AGREEMENT AND PLAN OF SPLIT-OFF
DATED AS OF JULY 1, 1997
AMONG
IATROS HEALTH NETWORK, INC.
AND
IHN/NEW HEALTH MANAGEMENT SYSTEMS, INC.
AND
XXXXXX X. XXXXXXX
AND
XXXXXX X. XXXXX
TABLE OF CONTENTS
Page
ARTICLE I
The Split-Off
SECTION 1.01. The Split-Off 2
SECTION 1.02. Closing 2
SECTION 1.03. Effective Time of the Split-Off 2
SECTION 1.04. Articles of Incorporation and Bylaws 2
SECTION 1.05. Directors 2
SECTION 1.06. Officers 2
SECTION 1.07. Assets and Liabilities of Sub 2
SECTION 1.08. Termination of Agreements 3
ARTICLE II
Effects of the Split-Off
SECTION 2.01. Effect on Capital Stock of the Constituent Corporations 4
SECTION 2.02. Exchange of Certificates 4
ARTICLE III
Representations and Warranties
SECTION 3.01. Representations and Warranties of the Parent 4
SECTION 3.02. Representations and Warranties of Xxxxxxx and Xxxxx 6
ARTICLE IV
Covenants Relating to Conduct of Business
SECTION 4.01. Conduct of Business 8
ARTICLE V
Additional Agreements
SECTION 5.01. Best Efforts 9
SECTION 5.02. Access to Information 10
SECTION 5.03. Legal Conditions to Split-Off 10
SECTION 5.04. Fees and Expenses 10
SECTION 5.05. Indemnification 10
SECTION 5.06. Public Announcements 11
SECTION 5.07. Mutual Releases 11
SECTION 5.08. Competition Among the Parties 11
SECTION 5.09. Cooperation Among the Parties 11
SECTION 5.10. Covenants by the Parent 12
SECTION 5.11. Release of the Parent 12
SECTION 5.12. 12
ARTICLE VI
Conditions Precedent
SECTION 6.01. Conditions to Obligations of the Parent 12
SECTION 6.02. Conditions to Obligations of Xxxxxxx and Xxxxx 13
SECTION 6.03. Frustration of Closing Conditions 15
ARTICLE VII
Indemnification
SECTION 7.01. Indemnification by Xxxxxxx and Xxxxx 15
SECTION 7.02. Indemnification by the Parent 16
SECTION 7.03. Notification of Claims 16
ARTICLE VIII
Termination, Amendment and Waiver
SECTION 8.01. Termination 18
SECTION 8.02. Effect of Termination 18
SECTION 8.03. Amendment 19
SECTION 8.04. Extension; Waiver 19
ARTICLE IX
General Provisions
SECTION 9.01. Nonsurvival of Representations and Warranties 19
SECTION 9.02. Notices 19
SECTION 9.03. Interpretation 20
SECTION 9.04. Counterparts 21
SECTION 9.05. Entire Agreement; No Third Party Beneficiaries 21
SECTION 9.06. Governing Law 21
SECTION 9.07. Assignment; Binding Effect 21
SECTION 9.08. Enforcement 21
SECTION 9.09. Further Assurances 22
SECTION 9.10. Time of Essence 22
SECTION 9.11. Reporting for Tax Purposes 22
SECTION 9.12 Completion of Schedules 22
SCHEDULES
Schedule 1.07(a) - Statement of Assets
Schedule 1.07(b) - Contracts of the Sub
Schedule 1.07(c) - Liabilities of the Sub
Schedule 1.08 - Xxxxxxx/Xxxxx Agreements
Schedule 3.01(c) - Governmental Authorizations of the Sub
Schedule 3.01(d) - Non-Contravention of the Sub
Schedule 3.02(b) - Governmental Authorizations of Xxxxxxx and Xxxxx
Schedule 3.02(c) - Non-Contravention of Xxxxxxx and Xxxxx
Schedule 5.09 - Financial Services and Ancillary Services
Schedule 5.11 - List of Parent Guaranty Obligations
EXHIBITS
Exhibit A Mutual Release Agreement
AGREEMENT AND PLAN OF SPLIT-OFF
THIS AGREEMENT AND PLAN OF SPLIT-OFF ("Agreement") dated as
of July 1, 1997 among Iatros Health Network, Inc., a Delaware
corporation (the "Parent"); IHN/New Health Management Systems,
Inc., a Pennsylvania corporation (the "Sub"); Xxxxxx X. Xxxxxxx,
an individual ("Xxxxxxx"); and Xxxxxx X. Xxxxx, an individual
("Xxxxx").
Background
WHEREAS, the Parent owns one hundred percent (100%) of the
issued and outstanding shares of common stock of the Sub
consisting of two hundred (200) shares (the "Sub Shares") and
Xxxxxxx and Xxxxx own (i) certain shares of the issued and
outstanding common stock of the Parent and (ii) a twenty percent
(20%) phantom stock interest in the Sub; and
WHEREAS, the respective Boards of Directors of the Parent
and the Sub have approved the Split-Off of the Sub from the
Parent (the "Split-Off"), upon the terms and subject to the
conditions set forth in this Agreement, whereby all of the Sub
Shares will be transferred by the Parent to Xxxxxxx and Xxxxx in
exchange for the transfer of an aggregate of one hundred (100)
shares of the issued and outstanding common stock of the Parent
(the "Parent Shares") by Xxxxxxx and Xxxxx to the Parent; and
WHEREAS, each of the Parent and the Sub will survive the
Split-Off as an independent corporation; and
WHEREAS, the Parent, the Sub, Xxxxxxx and Xxxxx desire to
make certain representations, warranties, covenants and
agreements in connection with the Split-Off and also to prescribe
various conditions to the Split-Off; and
WHEREAS, for federal income tax purposes, it is intended
that the Split-Off shall qualify as a tax-free transaction under
the provisions of Section 355 of the Internal Revenue Code of
1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the representations,
warranties, covenants and agreements contained in this Agreement,
and intending to be legally bound hereby, the parties agree as
follows:
ARTICLE I
SECTION 1.01. The Split-Off. Upon the terms and subject
to the conditions set forth in this Agreement, the Sub shall
split-off from the Parent at the Effective Time of the Split-Off
(as defined in Section 1.03). Following the Effective Time of
the Split-Off, the Parent and the Sub shall each have a separate
corporate existence, and each shall continue as a surviving,
independent corporation after the Split-Off.
SECTION 1.02. Closing. The closing of the Split-Off
(the "Closing") will take place at 10:00 a.m. on a date to be
specified by the parties (the "Closing Date"), which (subject to
satisfaction or waiver of the conditions set forth in
Sections 6.01 and 6.02) shall be no later than the second
business day after satisfaction of the conditions set forth in
Section 6.01, unless another date or place is agreed to in
writing by the parties hereto. The parties shall use their best
efforts to effect the Closing on or before August 20, 1997.
SECTION 1.03. Effective Time of the Split-Off. The
Split-Off shall be effective as of July 1, 1997, at 12:01 a.m.
(the date and time the Split-Off becomes effective being
hereinafter referred to as the "Effective Time of the Split-
Off").
SECTION 1.04. Articles of Incorporation and Bylawsof
Incorporation
(a) The Articles of Incorporation of the Sub as in
effect immediately prior to the Effective Time of the Split-Off
shall be the Articles of Incorporation of the Sub until
thereafter changed or amended as provided therein or by
applicable law.
(b) The Bylaws of the Sub as in effect at the
Effective Time of the Split-Off shall be the Bylaws of the Sub
until thereafter changed or amended as provided therein or by
applicable law.
SECTION 1.05. Directors. The directors of the Sub at
the Effective Time of the Split-Off, other than Xxxxxxx and
Xxxxx, shall resign as of the Effective Time of the Split-Off,
and Xxxxxxx and Xxxxx shall be the sole directors of the Sub.
SECTION 1.06. Officers. The officers of the Sub at the
Effective Time of the Split-Off, other than Xxxxxxx and Xxxxx,
shall resign as of the Effective Time of the Split-Off, and
Xxxxxxx and Xxxxx shall be the sole officers of the Sub.
SECTION 1.07. Assets and Liabilities of SubError!
Reference source not found.. At the Effective Time of the Split-
Off, the Sub will be the sole owner of all of its usual and
customary assets (whether real and immoveable, personal and
moveable, or mixed and whether tangible or intangible), which are
set forth on the Statement of Assets set forth on Schedule
1.07(a), including the nursing home contracts for the facilities
Effective Time of the Split-Off, the Sub will be subject to and
obligated for its usual and customary liabilities, which are set
forth on the Statement of Liabilities set forth on Schedule
1.07(c). The assets and liabilities set forth in Schedules
1.07(a) and 1.07(c), respectively, shall be mutually agreed upon
by Xxxxxxx and Xxxxx, on the one hand and the Parent, on the
other hand, as of the Effective Date of the Split-Off.
Notwithstanding anything in this Section 1.07 to the contrary,
all intercompany assets and liabilities incurred in the ordinary
course of business between the Sub and the Parent prior to the
Effective Time of the Split-Off shall not be included in
Schedules 1.07(a) and 1.07(c).
SECTION 1.08. Termination of Agreements.. At the
Effective Time of the Split-Off, the Employment Agreements and
the Phantom Stock Agreements among the Parent, the Sub, Xxxxxxx
and Xxxxx, as set forth on Schedule 1.08 shall terminate and be
of no further force and effect and Parent shall be excused from
any further liability thereunder. At the Effective Time any and
all salary guarantees and commitments of the Parent in connection
with such agreements shall have been terminated.
ARTICLE II
Effects of the Split-Off ARTICLE II
SECTION 2.01. Effect on Capital Stock of the Constituent
Corporation. As of the Effective Time of the Split-Off, by
virtue of the Split-Off:
(a) Capital Stock of the Sub. Each issued and
outstanding share of capital stock of the Sub shall continue to
be issued and outstanding Common Stock, no par value, of the Sub.
(b) Capital Stock of the Parent. Each issued and
outstanding share of the Capital Stock of Parent shall continue
to be issued and outstanding Common Stock, 0.001 par value of the
Parent.
(c) Exchange of Shares. Upon the Effective Date of
the Split-Off, the Parent shall transfer to Xxxxxxx and Xxxxx the
Sub Shares and Xxxxxxx and Xxxxx shall transfer to the Parent the
Parent Shares. There shall be no other consideration transferred
by any of the parties by virtue of the Split-Off.
SECTION 2.02. Exchange of Certificates
(a) Exchange Procedures. At the Closing, (i) the
Parent shall deliver the certificate(s) for the Sub Shares to
Xxxxxxx and Xxxxx in consideration for the right to receive the
certificate(s) for the Parent Shares from Xxxxxxx and Xxxxx and
(ii) Xxxxxxx and Xxxxx shall deliver the certificate(s) for the
Parent Shares to the Parent, in consideration for the right to
receive the certificate(s) for the Sub Shares from the Parent.
Xxxxxxx and Xxxxx shall each deliver fifty (50) Parent Shares to
Parent, and Parent shall deliver one hundred (100) Sub Shares to
each of Xxxxxxx and Xxxxx. Until surrendered as contemplated by
this Section 2.02, each of the certificate(s) representing the
Sub Shares shall be deemed at any time after the Effective Time
of the Split-Off to represent only the right to receive upon such
surrender the certificate(s) representing the Parent Shares and
each of the certificate(s) representing the Parent Shares shall
be deemed at any time after the Effective Time of the Split-Off
to represent only the right to receive upon such surrender the
certificate(s) representing the Sub Shares.
ARTICLE III
Representations and WarrantiesARTICLE III
SECTION 3.01. Representations and Warranties of the Parent
(a) Corporate Existence and Power. The Parent is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, and the Sub is
a corporation duly incorporated, validly existing and in good
standing under the laws of the Commonwealth of Pennsylvania; and
the Parent and the Sub each has all corporate power and authority
necessary to enable it to enter into the transactions
contemplated hereby.
(b) Corporate Authorization. The execution,
delivery and performance by the Parent and the Sub of this
Agreement, and the consummation by the Parent of the Split-Off
and other transactions contemplated by this Agreement, are within
the corporate power and authority of the Parent and the Sub and
have been duly authorized by all necessary corporate action.
This Agreement has been duly and validly authorized, executed and
delivered by the Parent and the Sub and constitutes a valid and
binding obligation of the Parent and the Sub enforceable against
the Parent and the Sub in accordance with its terms, except
(a) that such enforcement may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium and other
similar laws affecting the enforcement of creditors' rights
generally from time to time in effect, (b) that such enforcement
may be limited by equitable principles of general application,
(c) that such enforcement may be limited by courts with respect
to any "unconscionable" provisions contained herein, and (d) that
certain of the covenants contained herein may not be specifically
enforceable and courts may award money damages rather than
specific performance for contractual provisions involving matters
other than payment of money.
(c) Governmental Authorization. The execution,
delivery and performance by the Parent and the Sub of this
Agreement, and the consummation of the Split-Off and other
transactions contemplated by this Agreement by the Parent and to
the knowledge of Parent, the Sub, do not and will not require any
consent, approval or action by or in respect of, or any
declaration, filing or registration with, any governmental or
regulatory body, court, agency, official or authority
("Governmental Authority"), except for filings, permits,
authorizations, consents and approvals as may be required under
any other applicable requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), the Securities Act, the
BCL, the Delaware General Corporation Law, the Pennsylvania
Business Corporation Law and the laws of other states in which
the Parent or the Sub is qualified to do or is doing business or
such ownership and control disclosure forms and approvals as may
be required under federal and state healthcare and licensure laws
and regulations applicable to the Parent, and as disclosed in
Schedule 3.01(c).
(d) Non-Contravention. Except as set forth in
Schedule 3.01(d), the execution, delivery and performance by the
Parent and the Sub of this Agreement, and the consummation of the
Split-Off and other transactions contemplated by this Agreement
by the Parent and the Sub, do not and will not, with or without
the giving of notice, the lapse of time or other: (i) contravene
or conflict with the certificates of incorporation or by-laws of
the Parent or to the knowledge of Parent, the Sub, (ii) assuming
compliance with the matters referred to in Section 3.01(c),
contravene or conflict with or constitute a violation of any
provision of any law, rule, regulation, judgment, injunction,
order or decree binding upon or applicable to the Parent or to
the knowledge of Parent, the Sub, (iii) require any consent,
approval or other action by any person, contravene or conflict
with or constitute a violation of or a default under, or give
rise to any right of termination, cancellation or acceleration of
any right or obligation of the Parent or to the knowledge of
Parent, the Sub or to a loss of any benefit to which the Parent
or to the knowledge of Parent, the Sub is entitled, under any
material provision of any material agreement, contract,
indenture, any license, franchise, permit or other similar
authorization held by the Parent or to the knowledge of Parent,
the Sub, or any lease or other instrument binding upon the Parent
or the Sub, or (iv) result in the creation or imposition of any
mortgage, pledge, security interest, lien, claim, charge,
restriction, encumbrance or assessment of any kind (each, a
"Lien") on any asset of the Parent or to the knowledge of Parent,
the Sub.
(e) Capitalization; Ownership of Shares.
There are no outstanding obligations of the Parent or the Sub or
any of their subsidiaries or affiliates, to sell, deliver or
otherwise transfer to any third party the Sub Shares, other than
any such obligations that may have been created by Xxxxxxx and
Xxxxx. The Sub Shares are owned by the Parent and are free and
clear of all liens, encumbrances, security interest, options,
rights or claims of others except for the rights of Xxxxxxx and
Xxxxx created by this Agreement.
(f) Assets and Liabilities of the Sub. To the
knowledge of the Parent, except as set forth on Schedules
1.07(a), (b) and (c), there exist no assets or liabilities of the
Sub.
(g) Disclosure. No statement of fact by the Parent
contained in this Agreement and no written statement of fact
furnished or to be furnished by the Parent to Xxxxxxx or Xxxxx
pursuant to this Agreement contains or will contain any untrue
statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements herein or
therein contained not misleading.
(h) Knowledge of the Parent and the Sub. Neither
the Parent nor the Sub has any independent knowledge that any
representation or warranty of Xxxxxxx and Xxxxx herein is not
true and correct as of the Closing hereunder.
(i) Financial Statements. Assuming that the
underlying accounting data furnished to the Parent by the Sub is
and was accurate, all financial statements of the Sub prepared by
or on behalf of the Parent are, as of June 30, 1997, true,
complete and accurate; and all such financial statements have
been prepared in accordance with generally accepted accounting
principles applied on a consistent basis both as to
classification of items and amounts (except as may be indicated
therein or in the notes thereto); and fairly presents the
financial position of the Sub as of June 30, 1997, subject to
normal adjustments described therein, which adjustments will not
be material in amount or effect.
SECTION 3.02. Representations and Warranties of Xxxxxxx
and Xxxxx. Xxxxxxx and Xxxxx hereby represent and warrant to the
Parent as follows:
(a) Authorization. This Agreement has been duly
authorized, executed and delivered by Xxxxxxx and Xxxxx and
constitutes a valid and binding obligation of Xxxxxxx and Xxxxx,
enforceable against Xxxxxxx and Xxxxx in accordance with its
terms, except (a) that such enforcement may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium and
other similar laws affecting the enforcement of creditors' rights
generally from time to time in effect, (b) that such enforcement
may be limited by equitable principles of general application,
(c) that such enforcement may be limited by courts with respect
to any "unconscionable" provisions contained herein, and (d) that
certain of the covenants contained herein may not be specifically
enforceable and courts may award money damages rather than
specific performance for contractual provisions involving matters
other than payment of money.
(b) Governmental Authorization. The
execution, delivery and performance by Xxxxxxx and Xxxxx of this
Agreement, and the consummation of the Split-Off and other
transactions contemplated by this Agreement by Xxxxxxx and Xxxxx,
do not and will not require any consent, approval or action by or
in respect of, or any declaration, filing or registration with,
any Governmental Authority, other than such ownership and control
disclosure forms and approvals as may be required under federal
and state healthcare and licensure laws and regulations
applicable to Xxxxxxx and Xxxxx as disclosed in Schedule 3.02(b).
(c) Non-Contravention. Except as set forth in
Schedule 3.02(c), the execution, delivery and performance by
Xxxxxxx and Xxxxx of this Agreement, and the consummation of the
Split-Off and other transactions contemplated by this Agreement
by Xxxxxxx and Xxxxx, do not and will not, with or without the
giving of notice, the lapse of time or both: (i) contravene or
conflict with the matters referred to in Section 3.02(b), (ii)
assuming compliance with the matters referred to in Section
3.02(b), contravene or conflict or constitute a violation of any
provision of any law, rule, regulation, judgment, injunction,
order or decree currently in effect and binding upon or
applicable to Xxxxxxx and Xxxxx, (iii) require any consent,
approval or other action by any person, contravene or conflict
with or constitute a violation of or a default under, or give
rise to any right of termination, cancellation or acceleration of
any right or obligation of Xxxxxxx and Xxxxx or to a loss of any
benefit to which Xxxxxxx and Xxxxx are entitled, under any
material provision of any material agreement, contract,
indenture, any license, franchise, permit or other similar
authorization held by Xxxxxxx and Xxxxx, or any lease or other
instrument binding upon Xxxxxxx and Xxxxx, or (iv) result in the
creation or imposition of any Lien on any asset of Xxxxxxx and
Xxxxx.
(d) Ownership of Shares. The Parent Shares are
owned by Xxxxxxx and Xxxxx and are free and clear of any and all
liens, encumbrances, security interests, options or rights or
claims of others created by Xxxxxxx and Xxxxx with respect
thereto.
(e) Capitalization. There are no outstanding
obligations of the Sub or any of its affiliates or subsidiaries
to sell, deliver or otherwise transfer to any third party any of
the Parent Shares.
(f) Acquisition of Sub Shares. Xxxxxxx and Xxxxx
are acquiring the Sub Shares to be transferred hereunder for
their own account (and not for the account of others) for
investment and not with a view to the distribution thereof.
Neither Xxxxxxx nor Xxxxx will sell or otherwise dispose of the
Sub Shares without registering such sale or other disposition
under the Securities Act of 1933, as amended (the "Securities
Act"), and under any applicable state securities law, unless such
sale or other disposition is exempt from such registration in
which case the sale or other disposition will be made in
compliance with such exemption.
(g) Disclosure. No statement of fact by
Xxxxxxx and Xxxxx contained in this Agreement and no written
statement of fact furnished or to be furnished by Xxxxxxx and
Xxxxx to Parent pursuant to this Agreement contains or will
contain any untrue statement of a material fact or omits or will
omit to state a material fact necessary in order to make the
statements herein or therein contained not misleading.
(h) Knowledge of Xxxxxxx and Xxxxx. Neither
Xxxxxxx nor Xxxxx has independent knowledge that any
representation or warranty of the Parent and the Sub herein is
not true and correct as of the Closing hereunder.
(i) Assets and Liabilities of the Sub. To the
knowledge of Xxxxx and Xxxxxxx, except as set forth on Schedules
1.07(a), (b) and (c), there exist no assets or liabilities of the
Sub.
ARTICLE IV
Covenants Relating to Conduct of BusinessARTICLE IV
SECTION 4.01. Conduct of Business.
(a) Conduct of Business by the Sub. During the
period from the date of this Agreement to the Closing, Sub shall
carry on its businesses in the usual, regular and ordinary course
in substantially the same manner as heretofore conducted, shall
remain in good standing under the laws of the Commonwealth of
Pennsylvania and any other states in which it is qualified to do
business and, to the extent consistent therewith, use its best
efforts to preserve intact their current business organizations,
keep available the services of their current officers and
employees, preserve their relationships with customers,
suppliers, licensors, licensees, distributors and others having
business dealings with them to the end that their goodwill and
ongoing businesses shall be, unimpaired at the Closing and the
Effective Time of the Split-Off. Without limiting the generality
of the foregoing, during the period from the date of this
Agreement to the Closing, the Sub shall not, and Parent, Xxxxx
and Xxxxxxx shall not cause the Sub to:
(i) acquire or agree to acquire (x) by merging
or consolidating with, or by purchasing a substantial portion of
the assets of, or by any other manner, any business or any
corporation, partnership, joint venture, association or other
business organization or division thereof or (y) any assets that
individually or in the aggregate are material to the Sub except
purchases of inventory in the ordinary course of business
consistent with past practice;
(ii) incur any material indebtedness, except
for short term borrowings incurred in the ordinary course of
business consistent with past practice, or (y) make any loans,
advances or capital contributions to, or investments in, or
dividend distributions to, any other person, other than to the
Sub;
(iii) except in the ordinary course of
business, modify, amend or terminate any material contract or
agreement to which the Sub is a party or waive, release or assign
any material rights or claims thereunder;
(iv) take any action that (without giving
effect to any action taken or agreed to be taken by the Parent or
any of its affiliates) would prevent the Parent, the Sub, and
Xxxxxxx and Xxxxx from accounting for the Split-Off as a "tax-
free transaction" under Section 355 of the Code;
(v) authorize any of, or commit or agree to
take any of, the foregoing actions.
(b) Conduct of Business by the Parent. During the
period from the date of this Agreement to the Closing, neither
the Parent nor the Sub shall take any action that (without giving
effect to any action taken or agreed to be taken by the Sub or
any of its affiliates) would prevent the Sub and Xxxxxxx and
Xxxxx from accounting for the Split-Off as a "tax-free
transaction" under Section 355 of the Code.
(c) Other Actions. Xxxxxxx and Xxxxx, on the one
hand, and the Parent and the Sub, on the other hand, shall not,
and shall not permit any of their respective subsidiaries to,
take any action that would, or that could reasonably be expected
to, result in (i) any of the representations and warranties of
such party set forth in this Agreement that are qualified as to
materiality becoming untrue, (ii) any of such representations and
warranties that are not so qualified becoming untrue in any
material respect or (iii) any of the conditions to the Split-Off
set forth in Article VI not being satisfied.
(d) Advice of Changes. Xxxxxxx and Xxxxx, on the
one hand, and the Parent and the Sub, on the other hand, shall
promptly advise the other party orally and in writing of any
change or event having, or which, insofar as can reasonably be
foreseen, would have, a material adverse effect on such party or
on the truth of their respective representations and warranties.
ARTICLE V
Additional Agreements
SECTION 5.01. Best Efforts. Subject to the terms
and conditions of this Agreement, each of the parties hereto
agrees to use its best efforts to take, or cause to be taken, all
actions, and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by
this Agreement. Each party shall promptly consult with the other
with respect to, provide any necessary information with respect
to and provide the other, or its counsel, copies of, all filings
made by such party with any Governmental Authority in connection
with this Agreement and the transactions contemplated hereby.
SECTION 5.02. Access to Information Upon reasonable
notice and subject to restrictions contained in the
confidentiality agreements to which such party may be subject,
Dawkins, Halko, the Sub and the Parent shall each, afford to the
officers, employees, accountants, counsel and other representa-
tives of the others, reasonable access, during normal business
hours during the period prior to the Closing Date, to all
information concerning the Sub's business, properties and
personnel as such other party may reasonably request. Unless
otherwise required by law, the parties will hold any such
information which is nonpublic in confidence until such time as
such information otherwise becomes publicly available through no
wrongful act of either party, and in the event of termination of
this Agreement for any reason each party shall promptly return
all nonpublic documents obtained from any other party, and any
copies made of such documents, to such other party.
SECTION 5.03. Legal Conditions to Split-OffError!
Reference source not found.. Each of the Sub and the Parent will
take all reasonable actions necessary to comply promptly with all
legal requirements which may be imposed on itself with respect to
the Split-Off, which actions shall include, without limitation,
furnishing all information required in connection with approvals
of or filings with any Governmental Authority and will promptly
cooperate with and furnish information to each other in
connection with any such requirements imposed upon them in
connection with the Split-Off. Each of the Sub and the Parent
will take all reasonable actions necessary to obtain, and will
cooperate with each other in obtaining, any consent,
authorization, order or approval of, or any exemption by, any
Governmental Authority or other public or private third party,
required to be obtained or made by the Parent or the Sub in
connection with the Split-Off or the taking of any action
contemplated thereby or by this Agreement.
SECTION 5.04. Fees and Expenses. All costs and expenses
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such
expenses.
SECTION 5.05. Indemnification.
(a) Continuing Indemnifications. The Sub
shall, and from and after the Effective Time of the Split-Off,
indemnify, defend and hold harmless each person who is now, or
has been at any time prior to the date of this Agreement or who
becomes prior to the Effective Time of the Split-Off, an officer
or director of the Sub (the "Indemnified Parties") against
(i) all losses, claims, damages, costs, expenses, liabilities or
judgments or amounts that are paid in settlement with the
approval of the indemnifying party, which approval shall not be
unreasonably withheld, of or in connection with any claim,
action, suit, proceeding or investigation based in whole or in
part on or arising in whole or in part out of the fact that such
person is or was a director, officer or employee of the Sub,
whether pertaining to any matter existing or occurring at or
prior to the Effective Time of the Split-Off and whether asserted
or claimed prior to or at or after the Effective Time
("Indemnified Liabilities") and (ii) all Indemnified Liabilities
based in whole or in part on, or arising in whole or in part out
of, or pertaining to this Agreement or the transactions
contemplated hereby, in each case to the full extent a
corporation is permitted under the BCL to indemnify directors and
officers, as the case may be.
SECTION 5.06. Public Announcements. Except as required
by law, including but not limited to, federal and state
securities laws and rules and regulations of the Securities and
Exchange Commission (the "Commission"), state securities
commissions, the National Association of Securities Dealers, Inc.
and NASDAQ, the Parent, on the one hand, and the Sub, Xxxxxxx and
Xxxxx, on the other hand, will consult with each other before
issuing, and provide each other the opportunity to review,
comment upon and concur with, any press release or other public
statements with respect to the transactions contemplated by this
Agreement, including the Split-Off, and shall not issue any such
press release or make any such public statement prior to such
consultation and the receipt of the prior written consent of the
other parties, except as may be required by applicable law, court
process or by obligations pursuant to any listing agreement with
any national market system. If consent is not received by the
party requesting consent within five (5) business days of receipt
by the party from whom consent is requested, the party from whom
consent was requested shall have been deemed to have consented
to the issue of such press release or public statement.
Notwithstanding anything to the contrary contained in this
Section 5.06, Xxxxx and Xxxxxxx may discuss the Split-Off
Transaction with the owners of the nursing homes set forth on
Schedule 1.07(b).
SECTION 5.07. Mutual. As additional consideration for
the benefits being provided hereunder to each party, the Sub,
Xxxxxxx and Xxxxx, on one hand, and the Parent, on the other
hand, shall contemporaneously with the Effective Time of the
Split-Off, execute a mutual release in the form attached hereto
as Exhibit A hereto.
SECTION 5.08. Competition Among the Parties. The Parent
hereby acknowledges that upon the Effective Date of the Split-
Off, the Sub, Xxxxxxx and Xxxxx shall not be subject to any
restrictions on competition with the Parent in any field,
including the provision of nursing home management and related
services, and the Sub, Xxxxxxx and Xxxxx hereby acknowledge that
upon the Effective Date of the Split-Off, the Parent also shall
not be subject to any such restrictions on competition with the
Sub, Xxxxxxx or Xxxxx.
SECTION 5.09. Cooperation Among the Parties.
Subject to the consent of the owners of the nursing homes set
forth on Schedule 1.07(b) hereto, which such nursing homes are
managed by the Sub pursuant to the contracts set forth on Sched-
ule 1.07(b) hereto, the Sub shall use its reasonable best efforts
to continue to use the Parent as the provider of the Financial
Services and Ancillary Services set forth in Schedule 5.09,
following the Effective Time of the Split-Off.
SECTION 5.10. Covenants by the Parent
From the date of this Agreement until the
Closing, the Parent covenants not to purchase, acquire, purchase
or acquire any option for, or consider any purchase, acquisition
or offer to purchase or acquire, any of the outstanding capital
stock of the Sub, all or a substantial amount of the assets of
the Sub or the merger or other consolidation of the Sub with any
other person.
SECTION 5.11. Release of the Parent. At the Effective
Time of the Split-Off, the Sub shall cause the Parent to be
released from all of the Parent's guaranty obligations with
respect to all operating deficits agreements, guarantees, loans,
commitments to provide financial or other assistance with respect
to the Sub and with respect to any other obligations of the Sub
listed on Schedule 5.11 attached hereto, including, without
limitation, any obligations pertaining to any facilities managed
by the Parent or any of its affiliates and with respect to which
such facilities the management contracts are to be assigned to
the Sub or any of its affiliates contemporaneously with the
Effective Time of the Split-Off. All such guaranty obligations
are listed on Schedule 5.11 hereto. To the extent the Sub, Xxxxx
or Xxxxxxx receives any repayment of any loan or advance made by
the Parent pursuant to an operating deficits agreement, the party
receiving such payment shall promptly deliver that payment to the
Parent.
SECTION 5.12. Xxxxx, Xxxxxxx and the Sub and its employees
each agree to make themselves reasonably available to Parent and
Parent's attorneys or representatives in order to assist as
needed with the defense or prosecution of any litigation
involving Parent. Xxxxx, Xxxxxxx and the Sub shall provide
reasonable assistance to Parent in collecting any amounts that
are due to Parent in connection with any financings or
transactions referred to in Schedule 5.11 attached hereto.
ARTICLE VI
Conditions PrecedentARTICLE VI
SECTION 6.01. Conditions to Obligations of the Parent.
The obligations of the Parent and the Sub to effect the Split-Off
are further subject to satisfaction or waiver of the following
conditions:
(a) Representations and Warranties. The covenants,
representations and warranties of Xxxxxxx and Xxxxx set forth in
this Agreement shall be true and correct in each case as of the
date of this Agreement and as of the Closing Date as though made
on and as of the Closing Date, except to the extent such cove-
nants, representations and warranties speak as of an earlier
date, and the Parent shall have received a certificate signed by
Xxxxxxx and Xxxxx to such effect.
(b) Performance of Obligations of Xxxxxxx and
Xxxxx. Xxxxxxx, Xxxxx and the Sub shall have performed in all
material respects all obligations required to be performed by
them under this Agreement at or prior to the Closing Date, and
the Parent shall have received a certificate signed by Xxxxxxx
and Xxxxx to such effect.
(c) No Litigation. There shall not be pending or
threatened by any Governmental Authority any suit, action or
proceeding and there shall not be pending by any other person any
suit, action or proceeding that has a reasonable likelihood of
success, in each case (i) challenging the exchange of the Parent
Shares and the Sub Shares by the Parent, on the one hand, and
Xxxxxxx and Xxxxx, on the other hand, seeking to restrain or
prohibit the consummation of the Split-Off or any of the other
transactions contemplated by this Agreement or seeking to obtain
from the Parent any damages that are material to the Parent, or
(ii) that otherwise could reasonably be expected to have a
material adverse effect on the Parent.
(d) Board Approval. This Agreement shall have been
approved by the Boards of Directors of the Parent and the Sub.
(e) Mutual Release. Xxxxxxx, Xxxxx and the Sub
shall have executed the Mutual Release in the form attached
hereto as Exhibit A.
(f) Consents and Approvals. The Sub shall have
obtained all authorizations, declarations, approvals and consents
(all of which shall be in full force and effect) to the Split-Off
under any of the Contracts, the failure to obtain which would
have a material adverse effect on the continuation of such
Contract.
(g) No Adverse Findings. Parent shall not have
discovered any information through any investigation or through
its review of the information provided in the Schedules attached
hereto which in the reasonable opinion of the Parent is material
and adverse to an evaluation of the merits of the Split-Off from
the perspective of the Parent.
SECTION 6.02. Conditions to Obligations of Xxxxxxx and
HalkoError! Reference source not found.. The obligations of
Xxxxxxx and Xxxxx to effect the Split-Off is further subject to
satisfaction or waiver of the following conditions:
(a) Representations and Warranties. The covenants,
representations and warranties of the Parent and the Sub set
forth in this Agreement shall be true and correct in each case as
of the date of this Agreement and as of the Closing Date as
though made on and as of the Closing Date, except to the extent
such representations speak as of an earlier date, and Xxxxxxx and
Xxxxx shall have received a certificate signed by the chief
executive officer and the chief financial officer of the Parent
to such effect.
(b) Performance of Obligations of the Parent
and the Sub. The Parent and the Sub shall have performed in all
material respects all obligations required to be performed by
them under this Agreement at or prior to the Closing Date, and
Xxxxxxx and Xxxxx shall have received a certificate signed by the
chief executive officer and the chief financial officer of the
Parent to the effect that the Parent has performed all of its
obligations under this Agreement.
(c) Certificates. The Parent shall have delivered
to Xxxxxxx and Xxxxx certified copies of resolutions duly adopted
by the Parent's and the Sub's Boards of Directors evidencing the
taking of all corporate action necessary to authorize the
execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such
reasonable detail as Xxxxxxx and Xxxxx and their counsel shall
reasonably request.
(d) No Litigation. There shall not be pending or
threatened by any Governmental Authority any suit, action or
proceeding and there shall not be pending by any other person any
suit, action or proceeding that has a reasonable likelihood of
success, in each case (i) challenging the exchange of the Parent
Shares and the Sub Shares by the Parent, on the one hand, and
Xxxxxxx and Xxxxx, on the other hand, seeking to restrain or
prohibit the consummation of the Split-Off or any of the other
transactions contemplated by this Agreement or seeking to obtain
from Xxxxxxx, Xxxxx or the Sub any damages that are material to
Xxxxxxx, Xxxxx or the Sub, or (ii) that otherwise could
reasonably be expected to have a material adverse effect on the
Sub, Xxxxxxx or Xxxxx.
(e) Consents and Approvals. The Sub shall have
obtained all authorizations, declarations, approvals and consents
(all of which shall be in full force and effect) to the Split-Off
under any of the Contracts, the failure to obtain which would
have a material adverse effect on the continuation of such
Contract.
(f) No Adverse Findings. Xxxxxxx and Xxxxx shall
not have discovered any information through their investigation
contemplated herein or through their review of the information
provided in the Schedules attached hereto which in the reasonable
opinion of Xxxxxxx and Xxxxx is material and adverse to an
evaluation of the merits of the Split-Off from the perspective of
Xxxxxxx and Xxxxx.
(g) No Material Adverse Change. There shall not
have occurred a material adverse change in the business of the
Sub subsequent to the date of this Agreement and prior to the
Closing.
(h) Mutual Release. The Parent shall have executed
the Mutual Release in the form attached hereto as Exhibit A.
SECTION 6.03. Frustration of Closing Conditions.
None of the Sub, the Parent, Xxxxxxx and Xxxxx may rely on the
failure of any condition set forth in Section 6.01 or 6.02, as
the case may be, to be satisfied if such failure was caused by
such party's failure to act in good faith or to use its best
efforts to consummate the Split-Off and the other transactions
contemplated by this Agreement, as required by Section 5.01.
ARTICLE VII
Indemnification
SECTION 7.01. Indemnification by Xxxxxxx and Xxxxx.
(a) If the transactions contemplated herein shall
be consummated, and if timely notice of a claim for
indemnification is furnished pursuant to Section 7.04 hereof,
Xxxxxxx and Xxxxx shall, in their individual capacities only,
indemnify, hold harmless the Parent, its successors and assigns
and all directors, officers, employees and representatives of
each of the foregoing, other than themselves and promptly defend
such persons from and against any and all losses, damages, costs,
expenses, liabilities, obligations and claims of any kind
(including, without limitation, reasonable attorney fees and
other legal costs and expenses) which such persons may at any
time suffer or incur, or become subject to (the "Parent Losses"),
as a result of or in connection with:
(i) any breach or inaccuracy of any of
the representations and warranties made by Xxxxxxx or Xxxxx in or
pursuant to this Agreement, or in any instrument, certificate or
affidavit delivered by Xxxxxxx and Xxxxx at the Effective Time of
the Split-Off in accordance with the provisions of any Section
hereof;
(ii) any failure by Xxxxxxx or Xxxxx or
the Sub to carry out, perform, satisfy and discharge any of their
covenants, agreements, undertakings, liabilities or obligations
to the Parent under this Agreement or under any of the documents
and materials delivered by Xxxxxxx or Xxxxx pursuant to this
Agreement; or
(iii) any suit, action or other
proceeding brought by any Governmental Authority or third person
arising out of, or in any way related to, any of the matters
referred to in this Section 7.01.
(b) The Parent shall not be entitled to
indemnification hereunder for any Parent Losses suffered by it as
a result of any of the occurrences set forth in Section 7.01(a)
hereof unless the aggregate amount of such Parent Losses suffered
by the Parent exceeds $10,000 and then Xxxxxxx and Xxxxx, jointly
and not severally, shall be responsible only for the amount of
such Parent Losses that exceeds $10,000.
(c) The Parent shall not be entitled to be
indemnified hereunder for any Parent Losses suffered by the
Parent as a result of any of the breaches set forth in Section
7.01(a)(i) hereof of which the Parent had knowledge prior to the
Closing.
SECTION 7.02. Indemnification by the Parent.
(a) If the transactions contemplated herein shall
close, the Parent shall indemnify and hold harmless Xxxxxxx and
Xxxxx from and against, and reimburse them for, any and all
losses, damages, costs, expenses, liabilities, obligations and
claims of any kind (including, without limitation, reasonable
attorney fees and other legal costs and expense) which they may
at any time suffer or incur, or become subject to (the "Xxxxxxx
and Xxxxx Losses"), as a result of or in connection with:
(i) any breach or inaccuracy of any
representations and warranties made by the Parent or the Sub in
or pursuant to this Agreement, or in any certificate or affidavit
delivered by the Parent or the Sub at the Effective Time of the
Split-Off in accordance with the provisions of any Section
hereof;
(ii) any failure by the Parent to carry
out, perform, satisfy and discharge any of its covenants,
agreements, undertakings, liabilities or obligations under this
Agreement or under any of the documents and materials delivered
by the Parent or the Sub pursuant to this Agreement; or
(iii) any suit, action or other
proceeding brought by any Governmental Authority or third person
arising out of, or in any way related to, any of the matters
referred to in this Section 7.02.
(b) Xxxxxxx and Xxxxx shall not be entitled to
indemnification hereunder for any Xxxxxxx and Xxxxx Losses
suffered by them as a result of any of the occurrences set forth
in Section 7.02(a) hereof unless the aggregate amount of such
Xxxxxxx and Xxxxx Losses suffered by Xxxxxxx and Xxxxx exceeds
$10,000 and then the Parent shall be responsible only for the
amount of such Xxxxxxx and Xxxxx Losses that exceeds $10,000.
(c) Xxxxxxx and Xxxxx shall not be entitled to be
indemnified hereunder for any Xxxxxxx and Xxxxx Losses suffered
by them as a result of any of the breaches set forth in Section
7.02(a)(i) hereof of which Xxxxxxx and Xxxxx had knowledge prior
to the Closing.
SECTION 7.03. Notification of Claims.
(a) A party entitled to be indemnified
pursuant to this Article VII (the "Indemnified Party") shall
notify the party liable for such indemnification (the
"Indemnifying Party") in writing of any claim or demand which the
Indemnified Party has determined has given or could give rise to
a right of indemnification under this Agreement. Subject to the
Indemnifying Party's right to defend in good faith third party
claims as hereinafter provided, the Indemnifying Party shall
satisfy its obligations under this Article VII within thirty (30)
days after the receipt of written notice thereof from the
Indemnified Party.
(b) If the Indemnified Party shall notify the
Indemnifying Party of any claim or demand pursuant to this
Section 7.03, and if such claim or demand relates to a claim or
demand asserted by a third party against the Indemnified Party
which the Indemnifying Party acknowledges is a claim or demand
for which it must indemnify or hold harmless the Indemnified
Party under this Article VII, the Indemnifying Party may elect to
defend any such claim or demand asserted against the Indemnified
Party. The Indemnified Party shall cooperate in the defense of
any such claim or demand. The Indemnifying Party shall notify
the Indemnified Party in writing, within fifteen (15) days after
the date of the notice of claim given by the Indemnified Party to
the Indemnifying Party under this Section 7.03 of its election to
defend in good faith any such third party claim or demand. So
long as the Indemnifying Party is defending in good faith any
such claim or demand asserted by a third party against the
Indemnified Party, the Indemnified Party shall not settle or
compromise such claim or demand. The Indemnified Party shall
make available to the Indemnifying Party or its agents all
records and other materials in the Indemnified Party's possession
reasonably required by it for its use in contesting any third
party claim or demand. In the event that the Indemnifying Party
shall elect not to defend, the Indemnified Party may, but shall
not be obligated to, assume the defense of such claim at the cost
and expense of the Indemnifying Party, subject to the right of
the Indemnifying Party to assume the defense of such claim at any
time prior to settlement, compromise or final determination
thereof.
Anything in this Section 7.03 to the contrary
notwithstanding, (i) if there is a reasonable probability that a
claim may materially and adversely affect the Indemnified Party
other than as a result of money damages or other money payments,
the Indemnified Party shall have the right, at its own cost and
expense and without indemnification from the Indemnifying Party,
to defend, compromise or settle such claim, and (ii) the
Indemnifying Party shall not, without the Indemnified Party's
written consent, settle or compromise any claim or consent to
entry of any judgment which does not include an unconditional
term thereof giving by the claimant or the plaintiff to the
Indemnified Party a release from all liability in respect to such
claim.
(c) No notice of claim as provided under this
Section 7.03 addressed to the party against which indemnification
is claimed shall be valid if received by such party after
December 31, 1998, except for a claim under Section 7.01(a)(iii)
or Section 7.02(a)(iii), or any claim for breach of the covenant
set forth in Section 5.11, which may be made at any time until
any applicable guarantee, operating deficits or other obligation
or agreement is terminated.
ARTICLE VIII
Termination, Amendment and Waiver ARTICLE VIII
SECTION 8.01. TerminationSECTION 8.01. This Agreement
may be terminated at any time prior to the Closing of the Split-
Off:
(a) by mutual written consent of the Parent, the
Sub, Xxxxxxx and Xxxxx; or
(b) by either the Parent and the Sub on the one
hand, or Xxxxxxx and Xxxxx on the other hand:
(i) if the Split-Off shall not have been
consummated on or before August 20, 1997, unless (i) the failure
to consummate the Split-Off is the result of a willful and
material breach of this Agreement by the party seeking to
terminate this Agreement; provided, however, that the passage of
such period shall be tolled for any part thereof (but not
exceeding 30 calendar days in the aggregate) during which any
party shall be subject to a nonfinal order, decree, ruling or
action restraining, enjoining or otherwise prohibiting the
consummation of the Split-Off or (ii) the parties hereto are in
good faith pursuing the consummation of the Split-Off, in which
event the termination date under this Subsection 8.01(b)(i) shall
be extended for ten (10) days;
(ii) if any Governmental Authority shall have
issued an order, decree or ruling or taken any other action
permanently enjoining, restraining or otherwise prohibiting the
Split-Off and such order, decree, ruling or other action shall
have become final and nonappealable;
(iii) in the event of a breach by the other
party of any representation, warranty, covenant or other
agreement contained in this Agreement that (A) would give rise to
the failure of a condition set forth in Section 6.01(a) or (b) or
Section 6.02(a) or (b), as applicable, and (B) cannot be or has
not been cured within 5 days after the giving of written notice
to the breaching party of such breach (a "Breach") (provided that
the terminating party is not then in Breach of any representa-
tion, warranty, covenant or other agreement contained in this
Agreement).
SECTION 8.02. Effect of Termination. In the event of
termination of this Agreement as provided in Section 8.01, this
Agreement shall forthwith become void and have no effect, without
any liability or obligation on the part of the Parent and the Sub
on the one hand, or Xxxxxxx and Xxxxx on the other hand, other
than the provisions of Article I, Section 5.04, Article VII,
Section 8.02 and Article IX, and except to the extent that such
termination results from the willful and material breach by a
party of any of its representations, warranties, covenants or
agreements set forth in this Agreement.
SECTION 8.03. Amendment. This Agreement may not be
amended except by an instrument in writing signed on behalf of
each of the parties.
SECTION 8.04. Extension; Waiver. At any time prior to
the Closing, the parties may (a) extend the time for the
performance of any of the obligations or other acts of the other
parties, (b) waive any inaccuracies in the representations and
warranties of the other parties contained in this Agreement or in
any document delivered pursuant to this Agreement, or (c) waive
compliance by the other parties with any of the agreements or
conditions contained in this Agreement. Any agreement on the
part of a party to any such extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of
such party. The failure of any party to this Agreement to assert
any of its rights under this Agreement or otherwise shall not
constitute a waiver of such rights.
ARTICLE IX
General ProvisionsARTICLE IX
SECTION 9.01. Nonsurvival of Representations and
Warranties. The representations and warranties in this Agreement
or in any instrument delivered pursuant to this Agreement shall
survive the Closing, but shall expire on December 31, 1998,
unless a claim for indemnification is made pursuant thereto on or
before such date.
SECTION 9.02. Notices. All notices, requests, claims,
demands and other communications under this Agreement shall be in
writing and shall be deemed given if delivered personally,
telecopied (which is confirmed) or sent by overnight courier
(providing proof of delivery) to the parties at the following
addresses (or at such other address for a party as shall be
specified by like notice):
(a) if to the Parent or the Sub, to
Iatros Health Network, Inc.
12 Piedmont Center
0000 Xxxxxxxx Xxxx, X.X.
Xxxxx 000
Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxxxx
with a copy to:
Xxxxxxxxxx & Xxxxxxxx, P.C.
0000 Xxxx Xxxxx
Xxxxxxxxx Xxxxxx
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxx, Esquire
(b) if to Xxxxxxx and Xxxxx, to
Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxx
000 Xxxxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
Telecopier: (000) 000-0000
with a copy to:
Duane, Morris & Heckscher LLP
Xxx Xxxxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esquire
SECTION 9.03. Interpretation. When a reference is
made in this Agreement to an Article, Section, Exhibit or
Schedule, such reference shall be to an Article or Section of, or
an Exhibit or Schedule to, this Agreement unless otherwise
indicated. The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the
words "without limitation". The words "hereof", "herein" and
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement. All terms defined in
this Agreement shall have the defined meanings when used in any
certificate or other document made or delivered pursuant hereto
unless otherwise defined therein. The definitions contained in
this Agreement are applicable to the singular as well as the
plural forms of such terms and to the masculine as well as to the
feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any
agreement or instrument that is referred to herein means such
agreement, instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes)
by succession of comparable successor statutes and references to
all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and
assigns.
SECTION 9.04. Counterparts. This Agreement may be
executed in one or more counterparts, all of which shall be
considered one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the
parties and delivered to the other parties.
SECTION 9.05. Entire Agreement; No Third Party
Beneficiaries. This Agreement (including the documents and
instruments referred to herein) (a) constitutes the entire
agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with
respect to the subject matter of this Agreement and (b) except
for the provisions of Article II, Section 5.05 and Section 5.06
and Article VII, are not intended to confer upon any person other
than the parties any rights or remedies.
SECTION 9.06. Governing Law. This Agreement shall be
governed by, and construed in accordance with, the internal laws
of the State of Georgia regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws
thereof.
SECTION 9.07. Assignment; Binding Effect. Neither this
Agreement nor any of the rights, interests or obligations under
this Agreement shall be assigned, in whole or in part, by
operation of law or otherwise by any of the parties without the
prior written consent of the other parties. Subject to the
preceding sentence, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by, the parties and their
respective successors, assigns, personal representatives,
administrators, executors and heirs.
SECTION 9.08. Enforcement. The parties agree that
irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance
with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions of this
Agreement in any court of the United States located in the State
of Georgia or Commonwealth of Pennsylvania or any Georgia or
Pennsylvania state court, this being in addition to any other
remedy to which they are entitled at law or in equity. In
addition, each of the parties hereto (a) consents to submit
itself to the personal jurisdiction of any federal court located
in the Commonwealth of Pennsylvania or State of Georgia or any
Pennsylvania or Georgia state court in the event any dispute
arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not
attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court and (c) agrees that
it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court
other than a Federal court sitting in the Commonwealth of
Pennsylvania or the State of Georgia or any Pennsylvania or
Georgia state court.
SECTION 9.09. Further Assurances. From time to time
after the Effective Time of the Split-Off, upon the reasonable
request of a party, the other parties shall execute and deliver
or cause to be executed and delivered such further instruments of
conveyance, assignment and transfer and take such further action
as may reasonably request in order to more effectively perfect
the Split-Off.
SECTION 9.10. Time of Essence. Time is of the essence
of this Agreement.
SECTION 9.11. Reporting for Tax Purposes. All of the
parties agree to treat the Split-Off as a tax-free transaction
within the meaning of Section 355 of the Code for federal income
tax purposes and to report the Split-Off and prepare and file all
federal income tax returns and financial statements in a manner
which is consistent with such treatment.
SECTION 9.12. Completion of Schedules. The following
schedules have not been completed as of the date of execution by
the parties of this Agreement; however, such schedules shall be
completed and mutually agreed to by the parties in good faith on
or before August 31, 1997:
Schedule 1.07(a) - Statement of Assets
Schedule 1.07(c) - Statement of Liabilities
Schedule 5.09 - Financial Services and
Ancillary Services
Schedule 5.11 - Parent Guaranty Obligations
Any dispute among the parties regarding the content of the
foregoing schedules that prevents the parties reaching mutual
agreement shall be submitted by the parties to binding
arbitration in accordance with the rules of the American
Arbitration Association. The arbitration proceeding shall be
held in Charlotte, North Carolina.
IN WITNESS WHEREOF, the Parent, the Sub, Xxxxxxx and
Xxxxx have signed this Agreement or have caused this Agreement to
be signed by their respective officers thereunto duly authorized,
all as of the date first written above.
Attest: IATROS HEALTH NETWORK, INC.
By:
Title: Title
Attest: IHN/NEW HEALTH MANAGEMENT
SYSTEMS, INC.
By:
Title: Title:
Witness:
_____________________________________
XXXXXX X. XXXXXXX,
individually
Witness:
XXXXXX X. XXXXX, individually
PH1\325360.1
EXHIBIT A
Mutual Release Agreement
32
PH1\325360.10
