustment as provided in Section 7.4.
2.3 Payment of the Purchase Price. At the Closing, the Buyer shall
pay to Transworld the Purchase Price (other than the Collected A/R). The
Collected A/R received by the Company during the 90-day period following the
Closing Date shall be paid to Transworld within 10 days following the expiration
of such 90-day period. Payment of the Purchase Price shall be made by check or
wire transfer of immediately available funds to such accounts as shall be
specified to Buyer by Transworld in writing.
2.4 Obligations with Respect to Accounts Receivable.
(a) Collection Efforts. Buyer agrees to use its normal
collection practices in its efforts to collect the Company Accounts.
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(b) Subsequent Adjustments. (1) In the event an audit of the
Company Accounts (or any prior accounts receivable of the Company) is conducted
within six (6) months after the Closing Date, and, as a result of such audit a
Payor becomes entitled to a refund of either Collected A/R or of any payments
made prior to the Closing Date for services rendered by the Company, Transworld
shall pay to such Payor such amounts due within ten (10) days of its receipt of
written notice thereof, unless it shall give a written objection thereto within
such ten (10) day period, in which case Transworld and Buyer shall use their
best efforts to resolve such dispute with the Payor in a prompt manner. In any
event, Transworld shall be liable for any amounts ultimately due to such Payor
as a result of such audit.
(2) In the event an audit referred to in subsection
(1) above results in an underpayment of Collected A/R or of any receivable paid
prior to the Closing Date, Buyer shall (or shall direct the Payor to) pay such
amount to Transworld.
2.5 Self-Insured IBNR Liabilities. Buyer shall not assume any
liability or obligation arising out of or related to the Company's and/or
Transworld's self insured health benefits plan, specifically IBNRs thereunder,
regardless of any accruals or reserves in the Financial Statements. Such
obligations shall remain obligations of Transworld, and Transworld hereby
undertakes to satisfy such obligations in the same manner as if the claims were
filed by current Transworld employees.
3. CLOSING.
3.1 Closing. Subject to the terms and conditions of this Agreement,
the Closing shall take place at the offices of the Buyer, at 2330 W. Joppa Road,
Lutherville, Maryland, beginning at 8:30 a.m. on the Closing Date.
3.2 Documents to be Delivered by the Company. At the Closing, the
Company or Transworld, as applicable, shall deliver each of the following
documents to the Buyer:
(a) Delivery of Stock Certificates. The Company Certificates,
duly endorsed in blank for transfer or accompanied by duly executed stock powers
in blank.
(b) Resignations. Written resignations of all Directors and
Officers of the Company.
(c) Certificate of Secretarial Officer. A certificate of the
Secretary of the Company dated as of the Closing Date, attesting to (i) the
Company's Articles of Incorporation and By-Laws, (ii) the resolutions of the
Company's Board of Directors and Transworld authorizing the execution, delivery
and performance of this Agreement, and (iii) the incumbency and the signature of
each officer and director of the Company.
(d) Good Standing Certificate. A good standing certificate
issued by the SDAT and dated not earlier than 10 Business Days prior to the
Closing, indicating that the
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Company is in good standing in Maryland, and a good standing certificate issued
by the New York Department of State and dated not earlier than 10 Business Days
prior to the Closing, indicating that Transworld is in good standing in New
York.
(e) Opinion of Counsel. A signed opinion of Transworld's
counsel, dated as of the Closing Date and addressed to the Buyer, substantially
in the form of EXHIBIT A.
(f) Consents to Assignments of Leases. A consent to the
assignment and estoppel certificate with respect to each of the following
leases, duly executed by the respective landlord thereto, which shall provide,
among other things, that the lease is in full force and effect, that the tenant
thereunder is not in default of any provision thereunder, and that the landlord
consents to the assignment of the lease to the Buyer, substantially in the form
of EXHIBIT B, and reasonably satisfactory to the Buyer and its counsel:
Date of Lease Lessor
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March, 1989 Arundel Radiology Limited Partnership
August 1, 1992 St. Joseph's Hospital, Inc.
December 15, 1984, as amended White Square Limited Partnership
(g) UCC Terminations. Evidence of the valid termination of all
Uniform Commercial Code ("UCC") financing statements and U.S. Patent and
Trademark Office security interests filed against the Company or Transworld
(related to the Assets if filed against Transworld).
(h) Mercy Agreement. An amendment to the Management Agreement,
dated February 1, 1993, as amended, between Mercy Medical Center, Inc.
("MERCY"), and the Company, duly executed by Mercy, in substantially the form of
EXHIBIT C.
(i) ROAM Certificate. An estoppel certificate with respect to
the Management, Facility Access, and Loan Agreement, dated October 1, 1992, as
amended, between ROAM, and the Company, duly executed by ROAM, stating that all
fees and other amounts payable under the Management Agreement have been paid to
June 30, 1997, in substantially the form of EXHIBIT D.
(j) Amended Employment Agreements. David Spearman and Melvin
Jeffers shall have duly executed and delivered amendments to their respective
employment agreements with the Company, extending the expiration date of the
Employment Agreements, in the forms of EXHIBITS E AND F, respectively.
(k) Other Documents. Such other documents as shall be
reasonably requested by the Buyer and its counsel.
3.3 Documents to be Delivered by the Buyer. At the Closing, the
Buyer shall deliver each of the following to Transworld and the Company:
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(a) Certificate of the Secretary. A certificate of the
Secretary of the Buyer dated as of the Closing Date, attesting to (i) the
Buyer's Articles of Incorporation, and (ii) the resolutions of the Buyer's Board
of Directors authorizing the execution, delivery and performance of this
Agreement.
(c) Good Standing Certificate. A good standing certificate
issued by the SDAT and dated not earlier than 10 Business Days prior to the
Closing, indicating that the Buyer is in good standing in Maryland.
(d) Opinion of Counsel. A signed opinion of the Buyer's
counsel, dated as of the Closing Date and addressed to the Company and
Transworld, substantially in the form of EXHIBIT G.
(e) Purchase Price. The Purchase Price by wire transfer of
immediately available funds in accordance with written instructions provided by
Transworld to the Buyer.
(f) Other Documents. Such other documents as shall be
reasonably requested by Transworld and the Company and its counsel.
4. REPRESENTATIONS AND WARRANTIES OF THE BUYER. The Buyer hereby
represents and warrants to the Company and Transworld as follows:
4.1 Organization and Good Standing. The Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland.
4.2 Authority. This Agreement has been duly executed and delivered
by the Buyer and, assuming the due execution and delivery by Transworld and the
Company, constitutes the legal, valid and binding obligation of the Buyer,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws affecting the rights of
creditors generally and the exercise of judicial discretion in accordance with
general principles of equity.
4.3 Validity of Contemplated Transactions. The execution, delivery
and performance by the Buyer of this Agreement and each other transaction
document to which it is a party, will not (a) contravene or violate the Articles
of Incorporation of the Buyer or any Regulation or Court Order that is
applicable to the Buyer, or (b) require the Buyer to give notice to, make any
filing with, or obtain any permit, authorization or approval from, any federal,
state, local or other governmental court, agency or body, except for any filing
made on or prior to the Closing Date, or permitted to be made after the Closing
Date.
4.4 Brokers. The Buyer has not employed any broker, finder or agent
with respect to this transaction and does not know of any basis on which any
third party could claim any broker's, finder's, agent's or similar fee with
respect thereto from the Buyer. The Buyer agrees to indemnify and hold harmless
the Company and Transworld from any and all fees due to
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any broker, finder, or consultant, retained by or claiming through or under the
Buyer with respect to the transaction contemplated hereby.
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND TRANSWORLD. The
Company and Transworld hereby jointly and severally represent and warrant to the
Buyer as follows:
5.1 Organization and Good Standing. The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Maryland and has the corporate power and authority to carry on the
Business as it has been and is now being conducted and to own, lease and operate
the Assets. The Company is not required to qualify to do business as a foreign
corporation in any jurisdiction. The Company has no subsidiaries and no stock or
other equity interest (whether controlling or not) in any corporation,
association, partnership, joint venture or other entity.
5.2 Capitalization. The total authorized capital stock of the
Company consists of One Hundred Thousand (100,000) shares of common stock, par
value One Dollar ($1.00) per share, Three (3) of which are issued and
outstanding. Transworld is the record and beneficial owner of all of the Company
Shares and has, and will transfer to the Buyer at the Closing, good and
marketable title to such shares, free and clear of any Liens and with no
restriction on the voting rights and the other incidents of record and
beneficial ownership pertaining to such shares. All of the Company Shares have
been duly authorized and validly issued, are fully paid and nonassessable, and
were not issued in violation of the terms of any Contract binding upon the
Company. Except as set forth above, there are no shares of capital stock or
other equity securities of the Company issued or outstanding. The Company Shares
have not been issued in violation of, and are not subject to, any preemptive or
subscription rights. There are no outstanding options, warrants, calls,
agreements, subscriptions, convertible or exchangeable securities or other
commitments of any character pursuant to which Transworld or the Company is or
may become obligated to issue, sell, purchase, return or redeem any securities
of the Company, other than this Agreement, and no equity securities of the
Company are reserved for issuance for any purpose.
5.3 Authority. Transworld has the full right, power and authority to
execute, deliver and perform this Agreement and each other transaction document
to which it is a party, and the Company has the corporate power and authority,
to execute, deliver and perform this Agreement and each other transaction
document to which it is a party. This Agreement has been duly executed and
delivered by Transworld and the Company and, assuming the due execution and
delivery by the Buyer, constitutes their respective legal, valid and binding
obligation, enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws affecting the
rights of creditors generally and the exercise of judicial discretion in
accordance with general principles of equity.
5.4 Validity of Contemplated Transactions. The execution, delivery
and performance by the Company and Transworld of this Agreement and each other
transaction
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document to which they are party, will not (a) contravene or violate the
Articles of Incorporation or Bylaws of the Company or any Regulation or Court
Order that is applicable to the Company or Transworld or to the Business; (b)
result in a Default under, permit the acceleration of any obligation under, or
require the consent or approval of any party to, any Contract to which the
Company or Transworld is a party or by which the Business or any of the Assets
is affected (subject to SCHEDULE 5.13); (c) require the Company or Transworld to
give notice to, make any filing with, or obtain any permit, authorization or
approval from, any federal, state, local or other governmental court, agency or
body; or (d) result in the creation or imposition of any Liens upon the Business
or any of the Assets.
5.5 Compliance with Regulations and Court Orders. Neither the
Company nor Transworld is in violation of any Court Order or Regulation
applicable to the Company, the Business or any of the Assets, and the Assets
have not been used or operated by the Company, Transworld or any other person or
entity in violation of any Regulation or Court Order, in either case where such
violations could have, individually or in the aggregate, an adverse effect on
the Business or any of the Assets. The Company has made all filings and
notifications required to be made by it under applicable Regulations.
5.6 Third-Party Options. There are no existing Contracts with, or
rights in, any third party to acquire any of the Assets or any interest therein.
5.7 Transactions with Affiliates. Except in its respective
capacities as stockholder, director, officer, employee, or landlord, Transworld,
directly or indirectly, at the Closing Date, does not (a) own or have an
ownership interest in any of the Assets, or (b) transact business with the
Company, the existence, loss or discontinuance of which could have, individually
or in the aggregate, a material adverse affect on the Business or any of the
Assets. Except as set forth in SCHEDULE 5.13, all such Contracts, arrangements
and relationships have been on substantially the same terms and conditions as
similar transactions between the Company and non-affiliated parties and are
properly recorded on the books and records of the Company.
5.8 Accounts Receivable. The accounts receivable on SCHEDULE 5.8 and
those arising since the date thereof (a) are valid and genuine, (b) arise out of
bona fide performance of services or transactions in connection with the
Business, (c) are not subject to defenses, setoffs or counterclaims, and (d)
subject to insurance adjustments, have been billed and are generally due within
30 days of such billing. SCHEDULE 5.8 sets forth a list of all persons and Third
Party Payors owing receivables to the Company in connection with the Business
showing the dates such accounts receivable were incurred, the amounts and aging
of all such accounts receivable, and the reserves maintained with respect to
such accounts. An updated SCHEDULE 5.8 shall be delivered by Transworld to the
Buyer at the Closing, which shall be current as of June 30, 1997.
5.9 All Assets. SCHEDULE 5.9 sets forth a complete and accurate list
and summary description of all Assets and properties owned by the Company with a
value in excess of One Thousand Dollars ($1,000.00) as of June 30, 1997 and
their respective book value.
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5.10 Title to and Condition of Personal Property. The Company owns
outright and has good and marketable title to all of the Assets, free and clear
of all Liens (except Permitted Liens), and none of the Assets are leased by the
Company. All equipment and all other tangible assets and properties that are
part of the Assets are in normal operating condition and repair (ordinary wear
and tear for assets of their type and age excepted), are useable in the ordinary
course of the Business and conform in all material respects to all applicable
Regulations relating to their use and operation.
5.11 Physical Inventory of Tangible Assets. Under Buyer's
observation, the Company shall complete a physical inventory of the tangible
Assets of the Company having a fair market value of $1,000 or more at the end of
the month preceding the Closing, and the Company shall deliver a statement of
such inventory at least five (5) business days prior to the Closing Date.
5.12 Environmental Matters. Except as disclosed on SCHEDULE 5.12,
(a) neither the Company nor Transworld has any knowledge of the presence of any
Hazardous Materials on any real property operated or used by it, other than
Hazardous Materials of the kinds and in the amounts normally used in a radiation
therapy practice, (b) the disposal of all Hazardous Materials by the Company has
complied with all Regulations, and (c) neither the Company nor Transworld has
any knowledge that they have any liabilities associated with Hazardous
Materials.
5.13 Contracts.
5.13.1 SCHEDULE 5.13 sets forth a complete and accurate list
or description of all Contracts to which the Company is a party or any of the
Assets are affected, including, but not limited to, (i) all Third Party Payor
Contracts; (ii) all contracts for physician services performed for the Company;
(iii) management services contracts; (iv) loan agreements; (v) service
agreements; (vi) employment contracts; and (vii) joint venture agreements. The
Buyer shall take all necessary action to cause the transfer of the Third Party
Payor Contracts from the Company or Transworld to the Buyer or its affiliates,
and the Company and Transworld shall cooperate and assist the Buyer in
connection with the transfers. The Company and Transworld will obtain any
necessary consents or amendments of any Third Party Payor Contract, or any other
contract or agreement, naming the Buyer as the new owner of the Company and a
party to the Contract on or before the Closing Date.
5.13.2 All of the Contracts set forth in SCHEDULE 5.13 are
valid, binding and enforceable in accordance with their terms, except to the
extent that the enforcement may be limited by bankruptcy, insolvency,
reorganization, moratoriums or similar laws of general application affecting
creditors' rights generally and the application of general principles of equity.
Except as may be disclosed in SCHEDULE 5.13, (i) all parties to such Contracts
have complied in all material respects with the provisions thereof, (ii) no
party is in Default, or has received notice of Default, thereunder, (iii) no
event has occurred that, but for the passage of time
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or the giving of notice or both, would constitute a Default thereunder, and (iv)
the Company has neither given nor received any notice of cancellation or
termination thereunder.
5.14 Licenses. Except as set forth on SCHEDULE 5.14, the Company
and, to the best of the Company's and Transworld's knowledge, each Physician,
has all licenses, permits, consents, approvals, authorizations, qualifications
and orders of governmental authorities necessary to conduct the Business as it
is now being conducted and has paid all fees and charges due in connection
therewith, and is in compliance with all laws which relate to the Business. A
copy of all licenses, permits, consents, approvals, and authorizations,
qualifications and orders of governmental authorities are attached to and
incorporated within SCHEDULE 5.14. The Company and, to the best of the Company's
and Transworld's knowledge, each Physician, is credentialed for each managed
care plan in which the Company participates as a provider ("CERTIFICATIONS").
All the Certifications are in full force and effect in all material respects.
The Company and, to the best of the Company's and Transworld's knowledge, each
Physician, is in compliance with, and has not received notice of any
noncompliance with respect to, the terms and conditions of any such
Certification in any case where noncompliance could have an adverse effect on
the Business or any of the Assets, and no proceeding is pending or threatened to
revoke or limit any such Certification. Except as disclosed in SCHEDULE 5.14,
all such Certifications are renewable by their terms or in the ordinary course
of business without the need to comply with any special qualification procedures
or to pay any amounts other than routine filing fees, and neither Transworld nor
the Company has received actual notice that any of the Certifications will be
adversely affected by the completion of the transaction.
5.15 Litigation and Claims. Except as disclosed in SCHEDULE 5.15,
(a) there are no claims, litigation, arbitration, proceedings, or governmental
investigations ("LEGAL PROCEEDING") pending or, to the best knowledge of the
Company and Transworld, threatened against the Company or the Business, (b) no
event has occurred and no claim has been asserted that might result in a Legal
Proceeding against the Company or the Business or, to the best of the Company's
and Transworld's knowledge, ROAM or any Physician, (c) there is no reasonable
basis for any such claim, (d) none of the Company, Transworld or any employee of
any of them has received any opinion or memorandum or legal advice from legal
counsel to the effect that it is exposed, from a legal standpoint, to any
liability or disadvantage which may adversely affect the Business, and (e) none
of its directors, officers, or employees, and, to the best of the Company's and
Transworld's knowledge, none of the Physicians has been excluded or suspended
from the Medicare and Medicaid programs. Except as set forth in SCHEDULE 5.15,
each pending or threatened Legal Proceeding against the Company or the Business
is fully covered by insurance (subject to applicable deductibles).
5.16 Insurance. The Company maintains as to the Business, the
Assets, and the employees, with financially sound and reputable insurers,
insurance against such casualties and contingencies and of such types (including
malpractice) and in such amounts that it considers reasonably appropriate for
these purposes. SCHEDULE 5.16 contains a complete and correct list of all
insurance policies of the Company. True, correct and complete copies of the
insurance policies of the Company have been made available or delivered to Buyer
not later than 10 days
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before the Closing Date. SCHEDULE 5.16 sets forth a brief description of claims
made or occurrences reported involving any Company personnel that are still
pending. SCHEDULE 5.16 sets forth the aggregate amount paid out under each
Company or employee insurance policy during the period from January 1, 1996 to
the date hereof relating to any such claim. To the best of the Company's and
Transworld's knowledge, at the time each Physician was credentialed by the
health maintenance organizations party to the Third Party Payor Contracts, such
Physician had in full force all necessary malpractice insurance coverage, and
such insurance is in full force and effect today. There have been no lapses in
any of the foregoing insurance coverages.
5.17 Employees. SCHEDULE 5.17 lists all of the present employees of
the Company and each such employee's position, social security number, date of
hire, current annual salary or hourly wage, average number of hours worked per
week, date of last salary increase and a summary of salary, bonuses and accrued
sick leave or other compensation, if any, (a) paid or payable to such person by
the Company for or in respect of the current calendar year or (b) deferred from
a prior year and paid or payable in the current or any subsequent calendar year.
SCHEDULE 5.17 also sets forth the earnings for each such employee as reflected
on Form W-2 for the most recently completed calendar year.
5.18 Overtime, Back Wages, Vacation, Discrimination and Occupational
Safety Claims. Except as set forth in SCHEDULE 5.18, there are no claims pending
or, to the knowledge of the Company or Transworld, threatened against the
Company (whether under federal or state law, under any employment agreement or
otherwise) asserted by any present or former employee of the Company or any
governmental agency, including, but not limited to, claims for or on account of
(a) wages, salary, severance or overtime pay, or (b) vacation pay or pay in lieu
of vacation time off, or any violation of any Regulation relating to minimum
wages or maximum hours of work. No person (including any governmental agency)
has asserted or, to the knowledge of the Company and Transworld, threatened a
claim against the Company under or arising out of, and the Company is not
subject to, any judgment, order or inquiry relating to, any Regulation relating
to discrimination, occupational safety in employment or employment practices.
5.19 Employee Benefit Plans; ERISA.
5.19.1 SCHEDULE 5.19 contains a complete and correct list of
Company Employee Benefit Plans. SCHEDULE 5.19 clearly identifies all Company
Employee Benefit Plans which are (a) Company Employee Pension Plans, (b)
Multiple Employer Plans, (c) plans other than Multiple Employer Plans that are
subject to Section 412 of the Code or Section 302 of ERISA, (d) plans intended
to qualify under Section 401 of the Code, and (e) Company Employee Welfare Plans
which provide for continuing benefits or coverage for any participant or any
beneficiary of a participant after such participant's termination of employment
except coverage or benefits required by Part 6 of Title I of ERISA or Section
4980B of the Code if paid 100% by the participant or beneficiary.
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5.19.2 Except as set forth on SCHEDULE 5.19:
(a) true, correct and complete copies of the following
documents, with respect to each of the Company Employee Benefit Plans, have been
made available or delivered to Buyer not later than 10 days before the Closing
Date: (i) all plan documents and related funding or service agreements,
including trust agreements, insurance policies and service agreements and
amendments thereto, (ii) the most recent Form 5500 and any financial statements
attached thereto and those for the prior three years, (iii) the last Internal
Revenue Service determination letter and the last application submitted for a
determination letter, (iv) summary plan descriptions, (v) the most recent
actuarial report and those for the prior three years, (vi) written descriptions
of all non-written agreements relating to any such plan, (vii) all reports
submitted within the four years preceding the date of this Agreement by
third-party administrators, actuaries, investment managers, consultants or other
independent contractors, and (viii) all notices received within the four years
preceding the date of this Agreement from the Internal Revenue Service,
Department of Labor or any other governmental agency or entity;
(b) all amendments and actions required to bring the
Company Employee Benefit Plans into conformity in all material respect with all
of the applicable provisions of ERISA, the Code and any other applicable laws
(including the rules and regulations thereunder) have been made or taken except
to the extent that such amendments or actions are not required by law to be made
or taken until a date after the Closing Date and are disclosed on SCHEDULE 5.19;
(c) the Company Employee Pension Plans which are
intended to qualify under Section 401 of the Code are so qualified and the
trusts maintained pursuant thereto are exempt from federal income taxation under
Section 501 of the Code, and nothing has occurred with respect to such plans
which could cause the loss of such qualification or exemption or the imposition
of any lien, penalty, or tax under ERISA or the Code; each Company Employee
Welfare Plan intended to meet the requirements of tax-favored treatment under
Subchapter B of Chapter 1 of the Code meets such requirements; each Company
Employee Welfare Plan that is a group health plan as defined in Section
5000(b)(1) of the Code has been operated in compliance with the group health
plan continuation coverage requirements of Section 4980B of the Code, Sections
601 through 608 of ERISA, Title XXII of the Public Health Service Act and the
provisions of the Social Security Act, to the extent such requirements are
applicable;
(d) no Company Employee Benefit Plans have been amended
in any manner which would require the posting of any security under Section
401(a)(29) of the Code or Section 307 of ERISA;
(e) the Company and ERISA Affiliates have met the
minimum funding standards and have made all contributions required under Section
302 of ERISA and Section 412 of the Code; no accumulated funding deficiency,
whether or not waived, exists with respect to any Company Employee Pension Plan,
and no event has occurred or circumstance
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<PAGE> 15
exists that may result in an accumulated funding deficiency as of the last day
of the current plan year for any such plan;
(f) the Company and ERISA Affiliates have paid all
amounts due to the PBGC pursuant to Section 4007 of ERISA;
(g) the actuarial report for each Company Employee
Pension Plan fairly presents the financial condition and the results of
operations of each such plan in accordance with GAAP;
(h) the benefit liabilities (as defined in Section
4001(a)(16) of ERISA) of each Company Employee Pension Plan which is a defined
benefit plan calculated using the actuarial assumptions that would be used by
the PBGC in the event of the termination of such plan do not exceed the fair
market value of the assets of such plan;
(i) there are no material pending claims or lawsuits
which have been asserted or instituted by or against the Company Employee
Benefit Plans, against the assets of any of the trusts under such plans or by or
against the plan sponsor, plan administrator, or any fiduciary of the Company
Employee Benefit Plans (other than routine benefit claims) and neither the
Company nor any ERISA Affiliate has knowledge of facts which could form the
basis for any such claim or lawsuit;
(j) the Company Employee Benefit Plans have been
maintained in accordance with their plan documents and with all provisions of
the Code and ERISA (including rules and regulations thereunder) and other
applicable law, and none of the Company nor any "party in interest" or
"disqualified person" with respect to the Company Employee Benefit Plans has
engaged in a "prohibited transaction" within the meaning of Section 4975 of the
Code or Title I, Part 4 of ERISA which is not exempt under applicable law,
regulations and administrative exemptions;
(k) neither the Company nor any ERISA Affiliate has
incurred any outstanding liability under Section 4062 of ERISA to the PBGC, to a
trust established under Section 4041 or 4042 of ERISA, or to a trustee appointed
under Section 4042 of ERISA;
(l) none of the Company Employee Benefit Plans contains
any provisions which would prohibit the transactions contemplated by this
Agreement or which would give rise to any severance, termination or other
payments or liabilities as a result of the transactions contemplated by this
Agreement (including, without limitation, any acceleration of vesting or payment
of benefits), and no payment that is owed or may become due any director,
officer, employee, or agent of the Company will be non-deductible by the Company
under Section 280G of the Code or subject to tax under Code Section 4999;
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(m) the Company has no liability (whether actual,
contingent, with respect to any of its assets or otherwise) with respect to any
Employee Benefit Plan maintained by any ERISA Affiliate;
(n) no reportable event (as defined in Section 4043 of
ERISA and the regulations thereunder) has occurred, nor will any occur as a
result of the transactions contemplated herein, with respect to any Company
Employee Pension Plan, any Employee Benefit Plan maintained by or contributed to
by an ERISA Affiliate or any Multiemployer Plan, other than events with respect
to which the Department of Labor has waived the 30 days notice requirement;
(o) neither the Company nor any ERISA Affiliate has
knowledge of any facts or circumstances that may give rise to any liability of
the Company or an ERISA Affiliate to the PBGC under Title IV of ERISA (other
than liability under Section 4007 of ERISA); and
(p) each of the Company Employee Benefit Plans
(including without limitation each such plan covering retirees of the Company or
the beneficiaries of such retirees) may be terminated or amended by its
sponsoring employer, in any manner and at any time, without the consent of and
without any further liability to its participants and beneficiaries for benefits
that may be accrued or expenses that may be incurred after the date of such
termination or amendment; the Company and the ERISA Affiliates have no knowledge
of any oral or written statement made by the Company, an ERISA Affiliate or any
officer, employee or agent thereof, regarding a Company Employee Benefit Plan
that was not in accordance with such plan and that could have a material adverse
effect on the Company.
5.19.3 With respect to each Multiemployer Plan or Multiple
Employer Plan,
(a) SCHEDULE 5.19 sets forth the name of each
Multiemployer Plan and, as of the last valuation date of the Multiemployer Plan,
the amount of potential withdrawal liability of the Company, calculated
according to information made available pursuant to Section 4221 of ERISA;
(b) the Company and the ERISA Affiliates have not
incurred any liability under Title IV of ERISA as a result of any withdrawal
from the Multiemployer Plan or Multiple Employer Plan, nor will the transactions
contemplated under this Agreement give rise to any such withdrawal liability;
(c) no event has occurred or circumstance exists that
presents a risk of the occurrence of any withdrawal from, or the termination,
reorganization, or insolvency of, the Multiemployer Plan or Multiple Employer
Plan that could result in withdrawal or other liability of the Company or an
ERISA Affiliate under Sections 4201, 4063 or 4064 of ERISA;
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(d) neither the Company nor any ERISA Affiliate has
received notice from the Multiemployer Plan that it is in reorganization or is
insolvent, that increased contributions may be required to avoid a reduction in
plan benefits or the imposition of any excise tax, or that such plan intends to
terminate or has terminated; and
(e) the Multiemployer Plan is not a party to any pending
merger or asset or liability transfer or is subject to any proceeding brought by
the PBGC.
5.19.4 Except as disclosed on SCHEDULE 5.19, neither the
Company nor any ERISA Affiliate has prepaid or prefunded any Company Employee
Welfare Plan through a trust, reserve, premium stabilization or similar account;
all contributions by the Company or an ERISA Affiliate to a voluntary employees'
beneficiary association, as defined in Section 501(c)(9) of the Code, whose
members include employees of the Company ("VEBA"), are deductible and under the
Code; such VEBA is exempt from federal income tax and no event has occurred or
circumstance exists that will or could give rise to disqualification or loss of
tax-exempt status of such VEBA; no amount or any asset of such VEBA is subject
to tax as unrelated business taxable income.
5.19.5 With respect to each Transworld or Company Stock Option
Plan each option to purchase common stock of Transworld or the Company which is
intended to qualify as an incentive stock option under Section 422 of the Code
has at all times satisfied, in form and in the manner granted and administered,
the requirements of Section 422 of the Code. Each plan under which any such
Company or Transworld incentive stock option has been granted has at all times
satisfied, in form and in the manner adopted, approved and administered, the
requirements of Section 422 of the Code.
5.20 Financial Statements. Attached hereto as SCHEDULE 5.20 are the
Company's statements of financial condition (balance sheet) as of October 31,
1996 and June 30, 1997, together with the statements of operations, cash flows
and changes in stockholders' equity for each fiscal year in the three year
period ended October 31, 1996, and for the period November 1, 1996 through June
30, 1997. All such statements (the "FINANCIAL STATEMENTS") have been or will be
prepared in conformity with GAAP consistently applied throughout all periods and
will include all disclosures necessary for a complete and fair understanding of
such Financial Statements as required by GAAP.
5.21 Books of Account; Returns and Reports; Taxes. The books of
account of the Company fairly reflect, on a cash basis, (a) all material
transactions relating to the Company and (b) all material items of income and
expense, and all assets, liabilities and accruals, relating to the Company. All
transactions reflected on the books of account for the Company have been duly
authorized by all necessary corporate action. Except as provided in SCHEDULE
5.21, the Company, or Transworld with respect to the Company, has duly and
timely filed with the appropriate governmental agencies all federal, state and
local tax reports and returns and all other reports and returns required to be
filed by it pursuant to any Regulation, and the Company has duly made all
deposits required by law to be made with respect to employees' withholding
taxes.
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The Company, or Transworld with respect to the Company, has duly paid all taxes,
duties and charges (including penalties and interest thereon) payable by it.
Neither the Company nor Transworld, with respect to the Company, has received
any notice of assessment or deficiency or proposed assessment from or by the
Internal Revenue Service (the "IRS") or any other taxing authority in connection
with its tax returns or reports, and there is no pending tax examination of, or
tax claim asserted against, the Company or any of the Assets. There is no tax
lien on any of the Assets, except for Liens for taxes not yet due and payable.
The federal income tax returns filed by the Company, or Transworld with respect
to the Company, for its fiscal years ended October 31, 1994, 1995, and 1996 have
not been audited, and no agreement for the extension of time or waiver of the
statute of limitations for the assessment of any deficiency or adjustment for
any year is in effect. Neither the Company nor Transworld, with respect to the
Company, has agreed to extend or waive any statute of limitations applicable to
the assessment or collection of any tax. True, correct and complete copies of
all federal and state income tax returns filed by the Company, or Transworld
with respect to the Company, for the period from and including fiscal 1994 have
been provided to the Buyer by the Company.
5.22 Liabilities. SCHEDULE 5.22 sets forth a complete and accurate
list and summary description of all obligations (including but not limited to
trade payables, debts, accrued liabilities, reserves and employee benefits), all
contingent liabilities (including but not limited to asserted claims and
assessments that are probable of assertion) and all commitments (including but
not limited to leases, purchase commitments and other contractual commitments)
of the Company as of June 30, 1997, and their respective dollar amounts
(collectively, the "LIABILITIES"). Without limiting the generality of the
foregoing, the term "Liabilities" includes any direct or indirect liability,
indebtedness, obligation, expense, claim, deficiency or guaranty of or by any
person of any type, whether accrued, deferred, absolute, contingent or
otherwise. Liabilities shall specifically include all tax liabilities based on
the income and expense of the Company, and the employment of its employees, for
all periods up to and including the Closing Date. To the best of Transworld's
knowledge, the Company has no Liabilities, known or unknown, except as reflected
in SCHEDULE 5.22, and current Liabilities incurred in the ordinary course of
business since June 30, 1997.
5.23 No Material Adverse Developments. Since March 25, 1997, (a)
there has been no damage or destruction of any of the Assets, the Business, or
the Company by fire or other casualty, whether or not covered by insurance, and
(b) there has not been any material adverse change in the Company or the
Business, and no event has occurred or circumstances exist that will likely
result in such a material adverse change.
5.24 Existing Business. Since March 25, 1997, the Company has not:
(a) sold, assigned or transferred any of its tangible assets, except in the
ordinary course of business, (b) suffered any loss of property or waived any
right of substantial value, (c) made any change in compensation of any employee
of the Company, except in the ordinary course consistent with past practice, (d)
made any change in the manner of business or operations, (e) made any change in
its accounting practices, (f) entered into any transaction, except in the
ordinary course of business or as otherwise contemplated hereby, (g) declared
and failed to pay any dividend on, or
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made any other distribution with respect to, the Company Shares, (h) entered
into, created, assumed, secured or guaranteed any financial obligations except
for the incurring of unsecured trade debt in the ordinary course of business
consistent with past practice, or (i) entered into any commitment (contingent or
otherwise) to do any of the foregoing.
5.25 Additional Information. SCHEDULE 5.25 sets forth accurate lists
and summary descriptions of the following:
5.25.1 the names of all present officers and directors of the
Company;
5.25.2 the names and addresses of every bank and other
financial institution in which the Company maintains an account (whether
checking, savings or otherwise), lock box or safe deposit box, and the account
numbers and names of persons having signing authority or other access thereto;
5.25.3 the names of all persons authorized to borrow money or
incur or guarantee indebtedness on behalf of the Company;
5.25.4 the names of all persons holding powers of attorney
from the Company and a summary statement of the terms thereof; and
5.25.5 all names under which the Company has conducted any
business during the last five (5) years.
5.26 Corporate Records. The minute books of the Company are current
and contain correct and complete copies of all charter documents of the Company
(including all amendments thereto and restatements thereof) and of all minutes
of meetings, resolutions and other actions and proceedings of its stockholders
and board of directors and all committees thereof, duly signed by the Secretary
or an Assistant Secretary of the Company. The stock record book of the Company
is also current, correct and complete and reflects the issuance of all of the
Company Shares to Transworld.
5.27 Brokers. Neither the Company nor Transworld has employed any
broker, finder or agent with respect to this transaction or knows of any basis
on which any third party could claim any broker's, finder's, agent's or similar
fee with respect thereto from the Company or Transworld. Transworld agrees to
indemnify and hold harmless the Buyer from any and all fees due to any broker,
finder, or consultant, retained by or claiming through or under the Company or
Transworld with respect to the transaction contemplated hereby.
5.28 Delivery of Documents. The Company has delivered to the Buyer
true and complete copies of (a) all material written Contracts and summaries of
any material oral Contracts, that concern or relate to the Company, the Assets
or the Business and (b) all other documents (including all amendments,
supplements or waivers currently in effect) described in any Schedule hereto or
required to be delivered on or before the date hereof.
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5.29 Full Disclosure. (a) This Agreement, including any Schedule or
Exhibit to this Agreement, and any other document or agreement delivered in
connection with the transactions contemplated hereby, contain no untrue
statement of a material fact or omit to state a material fact necessary to make
the statements contained herein not misleading, (b) none of the written
statements, documents or certificates prepared or supplied by the Company or
Transworld with respect to the transactions contemplated hereby, when read
together and in light of the circumstances in which they were made, contain an
untrue statement of a material fact or omit to state a material fact necessary
to make the statements contained therein not misleading, and (c) there is no
material fact that the Company or Transworld have not disclosed to the Buyer or
its counsel in writing which materially adversely affects or could reasonably be
expected materially adversely to affect the Assets, the Company, or the
Business.
5.30 Real Property. Other than leasehold interests, the Company
does not own any rights to real property located in the State of Maryland or
elsewhere.
5.31 Leasehold Interests. Each lease or agreement to which the
Company is a party under which it is a lessee of any property, real or personal
(collectively, the "COMPANY LEASES") is listed in SCHEDULE 5.31 hereto. A copy
of each Company Lease has previously been delivered to the Buyer. Each Company
Lease is a valid and existing agreement without any material default of the
Company thereunder and without any material default thereunder of any other
party thereto. No event has occurred and is continuing which, with due notice or
lapse of time or both, would constitute a default or event of default by the
Company under any such lease or agreement or by any other party thereto.
Possession of such property by the Company has not been disturbed and no claim
has been asserted against the Company adverse to its rights in such leasehold
interests. To the extent required, each of the Company Leases relating to
Franklin Square, North Arundel and St. Joseph will have been duly assigned to
the Buyer on or prior to the Closing.
6. COVENANTS OF THE BUYER. The Buyer covenants to the Company and
Transworld that, except as otherwise consented to in writing by the Company
after the date of this Agreement:
6.1 Confidentiality. If this Agreement terminates without the
consummation of the transactions contemplated hereby, the parties and their
respective affiliates and agents: (a) shall hold in confidence and refrain from
using all non-public information received in connection with the transactions
contemplated in this Agreement; and (ii) shall return promptly all such
non-public information to the party supplying such confidential information.
6.2 Access to Records. Buyer shall permit Transworld, at its
expense, upon Transworld's request with at least 10 days' notice, to inspect
records, books and other documents relating to the Company, the Assets, or the
Liabilities, for the purposes of preparing tax returns and financial statements
and responding to tax audits, for meeting Transworld's obligations to satisfy
the Liabilities as set forth herein, or for use in connection with other claims
against Transworld (other than a claim between Buyer and Transworld, in which
case inspection shall
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occur through the discovery process), in all cases solely with respect to claims
and matters arising prior to the Closing Date.
7. COVENANTS OF THE COMPANY AND THE TRANSWORLD. The Company and Transworld
jointly and severally covenant to the Buyer that, except as otherwise consented
to in writing by the Buyer after the date of this Agreement:
7.1 Conduct of Business.
(a) Between the date hereof and the Closing Date, without the
prior written consent of the Buyer, such consent not to be unreasonably
withheld, neither the Company nor Transworld will: (i) conduct the Business
other than in the ordinary course; (ii) make any sale, transfer, lease or other
disposition of any Assets or mortgage, pledge or otherwise create a security
interest in any of the Assets, other than in the ordinary course of business;
(iii) fail to maintain the books, accounts and records of the Business on a
basis consistent with past practice; (iv) create, incur or assume any
indebtedness (except for accounts payable in the ordinary course of business)
for money borrowed in connection with the Business; (v) with respect to the
Business, effect any transaction with any other entity or person, the terms of
which are not commercially reasonable or are other than on an arm's length
basis; (vi) take any action that would cause any of the representations and
warranties made in Article 5 hereof not to remain true and correct; (vii)
undertake any action or engage in any omission which shall impair or jeopardize
any of the rights to any of the Assets; (viii) negotiate for or consummate the
sale, lease, transfer or conveyance in any way of the Company's assets or any
rights thereto to any party other than the Buyer; (ix) declare or pay any
dividend or make any distribution, whether in cash, shares, or property; (x)
enter into, amend, or extend the terms of any employment or consulting
agreement; or (xi) enter into any contract, agreement, commitment or arrangement
with respect to any of the actions prohibited by the foregoing.
(b) From the date hereof until the Closing Date, the Company
and Transworld shall keep the Buyer advised of any significant decisions
concerning the Business or the Assets and shall use their best efforts to
preserve the Business.
7.2 Confidentiality. If this Agreement terminates without the
consummation of the transactions contemplated hereby, the parties and their
respective affiliates and agents: (a) shall hold in confidence and refrain from
using all non-public information received in connection with the transactions
contemplated in this Agreement; and (ii) shall return promptly all such
non-public information to the party supplying such confidential information.
7.3 Liabilities. The Company and Transworld shall continue to pay,
fulfill, perform or otherwise discharge all Liabilities and obligations arising
out of, relating to, or in connection with the Business consistent with past
practice.
7.4 COBRA Notification and Responsibility. For notices and payments
related to events occurring prior to the Closing Date, Transworld shall be
responsible for
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any notices required to be given to employees or former employees of the Company
pursuant to Section 4980B of the Code (or Sections 601 through 608 of ERISA),
the Worker Adjustment and Retraining Notification Act and/or Section 402(f) of
the Code, and for any payments or benefits required pursuant to such laws or on
account of violation of any requirement of such laws.
7.5 Access to Business.
7.5.1 Between the execution of this Agreement and the Closing
Date, the Company and Transworld shall (a) permit the Buyer and its counsel,
accountants, auditors and other representatives and advisors complete access to
all of the Company's Business, staff, offices, properties, books and records,
contracts and commitments of the Company, as they relate to the Business, and
(b) provide an opportunity to communicate with employees and consultants of the
Company, in order to complete Buyer's due diligence examination of the Company
and the Business ("DUE DILIGENCE EXAMINATION"). The Company and Transworld shall
cooperate with the Buyer and its counsel, accountants, auditors and other
representatives and advisors to complete the due diligence examination. In
completing the Due Diligence Examination, the Buyer shall use its best efforts
to avoid undue disruption of the Business.
7.5.2 Within twenty (20) days following its completion of the
Due Diligence Examination, the Buyer will notify Transworld whether it desires
to adjust the Purchase Price. If Buyer is dissatisfied with the results of its
Due Diligence Examination, Buyer, at its option, may terminate its efforts to
complete the acquisition with no further obligation or liability to the Company
or Transworld. If Buyer reduces the Purchase Price pursuant to this Section
7.5.2 and Transworld is dissatisfied with such adjustment, Transworld, at its
option, may terminate this Agreement, within five (5) business days of receipt
of Buyer's Purchase Price reduction, with no further obligations or liability to
Buyer.
7.6 Supplemental Disclosure. The Company and Transworld shall have
the continuing obligation to supplement or amend all disclosures with respect to
any matter hereafter arising or discovered which, if existing or known at the
date of this Agreement, would have been required to be set forth or described
therein; provided, however, that for the purpose of the rights and obligations
of the parties hereunder, any such supplemental or amended disclosure shall not
be deemed to have been disclosed as of the date of this Agreement unless so
agreed to in writing by the Buyer, and, accordingly, shall have no effect on the
Liabilities or obligations of the parties under this Agreement.
7.7 No-Shop. So long as this Agreement has not been terminated in
accordance with its provisions, the Company and Transworld shall negotiate
exclusively with the Buyer for the transactions contemplated hereby, and during
such time, none of the Company nor Transworld, or its or their affiliates,
advisors, directors, officers, employees or agents (collectively, the "COMPANY
PARTIES") shall, directly or indirectly, solicit, discuss any proposal
regarding, or negotiate with any person or entity, the sale or other acquisition
of the Assets or the Business, whether by asset or stock sale, merger, or
otherwise. If the Company or Transworld shall materially breach the provisions
of this Section 7.7, then the Company Parties shall pay to
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the Buyer by wire transfer of immediately available funds, Fifty Thousand
Dollars ($50,000), such obligation to survive termination of this Agreement. The
parties hereto acknowledge and agree that the provisions of this Section 7.7 are
reasonable and are an integral part of the transactions contemplated hereby, and
without these provisions, the parties would not execute and deliver this
Agreement; accordingly, if the Company Parties fail to pay the amount set forth
herein and in order to obtain such payment, the Buyer institutes suit against
one or more of the Company Parties, the Company Parties shall pay to the Buyer
its reasonable costs and expenses (including reasonable attorneys' fees) in
connection with such suit, together with interest on the amount of such costs
and expenses at the legal rate of interest (such obligation to survive
termination of this Agreement).
7.8 Maintain Existing Business. The Company shall take such steps as
are necessary and appropriate to preserve its existing relationships with
patients, vendors and service providers, physicians, third party payors and key
employees, and the Company and Transworld shall inform the Buyer promptly of the
occurrence of any event which may result in a material adverse change to the
Assets or the Business.
7.9 Supplemental Schedules. Within fifteen (15) days following the
Closing, Transworld shall supplement the following Schedules so as to make them
current as of the Closing Date:
(i) SCHEDULE 5.8, List of Accounts Receivable;
(ii) SCHEDULE 5.9, List of Assets;
(iii) SCHEDULE 5.20, Company's statement of financial
condition (balance sheet) as of the Closing Date, and the Company's statement of
operations, cash flows and changes in stockholder's equity for the period
November 1, 1996 through the Closing Date;
(iv) SCHEDULE 5.22, Liabilities; and
(v) EXHIBIT D, ROAM Estoppel Certificate, stating all fees and
other amounts payable under the Management Agreement have been paid to July 31,
1997.
Each such supplemented schedule shall be deemed to be a part of the
representation and warranty to which it relates as if it were incorporated into
the Agreement as of the Closing Date. Such supplemental schedules shall be in
form and substance reasonably satisfactory to Buyer.
7.10 Filing of Tax Returns. Transworld shall file on a timely basis
all federal, state and local tax returns of the Company, and Transworld to the
extent related to the Company, for all periods ending on or before the Closing
Date, and shall pay in full any tax due as reflected in such returns.
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7.11 Administration of Transworld 401(k) Plan. Transworld shall
amend its Code Section 401(k) retirement plan ("TRANSWORLD 401(k) PLAN") to
provide that, effective as of the Closing Date, the employees of the Company
will not be eligible to participate in, and will be fully vested in their
account balances under, the Transworld 401(k) Plan. As soon as possible after
the Closing Date, Transworld shall provide the employees of the Company with all
necessary and appropriate notices and election forms to give them the option of
(i) receiving a distribution of their account balances in accordance with the
terms of the Transworld 401(k) Plan made on their behalf to the Code Section
401(k) plan of the Buyer in which the Company's employees will participate (the
"BUYER 401(k) PLAN"), or (iii) to the extent required by the participant consent
requirements of Code Section 411(a)(11), leaving their account balances in the
Transworld 401(k) Plan. Transworld shall cause the Transworld 401(k) Plan to
distribute or maintain the accounts of the Company's employees in accordance
with their elections and in accordance with the applicable requirements of the
Code and ERISA.
8. CONDITIONS TO THE BUYER'S OBLIGATIONS. Unless waived by the Buyer in
writing, in its sole discretion, all obligations of the Buyer under this
Agreement are subject to the fulfillment, prior to or at the Closing, of each of
the following conditions:
8.1 Representations and Warranties. Each of the representations and
warranties contained in Section 5 hereof shall be true and accurate in all
material respects (except with respect to any representation or warranty that is
already qualified as to materiality, which shall be true and correct in all
respects) as of the date of this Agreement and shall be true and correct in all
material respects (except with respect to any representation or warranty that is
already qualified as to materiality, which shall be true and correct in all
respects) as of the Closing Date as if made on the Closing Date (except for any
representation or warranty expressly stated to have been made or given as of a
specified date, which, at the Closing Date, shall be true and correct in all
respects as of the date expressly stated). Each of the Company and Transworld
shall have delivered to the Buyer a certificate of its president, certifying the
fulfillment, to the extent applicable to such party, of the conditions set forth
in this Section 8.1 and in Sections 8.2, and 8.7 below, and a certificate of the
Secretary of the party supplying such certificate as to the incumbency of such
officer executing the certificate.
8.2 Covenants and Obligations. All of the covenants and obligations
that each of the Company and Transworld is required to perform or to comply with
pursuant to the terms of this Agreement at or prior to Closing shall have been
duly performed or complied with by the Company and Transworld, as applicable, in
all material respects prior to the Closing Date.
8.3 No Proceeding or Litigation.
(a) No preliminary or permanent injunction or other order
shall have been issued by any court of competent jurisdiction, whether federal,
state or foreign, or by any governmental or regulatory body, whether federal,
state or foreign, nor shall any statute, rule, regulation or executive order be
promulgated or enacted by any governmental authority, whether
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federal, state or foreign, which prevents the consummation of the transactions
contemplated by this Agreement.
(b) No suit, action, claim, proceeding or investigation before
any court, arbitrator or administrative, governmental or regulatory body,
whether federal, state or foreign, shall have been commenced and be pending
against the Company or Transworld or any of their respective affiliates,
officers or directors seeking to prevent the transactions contemplated hereby or
asserting that the transactions contemplated hereby would be illegal.
8.4 Approvals of Governmental Authorities. All governmental
approvals necessary or advisable in the opinion of the Buyer's counsel to
consummate the transactions contemplated by this Agreement shall have been
received and shall not contain any provision which, in the judgment of the
Buyer, is unduly burdensome.
8.5 Form and Content of Documents. The form and content of all
documents, certificates and other instruments delivered by the Company and
Transworld shall be reasonably satisfactory to the Buyer and its counsel.
8.6 Consents and Approvals. The Company and Transworld shall have
obtained all consents and approvals, if any, required to be obtained in
connection with this transaction in order to avoid a Default under any of the
Contracts disclosed in SCHEDULE 5.13. Each of the consents and approvals
obtained by the Company shall be free from burdensome restrictions and
conditions not applicable to the Company prior to the date of this Agreement.
8.7 Material Adverse Changes. Since March 25, 1997, neither the
Company, the Business nor the Assets shall have been materially adversely
affected in any way. There shall be no condition existing or threatened with
respect to the Company, the Business or the Assets that might be expected to
have a material adverse effect on any of them.
8.8 Execution of Closing Documents. Transworld and the Company shall
have executed, acknowledged and delivered to the Buyer each of the Closing
documents applicable to it described in Section 3.2.
8.9 Transworld and Board Approval of the Transaction. Transworld and
the Company's Board of Directors shall have approved this transaction as
required by law or the Company's Charter and Bylaws.
8.10 Independent Accountant's Report. The Buyer shall have received
a report from Transworld's independent accountants on the Financial Statements
of the Company for the fiscal year ended October 31, 1996, stating that, based
upon such accounting firm's audit of the Financial Statements of Transworld for
such fiscal year, nothing has come to their attention that would indicate that
the Financial Statements of the Company were not prepared in conformity with
GAAP.
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8.11 Amendment of Employment Agreements. David Spearman and Melvin
Jeffers, shall have executed the Amended Employment Agreements appended hereto
as EXHIBITS E AND F, respectively, extending the expiration date of the
Employment Agreements.
8.12 Termination of Agreements with Transworld. Transworld and the
Company shall have terminated that certain Management Agreement, dated
__________, between Transworld and the Company, without any further obligations
by the Company to Transworld. Transworld shall have also forgiven or contributed
to the capital of the Company all Liabilities of the Company owed to Transworld.
8.13 Release of the Company and the Assets on Debt Obligations.
Transworld and the Company shall, at or prior to the Closing, discharge all
Liens on the Assets and the Company Shares, in a manner reasonably satisfactory
to the Buyer and its counsel. In the event Transworld and the Company have
failed to discharge any Lien at the time of Closing (including, but not limited
to, the Liens held by Bankers Trust Company on the Assets and Company Shares,
pursuant to a Security Agreement dated as of July 31, 1996, a Pledge Agreement
dated as of July 31, 1996, and an Assignment of Security Interest in Trademarks
dated as of July 31, 1996), then the Purchase Price shall be placed in escrow.
9. CONDITIONS TO THE COMPANY'S AND TRANSWORLD'S OBLIGATIONS. Unless waived
in writing by the Company and Transworld, in their sole discretion, all
obligations of the Company and Transworld under this Agreement are subject to
the fulfillment, prior to or at the Closing, of each of the following
conditions:
9.1 Representations and Warranties. Each of the representations and
warranties contained in Section 4 hereof shall be true and correct in all
material respects (except with respect to any representation or warranty that is
already qualified as to materiality, which shall be true and correct in all
respects) as of the date of this Agreement and shall be true and correct in all
material respects (except with respect to any representation or warranty that is
already qualified as to materiality, which shall be true and correct in all
respects) as of the Closing Date as if made on the Closing Date (except for any
representation or warranty expressly stated to have been made or given as of a
specified date, which, at the Closing Date, shall be true and correct in all
respects as of the date expressly stated). The Buyer shall have delivered to the
Company and Transworld a certificate of its Secretary certifying the
fulfillment, to the extent applicable to such party, of the conditions set forth
in this Section 9.1 and in Section 9.2 below.
9.2 Covenants and Obligations. All of the covenants and obligations
that the Buyer is required to perform or to comply with pursuant to the terms of
this Agreement at or prior to Closing shall have been duly performed or complied
with by the Buyer.
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9.3 No Proceeding or Litigation.
(a) No preliminary or permanent injunction or other order
shall have been issued by any court of competent jurisdiction, whether federal,
state or foreign, or by any governmental or regulatory body, whether federal,
state or foreign, nor shall any statute, rule, regulation or executive order be
promulgated or enacted by any governmental authority, whether federal, state or
foreign, which prevents the consummation of the transactions contemplated by
this Agreement.
(b) No suit, action, claim, proceeding or investigation before
any court, arbitrator or administrative, governmental or regulatory body,
whether federal, state or foreign, shall have been commenced and be pending
against the Buyer or any of its affiliates, officers or directors seeking to
prevent the transactions contemplated hereby or asserting that the transactions
contemplated hereby would be illegal.
9.4 Execution of Closing Documents. The Buyer shall have executed,
acknowledged and delivered to Transworld each of the Closing documents
applicable to it described in Section 3.3.
9.5 Approvals of Governmental Authorities. All governmental
approvals necessary or advisable in the opinion of Transworld's counsel to
consummate the transactions contemplated by this Agreement shall have been
received and shall not contain any provision which, in the judgment of
Transworld, is unduly burdensome.
9.6 Board Approval of the Transaction. The Board of Directors of the
Buyer shall have approved this transaction as required by law or the Buyer's
Articles of Incorporation or Bylaws.
10. INDEMNIFICATION.
10.1 Indemnification by Transworld. Except as otherwise limited by
this Section 10, Transworld shall indemnify, defend and hold harmless the Buyer,
the Company, and their respective officers, directors, employees, agents,
affiliates, successors and assigns (collectively, the "BUYER INDEMNIFIED
PARTIES") from and against any and all liabilities, losses, damages, claims,
costs and expenses, interest, awards, judgments and penalties (including,
without limitation, reasonable legal costs and expenses) suffered or incurred by
any of the Buyer Indemnified Parties (hereinafter, a "BUYER LOSS") arising out
of or resulting from any of the following:
(a) the breach of any representation or warranty by the
Company or Transworld contained herein or in any document delivered hereunder at
the Closing;
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(b) the breach of any covenant or agreement by Transworld or
the Company contained herein or in any document delivered hereunder at the
Closing; and
(c) any claims arising out of, relating to, or in connection
with, the conduct of the Business prior to, and including, the Closing Date,
including, but not limited to, accounts payable, tax, or other obligations of
the Business and claims for reimbursement of fees accrued prior to the Closing
Date as provided in Section 2.4 hereof.
10.2 Indemnification by the Buyer. Except as otherwise limited by
this Section 10, the Buyer shall indemnify, defend and hold harmless Transworld,
and its respective officers, directors, employees, agents, affiliates,
successors and assigns (the "COMPANY INDEMNIFIED PARTIES") from and against any
and all liabilities, losses, damages, claims, costs and expenses, interest,
awards, judgments and penalties (including, without limitation, reasonable legal
costs and expenses) suffered or incurred by them (hereinafter, a "COMPANY LOSS")
arising out of or resulting from any of the following:
(a) the breach of any representation or warranty by the Buyer
contained herein or in any document delivered hereunder at the Closing;
(b) the breach of any covenant or agreement by the Buyer
contained herein or in any document delivered hereunder at the Closing; and
(c) any claims arising out of, relating to, or in connection
with, the conduct of the Business subsequent to the Closing Date, including, but
not limited to, accounts payable, tax, or other post-Closing obligations of the
Business.
10.3 General Indemnification Provisions.
(a) For the purposes of this Section 10.3, the term
"INDEMNITEE" shall refer to the Buyer Indemnified Parties or the Company
Indemnified Parties, as applicable, entitled, or claiming to be entitled, to be
indemnified, pursuant to the provisions of Section 10.1 or 10.2, as the case may
be; the term "INDEMNITOR" shall refer to the person or persons having the
obligation to indemnify pursuant to such provisions; and "LOSSES" shall refer to
the "COMPANY LOSSES" or the "BUYER LOSSES," as the case may be.
(b) An Indemnitee shall give written notice (a "NOTICE OF
CLAIM") to the Indemnitor within ten (10) Business Days after the Indemnitee has
knowledge of any claim (including a Third Party Claim, as hereinafter defined)
which an Indemnitee has determined has given or could give rise to a right of
indemnification under this Agreement. No failure to give such Notice of Claim
shall affect the indemnification obligations of the Indemnitor hereunder, except
to the extent Indemnitor can demonstrate such failure materially prejudiced
Indemnitor's ability to successfully defend the matter giving rise to the claim
or to the extent the Notice of Claim is given after the period for the survival
of representations and warranties set forth in Section 10.2 below. The Notice of
Claim shall state the nature of the claim, the amount of the
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Losses, if known, and the method of computation thereof, all with reasonable
particularity and containing a reference to the provisions of this Agreement in
respect of which such right of indemnification is claimed or arises.
(c) The obligations and liabilities of an Indemnitor under
this Section 10 with respect to Losses arising from claims of any third party
that are subject to the indemnification provisions provided for in this Section
9 ("THIRD PARTY CLAIMS") shall be governed by and contingent upon the following
additional terms and conditions: the Indemnitee at the time it gives a Notice of
Claim to the Indemnitor of the Third Party Claim shall advise the Indemnitor
that it shall be permitted, at its option, to assume and control the defense of
such Third Party Claim at its expense and through counsel of its choice if it
gives prompt notice of its intention to do so to the Indemnitee and confirms
that the Third Party Claim is one with respect to which the Indemnitor is
obligated to indemnify. In the event the Indemnitor exercises its right to
undertake the defense against any such Third Party Claim as provided above, the
Indemnitee shall cooperate with the Indemnitor in such defense and make
available to the Indemnitor all witnesses, pertinent records, materials and
information in its possession or under its control relating thereto as is
reasonably required by the Indemnitor. Similarly, in the event the Indemnitee
is, directly or indirectly, conducting the defense against any such Third Party
Claim, the Indemnitor shall cooperate with the Indemnitee in such defense and
make available to it all such witnesses, records, materials and information in
its possession or under its control relating thereto as is reasonably required
by the Indemnitee. Except for the settlement of a Third Party Claim which
involves the payment of money only and for which the Indemnitee is totally
indemnified by the Indemnitor, no Third Party Claim may be settled by the
Indemnitor without the written consent of the Indemnitee, which consent shall
not be unreasonably withheld. Similarly, no Third Party Claim may be settled by
the Indemnitee without the written consent of the Indemnitor, which consent
shall not be unreasonably withheld.
11. TERMINATION.
11.1 Methods of Termination. This Agreement may be terminated and
the purchase of the Stock as contemplated by this Agreement may be abandoned:
(a) by mutual written consent of the Buyer and Transworld; or
(b) on July 31, 1997 (or such later date as may be agreed to
by Buyer and Transworld) in the event the Closing has not occurred.
11.2 Procedure Upon Termination. In the event of termination by the
Buyer or the Seller or both pursuant to Section 11.1 above, written notice
thereof shall be promptly given by the terminating party to the other party, and
this Agreement shall terminate, and the purchase of the Stock hereunder shall be
abandoned without further action by the Buyer or Transworld. If this Agreement
is terminated as provided herein, each party shall redeliver all documents, work
papers and other material of any other party relating to the transactions
contemplated hereby, whether so obtained before or after the execution hereof,
to the party furnishing the same.
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11.3 Effect of Termination. If this Agreement is validly terminated
in accordance with Sections 11.1 and 11.2 above, then each of the parties shall
be relieved of their duties and obligations arising under this Agreement after
the date of such termination and such termination shall be without liability to
the Buyer or Transworld or the Company; provided, however, that the obligations
of the parties set forth in Section 7.2 shall survive any such termination and
shall be enforceable hereunder; provided, further, however, that nothing in this
Section 11.3 shall relieve the Buyer or Transworld or the Company of any
liability for a material breach of this Agreement occurring prior to
termination.
12. MISCELLANEOUS.
12.1 Mediation. Any controversy or claim arising out of, or relating
to, this Agreement or the making, performance, or interpretation of this
Agreement will be settled in the following manner: (a) one or more senior
executives of the Buyer will meet with Transworld to discuss and attempt to
resolve in good faith any such controversy or claim; (b) if such controversy or
claim is not resolved as contemplated by clause (a) above, the Buyer and
Transworld will, by mutual consent, select an independent third party to mediate
such controversy or claim, providing that such mediation will not be binding
upon any of the parties; and (c) if such controversy or claim is not resolved as
contemplated by clauses (a) or (b) above, the parties will have such rights and
remedies as may be available under this Agreement or otherwise.
12.2 Survival of Representations and Warranties. Each party hereto
covenants and agrees that its warranties and representations contained in this
Agreement and the Schedules, hereto, and its indemnification obligations set
forth in subsections (a) and (b) of Section 10.1 or 10.2, as applicable, shall
survive the Closing Date hereunder for a period of 36 months, and its
indemnification obligations set forth in subsection (c) of Section 10.1 or 10.2,
as applicable, (other than with respect to taxes) shall survive the Closing Date
hereunder for the lesser of three (3) years or until the applicable period of
limitation has expired. Notwithstanding the foregoing, the warranties and
representations set forth in Section 5.21 hereof, and the indemnification
obligation with respect thereto, shall survive until the longer of 36 months
after the Closing Date or until the applicable period of limitation with respect
to these matters has expired. If written notice of a claim for breach of a
representation or warranty has been given by a party prior to the expiration of
the survival period as provided in this Section 12.2, then the relevant
representation or warranty shall survive as to such claim until the claim has
been finally resolved.
12.3 Payment of Expenses and Taxes. All costs and expenses,
including, without limitation, fees and disbursements of counsel, financial
advisors and accountants, incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such costs
and expenses, whether or not the Closing shall have occurred.
12.4 Non-Compete.
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(a) In support of the value of the consideration to be
received by Transworld hereunder, Transworld agrees that, from and after the
Closing Date, Transworld, its subsidiaries, and affiliates shall not directly or
indirectly own, lease, maintain, manage, consult for, provide medical services
at, or otherwise operate, a radiation therapy business within a twenty (20)-mile
radius of Good Samaritan, Franklin Square, Mercy Medical, North Arundel, and St.
Joseph, for a period of three (3) years following the Closing Date.
(b) Transworld acknowledges that in view of the nature of the
Buyer's business objectives, and the consideration to be paid to Transworld
hereunder, the foregoing territorial and time limitations are reasonable and
properly required for the adequate protection of Buyer, and that in the event
that any such territorial or time limitation is deemed to be unreasonable and is
then reduced by a court of competent jurisdiction, then, as reduced, the
territorial and/or time limitation shall be enforced.
(c) The parties agree that a breach by Transworld, its
subsidiaries or affiliates of the foregoing restrictive covenant would cause
irreparable damage to the Buyer. Therefore, the Buyer shall be entitled to
preliminary and permanent injunctions restraining Transworld, its subsidiaries
or affiliates from breaching or continuing to breach the foregoing restrictive
covenant. The restricted period in the foregoing restrictive covenant shall be
extended by a period equal to the time period during which Transworld, its
subsidiary or affiliate is in breach thereof.
12.5 Assignment and Binding Effect. This Agreement may not be
assigned by any party hereto without the prior written consent of the other
parties, which consent shall not be unreasonably withheld. This Agreement shall
inure to the benefit of, and be binding upon and enforceable by, the parties
hereto and their respective heirs, executors, legal representatives, successors
and permitted assigns.
12.6 Notices. All notices, demands or requests which are required or
permitted to be given pursuant to this Agreement shall be in writing, and shall
be delivered personally, by commercial carrier, by fax with a machine-generated
confirmation sheet and regular mail follow-up or by registered or certified
mail, postage prepaid, addressed to a party as stated below, or as a party may
hereafter designate by notice given in accordance with this section:
If to the Buyer, to:
Parkway Ventures, Inc.
2330 W. Joppa Road, Suite 300
Lutherville, MD 21093
Attn: President
and
Robert J. Ryan, General Counsel
Facsimile No.: (410) 296-3350
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<PAGE> 32
With a copy to:
Piper & Marbury L.L.P.
Charles Center South
36 South Charles Street
Baltimore, Maryland 21201
Attn: Steven J. Mandell, Esquire
Facsimile No.: (410) 576-5050
If to Transworld:
Robert W. Fine
President and Chief Operating Officer
Transworld HealthCare, Inc.
555 Madison Avenue, 30th Floor
New York, New York 10022
Facsimile No.: (212) 750-7221
With a copy to:
Greg Marsella, Esquire
General Counsel
Transworld HealthCare, Inc.
555 Madison Avenue, 30th Floor
New York, New York 10022
Facsimile No.: (212) 750-7221
Notice given personally or by commercial carrier is effective upon delivery.
Notice given by fax with a machine-generated confirmation sheet is effective
upon the date of mailing the follow-up copy. Notice given by United States mail,
as provided above, is effective the third United States Post Office delivery day
after the date of mailing.
12.7 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE SUBSTANTIVE LAWS OF THE STATE OF
MARYLAND.
12.8 Severability. Any provision of this Agreement that 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.
12.9 Remedies Not Exclusive. Subject to Section 12.2, nothing in
this Agreement shall be deemed to limit or restrict in any manner any other
rights or remedies that any party may have against any other party at law, in
equity or otherwise.
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12.10 No Benefits to Others. The representations, warranties,
covenants and agreements contained in this Agreement are for the sole benefit of
the parties hereto and their heirs, executors, legal representatives, successors
and permitted assigns, and they shall not be construed as conferring any rights
on any other persons.
12.11 Entire Agreement; Amendments. This Agreement sets forth the
entire agreement of the parties hereto with respect to the subject matter
hereof. Any prior agreements, representations, warranties or understandings
between the parties hereto regarding the subject matter hereof, whether written
or oral, are superseded by this Agreement. This Agreement may not be amended or
modified except by a written instrument duly executed by each of the parties
hereto.
12.12 Exhibits and Schedules. All exhibits, schedules, certificates,
recitals, and other instruments or documents referred to herein are hereby
specifically made a part of this Agreement. Any reference in this Agreement to
an Exhibit or Schedule shall be deemed to be a reference to an Exhibit or
Schedule to this Agreement unless the context expressly indicates otherwise. Any
item disclosed in a Schedule hereto in response to one Section of this Agreement
shall not be deemed disclosed in response to any other Section hereof unless
specifically provided otherwise herein or unless specifically cross-referenced
in the Schedules.
12.13 Waiver. Any term or provision of this Agreement may be waived
at any time by the party entitled to the benefit thereof by a written instrument
duly executed by such party. No such waiver shall limit the ability of the
waiving party to enforce its remedies for a subsequent breach of such term or
provision or for a breach of any other term or provision hereof.
12.14 Section Headings; Gender; "Person"; "Affiliate". All section
endings and the use of a particular gender are for convenience only and shall in
no way modify or restrict any of the terms or provisions hereof. Any reference
in this Agreement to a Section shall be deemed to be a reference to a Section of
this Agreement unless the context expressly indicates otherwise. Any reference
herein to a "PERSON" shall include an individual, firm, corporation,
partnership, trust, association, government or political subdivision or agency,
unincorporated organization or any other entity; and any reference to an
"AFFILIATE" shall mean any person who, directly or indirectly, controls, is
controlled by, or is under common control with, the referenced party.
12.15 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute but one and the same instrument. This Agreement shall
become binding only when each party hereto has executed and delivered to the
other parties one or more counterparts.
12.16 Further Assurances. Each party shall, from time to time after
the Closing at no additional expense to such party, at the request of the other
party and without further compensation, use its or her best efforts (a) to take,
or cause to be taken, such action, (b) to execute and deliver, or cause to be
executed and delivered, such additional documents and
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instruments and (c) to do, or cause to be done, all things necessary, proper or
advisable under the provisions of this Agreement and under applicable law to
consummate and make effective the transactions contemplated hereby.
12.17 Public Announcements. No public announcements relating to this
Agreement or the transactions contemplated hereby shall be made unless in form,
and at such time, as the Company and the Buyer shall mutually agree, except that
nothing in this Agreement shall prevent a party hereto from making any
disclosure in connection with the transactions contemplated by this Agreement to
the extent required by law, provided that prior notice of such disclosure is
given to the other party.
12.18 Cooperation. Notwithstanding the provisions of Section 10.3(c)
hereof, except with respect to claims against each other, Transworld and the
Buyer shall cooperate with each other in defending claims asserted against the
other with respect to the operations of the Company prior to the Closing, or in
asserting any claim against others with respect thereto, and shall make
available to the other such witnesses, records, materials and other information
in its or her possession or under its or her control relating thereto as is
reasonably requested by such party.
[SIGNATURES APPEAR ON THE NEXT PAGE.]
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<PAGE> 35
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
under seal as of the date first written above.
WITNESS/ATTEST: PARKWAY VENTURES, INC.
/s/ Robert J. Ryan By: /s/ Robert M. Tarola
- ----------------------------- -------------------------------------
Robert J. Ryan Robert M. Tarola, Vice President
RADAMERICA, INC.
/s/ Gregory E. Marsella By: /s/ David Spearman
- ----------------------------- -------------------------------------
Gregory E. Marsella David Spearman, President
TRANSWORLD HOME HEALTHCARE, INC.
/s/ Gregory E. Marsella By: /s/ Robert W. Fine
- ----------------------------- -------------------------------------
Gregory E. Marsella Robert W. Fine
President and Chief Operating Officer
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