THIS ASSET PURCHASE AGREEMENT
is entered into on September 9, 1997 (the
"Signature Date"), and effective as of
July 1, 1997, between BONE, MUSCLE AND
JOINT, INC., a Delaware corporation (the
"Buyer"), and ORTHOPAEDIC ASSOCIATES OF
BETHLEHEM, INC., a Pennsylvania corporation
(the "Seller").
A. Lehigh Valley Bone, Muscle and Joint, Inc., an Affiliate (as hereinafter
defined) of the Seller (the "Medical Group"), is engaged in the business (the
"Subject Business") of providing orthopedic medical and surgical services and
related medical and ancillary services to patients.
B. The Buyer is engaged in the business of providing management,
administrative, financial, marketing, information technology, and related
services to professional medical organizations.
C. Concurrently herewith, the Medical Group and the Buyer are entering into
an Amended and Restated Management Services Agreement (the "Management Services
Agreement"), pursuant to which the Buyer will furnish to the Medical Group
management, administrative, and related services.
D. In order to effectuate the Management Services Agreement, the Buyer
desires to purchase from the Seller and the Seller desires to sell, transfer,
convey and assign to the Buyer, certain of the assets, properties, interests in
properties and rights of the Seller used by the Medical Group in the Subject
Business upon the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
representations, warranties, covenants and agreements
hereinafter set forth, and intending to be legally bound, the parties hereby
agree as follows:
ARTICLE I
Transfer of Purchased Assets, Assumption of
Liabilities and Related Matters
1.1. Transfer of Assets.
On the terms and subject to the conditions of this Agreement, at the
Closing (as hereinafter defined), the Seller shall sell, transfer, convey and
assign to the Buyer, and the Buyer shall purchase, assume, and accept from the
Seller, the following assets, properties, interests in properties and rights of
the Seller (the "Purchased Assets"), as the same shall exist immediately prior
to the Closing, free and clear of all Claims (as defined below) (except
Permitted Liens (as defined below)):
(a) the medical equipment owned by the Seller and listed on Schedule
1.1(a);
(b) the furniture, furnishings, trade fixtures, and office equipment
owned by the Seller and listed on Schedule 1.1(b);
(c) the Seller's rights and interests under the equipment leases
identified on Schedule 1.1(c), subject to the Buyer's assumption of the
obligations accruing thereunder as provided in Section 1.3;
(d) the supplies described on Schedule 1.1(d);
(e) the deposits identified on Schedule 1.1(e);
(f) and any additional items identified on Schedule 1.1(f).
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1.2. Assets Not Being Transferred.
All assets, properties, interests in properties, and rights of the Seller
not expressly identified in Section 1.1 or the Schedules referenced therein (the
"Excluded Assets") are expressly excluded from the assets of the Seller being
sold, assigned, or otherwise transferred to the Buyer.
1.3. Liabilities Being Assumed.
Except as otherwise provided herein and subject to the terms and conditions
of this Agreement, simultaneously with the sale, transfer, conveyance and
assignment to the Buyer of the Purchased Assets, the Buyer shall assume, and
hereby agrees to pay when due, those liabilities accruing after the Closing Date
(as hereinafter defined) under the equipment leases identified in Schedule
1.1(c) (the "Assumed Obligations"); provided, however, that any and all
obligations and liabilities arising under any such lease as of or prior to the
Closing Date and any and all obligations and liabilities arising out of or in
connection with the Seller's breach of any such lease shall, in each case,
remain the obligations and liabilities of the Seller.
1.4. Liabilities Not Being Assumed.
The Buyer is not assuming any liabilities or obligations of the Seller
(fixed or contingent, known or unknown, matured or unmatured) whatsoever other
than the Assumed Obligations. For convenience of reference, all liabilities and
obligations of the Seller not being assumed by the Buyer are collectively
referred to as the "Excluded Obligations." The Seller hereby agrees to pay all
Excluded Obligations as and when such Excluded Obligations become due.
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1.5. Instruments of Conveyance and Transfer, Etc.
At the Closing, the Seller shall deliver (or cause to be delivered) to the
Buyer such deeds, bills of sale, endorsements, assignments and other good and
sufficient instruments of sale, transfer, conveyance and assignment as shall be
necessary to sell, transfer, convey and assign to the Buyer, in accordance with
the terms hereof, title to the Purchased Assets, free and clear of all Claims
(except Permitted Liens), including, without limitation, the delivery of a Xxxx
of Sale (the "Xxxx of Sale") substantially in the form of Exhibit A attached
hereto and the delivery of an Assignment and Assumption Agreement (the
"Assignment and Assumption Agreement") substantially in the form of Exhibit B
attached hereto. Simultaneously therewith, the Seller shall take all steps as
may be reasonably required to put the Buyer in possession and operating control
of the Purchased Assets.
1.6. Further Assurances.
The Seller shall pay or cause to be paid to the Buyer promptly any amounts
which shall be received by the Seller after the Closing which constitute
Purchased Assets. The Seller shall, at any time and from time to time after the
Closing, upon the reasonable request of the Buyer, execute, acknowledge, deliver
and file, or cause to be done, executed, acknowledged, delivered or filed, all
such further acts, transfers, conveyances, assignments or assurances as may
reasonably be required for better selling, transferring, conveying, assigning
and assuring to the Buyer, or reducing to possession by the Buyer, any of the
assets, properties, interests in properties or rights being purchased by the
Buyer hereunder. Any expenses incurred in connection with the foregoing shall be
borne by the Seller.
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1.7. Assignment of Leases.
Anything contained in this Agreement to the contrary notwithstanding, this
Agreement shall not constitute an agreement or attempted agreement to assign any
office lease or equipment lease if an attempted assignment thereof, without the
consent of any other party thereto, would constitute a breach thereof or in any
way affect the rights of the Buyer or the Seller thereunder. The Seller shall
use its best efforts, and the Buyer shall cooperate with the Seller, to obtain
the consent of any such third party to the assignment thereof to the Buyer. If
such consent is not obtained, the Seller shall cooperate with the Buyer in any
arrangements reasonably necessary or desirable to provide for the Buyer the
benefits (together with the obligations to perform) thereunder.
ARTICLE II
PURCHASE PRICE; ALLOCATION
2.1. Purchase Price; Payment.
The purchase price (the "Purchase Price") to be paid for the Purchased
Assets shall be $254,581.71, of which $204,581.71 (the "CoreStates Amount") will
be delivered by the Buyer to CoreStates Bank, N.A. as payment in full of that
certain promissory note dated April 26, 1994 issued by the Medical Group to
CoreStates Bank, N.A.
2.2. Allocation of Purchase Price.
The Purchase Price shall be allocated among the Purchased Assets in a
statement (the "Statement of Allocation") reflecting the allocation set forth in
Schedule 2.2 attached hereto. The parties shall complete their respective tax
returns for the period which includes the Closing Date in a manner that is
consistent with the Statement of Allocation.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of the Seller.
The Seller and the Medical Group hereby jointly and severally represent and
warrant to the Buyer, as of the date hereof, as follows:
(a) Organization; Good Standing; Qualification and Power. The Seller is
a corporation duly formed, validly existing and in good standing under the laws
of the State of Pennsylvania and has all requisite power and authority to own,
lease and operate its properties and to carry on its business as now being
conducted and as proposed to be conducted, to execute and deliver this
Agreement, the Xxxx of Sale and the Assignment and Assumption Agreement, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The Seller has delivered to the
Buyer a true and correct copy of its certificate of incorporation as in effect
on the date hereof.
(b) Authority. The execution, delivery and performance of this
Agreement, the Xxxx of Sale and the Assignment and Assumption Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by all necessary corporate action on the part of the
Seller. This Agreement, the Xxxx of Sale and the Assignment and Assumption
Agreement have been duly and validly executed and delivered by the Seller and
constitute legal, valid and binding obligations of the Seller enforceable in
accordance with their respective terms, except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the rights of creditors generally. Neither the execution, delivery or
performance by the Seller of this Agreement, the Xxxx of Sale or the Assignment
and Assumption
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Agreement nor the consummation by the Seller of the transactions contemplated
hereby or thereby, nor compliance by the Seller with any provision hereof or
thereof will (i) conflict with or result in a breach of any provision of the
Seller's formation documents, (ii) cause a default (with due notice, lapse of
time or both), or give rise to any right of termination, cancellation or
acceleration, under any of the terms, conditions or provisions of any note,
bond, lease, mortgage, indenture, license or other instrument, obligation or
agreement to which the Seller is a party or by which it or any of its respective
properties or assets may be bound or (iii) violate any law, statute, rule or
regulation or order, writ, judgment, injunction or decree of any court,
administrative agency or governmental body applicable to the Seller or any of
its respective properties or assets. Except as set forth on Schedule 3.1(b), no
permit, authorization, consent or approval of or by, or any notification of or
filing with, any person (governmental or private) is required in connection with
the execution, delivery or performance by the Seller of this Agreement, the Xxxx
of Sale or the Assignment and Assumption Agreement or the consummation of the
transactions contemplated hereby or thereby.
(c) Title to Assets, Properties, Interests in Properties and Rights and
Related Matters.
(i) The Seller has good and valid title to all of the Purchased
Assets, free and clear of all security interests, judgments, liens, pledges,
claims, charges, escrows, encumbrances, easements, options, rights of first
refusal, rights of first offer, mortgages, indentures, security agreements or
other agreements, arrangements, contracts, commitments, understandings or
obligations, whether written or oral and whether or not relating in any way to
credit or the borrowing of money (collectively, "Claims"), of any kind or
character, except for (i) those Claims set forth on Schedule 3.1(c) and (ii)
Permitted Liens.
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(ii) There does not exist any condition which materially interferes
with the economic value or use (consistent with the Seller's past practice) of
any tangible personal property included in the Purchased Assets and such
property is in good operating condition and repair, reasonable wear and tear
excepted.
(iii) The Seller has the complete and unrestricted power and the
unqualified right to sell, transfer, convey and assign, and the Seller is hereby
selling, transferring, conveying and assigning to the Buyer, the Purchased
Assets, and this Agreement, the Xxxx of Sale and the Assignment and Assumption
Agreement are sufficient to sell, transfer, convey and assign to the Buyer all
right, title and interest of the Seller in and to the Purchased Assets, free and
clear of all Claims (other than Permitted Liens) and to vest in the Buyer good
and valid title thereto.
(iv) As used in this Agreement, "Permitted Liens" shall mean
(i) any lien for current taxes not yet due and payable, (ii) liens of carriers,
warehousemen, mechanics and materialmen created in the ordinary course of the
Subject Business for amounts not yet due and payable which do not materially
detract from the value or impair the use of any property or assets, (iii) in the
case of Purchased Assets, liens incurred in the ordinary course of the Subject
Business (including, without limitation, surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and other types of
social security benefits and (iv) statutory landlord liens securing rents not
yet due and payable.
(d) Litigation. Except as set forth on Schedule 3.1(d), there are no
(i) actions, suits, claims, investigations or legal or administrative or
arbitration proceedings pending or, to the best knowledge of the Seller,
threatened against the Seller, the Purchased Assets or the Subject Business,
whether at
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law or in equity, or before or by any Federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality or
(ii) judgments, decrees, injunctions or orders of any court, governmental
department, commission, agency, instrumentality or arbitrator against the Seller
or affecting the Purchased Assets or the Subject Business. The Seller has
delivered to the Buyer all documents and correspondence relating to matters
referred to in said Schedule 3.1(d).
(e) Compliance; Governmental Authorizations. The Seller has complied in
all material respects with all applicable Federal, state, local or foreign laws,
ordinances, regulations and orders. The Seller has all Federal, state, local and
foreign governmental licenses and permits necessary in the conduct of the
Subject Business the lack of which would have a material adverse effect on the
Seller's ability to operate the Subject Business after the Closing Date on
substantially the same basis as presently operated, such licenses and permits
are in full force and effect, no violations are or have been recorded in respect
of any thereof and no proceeding is pending or threatened to revoke or limit any
thereof. None of such licenses and permits shall be affected in any material
respect by the transactions contemplated hereby.
(f) Disclosure. Neither this Agreement (including the Exhibits and
Schedules attached hereto), the Xxxx of Sale, the Assignment and Assumption
Agreement nor any other document, certificate or written statement furnished to
the Buyer by or on behalf of the Seller in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein not misleading.
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3.2. Representations and Warranties of the Buyer.
The Buyer represents and warrants to the Seller, as of the date hereof, as
follows:
(a) Organization, Good Standing and Power. The Buyer (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, (ii) has all requisite corporate power and authority
to own, lease and operate its properties, to carry on its business as now being
conducted, to execute and deliver this Agreement and the Assignment and
Assumption Agreement, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby.
(b) Authority. The execution, delivery and performance of this Agreement
and the Assignment and Assumption Agreement, and the consummation of the
transactions contemplated hereby and thereby, have been duly and validly
authorized by all necessary corporate action on the part of the Buyer. This
Agreement and the Assignment and Assumption Agreement have been duly and validly
executed and delivered by the Buyer, and constitute legal, valid and binding
obligations of the Buyer, enforceable in accordance with their respective terms
except as enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the rights of creditors
generally. Neither the execution, delivery or performance by the Buyer of this
Agreement or the Assignment and Assumption Agreement nor the consummation by the
Buyer of the transactions contemplated hereby or thereby, nor compliance by the
Buyer with any provision hereof or thereof, will (i) conflict with or result in
a breach of any provisions of the Certificate of Incorporation or By-laws of the
Buyer, (ii) cause a default (with due notice, lapse of time or both), or give
rise to any right of termination, cancellation or acceleration, under any of the
terms, conditions or provisions of any material note, bond, lease, mortgage,
indenture, license or other instrument,
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obligation or agreement to which the Buyer is a party or by which it or any of
its properties or assets is or may be bound or (iii) violate any law, statute,
rule or regulation or order, writ, judgment, injunction or decree of any court,
administrative agency or governmental body applicable to the Buyer or any of its
properties or assets. Except as set forth on Schedule 3.2(b), no permit,
authorization, consent or approval of or by, or any notification of or filing
with, any person (governmental or private) is required in connection with the
execution, delivery or performance by the Buyer of this Agreement or the
Assignment and Assumption Agreement or the consummation by the Buyer of the
transactions contemplated hereby or thereby.
ARTICLE IV
CONDITIONS TO CLOSING
4.1. Conditions to Each Party's Obligations.
The obligations of the Seller to sell the Purchased Assets, and of the
Buyer to purchase the Purchased Assets, are subject to the satisfaction of the
following conditions unless waived in writing (to the extent such conditions can
be waived by the Seller or the Buyer, as applicable):
(a) Legal Action. No temporary restraining order, preliminary injunction
or permanent injunction or other order preventing the consummation of the
transactions contemplated hereby shall have been issued by any Federal or state
court and remain in effect. Each party agrees to use its best efforts to have
any such injunction or order lifted.
(b) Legislation. No Federal, state, local or foreign statute, rule or
regulation shall have been enacted which prohibits, restricts or delays the
consummation of the transactions contemplated by this Agreement or any of the
conditions to the consummation of such transactions.
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(c) Related Agreements. Each of the related agreements identified in
Section 4.4 hereof (collectively, the "Related Agreements") shall have been
fully executed and delivered prior to or at the Closing by all of the parties
required to execute and deliver such agreements.
4.2. Conditions to Obligations of the Buyer.
The obligation of the Buyer to purchase the Purchased Assets is subject to
the satisfaction of the following conditions unless waived in writing (to the
extent such conditions can be waived) by the Buyer:
(a) Representations and Warranties. The representations and warranties
of the Seller set forth in Section 3.1 shall in each case be true and correct in
all material respects as of the Closing Date and as of the Signature Date as
though made at and as of the Signature Date.
(b) Performance of Obligations. The Seller shall have performed all
obligations required to be performed by it under this Agreement prior to and at
the Closing.
(c) Authorization. All action necessary to authorize the execution,
delivery and performance of this Agreement, the Xxxx of Sale and the Assignment
and Assumption Agreement by the Seller and the consummation of the transactions
contemplated hereby and thereby shall have been duly and validly taken by the
Seller and the Seller shall have full power and right to consummate the
transactions contemplated hereby and thereby.
(d) Consents and Approvals. The Seller shall have delivered to the Buyer
duly executed copies of any consents and approvals, if any, required by this
Agreement or the Schedules, in each case in form and substance satisfactory to
the Buyer and counsel to the Buyer.
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(e) Government Consents, Authorizations, Etc. All consents,
authorizations, orders or approvals of, and filings or registrations with, any
Federal, state, local or foreign governmental commission, board or other
regulatory body which are required for or in connection with the execution and
delivery by the Seller of this Agreement, the Xxxx of Sale and the Assignment
and Assumption Agreement and the consummation by the Seller of the transactions
contemplated hereby and thereby shall have been obtained or made.
4.3. Conditions to Obligations of the Seller.
The obligation of the Seller to sell the Purchased Assets to the Buyer is
subject to the satisfaction of the following conditions unless waived in writing
(to the extent such conditions can be waived) by the Seller:
(a) Representations and Warranties. The representations and warranties
of the Buyer set forth in Section 3.2 shall in each case be true and correct in
all material respects as of the Closing Date and as of the Signature Date as
though made at and as of the Signature Date.
(b) Performance of Obligations. The Buyer shall have performed all
obligations required to be performed by it under this Agreement prior to and at
the Closing.
(c) Authorization. All action necessary to authorize the execution,
delivery and performance of this Agreement and the Assignment and Assumption
Agreement by the Buyer and the consummation of the transactions contemplated
hereby and thereby shall have been duly and validly taken by the Buyer.
(d) Government Consents, Authorizations, Etc. All consents,
authorizations, orders or approvals of, and filings or registrations with, any
Federal, state, local or foreign
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governmental commission, board or other regulatory body which are required for
or in connection with the execution and delivery by the Buyer of this Agreement
and the Assignment and Assumption Agreement and the consummation by the Buyer of
the transactions contemplated hereby and thereby shall have been obtained or
made.
4.4 Related Agreements.
The Related Agreements referred to in this Agreement consist of the
following:
(a) the Management Services Agreement between the parties hereto;
(b) the Restricted Stock Agreements between the Buyer and each of the
physicians receiving capital stock of the Buyer as of the date hereof,
respectively;
(c) the Stockholder Non-Competition Agreements among the Seller, the
Buyer, and each of the physicians receiving capital stock of the Buyer as of the
date hereof, respectively;
(d) the Xxxx of Sale executed by the Seller; and
(e) the Assignment and Assumption Agreement between the Seller and the
Buyer.
ARTICLE V
CLOSING
5.1. Date.
The closing (the "Closing") for the consummation of the transactions
contemplated by this Agreement shall be deemed to have taken place at 12:01 a.m.
on July 1, 1997 (the "Closing Date"), irrespective of the actual date(s) and
time(s) that all of the documents required hereunder are executed and delivered.
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5.2. Closing Transactions.
At the Closing, the parties shall take the actions and deliver the
documents identified in this Section 5.2. The Closing shall not be deemed to
have taken place, and the transactions contemplated by this Agreement shall not
be deemed to have been consummated, unless all of the closing transactions
identified in this Section 5.2 have been completed or waived in writing by the
parties.
(a) The Seller shall deliver to the Buyer an executed copy of the Xxxx
of Sale;
(b) Each of the parties shall execute and deliver to the other a copy
of the Assignment and Assumption Agreement;
(c) The Buyer shall deliver to the Seller the amount of the Purchase
Price remaining after payment of the CoreStates Amount payable by cashier's
check or wire transfer of funds to an account designated in writing by the
Seller;
(d) The Medical Group and the Buyer shall execute and deliver a fully
executed copy of the Management Services Agreement;
(e) The Medical Group shall deliver Restricted Stock Agreements to the
Buyer executed by each of the physicians receiving capital stock of the Buyer as
of the date hereof, respectively, and the Buyer shall execute and deliver to the
Medical Group Restricted Stock Agreements for each of the physicians receiving
capital stock of the Buyer as of the date hereof, respectively;
(f) The Buyer shall deliver to the physicians receiving capital stock
of the Buyer as of the date hereof stock certificates issued in their respective
names as required under the terms of the Restricted Stock Agreements; and
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(g) The Medical Group shall deliver to the Buyer Stockholder
Non-Competition Agreements executed by each of the physicians receiving capital
stock of the Buyer as of the date hereof.
ARTICLE VI
INDEMNIFICATION
6.1. Definitions.
As used in this Agreement, the following terms shall have the following
meanings:
(a) "Affiliate", as to any person, means any other person that,
directly or indirectly, through one or more intermediaries, controls, is
controlled by or is under common control with such person.
(b) "Buyer Indemnification Event" shall mean the following:
(i) (A) the untruth, inaccuracy or breach of any representation
or warranty of the Seller or the Medical Group contained in this Agreement, any
Schedule or Exhibit attached hereto, the Xxxx of Sale, the Assignment and
Assumption Agreement or any certificate delivered by the Seller in connection
herewith (or any facts or circumstances constituting any such untruth,
inaccuracy or breach) or (B) the breach of any agreement or covenant of the
Seller contained in this Agreement, the Xxxx of Sale, or the Assumption or
Assignment Agreement;
(ii) the assertion against the Buyer or any Buyer Indemnified
Person of any liability or obligation arising from, relating to, or in any way
connected with the operation of the Subject Business at any time prior to the
Closing;
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(iii) the assertion against the Buyer or any Buyer Indemnified
Person of any liability or obligation arising from, relating to, or in any way
connected with any Excluded Obligation; and
(iv) any non-compliance by the Seller with the "bulk sales laws"
of the State of Pennsylvania to the extent that such laws may be applicable to
the transactions contemplated hereby.
(c) "Buyer Indemnified Persons" shall mean and include the Buyer, its
Affiliates and their respective officers, directors, and employees.
(d) "Indemnified Persons" shall mean the Buyer Indemnified Persons or
the Seller Indemnified Persons, as the case may be.
(e) "Indemnifying Person" shall mean the Buyer or the Seller and the
Medical Group, as the case may be.
(f) "Losses" shall mean any and all losses, claims, damages,
liabilities, expenses (including reasonable attorneys' and accountants' fees),
assessments, tax deficiencies and taxes (including interest or penalties
thereon) sustained, suffered or incurred by any Indemnified Person arising from
any matter which is the subject of indemnification under Section 6.2.
(g) "Seller Indemnification Event" shall mean (i) the untruth,
inaccuracy or breach of any representation or warranty of the Buyer contained in
this Agreement, any Schedule or Exhibit attached hereto, the Assignment and
Assumption Agreement or any certificate delivered by the Buyer in connection
herewith (or any facts or circumstances constituting any such untruth,
inaccuracy or breach) or (ii) the breach of any agreement or covenant of the
Buyer contained in this Agreement or the Assignment and Assumption Agreement.
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(h) "Seller Indemnified Persons" shall mean and include the Seller and
its equity owners and employees.
6.2. Indemnification Generally.
(a) The Seller and the Medical Group shall jointly and severally
indemnify, defend and hold harmless the Buyer Indemnified Persons, and each of
them, from and against any and all Losses resulting from Buyer Indemnification
Events.
(b) The Buyer shall indemnify, defend and hold harmless the Seller
Indemnified Persons, and each of them, from and against any and all Losses
resulting from Seller Indemnification Events.
(c) The parties hereto agree that in the event of a conflict between
the terms of this Article VI and the terms of the Management Services Agreement,
the terms and provisions of the Management Services Agreement shall prevail.
6.3. Assertion of Claims.
No claim, demand, suit or cause of action shall be brought under Section
6.2 unless the Indemnified Persons, or any of them, give the Indemnifying Person
written notice of the existence of any such claim, demand, suit or cause of
action, stating with particularity the nature and basis of said claim, and the
amount thereof, to the extent known, and providing to the extent reasonably
available all written documentation relating thereto. Such written notice shall
be delivered to the Indemnifying Person as soon as practicable upon receipt of
actual knowledge of such claim, demand, suit or cause of action; provided,
however, that the failure to provide such written notice shall not affect the
Indemnified Persons' right to indemnification hereunder if failure to provide
such written notice does not materially adversely affect the Indemnifying
Person. Upon the giving of such written notice as aforesaid, the
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Indemnified Persons, or any of them, shall have the right to commence legal
proceedings subsequent to the applicable survival date, if any, for the
enforcement of their rights under Section 6.2.
6.4. Notice and Defense of Third Party Claims.
(a) In the event any action, suit or proceeding is brought by a third
party against an Indemnified Person, with respect to which an Indemnifying
Person may have liability under Section 6.2, the action, suit or proceeding
shall, upon the written agreement of the Indemnifying Person that it is
obligated with respect to such action, suit or proceeding, be defended
(including all proceedings on appeal or for review which counsel for the
defendant shall deem appropriate) and, unless otherwise provided below,
controlled by such Indemnifying Person. The Indemnified Persons shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Persons,
unless (i) the employment of such counsel shall have been authorized in writing
by the Indemnifying Person in connection with the defense of such action, suit
or proceeding, (ii) the Indemnifying Person shall fail actively and diligently
to defend such action, suit or proceeding, (iii) the Indemnified Persons shall
have reasonably concluded that such action, suit or proceeding involves to a
significant extent matters beyond the scope of the indemnity agreement contained
in Section 6.2 or (iv) the Indemnified Persons shall have reasonably concluded
that there may be one or more legal or equitable defenses available to the
Indemnified Persons which are different from or additional to those available to
the Indemnifying Person, in any of which events the Indemnifying Person shall
not have the right to direct the defense of such action, suit or proceeding on
behalf of the Indemnified Persons and that portion of any fees and expenses of
counsel related to matters covered by the indemnity agreement and contained in
Section 6.2 shall be borne by the Indemnifying
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Person. The Indemnified Persons shall be kept fully informed of such action,
suit or proceeding at all stages thereof whether or not they are so represented.
The Indemnifying Person shall make available to the Indemnified Persons and
their attorneys and accountants all books and records of the Indemnifying Person
relating to such action, suit or proceeding and the parties hereto agree to
render to each other such assistance as they may reasonably require of each
other in order to ensure the proper and adequate defense of any such action,
suit or proceeding.
(b) The Indemnifying Person shall not make any settlement of any action,
suit or proceeding without the written consent of the Indemnified Persons, which
consent shall not be unreasonably withheld; provided, however, that in the event
the Indemnified Persons refuse to consent to a settlement acceptable to the
Indemnifying Person which is capable of settlement by the payment of money only
and the Indemnifying Persons shall demonstrate to the reasonable satisfaction of
the Indemnified Persons their ability to pay such amount, the Indemnifying
Person may pay the amount of the proposed settlement to the Indemnified Persons
and shall thereupon be released from any further liability with respect to such
action, suit or proceeding.
6.5. Survival of Representations, Warranties and Covenants.
The representations and warranties of the Seller and the Medical Group
contained in Section 3.1 and the representations and warranties of the Buyer
contained in Section 3.2 shall survive the Closing and shall terminate
forty-five (45) days following the second anniversary of the Signature Date;
provided, however, that the representations and warranties of the Seller and the
Medical Group set forth in Sections 3.1(a), 3.1(b), 3.1(c) and 3.1(e), and the
representations and warranties of the Buyer set forth in Sections 3.2(a) and
3.2(b), shall survive the Closing and remain in full force and effect until the
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expiration of the statute of limitations, if any, applicable to the matters set
forth therein (and indefinitely, if none).
ARTICLE VII
REPURCHASE OF ASSETS
The Purchased Assets are subject to repurchase by the Medical Group from
the Buyer upon termination of the Management Services Agreement in accordance
with Section 13.5 of the Management Services Agreement.
ARTICLE VIII
AMENDMENT, MODIFICATION AND WAIVER
This Agreement shall not be altered or otherwise amended except pursuant to
an instrument in writing signed by each of the parties. The waiver by one party
of the performance of any covenant, condition or promise shall not invalidate
this Agreement, nor shall it be considered as a waiver by such party of any
other covenant, condition or promise. The delay in pursuing any remedy or in
insisting upon full performance for any breach or failure of any covenant,
condition or promise shall not prevent a p from later pursuing any remedies or
insisting upon full performance for the same or any similar breach or failure.
ARTICLE IX
MISCELLANEOUS
9.1. Transfer Taxes, Etc.
The Seller shall pay all sales, use and excise taxes and all registration,
recording or transfer taxes which may be
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payable in connection with the transactions contemplated by this Agreement.
9.2. Entire Agreement.
This Agreement (including the recitals hereof and the Schedules and the
Exhibits attached hereto), together with the Related Agreements referenced
herein, contains the entire agreement between the parties hereto with respect to
the transactions contemplated hereby and supersedes all prior agreements,
representations, warranties and understandings, either oral or written, between
the parties with respect thereto, including, without limitation the Stock
Purchase Agreement dated as of July 1, 1996, among the Buyer, the Seller and the
other parties thereto, which agreement is hereby terminated and of no further
force or effect.
9.3. Descriptive Headings.
Descriptive headings are for convenience only and shall not control or
affect the meaning or construction of any provisions of this Agreement.
9.4. Notices.
All notices or other communications which are required or permitted
hereunder shall be in writing and sufficient if delivered personally or sent by
telecopier, nationally-recognized overnight courier, or certified mail, postage
prepaid, return receipt requested, addressed as follows:
(a) if to the Buyer, to:
Bone, Muscle and Joint, Inc.
0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000X
Xxxx Xxxxx, Xxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000;
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with a copy to:
X'Xxxxxxxx Graev & Karabell, LLP
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Held, Esq.
Telecopier: (000) 000-0000; and
(b) if to the Seller, to:
Orthopaedic Associates of Bethlehem, Inc.
x/x Xxxxxx Xxxxxx Xxxx, Xxxxxx
and Joint Group, L.L.C.
0000 Xxxxxxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxxx, M.D.
Telecopier: (000) 000-0000;
with a copy to:
Xxxxxxxx Xxxxxxxxx & Xxxx, P.C.
0000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Telecopier: (000) 000-0000;
or to such other address as the party to whom notice is to be given may have
furnished to each other party in writing in accordance herewith. Any such
communication shall be deemed to have been given (i) when delivered if
personally delivered or sent by telecopier, (ii) on the Business Day after
dispatch if sent by nationally-recognized, overnight courier and (iii) on the
fifth Business Day after dispatch, if sent by mail. As used herein, "Business
Day" means a day that is not a Saturday, Sunday or a day on which banking
institutions in the state of Pennsylvania are not required to be open.
9.5. Counterparts.
This Agreement may be executed in any number of counterparts, and each such
counterpart shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
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9.6. Bulk Sales Compliance.
The Buyer hereby waives compliance by the Seller with the provisions of the
"bulk sales laws" of any state which may be applicable to the transactions
contemplated hereby; provided, however, that the Seller shall indemnify the
Buyer in connection with such noncompliance to the extent provided in Article 6
hereof.
9.7. Governing Law.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Pennsylvania without giving effect to
the laws and principles thereof, or of any other jurisdiction, which would
direct the application of the laws of another jurisdiction.
9.8. Attorneys' Fees.
In the event of any dispute or controversy arising out of or relating to
this Agreement, the prevailing party shall be entitled to recover from the other
party all costs and expenses, including attorneys' fees and accountants' fees,
incurred in connection with such dispute or controversy.
9.9. Benefits of Agreement.
The terms and provisions of this Agreement shall be binding upon and inure
to the benefit of the parties and their respective successors and permitted
assigns. Anything contained herein to the contrary notwithstanding, this
Agreement shall not be assignable by any party without the consent of the other
party hereto, and any purported assignment without such consent shall be null
and void.
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9.10. Pronouns.
As used herein, all pronouns shall include the masculine, feminine,
neuter, singular and plural thereof whenever the context and facts require such
construction.
* * * *
IN WITNESS WHEREOF, each of the parties hereto has caused this Asset
Purchase Agreement to be executed on its behalf effective as of the day and year
first above written.
BONE, MUSCLE AND JOINT, INC.
By:____________________________
Name:
Title:
ORTHOPAEDIC ASSOCIATES OF BETHLEHEM, INC.
By:______________________________
Name:
Title:
Acknowledged and Agreed
(as to Sections 2.1, 3.1,
5.2, 6.1, 6.2, 6.3, 6.4,
6.5 and Article VII:
LEHIGH VALLEY BONE, MUSCLE
AND JOINT GROUP, L.L.C.
By:__________________________
Name:
Title:
SCHEDULE 1.1(a)
Medical Equipment
SCHEDULE 1.1(b)
Furniture, Furnishings,
Trade Fixtures, and Office Equipment
SCHEDULE 1.1(c)
Equipment Leases
SCHEDULE 1.1(d)
Supplies
All of the medical supplies, office supplies, postage, and printed
materials owned by the Medical Group and located on the premises of any of the
Medical Group's offices at 12:01 a.m. on the Closing Date hereunder.
SCHEDULE 1.1(e)
Deposits
None.
SCHEDULE 1.1(f)
Additional Items
SCHEDULE 2.2
Allocation of Purchase Price
Medical Equipment, Furniture, Furnishings,
Trade Fixtures, and Office Equipment $254,581.71
Supplies $ 0
Deposits $ 0
TOTAL: $254,581.71
SCHEDULE 3.1(b)
Seller Consents
SCHEDULE 3.1(c)
Claims
SCHEDULE 3.1(d)
Litigation
SCHEDULE 3.2(b)
Buyer Consents
EXHIBIT A
XXXX OF SALE
ORTHOPAEDIC ASSOCIATES OF BETHLEHEM, INC., a Pennsylvania corporation (the
"Seller"), hereby sells, conveys, transfers, assigns and delivers to BONE,
MUSCLE AND JOINT, INC., a Delaware corporation (the "Buyer"), the following
assets, properties, interests in properties and rights of the Seller
(collectively, the "Purchased Assets"):
1. the medical equipment owned by the Seller and listed on Schedule
1.1(a) of that certain Asset Purchase Agreement between the Seller and the Buyer
entered into as of the date hereof (the "Asset Purchase Agreement");
2. the furniture, furnishings, trade fixtures, and office equipment owned
by the Seller and listed on Schedule 1.1(b) of the Asset Purchase Agreement;
3. the Seller's rights and interests under the equipment identified on
Schedule 1.1(c) of the Asset Purchase Agreement, subject to the Buyer's
assumption of the obligations accruing thereunder as provided in Section 1.3;
4. the supplies described on Schedule 1.1(d) of the Asset Purchase
Agreement;
5. the deposits identified on Schedule 1.1(f) of the Asset Purchase
Agreement; and
6. any additional items identified on Schedule 1.1(g) of the Asset
Purchase Agreement.
All assets, properties, interests in properties, and rights of the Seller not
expressly identified above or in the schedules referenced in the Asset Purchase
Agreement (the "Excluded Assets") are expressly excluded from the assets of the
Seller being sold, assigned, or otherwise transferred to the Buyer.
To the extent that there is a conflict between the terms and provisions of
this Xxxx of Sale and the Asset Purchase Agreement, the terms and provisions of
the Asset Purchase Agreement shall prevail.
IN WITNESS WHEREOF, the Seller has executed this instrument on September
__, 1997, effective as of the 1st day of July, 1997.
ORTHOPAEDIC ASSOCIATES OF
BETHLEHEM, INC.
By:______________________________
Name:
Title:
