STOCK REPURCHASE AND SETTLEMENT AGREEMENT
AGREEMENT, dated April 8, 2003, by and among DAMADIAN MRI IN FOREST HILLS,
P.C., a New York professional corporation having its executive office in
Melville, New York ("Damadian MRI"), HEALTH MANAGEMENT CORPORATION OF AMERICA,
f/k/a U.S. HEALTH MANAGEMENT CORPORATION, a Delaware corporation having its
principal place of business in Melville, New York ("HMCA"), FONAR CORPORATION, a
Delaware corporation having its principal place of business in Melville, New
York ("Fonar"), XXXXXXX X. XXXXXXXX, M.D. ("RVD"), A & A SERVICES, INC., a New
York corporation and wholly owned subsidiary of HMCA having its principal place
of business in Melville, New York ("A & A"), XX. XXXXXXXX XXXXXXXX & XX. XXXXX
XXXXXX PHYSICIANS, P.C. ("Physicians"), CORONA MEDICAL OFFICES, P.C. ("Corona"),
LIBERTY MEDICAL OFFICES, P.C. ("Liberty"), RIDGEWOOD MEDICAL CARE, P.C.
("Ridgewood"), (Physicians is a New York professional corporation owned by RVD
having its principal places of business in Queens County, New York; Corona,
Liberty and Ridgewood are dissolved New York professional corporations owned by
RVD and are hereinafter sometimes referred to as "Dissolved Corporations";
Physicians and the Dissolved Corporations are hereinafter sometimes referred to
as "the Professional Corporations"), XXXXX XXXXXX, D.O. ("Xxxxxx") and XXXXXXXX
XXXXXXXX, D.O. ("Marciano").
W I T N E S S E T H:
WHEREAS, Xxxxxx and Xxxxxxxx (hereinafter sometimes referred to as the
"Buyers") previously sold A&A to HMCA and the Professional Corporations to RVD
pursuant to a Stock Purchase Agreement dated March 20, 1998 (the "Original Stock
Purchase Agreement);
WHEREAS, HMCA and A & A provide physician practice management services to
the Professional Corporations; WHEREAS, HMCA is the record and beneficial owner
of all of the issued and outstanding shares of the stock of A & A;
WHEREAS, pursuant to the terms and conditions of the Original Stock
Purchase Agreement, Damadian MRI entered into employment agreements with Xxxxxx
and Marciano, (the "Employment Agreements");
WHEREAS, Fonar, the parent corporation of HMCA, agreed to guaranty certain
obligations of HMCA, as set forth in the Original Stock Purchase Agreement and
the Guaranty of Fonar given pursuant thereto (the "Fonar Guaranty");
WHEREAS, from time to time the parties have amended, modified and extended
the time for the performance of certain of their respective obligations under
the Original Stock Purchase Agreement and the Employment Agreements, including
the promissory notes issued under the Original Stock Purchase Agreement (the
"Promissory Notes");
WHEREAS, the Promissory Notes consist of the following notes issued under
the Original Stock Purchase Agreement, as the same may have been modified,
amended or extended;
a) Promissory Note dated March 20, 1998 by HMCA to Marciano in the original
principal amount of $2,000,000, payable in 16 equal consecutive quarterly
installments of principal and interest in the amount of $150,021.97 each,
commencing March 20, 1999, with interest at the rate of 6% per annum (the "1998
Marciano Note");
b) Promissory Note dated March 20, 1998 by HMCA to Xxxxxx in the original
principal amount of $2,000,000, payable in 16 equal consecutive quarterly
installments of principal and interest in the amount of $150,021.97 each,
commencing March 20, 1999, with interest at the rate of 6% per annum (the "1998
Xxxxxx Note");
c) Promissory Note dated September 20, 2000 by HMCA to Marciano in the
original principal amount of $1,000,000, payable in 8 equal consecutive
quarterly installments of principal and interest in the amount of $133,584.00
each, commencing December 20, 2000, with interest at the rate of 6% per annum,
(the "2000 Marciano Note");
d) Promissory Note dated September 20, 2000 by HMCA to Xxxxxx in the
original principal amount of $1,000,000, payable in 8 equal consecutive
quarterly installments of principal and interest in the amount of $133,584.00
each, commencing December 20, 2000, with interest at the rate of 6% per annum,
(the "2000 Xxxxxx Note").
e) Promissory Note dated March 20, 1998 by Physicians to Xxxxxx in the
original principal amount of $646,569.50, payable in 60 equal consecutive
monthly installments of $12,500 each commencing, April 20, 1998, with interest
at the rate of 6% per annum (the "Physicians Xxxxxx Note");
f) Promissory Note dated March 20, 1998 by Physicians to Marciano in the
original principal amount of $646,569.50, payable in 60 equal consecutive
monthly installments of $12,500 each, commencing April 20, 1998, with interest
at the rate of 6% per annum (the "Physicians Marciano Note");
WHEREAS, the obligations of HMCA to make payment under the 1998 Xxxxxx
Note, the 1998 Marciano Note, the 2000 Xxxxxx Note and the 2000 Marciano Note
were modified to permit HMCA to make payment thereof in shares of the common
stock of Fonar, as and to the extent provided in a Stock Payment Agreement,
dated December 20, 2001 (the "Stock Payment Agreement"), and pursuant to the
terms of the Stock Payment Agreement, HMCA has delivered 1,000,000 shares of
Fonar common stock to each of Xxxxxx and Xxxxxxxx;
WHEREAS, in consideration of Xxxxxx and Marciano agreeing to accept payment
of said Notes in the manner provided in the Stock Payment Agreement, the amount
of the total obligation of HMCA to Xxxxxx and Xxxxxxxx under said Notes was
increased to 115% of the sum of the then outstanding installment payments
remaining to be made thereunder plus certain interest charges, as provided in
the Stock Payment Agreement;
WHEREAS, concurrently with the Stock Payment Agreement, Damadian MRI, the
Professional Corporations and Xxxxxx and Marciano entered into an Amendment to
Employment Agreements ("Amendment to Employment Agreements") which among other
things provided for certain changes in the compensation payable to each of
Xxxxxx and Xxxxxxxx, including an increase in the Basic Compensation, as defined
therein, to each of them and permitting payment of any portion of their
compensation, other than $150,000 in Basic Compensation, in shares of Fonar
common stock;
WHEREAS, disputes have arisen among the parties under the Stock Purchase
Agreement and the Employment Agreements, as the same have been amended to date,
including the Stock Payment Agreement and Amendment to Employment Agreements,
and there are presently two cases pending in the Supreme Court of the State of
New York, County of Suffolk, styled Health Management Corporation of America and
Fonar Corporation v. Xxxxx Xxxxxx, D.O. and Xxxxxxxx Xxxxxxxx, D.O., Index No.
02-31554 Damadian MRI in Forest Hills, P.C. et al v. Xxxxx Xxxxxx, D.O.,
Xxxxxxxx Xxxxxxxx, D.O. and M&M Properties, L.L.C., Index No. 02-31553 and one
case pending in the Civil Court of the City of New York, Queens County styled
M&M Properties, LLC v. A&A Services, Inc., Index No. 50919 (the "Pending
Cases"); and
WHEREAS, the parties have decided to resolve the Pending Cases and all
other disputes, controversies and claims they may now or hereafter have arising
out of the Stock Purchase Agreement, Employment Agreements, Stock Payment
Agreement, Amendment to Employment Agreements or any other matter up to the date
of the closing of this Stock Repurchase and Settlement Agreement (the
"Closing"); NOW THEREFORE, in consideration of the premises, representations and
covenants contained herein, the parties hereto agree as follows:
1. Sale and Purchase of Stock of A & A. At the Closing, as hereinafter
defined, the Buyers shall repurchase from HMCA and HMCA shall sell to the Buyers
all of the issued and outstanding shares of A & A for the aggregate sum of Three
Million Dollars ($3,000,000) (the "A & A Purchase Price") by the Buyers'
delivery to HMCA of (a) $500,000 in cash, or by certified check, bank check or
wire transfer, (b) $2,500,000 by the delivery of a promissory note providing for
the payment $2,350,000 on or before the 75th day after the Closing and $150,000
six months after the date of the Closing without interest (the " Repurchase
Promissory Note"). If an event of default shall occur under the Repurchase
Promissory Note, however, interest will accrue on any unpaid principal at the
rate of eighteen percent (18%) per annum from the date of the event of the
default until the time of payment. The Buyers will each execute the Repurchase
Promissory Note, and A&A and the Professional Corporations shall jointly and
severally guarantee the payment of the Repurchase Promissory Note to HMCA.
Payments will be made under the Repurchase Promissory Note until the full amount
of the principal and accrued interest, if any, thereunder is paid in full, and
all payments shall be applied first to the accrued but unpaid interest, if any,
and then to the principal balance of the Repurchase Promissory Note.
2. Sale of Stock of Professional Corporations. At the Closing, RVD shall
sell and the Buyers shall buy all of the issued and outstanding shares of the
stock of Physicians, for a purchase price of $1.00 (the "P.C. Purchase Price").
At such time as each Dissolved Corporation is reinstated, RVD shall sell and the
Buyers shall buy all of the issued and outstanding shares of the stock of such
Dissolved Corporation for a purchase price of $1.00 (the "Additional P.C.
Purchase Prices").
3. Termination of the Obligations and Releases. Except as hereinafter
provided, effective upon the Closing, no party shall have any further obligation
under the Original Stock Purchase Agreement, the Employment Agreements, the
Stock Payment Agreement, the Amendment to Employment Agreements, the Promissory
Notes, the Fonar Guaranty or any other agreement or instrument executed and
delivered in connection with the Original Stock Purchase Agreement or any lease,
rental or other agreement entered into by any of the parties or their affiliates
following the closing of the Original Stock Purchase Agreement and before the
Closing including but not limited to the rental of the premises known 00-00
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx by M&M Properties, LLC to A&A (the "Prior
Agreements") . No party shall have any liability for any non-performance of such
party's obligations under any of the Prior Agreements, including any such
obligations arising prior to the Closing and including the nonpayment of any
amounts due thereunder prior to the Closing, whether such payments were to be
made in cash or in shares of Fonar common stock. The parties hereto shall
execute and deliver releases as provided in Paragraph 7(d) of this Agreement.
4. Stipulations of Discontinuance. The parties to the Pending Cases shall
execute Stipulations of Discontinuance for each of the Pending Cases, with
prejudice, which shall include all counterclaims made or which could have been
made by the defendants in such actions. Counsel shall exchange stipulations of
discontinuance for each of the Pending Cases which shall be filed promptly
following the Closing.
5. Cash, Accounts Receivable and Accounts Payable. Notwithstanding anything
to the contrary contained herein, all cash and Accounts Receivable of A&A and
the Professional Corporations existing as of the Closing shall be assigned and
transferred to HMCA by A&A and the Professional Corporations at the Closing, and
HMCA shall assume and agree to pay all Accounts Payable of A&A and the
Professional Corporations existing as of the Closing. For the purposes hereof
the terms Accounts Receivable and Accounts Payable shall have the meanings set
forth below:
Accounts Receivable: obligations of any clients, patients, insurance
companies, HMO's, PPO's, other third party payors and all other persons to pay
for goods and services provided by A&A or one or more Professional Corporation
prior to the Closing.
Accounts Payable: balances owed by A&A and the Professional Corporations
for taxes of any kind, as they become finally due, goods, supplies or services
purchased on account, excluding balances owed, if any to the Buyers or any
affiliates of the Buyers and shall also include any salaries or other
compensation due to employees and independent contractors of A&A and the
Professional Corporations, with the exception of the Buyers and any rents,
additional rents or utilities, with the exception of any rents, additional rents
or utilities owed to M&M Properties, LLC, the Buyers or any affiliates of the
Buyers. Accounts Payable shall consist of the schedule of Accounts Payable
provided by HMCA pursuant to Paragraph 8(d) (iii) of this Agreement, with the
exception of any items specifically excluded above, together with such other
commitments and expenditures mutually agreed to by HMCA and the Buyers and added
to the Schedule. The Buyers shall represent to HMCA that no other commitments or
expenditures except as are included on or added to the schedule have been
incurred by them or at their direction, except for items for which HMCA shall
have no responsibility. HMCA will represent to the Buyers that no other
commitments or expenditures except as included on or added to the schedule have
been incurred at HMCA's direction and which shall be included within the
definition of "Accounts Payable". HMCA and the Buyers shall sign the schedule
and the representations of each referred to herein shall be deemed made by their
signatures thereto.
The schedule of Accounts Payable delivered by HMCA pursuant to Paragraph
8(d) (iii) of this Agreement as supplemented in accordance with this provision
is hereinafter sometimes referred to as the "Accounts Payable Schedule".
For the purposes hereof, neither Accounts Receivable nor Accounts Payable
shall include any Accounts Receivable or Accounts Payable between any one or
more of A&A and the Professional Corporations.
6. Assigned Accounts Receivable and Collection Agreement. A&A, Physicians
and HMCA shall to enter into an agreement at the Closing which will enable HMCA
to xxxx and collect for HMCA's account the accounts receivable of Physicians
arising prior to the Closing (the "Assigned Accounts Receivable Collection
Agreement").
7. Closing. The Closing of the transactions contemplated hereby shall take
place at the offices of Fonar Corporation located at 000 Xxxxxx Xxxxx, Xxxxxxxx,
Xxx Xxxx, concurrently with the execution and delivery of this Agreement, or at
such other time and place as may be agreed upon in writing by the parties (such
time and date is herein called the "Closing Date"). At the Closing: (a) Cash
Payment. The Buyers shall deliver to HMCA, the sum of $500,000 in cash or by
certified check, bank check or wire transfer.
(b) Promissory Note for the Stock of A & A. The Repurchase Promissory Note
for the stock of A & A in the principal amount of $2,500,000 shall be executed
and delivered by Buyers and shall be in the form of Exhibit A hereto.
(c) P.C. Purchase Price. The P.C. Purchase Price for the stock of
Physicians shall be paid by the Buyers to RVD.
(d) Guaranty. A&A and the Professional Corporations shall jointly and
severally execute and deliver the Guaranty in the form of Exhibit C hereto of
the Repurchase Promissory Note, except as otherwise provided herein with respect
to the Dissolved Corporations. (e) Releases. The parties shall execute and
deliver releases in the form of Exhibit D-1 through D-3 hereto. (f) Stipulations
of Discontinuance. The parties to the Pending Cases shall execute at lease 3
original Stipulations of Discontinuance for each of the Pending Cases which
shall be in the forms of Exhibits E-1, E-2 and E-3 hereto. (g) Security
Agreement. A&A and the Professional Corporations shall execute and deliver to
HMCA a security agreement in the form of Exhibit F hereto, except as otherwise
provided herein with respect to the Dissolved Corporations. Pursuant to the
security agreement, A&A and the Professional Corporations will grant to HMCA a
security interest all existing and future assets of A&A and the Professional
Corporations, including accounts receivable, to secure the payment of the
Repurchase Promissory Note. (h) Assignments of Accounts Receivable and Transfer
of Cash; Assumption of Accounts Payable. The Professional Corporations and A&A
shall assign and transfer to HMCA all cash existing on the Closing Date and
Accounts Receivable arising prior to the Closing Date to HMCA at the Closing.
HMCA shall assume and agree to pay all the Accounts Payable of A&A and the
Professional Corporations arising prior to the Closing. Such assignment and
assumption agreement shall be in the form of Exhibit G (the "Assignment and
Assumption Agreement").
(i) Assigned Accounts Receivable Collection Agreement. A&A, Physicians and
HMCA shall execute and deliver the Assigned Accounts Receivable Collection
Agreement in the form of Exhibit H.
(j) Pledge Agreement. The Buyers shall pledge the shares of A&A and
Physicians (and upon their reinstatement and transfer to the Buyers the shares
of the Dissolved Corporations) to secure the payment of the Repurchase
Promissory Note (the "Pledge Agreement") and deliver the certificates for such
shares as provided therein. The Pledge Agreement shall be in the form of Exhibit
I hereto.
(k) Books and Records. All minute books of A&A and Physicians shall be
delivered to the Buyers, and upon the transfer of the shares of a Dissolved
Corporation to the Buyers, the minute books for such corporation will be
delivered to the Buyers.
(l) Resignations and Replacements. All present officers and directors of
A&A and the Physicians and upon their reinstatement and transfer to the Buyers,
the Dissolved Corporations shall resign from their respective positions and the
Buyers immediately effective upon such resignations shall be deemed, without
further action, the sole directors and officers of such corporations.
(m) Effectiveness of Transactions. The closing and effectiveness of each of
the transactions and other actions contemplated at the Closing is contingent
upon the closing and effectiveness of all of said transactions and actions in
accordance with the terms of this Agreement, except to the extent any such
contingency is waived or modified in writing and, with the exception of the
Dissolved Corporations, the reinstatement, transfer and pledge of shares of each
shall take place after the Closing, as set forth below.
(n) Dissolved Corporations. HMCA shall use its best efforts to reinstate
the Dissolved Corporations within six months of the Closing. Upon the
reinstatement of a Dissolved Corporation, RVD shall transfer all of the issued
and outstanding shares of the Dissolved Corporation to the Buyers. The Buyers
will simultaneously pledge said shares to HMCA under the Pledge Agreement as
additional security for the payment of the Repurchase Promissory Note, execute
the Guaranty, Security Agreement and the appropriate Releases (in the forms
attached as D-1(A) and D-2(A). Also simultaneously therewith, the then current
officers and directors of the Dissolved Corporation will resign. If the
Repurchase Promissory Note shall have been paid in full, then the Buyers need
not pledge the shares and the Dissolved Corporation shall only execute the
aforesaid Releases. HMCA represents and warrants to the Buyers that the
Dissolved Corporations have no assets (except for cash balances which are shown
on the books as assets of Physicians) and no liabilities, except taxes, interest
and penalties which have arisen as a result of the Dissolved Corporations not
filing tax returns or paying taxes. HMCA covenants that following the Closing no
business will be conducted by the Dissolved Corporations, no liabilities will be
created or permitted to arise with respect to the Dissolved Corporations, and no
actions will be taken with respect to the Dissolved Corporations except as may
be required to reinstate the Dissolved Corporations. HMCA will pay all costs
necessary to reinstate the Dissolved Corporations, including the payment of all
taxes, interest and penalties. Until the shares of a Dissolved Corporation have
been transferred to the Buyers, however, the Buyers may continue to use the name
of the Dissolved Corporation (without the designation "P.C.") for signage
purposes at the premises where it presently is used, but the Buyers may not
conduct business using the names of the Dissolved Corporation or use the name of
the Dissolved Corporation for any other purpose and shall conduct all business,
practice of medicine at the premises under the name of Physicians. If HMCA shall
be unable to reinstate a Dissolved Corporation within eighteen months of the
Closing, HMCA shall be under no further obligation to do so and such Dissolved
Corporation shall not be included as part of the transactions contemplated by
this Agreement. Neither HMCA, Damadian MRI nor RVD shall have any liability to
the Buyers in such case for failure to reinstate and transfer the Dissolved
Corporation and the Buyers will not have the right to offset any amounts due by
them hereunder or to any damages.
(o) Allocations. The parties shall set forth in an allocation schedule,
such allocations as they shall agree upon relating to salaries, benefits,
insurance, utilities and the like (the "Allocation Schedule") and make such
payments as shall be necessary in accordance therewith.
8. Representations and Warranties by HCMA. HMCA represents and warrants to
the Buyers as follows, provided however, that in making such representations,
HMCA is relying upon the truth and accuracy of the representations and
warranties of the Buyers contained in the Original Stock Purchase Agreement, and
that to the extent any representation or warranty made by HMCA is untrue or
inaccurate with respect to any state of facts, condition, action or omission,
existing at or arising prior to March 20, 1998 which was not disclosed by the
Buyers in the Original Stock Purchase Agreement, it shall not be deemed a
misrepresentation by HMCA. Except for the representations and warranties of HMCA
as expressly provided herein, the sale of A&A by HMCA and of the Professional
Corporations by RVD shall be "AS-IS" without any representations or warranties.
(a) Organization and Standing. Each of A&A and Physicians is a corporation
duly organized, validly existing and in good standing under the laws of the
State of New York, and has all requisite power and authority to enter into this
Agreement and to carry out the transactions contemplated hereby. Each of the
Dissolved Corporations was duly organized under the laws of the State of New
York but was dissolved for failure to file returns and remit payments for New
York franchise taxes. Neither HMCA nor RVD has sold, assigned, pledged or
otherwise transferred or encumbered any of the shares of A&A or the Professional
Corporations they acquired from the Buyers or caused additional shares to be
issued. Neither HMCA nor RVD is a party to or bound by any commitment, plan or
arrangement to issue or sell any capital stock or any other equity interest in
A&A or a Professional Corporation and there are no outstanding options, warrants
or other commitments or obligations exercisable or convertible into any such
security or interest in A&A or a Professional Corporation, except the obligation
to transfer and pledge the shares of the Dissolved Corporations as set forth in
this Agreement. Neither A&A nor any Professional Corporation is required to be
qualified licensed or domesticated as a foreign corporation in any State or
other jurisdiction on the basis of its properties owned or business transacted
as of the date hereof. (b) Authorization, Et Cetera. The execution and delivery
of this Agreement and the sale and all other transactions contemplated hereby
have been duly authorized by HMCA, Damadian MRI and RVD. No consent, approval,
authorization or order of, or registration, qualification, designation,
declaration or filing with, any governmental authority on the part of HMCA,
Damadian MRI or RVD is required in connection with the execution and delivery of
this Agreement or the carrying out of any transactions contemplated hereby. (c)
Subsidiaries. Neither A&A nor any Professional Corporation owns any stock or
other equity interest in any corporation, limited liability company, partnership
or other entity.
(d) Financial Statements. HMCA has or will deliver to the Buyer:
(i) separate balance sheets for A&A and Physicians (labeled "Woodhaven") as
at February 28, 2003.
(ii) an income statement for A&A showing the revenues and expenses by each
of the sites and expenses which cannot be allocated by site. Also included is an
income statement for Physicians (labeled "Woodhaven P.C.") and the combined
income statement for A&A and Physicians. These income statements are for the
eight month period ended February 28, 2003.
(iii) a schedule of accounts payable as at April 7, 2003 for A&A. As of
said date there was no accounts payable for the Professional Corporations or any
other known indebtedness and obligations of A&A and the Professional
Corporations except as disclosed in this Agreement.
All financial statements and schedules, referred to above are, or will be
when delivered, complete and correct in all material respects prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods indicated, fairly present or will when delivered fairly
present, in all material respects, the financial position of A&A and the
Professional Corporations as at the dates indicated and the results of their
operations for the periods indicated, and disclose all known liabilities, as at
said dates, except to the extent those liabilities are disclosed elsewhere in
this Agreement or a schedule or exhibit hereto.
(e) Absence of Certain Changes. Since February 28, 2003, there has not
been:
(i) any changes in the business, condition (financial or otherwise), assets
or liabilities of A&A or any Professional Corporation, whether or not covered by
insurance and whether or not arising from transactions in the ordinary course of
business, which, individually or in the aggregate, have been materially adverse,
except that revenues and patient xxxxxxxx have materially declined and expenses
have become past due because of insufficient revenues. In addition, the landlord
for the premises located at 00-00 Xxxxxxx Xxxxxx has sent a letter, dated March
7, 2003, claiming certain breaches of the terms of the lease. Except for the
obligation to pay monthly rent which may be due prior to the date of Closing,
HMCA shall have no obligation to take any action to cure or otherwise deal with
the alleged breaches. A copy of this letter has been provided to the Buyers.
(ii) any damage, destruction or other casualty loss (whether or not covered
by insurance) materially and adversely affecting the business or prospects of
any of A&A or the Professional Corporations or any of the assets and properties
of A&A or the Professional Corporations; and
(iii) the operations and business of each of A&A and the Professional
Corporations has been conducted in all respects only in the ordinary course and
substantially in the manner in which they have been conducted since they were
acquired by HMCA & RVD, except that the Dissolved Corporations have been
inactive.
(f) Tax Returns and Payments. All tax returns and reports of each of A&A
and the Professional Corporations required by law to be filed for all periods
from March 20, 1998 up to the Closing Date have been duly filed, and all taxes,
assessments, fees and other governmental charges upon any properties, assets,
income or franchises of A&A or any Professional Corporation or for which any of
them is otherwise liable, which are due and payable for all periods from March
20, 1998 up to the Closing Date have been paid except for (a) Corona, Liberty
and Ridgewood, which have been inactive and have not filed any returns or paid
taxes, including franchise taxes (b) tax returns have not been filed and taxes
have not been paid for Physicians for 2001 and 2002 (2002 is on extension) and
(c) taxes which are presently payable without penalty or interest. The charges,
accruals and reserves on the books of A&A and the Professional Corporations with
respect to taxes for all fiscal periods are adequate and HMCA does not know of
any actual or proposed tax assessment for any fiscal period or of any basis
therefor other than as so reflected on their respective books and records,
except for such taxes, interest and penalties which may be due for the Dissolved
Corporations. No extension of time for the assessment of deficiencies in any
federal or state tax has been requested of or granted by any of said
corporations. HMCA shall file when due (or as may be extended) the Federal,
State and local income tax returns for A&A and the Professional Corporations for
all periods from March 20, 1998 up to the Closing Date, shall pay all taxes,
interest and penalties as may be due for such periods and shall be entitled to
any refunds for any such periods. If required, following the Closing the Buyers
shall cause the new officers of A&A and the Professional Corporations to sign
such returns.
(g) Real Property. Neither of A&A or any of the Professional Corporations
own any real property. Exhibit J attached hereto contains a list of all leases
of any real property held by any of said corporations as lessee or tenant. HMCA
has delivered to the Buyers complete and correct copies of all such leases and
any extensions thereof for real property which are in their possession or of
which they have knowledge, except as shown on Exhibit J. Following the Closing
HMCA shall indemnify A&A, the Professional Corporations and the Buyers and hold
them harmless from and against any rents not paid prior to the Closing, with the
exception of the rental of the premises known as 00-00 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxx Xxxx by M&M Properties, LLC to A&A and the Professional
Corporations. (h) Banks, Et Cetera. Attached hereto as Exhibit K is a true and
complete list of every bank in which funds of A&A and the Professional
Corporations are on deposit or in which any of them has a safety deposit box.
(i) Personal Property. All personal properties and assets located on A&A's
and the Professional Corporation's premises are and at the Closing will be owned
by A&A or Physicians except as set forth Exhibit L hereto. A&A or Physicians has
good and marketable title to each of said items of personal property and assets,
in each case subject to no mortgage, pledge, lien, conditional sale agreement,
encumbrance or charge, except as set forth in Exhibit L attached hereto. None of
said personal properties or assets is held by A&A or Physicians as lessee under
or subject to any lease or as conditional vendee under any conditional sale or
other title retention agreement, except as set forth in Exhibit L. All inventory
and supplies are usable on an normal basis in the existing businesses of A&A and
Physicians. There have been no acquisitions or dispositions of any inventory or
supplies since February 28, 2003 except in the ordinary course of business
except for supplies and materials which may have been ordered by the Buyers or
at the direction of the Buyers, and the responsibility for which shall be as
reflected in the Accounts Payable Schedule or Allocation Schedule.
(j) Energy and Materials. Neither A&A nor any Professional Corporation has
received any notice or other communication, whether formal or informal, from any
supplier of gas, oil or electric power or of supplies or other materials used in
its business or operations to the effect that any such energy source, supplies
or material will become unavailable to an extent which might impair the
continued conduct of its business or operations at their current levels.
(k) Insurance. All property and operations of A&A and the Professional
Corporations are adequately insured with responsible insurers against all risks
normally insured against by companies in similar lines of business. Each of
these insurance policies is fully paid for periods extending in all cases beyond
the Closing Date, but will be terminated by HMCA effective as of the Closing
except as may be otherwise agreed upon by HMCA and the Buyers at the Closing and
appropriately referenced in the Allocation Schedule to be agreed upon at the
Closing. A schedule of such insurance is set forth in Exhibit P.
(l) Disclosure. Neither this Agreement nor any certificate, list or other
instrument purporting to disclose facts germane to the businesses of A&A or the
Professional Corporations delivered or to be delivered to the Buyers by or on
behalf of HMCA pursuant hereto or in connection with the transactions
contemplated hereby contains or will contain any untrue statement of a material
fact. To the best of HMCA's knowledge, there is no fact directly related to
A&A's and Physicians' businesses known to HMCA which materially and adversely
affects the business, properties, operations, condition or prospects, financial
or otherwise, of A&A and the Professional Corporations, which has not been set
forth in this Agreement or in the other documents, certificates and statements
already furnished to the Buyers by or on behalf of HMCA in connection with the
transactions contemplated hereby.
(m) Contracts. With the exception of those contracts and commitments listed
or referred to in Exhibit M, neither A&A nor any Professional Corporation is a
party to or bound by any written contract or commitment, other than:
(i) orders and commitments for the purchase of supplies or services entered
into in the ordinary course of business, other than those which may have been
made by or at the direction of the Buyers and the responsibility for which shall
be as reflected in the Accounts Payable Schedule or Allocation Schedule.
(ii) requests for medical services or medical or diagnostic procedures
scheduled by patients or referring physicians, independently of any other
agreement or contract.
(iii) maintenance, service and other contracts for A&A and the Professional
Corporation's equipment, made in the ordinary course of business other than
those which may have been made by or at the direction of the Buyers and the
responsibility for which shall be as reflected in the Accounts Payable Schedule
or the Allocation Schedule; or
(iv) employment relationships not under written agreement with the
employees of A&A and the Professional Corporations.
HMCA has delivered to the Buyers complete and correct copies of all written
contracts or commitments listed or referred to in Exhibit M except where
otherwise indicated therein or elsewhere in this Agreement.
(n) Compliance with Law and Government Regulations. Except as disclosed in
this Agreement or an Exhibit hereto, to the best of HMCA's knowledge, A&A and
the Professional Corporations are in full compliance with all applicable
statutes, regulations, decrees, orders, restrictions, guidelines and standards,
imposed by the United States of America, any state, county, municipality or
agency of any thereof, or any other governmental, regulatory or professional
authority, except that the Dissolved Corporations have failed to file tax
returns or make required tax payments and to the best knowledge of HMCA, neither
A&A nor a Professional Corporation has received any written notification from
the United States of America, any state, county, municipality or agency of any
thereof or any other governmental, regulatory or professional authority that it
is not in such full compliance, except as aforesaid.
(o) Employees. Attached hereto as Exhibit N is a true and complete list of
all persons employed by A&A and the Professional Corporations, specifying their
rates of compensation, benefits plans in which they participate and time they
have taken off for sickness, vacation and personal reasons from January 1, 2003
through March 21, 2003. The Buyers are included on the list because even though
they are employees of Damadian MRI, they are actually paid by Physicians and
following the Closing will not be employees of Damadian MRI. The salaries are
shown at their current hourly rates, except for Xxxxx Xxxxxx, Xxxxx Xxxxxxx, the
Buyers, Xxxxxxxxx Xxxxxxxxxx and Xxxxxxxx Xxxxxxxx, whose salaries are shown at
their current annual rates. The percentages in the 401k column represent the
percentage withheld from the employee's salary until the maximum allowable
amount is reached. There is no employer contribution to the 401k Plan. The
columns for Medical and Dental show which, if any, of those plans in which the
employee participates. The chart does not include bonuses or other benefits not
listed (e.g. cell phones) which they may be entitled to under written
agreements.
(p) Labor Contracts, Et Cetera. Neither A&A nor any Professional
Corporation is a party to any collective bargaining or other labor union
contract applicable to any persons employed by such corporation. HMCA does not
know of any activities or proceedings of any labor union (or representatives
thereof) to organize any employees of A&A or any Professional Corporation, or of
any threats of strikes or work stoppages by any employees of A&A or any
Professional Corporation.
(q) Litigation, Et Cetera. To the best of HMCA's knowledge there is no
litigation, arbitration, proceeding or investigation pending or threatened,
which might, either individually or collectively, result in any material adverse
change in the business or condition (financial or otherwise) of A&A or any
Professional Corporation or in any of its respective properties or assets, or in
any material liability on the part of A&A or any Professional Corporation, or in
any material change in the methods of doing business of A&A or any Professional
Corporation except as set forth in Exhibit O. There is no litigation,
arbitration, proceeding or investigation pending or threatened against HMCA,
Damadian MRI, RVD, A&A or the Professional Corporations which questions the
validity of this Agreement or of any action taken or to be taken pursuant to or
in connection with the provisions of this Agreement.
(r) Broker. Neither HMCA, Damadian MRI nor RVD have employed any finder,
broker, agent or other intermediary in connection with the negotiation or
consummation of this Agreement or any of the transactions contemplated hereby,
and HMCA and Damadian MRI will indemnify the Buyers and hold them harmless
against all liabilities, expenses, costs, losses and claims, if any, arising
from the employment by, or services rendered to it (or any allegation of any
such employment by, or services rendered to it) of any finder, broker, agent or
other intermediary in such connection.
9. Representations and Warranties of the Buyers. The Buyers jointly and
severally represent and warrant to HMCA, Damadian MRI and RVD as follows: (a)
Authorization, Et Cetera. The Buyers are duly authorized to execute and deliver
and perform their obligations under this Agreement. There are no consents
necessary to authorize the transactions contemplated hereby under any contract,
indenture or other agreement to which either of the Buyers is a party or by
which he is bound. The Buyers shall also make all necessary governmental and
non-governmental registrations, filings and notifications required to be made by
them in connection with the consummation of the transactions contemplated by
this Agreement.
(b) Litigation, Et Cetera. There is no litigation, arbitration, proceeding
or investigation pending or threatened against either of the Buyers which
questions the validity of this Agreement or of any action taken or to be taken
pursuant to or in connection with the provisions of this Agreement.
(c) Compliance with Other Instruments. Neither the execution and delivery
of this Agreement nor the carrying out of the transactions contemplated hereby
will result in any violation of or be in conflict with any term of any contract
or other instrument to which either Buyer is a party, or of any judgment,
decree, order, statute, rule or regulation by which either of the Buyers is
bound. (d) Broker. Neither Buyer has employed any finder, broker, agent or other
intermediary in connection with the negotiation or consummation of this
Agreement or any of the transactions contemplated hereby, and the Buyers will
indemnify HMCA, Damadian MRI and RVD and hold them harmless against all
liabilities, expenses, costs, losses and claims, if any, arising from the
employment by, or services rendered to it (or any allegation of any such
employment by, or services rendered to it) of any finder, broker, agent or other
intermediary in such connection.
10. Covenants of HMCA. HMCA covenants and agrees with the Buyers as
follows: (a) Books and Records. At the Closing, HMCA will turn over to the
Buyers all patient records and files, physician lists, lists of insurance
companies, lists of health maintenance organizations and preferred provider
organizations, books of account, inventory records, personnel records, financial
books and records and other books and records, including without limitation tax
records and returns, which are kept by or relate to A&A or Physicians and which
are in the possession or under the control of HMCA, Damadian MRI or RVD.
Following the Closing, HMCA will turn over to the Buyers all such books and
records with respect to each Dissolved Corporation at the time the Dissolved
Corporation is reinstated and transferred to the Buyers. (b) Further Assurances.
From time to time, at the Buyers' request (whether at or after the Closing) and
without further consideration, HMCA, Damadian MRI and RVD will execute and
transfer and will take such other action as the Buyers may reasonably request in
order to more effectively give effect to the transactions contemplated hereby.
(c) Noncompetition. Following the Closing, provided that the Buyers make
all payments under the Repurchase Promissory Note when due and are otherwise in
compliance with their obligations under this Agreement, neither HMCA, Damadian
MRI, their shareholders, affiliates nor any other entity now existing or
hereafter formed which any of them may own, control or manage (the "Restricted
Parties") directly or indirectly will establish, form, join, own, control,
acquire, operate or manage, or participate in the formation, establishment,
ownership, control, acquisition, operation or management of or be connected in
any manner with (whether as an officer, director, stockholder or otherwise) any
primary care medical facility for a period of two years within a radius of two
miles of any of the following premises now being used by A&A and the
Professional Corporations: 00-00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000,
000-00 Xxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000, 000-00 Xxxxxxx Xxxxxx, Xxxxxxxx
Xxxx, Xxx Xxxx 00000 and 00-00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000. It is
understood that any presently existing or future physical therapy and
rehabilitation facilities, wherever located, such as those located at 00-00
Xxxxxx Xxxxxxxxx, Xxxxxxxx, Xxx Xxxx 00000 or 000-000 Xxxxxxxxx Xxxxxxxx,
Xxxxxx, Xxx Xxxx 00000 or 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000
are not included within this noncompetition covenant. In addition, nothing
contained herein shall prohibit a Restricted Party from purchasing and holding
shares of stock of a competitor of A&A or the Professional Corporations, or
their subsidiaries or affiliates which are traded on any national or regional
stock exchange or on the NASDAQ System as long as the shares owned by such party
at any one time do not exceed one percent (1%) of the total shares of such class
outstanding and provided further that such party exercises no control over and
performs no executive, management or other services for such competitor. To the
extent that the foregoing covenant shall be held to be invalid or unenforceable
by a court of competent jurisdiction, such court may impose such lesser
restrictions as such court shall deem necessary or appropriate to properly
protect A&A and the Professional Corporations, but any such determination as to
the invalidity or unenforceability of this covenant shall not affect the
validity or enforceability hereof in any other State or jurisdiction.
11. Covenants of the Buyers. The Buyers jointly and severally, covenant and
agree with HMCA, Damadian MRI and RVD that: (a) Books and Records. After the
Closing, the Buyers will permit HMCA, Damadian MRI and RVD and their
representatives, at such reasonable times as they may request, to inspect and
make extracts from any books and records turned over by them to the Buyers at
the Closing for the purpose of preparing any tax returns, liquidating or
complying with other governmental requirements.
(b) Further Assurances. From time to time, at HMCA's, Damadian MRI's or
RVD's request (whether at or after the Closing) and without further
consideration, the Buyers will execute and transfer and take such other actions
as HMCA, Damadian MRI or RVD may reasonably request in order to more effectively
give effect to the transactions contemplated hereby.
(c) Noncompetition. Until the Repurchase Promissory Note is paid in full
and provided HMCA, Damadian MRI and RVD are in compliance with their obligations
under this Agreement neither Buyer, directly or indirectly will establish, form,
join, own, control, acquire, operate or manage, participate in the formation,
ownership, management, operation or control of, or be connected in any manner
with, any business (whether as an officer, director, stockholder, employee, or
otherwise) (i) involving the management of, or the provision of management
services to, any medical, physician or multi-specialty practice, or any medical
center or other medical facility, anywhere in the United States of America,
except for the provision of services by A&A to the Professional Corporations,
(ii) involving the ownership or operation of any medical, physician or
multi-specialty practice, or any medical center or other medical facility in
Queens, Kings, Nassau, Suffolk, Richmond, New York, Bronx and Westchester
Counties in New York, Fairfield County in Connecticut and Bergen, Hudson, Union,
Essex, Passaic and Middlesex Counties in New Jersey except for the practice of
family medicine by the Professional Corporations at the offices of the
Professional Corporations as existing on the Closing Date (listed in Exhibit B
hereto), or (iii), except as permitted herein, otherwise competitive with the
business of HMCA and its subsidiaries and practices, centers, facilities and
entities managed by HMCA or any of its subsidiaries ("HMCA Managed Entities") as
the same may from time to time be conducted in the aforesaid Counties.
Notwithstanding anything to the contrary contained herein, this covenant shall
not prohibit Physician from providing medical services in connection with any
charitable activity or any research conducted for charitable, educational or
other non-profit entities provided that the Buyer receives no compensation for
said activities. In addition, nothing contained herein shall prohibit either
Buyer from purchasing and holding shares of stock of a competitor of HMCA, or
its subsidiaries or affiliates which are traded on any national or regional
stock exchange or on the NASDAQ System as long as the shares owned by him at any
one time do not exceed one percent (1%) of the total shares of such class
outstanding and provided further that he exercises no control over and performs
no executive, management or other services for such competitor. To the extent
that the foregoing covenant shall be held to be invalid or unenforceable by a
court of competent jurisdiction, each Buyer agrees that such court may impose
such lesser restrictions as such court shall deem necessary or appropriate to
properly protect, HMCA, its subsidiaries, affiliates and HMCA Managed Entities,
but any such determination as to the invalidity or unenforceability of this
covenant shall not affect the validity or enforceability hereof in any State or
other jurisdiction. In addition, except as needed in the operation of A&A,
Physicians and after their transfer to the Buyers, the Dissolved Corporations,
each Buyer agrees to hold in confidence and not disclose or use for his own
benefit, any marketing plans, financial or other confidential information and
lists of referring physicians, chiropractors and other medical providers of HMCA
its subsidiaries, affiliates and HMCA Managed Entities.
12. Conditions of the Buyers Obligations. The obligations of the Buyers
under this Agreement are subject to the fulfillment to their reasonable
satisfaction, prior to or at the Closing, of each of the following conditions:
(a) Representations and Warranties True at Closing. The representations and
warranties made by HMCA in this Agreement and in any certificate or document
delivered pursuant to the provisions hereof shall be true at and as of the time
of Closing as though such representations and warranties were made at and as of
such time, except to the extent any misrepresentation may be untrue by reason of
any state of facts, condition, actions or omissions existing at or arising prior
to March 20, 1998 which were not disclosed by the Buyers in the Original Stock
Purchase Agreement.
(b) Performance. HMCA, Damadian MRI and RVD shall have performed and
complied with all agreements and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing.
(c) No Government Opposition. No governmental entity shall have made known
any opposition to, or questioning of, the consummation of the transactions
contemplated hereby.
(d) No Private Opposition. No private party shall have commenced an action
or filed suit against any of the parties or their respective shareholders
questioning in any way the validity of this Agreement or the transactions
contemplated hereby.
13. Conditions of HMCA's, Damadian MRI's and RVD's Obligations. The
obligations of HMCA, Damadian MRI and RVD under this Agreement are subject to
the fulfillment to their reasonable satisfaction, prior to or at the Closing, of
each of the following conditions:
(a) Representations and Warranties True at Closing. The representations and
warranties made by the Buyers in this Agreement and in any certificate or
document delivered pursuant to the provisions hereof shall be true at and as of
the time of Closing as though such representations and warranties were made at
and as of such time.
(b) Performance. The Buyers shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or complied
with by them prior to or at the Closing.
(c) No Government Opposition. No governmental entity shall have made known
any opposition to, or questioning of, the consummation of the transactions
contemplated hereby.
(d) No Private Opposition. No private party shall have commenced an action
or filed suit against any of the parties or their respective shareholders
questioning in any way the validity of this Agreement or the transactions
contemplated hereby.
14. Expenses. Except as otherwise provided herein, each party will pay all
costs and expenses attributable to the performance of and compliance with all
agreements and conditions contained in this Agreement to be performed or
complied with by such party (including, without limitation, all fees and
expenses of their respective counsel). 15. Survival of Representations and
Warranties. The representations and warranties made by the parties in this
Agreement shall survive the Closing for a period of twelve months. 16.
Indemnification by the Buyers. Except for the obligations assumed by HMCA under
the Assignment and Assumption Agreement , or otherwise in this Agreement, and to
the extent HMCA has agreed to indemnify the Buyers against undisclosed
liabilities as hereinafter provided, the Buyers jointly and severally shall
indemnify and hold harmless HMCA, Damadian MRI and RVD and their respective
subsidiaries, affiliates, current and former shareholders, directors, officers,
employees and agents (together, the "Indemnified Parties") from all losses,
liabilities, obligations, claims, lawsuits, judgments, costs and expenses
(including reasonable attorneys' fees) arising after the Closing from events,
acts or omissions, occurring after the Closing and to the extent reflected in
the Accounts Payable Schedule or Allocation Schedule, prior to the Closing,
which are incurred or suffered by, or asserted or claimed against, HMCA,
Damadian MRI or RVD relating to or arising out of A&A or any Professional
Corporation, any act or omission by or in behalf of any of them, or any of their
respective businesses or affairs. In the event that any claim is made with
respect to which an Indemnified Party intends to seek indemnification hereunder,
the Indemnified Party shall give the Buyers ("Indemnifying Parties") prompt
written notice of such claim. Nevertheless, the Indemnified Party shall have the
right to defend the claim with counsel of its own choosing provided that such
defense is conducted with diligence and continuity and provided further that the
Indemnifying Parties shall have the right to participate in the defense of such
claim with counsel of their choosing. The parties shall cooperate in the defense
of any such claim and neither the Indemnifying Parties nor the Indemnified Party
shall have the right to settle or pay any such claim without the consent of the
other, unless the party or parties settling the claim secures the release of the
other parties from any liability for the claim.
17. Indemnification by HMCA. Except as otherwise provided in this
Agreement, HMCA shall indemnify and hold harmless the Buyers, A&A, Physicians
and, after such time as they may be acquired by the Buyers, the Dissolved
Corporations and their respective subsidiaries, affiliates, shareholders,
directors, officers employees and agents (together, the "Indemnified Parties")
from all losses, liabilities, obligations, claims, lawsuits, judgments, costs
and expenses (including reasonable attorneys fees) arising from any material
misrepresentation, breach of warranty or breach of covenant by HMCA, Damadian
MRI or RVD under this Agreement or the failure of HMCA, Damadian MRI or RVD to
perform any obligation required to be performed by any of them hereunder (all
which are referred to as "Losses") provided however, that HMCA shall have no
obligation hereunder to indemnify the Indemnified Parties, in the aggregate, for
the first $50,000 in Losses in the aggregate. Notwithstanding the foregoing,
with respect to any litigation involving professional malpractice, whether or
not disclosed, if HMCA shall have complied with its obligation to provide or
reimburse the Buyers or any other physician or physician's assistant with
professional liability insurance and with respect to any construction, or other
commitments or expenditures not the responsibility of HMCA under the Accounts
Payable Schedule or Allocation Schedule, HMCA shall have no obligation to
provide any indemnification under this Agreement. There shall be no threshold
for indemnification, however, with respect to any amounts required to be paid by
HMCA on the Accounts Payable Schedule or Allocation Schedule or any undisclosed
Accounts Payable for which HMCA is responsible. In the event of any Loss,
whether or not it is below the threshold for indemnification hereunder, if the
Indemnified Party intends to seek indemnification hereunder or application of
such Loss to the threshold for indemnification hereunder, the Indemnified Party
shall give HMCA prompt written notice of such Loss and HMCA shall have the right
to assume the defense of the Loss with counsel of its own choosing reasonably
acceptable to the Indemnified Party provided that such defense is conducted with
diligence and continuity and provided further the Indemnified Party shall have
the right to participate in the defense of such Loss with counsel of its
choosing at its expense. The parties shall cooperate in the defense of any such
Loss and neither HMCA nor the Indemnified Party shall have the right to settle
or pay any such Loss without the consent of the other, unless the party or
parties settling the Loss secure the release of the other parties from any
liability for the Loss and in the case of an Indemnified Party, the Indemnified
Parties agree not to apply the Loss to the threshold for indemnification
hereunder.
18. Release of All Liability of RVD and Damadian MRI. Following the
Closing, neither RVD nor Damadian MRI shall have any liability to either of the
Buyers, A&A or the Professional Corporations for any reason whatsoever,
including but not limited to liability for any breach of this Agreement or any
misrepresentation contained herein, and the Buyers, A&A and the Professional
Corporations shall sign a general release to Xxxxxxx X. Xxxxxxxx and Damadian
MRI in the form annexed as Exhibit D-1. HMCA shall assume and pay any liability
which RVD or Damadian MRI would otherwise have, but for the provisions of this
Paragraph 18 and the release to be granted hereunder, for any breach by them of
this Agreement or any misrepresentation contained herein.
19. Notices, Et Cetera. All notices, consents and other communications
hereunder shall be in writing and shall be deemed to have been given when
delivered personally, sent by Federal Express or other overnight courier
service, or mailed by first-class, registered or certified mail, postage
prepaid, addressed to the address for such party set forth at the outset hereof.
20. Publicity; Confidentiality. Neither Buyer shall directly or indirectly make
or cause to be made any public announcements or issue any notices in any form
(other than as may be required by law) with respect to this Agreement or the
transactions contemplated hereby without the consent in writing of HMCA and the
terms of this Agreement shall be kept in strictest confidence by the Buyers and
shall not be disclosed by the Buyers except under compulsion of an order by a
court of competent jurisdiction or a properly constituted governmental
administrative body of the United States federal or a state government or an
agency of the City of New York. Fonar and HMCA may make such disclosures as they
may deem necessary or appropriate in any SEC or other governmental filings,
financial statements, business plans, press release or other communications.
21. Miscellaneous. This Agreement and the agreements, instruments and
documents executed by the parties pursuant to this Agreement embody the entire
agreement and understanding among the parties hereto with respect to the subject
matter hereof, and shall be binding upon and inure to the benefit of and be
enforceable by the successors and permitted assigns of such parties. This
Agreement may not be assigned by any party hereunder except that HMCA, Damadian
MRI or RVD may assign any of their rights hereunder to receive any payment to be
made by the Buyers hereunder without the consent of any other party. This
Agreement may be changed, waived, discharged or terminated only by an instrument
in writing signed by the party against whom enforcement of such change, waiver,
discharge or termination is sought. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law. The headings of this
Agreement are for reference only, and shall not limit or otherwise affect any of
the terms or provisions hereof. This Agreement may be executed in several
counterparts and may be executed by the respective parties hereto on separate
counterparts, each of which shall be an original but all of which together shall
constitute one and the same instrument. This Agreement shall be construed in
accordance with and governed by the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered in the manner legally binding upon them as of the
date first above written.
DAMADIAN MRI IN
FOREST HILLS, P.C.
By: /s/Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
[Seal] President
ATTEST:
/s/Xxxxx X. Xxxxx
HEALTH MANAGEMENT
CORPORATION OF AMERICA
By: /s/Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
[Seal] President
ATTEST:
/s/Xxxxx X. Xxxxx
FONAR CORPORATION
By: /s/Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
[Seal] President
ATTEST:
/s/Xxxxx X. Xxxxx
/s/Xxxxxxx X. Xxxxxxxx
XXXXXXX X. XXXXXXXX
XX. XXXXXXXX XXXXXXXX &
XX. XXXXX XXXXXX PHYSICIANS, P.C.
[Seal] By:/s/Xxxxxxx X. Xxxxxxxx
ATTEST:
/s/Xxxxx X. Xxxxx
CORONA MEDICAL OFFICES, P.C.
By: /s/Xxxxxxx X. Xxxxxxxx
[Seal]
ATTEST:
/s/Xxxxx X. Xxxxx
LIBERTY MEDICAL OFFICES, P.C.
By: /s/Xxxxxxx X. Xxxxxxxx
[Seal]
ATTEST:
/s/Xxxxx X. Xxxxx
A & A SERVICES, INC.
By: /s/Xxxxxxx X. Xxxxxxxx
[Seal]
ATTEST:
/s/Xxxxx X. Xxxxx
RIDGEWOOD MEDICAL CARE, P.C.
By: /s/Xxxxxxx X. Xxxxxxxx
[Seal]ATTEST:
/s/Xxxxx X. Xxxxx
/s/Xxxxx Xxxxxx
XXXXX XXXXXX, D.O.
/s/Xxxxxxxx Xxxxxxxx
XXXXXXXX XXXXXXXX, D.O.
M-9667
EXHIBIT A
FORM OF REPURCHASE
PROMISSORY NOTE
Melville, New York
$2,500,000 April 8, 2003
XXXXX XXXXXX and XXXXXXXX XXXXXXXX (the "Makers"), for value received,
hereby jointly and severally promise to pay to the order of HEALTH MANAGEMENT
CORPORATION OF AMERICA (the "Payee"), at its office located at 0 Xxxxxxxxx
Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000, or at such other address as the Payee
shall designate, the principal sum of Two Million Five Hundred Thousand
($2,500,000) Dollars without interest except upon the occurrence of an Event of
Default as hereinafter defined, in installments as follows: (1) $2,350,000 upon
the earlier to occur of a financial institution or financial institutions of the
Makers' selection making the funds available to the Makers or 75 days from the
date hereof and (2) $150,000 six months from the date hereof.
All payments shall be made in lawful money of the United States of America.
This Note may prepaid in full at any time, or in part from time to time, without
penalty or premium, but with interest accrued on all outstanding principal to
the date of such payment. All payments on this Note shall be applied first to
accrued but unpaid interest and then to the outstanding principal balance
hereof.
If any installment of this Note becomes due and payable on a Saturday,
Sunday, or public or other banking holiday under the laws of the State of New
York, the maturity thereof shall be extended to the next succeeding business
day, and interest shall be payable thereon at the rate herein specified during
such extension.
Except as otherwise provided herein, the Makers waive presentment, demand,
demand for payment, protest, notice of dishonor or notice of any kind in
connection with this Note.
This Note has been issued pursuant to a Stock Repurchase and Settlement
Agreement dated April 8, 2003 by and among the Payee, the Makers and others (the
"Repurchase Agreement").
The payment of this Note is secured by a Security Agreement executed by A&A
Services, Inc. ("A&A"), Xx. Xxxxxxxx Xxxxxxxx & Xx. Xxxxx Xxxxxx, Physicians,
P.C., ("Physicians"), Corona Medical Offices, P.C. ("Corona"), Liberty Medical
Offices, P.C. ("Liberty"), Ridgewood Medical Care, P.C. ("Ridgewood") and the
Payee (the "Security Agreement"), together with a Guaranty executed by A&A,
Physicians, Corona, Liberty and Ridgewood and a Pledge Agreement executed by the
Buyers covering their shares of A&A, Physicians, Corona, Liberty and Ridgewood,
all of even date herewith and entered into pursuant to the Repurchase Agreement.
This Note may be assigned in whole or in part by the Payee, and any
assignee of the Payee shall be entitled to the benefits provided in the Security
Agreement, Guaranty and other agreements referred to above to the extent
assigned by the Payee.
The obligations of the Makers to make the payments required under this
Agreement are absolute and unconditional and are not subject to reductions,
setoffs or counterclaims of any nature whatsoever.
The occurrence of any one or more of the following shall constitute an
Event of Default under this Note, except that any of the following with respect
to Corona, Liberty or Ridgewood, shall not be considered an Event of Default
unless and until such corporation has been reinstated and the shares transferred
to the Makers or their permitted assignees.
(1) The Makers shall fail to make any payment hereunder when due and such
failure shall continue for a period of five (5) days following written notice of
default;
(2) A default or event of default on the part of the Makers, A&A,
Physicians, Corona, Liberty or Ridgewood shall occur under the Repurchase
Agreement or any one or more of the Security Agreement, Guaranty or Pledge
Agreement or any other instrument issued under the Repurchase Agreement which is
not cured within any applicable grace or cure period provided therein;
(3) Any one or more of A&A, Physicians, Corona, Liberty or Ridgewood shall
cease doing business as a going concern, make an assignment for the benefit of
creditors, admit in writing its inability to pay its debts as they become due,
file a petition commencing a voluntary case under any chapter of Title 11 of the
United States Code (the "Bankruptcy Code"), be adjudicated an insolvent, file a
petition seeking for itself any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar arrangement under any present
or future statute, law, rule or regulation or file an answer admitting the
material allegations of a petition filed against it in any such proceeding,
consent to the filing of such a petition or acquiesce in the appointment of a
trustee, receiver or liquidator of it or of all or any part of its assets or
properties, or take any action looking to its dissolution or liquidation;
(4) An order for relief against any one or more of A&A, Physicians, Corona,
Liberty or Ridgewood shall have been entered under any chapter of the Bankruptcy
Code or a decree or order by a court having jurisdiction in the premises shall
have been entered approving as properly filed a petition seeking reorganization,
arrangement, readjustment, liquidation, dissolution or similar relief against
such entity under any present or future statute, law, rule or regulation, or any
trustee, receiver or liquidator of such entity or of all or any part of its
assets and properties shall be appointed; or if there is commenced against such
entity any proceeding seeking any such relief or the appointment of any such
trustee, receiver or liquidator which remains undismissed for a period of sixty
(60) days;
(5) Either Maker shall make an assignment for the benefit of creditors,
admit in writing his inability to pay his debts as they become due, file a
petition commencing a voluntary case under any chapter of Title 11 of the United
States Code (the "Bankruptcy Code"), be adjudicated an insolvent, file a
petition seeking for himself any reorganization, arrangement, composition,
readjustment, liquidation, or similar arrangement under any present or future
statute, law, rule or regulation or file an answer admitting the material
allegations of a petition filed against him in any such proceeding, consent to
the filing of such a petition or acquiesce in the appointment of a trustee,
receiver or liquidator of all or any part of his assets or properties;
(6) An order for relief against either Maker shall have been entered under
any chapter of the Bankruptcy Code or a decree or order by a court having
jurisdiction in the premises shall have been entered approving as properly filed
a petition seeking reorganization, arrangement, readjustment, liquidation, or
similar relief against either Maker under any present or future statute, law,
rule or regulation, or any trustee, receiver or liquidator of either Maker or of
all or any part of his assets and properties shall be appointed; or if there is
commenced against either Maker any proceeding seeking any such relief or the
appointment of any such trustee, receiver or liquidator which remains
undismissed for a period of sixty (60) days.
Upon the occurrence of an Event of Default, at the option of the Payee,
this Note shall become immediately due and payable together with interest at the
rate of 18% per annum on the unpaid principal hereof from the date of the Event
of Default through the date of payment.
In the case of the occurrence of an Event of Default, the Makers shall pay
to the Payee all reasonable costs and expenses (including reasonable attorneys
fees) incurred in connection with the enforcement and collection of this Note.
No delay on the part of the Payee in exercising any of its options, powers
or rights, or partial or single exercise thereof, shall constitute a waiver
thereof. No waiver of any of its rights hereunder shall be deemed to be made by
the Payee unless the same shall be in writing, duly signed on behalf of the
Payee, and each such waiver, if any, shall apply only with respect to the
specific instance involved, and shall in no way impair the rights of the Payee
or the obligations of the Makers to the Payee in any other respect at any other
time. This Note may be modified or amended only in a writing duly executed by
Payee and Makers.
This Note shall be governed and construed in accordance with the laws of
the State of New York without reference to the conflict of laws provisions
thereof.
The courts of record of New York State or of the United States District
Courts for the Southern and Eastern Districts of New York shall have exclusive
jurisdiction with respect to any legal action or proceeding relating to or
arising under this Note.
------------------------------
XXXXX XXXXXX
------------------------------
XXXXXXXX XXXXXXXX
EXHIBIT B
Offices
00-00 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
86-14, 86-16, 86-18 and 00-00 Xxxxxxx Xxxxxx Xxxxxxxxx, Xxx Xxxx 00000
000-00 Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxx Xxxx 00000
000-00 Xxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
EXHIBIT C
GUARANTY
This Guaranty dated as of April 8, 2003 is made and delivered by A&A Services,
Inc., Xx. Xxxxxxxx Xxxxxxxx & Xx. Xxxxx Xxxxxx, Physicians, P.C., Corona Medical
Offices, P.C., Liberty Medical Offices, P.C. and Ridgewood Medical Care, P.C.
(the "Corporations") to Health Management Corporation of America ("HMCA").
In consideration of HMCA entering into a certain Stock Repurchase and Settlement
Agreement (the "Repurchase Agreement") dated April 8, 2003 with the
Corporations, Xx. Xxxxx Xxxxxx ("Xxxxxx"), Xx. Xxxxxxxx Xxxxxxxx ("Xxxxxxxx"),
Damadian MRI in Forest Hills, P.C. and Fonar Corporation, the Corporations
hereby irrevocably and unconditionally guarantee to HMCA, the payment and
performance when due, whether at maturity, or earlier by acceleration or
otherwise, or later in the case of one or more extensions of time of payment or
renewal, in whole or in part of the Repurchase Promissory Note executed by
Xxxxxx and Marciano under the Repurchase Agreement and any and all other
obligations of Xxxxxx and Xxxxxxxx under Repurchase Agreement and the
agreements, instruments and documents issued thereunder (the "Obligations") in
accordance with and subject to the terms and conditions of the Repurchase
Agreement.
The Corporations waive (i) notice of acceptance of this Guaranty, (ii)
presentment, demand of payment, protest, notice of dishonor or non-payment of
any Obligations and (iii) any other notice to any party liable on the
Obligations.
HMCA may at any time and from time to time without the consent of, or notice
(except as shall be required by applicable statute and cannot be waived) to, the
Corporations, without incurring responsibility to the Corporations, without
impairing or releasing the obligations of the Corporations hereunder, upon or
without any terms or conditions and in whole or in part: (1) change or extend
the manner, place, terms or time of payment or otherwise alter any Obligation,
and the Guaranty herein made shall apply to the Obligations as so changed,
extended or altered; (2) sell, exchange, release, surrender, realize upon or
otherwise deal with in any manner and in any order any property by whomsoever at
any time pledged or mortgaged to secure the Obligations hereby guaranteed; (3)
exercise or refrain from exercising any rights against Xxxxxx and Marciano or
others; (4) settle or compromise any liability hereby guaranteed, any security
therefor and may subordinate the payment of all or any part thereof to the
payment of any liability of Xxxxxx and Xxxxxxxx to creditors of Xxxxxx and
Marciano other than HMCA; or (5) apply any sums by whomsoever paid or howsoever
realized to any liability or liabilities of Xxxxxx and Xxxxxxxx on whose behalf
such payment is made to HMCA regardless of what liability or liabilities of
Xxxxxx and Marciano remain unpaid.
The Corporations further guarantee that all payments made by Xxxxxx and Xxxxxxxx
to HMCA on any Obligation hereby guaranteed will, when made, be final. If claim
is ever made upon HMCA for repayment or recovery of any amount or amounts
received by HMCA in payment or on account of any of the liabilities of Xxxxxx
and Marciano, and HMCA repays all or part of said amount by reason of (a) any
judgment, decree or order of any court or administrative body having
jurisdiction, or (b) any settlement or compromise of any such claim effected by
HMCA with any such claimant (including Xxxxxx and Xxxxxxxx), or (c) as a result
of any order, settlement or rule entered in or applicable in any bankruptcy,
insolvency or similar proceeding instituted by or against Xxxxxx and Marciano,
then and in any such event the Corporations agree that such judgment, decree,
order, settlement, compromise or rule shall be binding upon the Corporations,
notwithstanding any revocation hereof or the cancellation of any note or
instrument evidencing any liability of the Corporations, and the Corporations
shall be and remain liable to HMCA hereunder for the amount so repaid or
recovered to the same extent as if such amount had never originally been
received by HMCA.
Any acknowledgement or new promises, whether by payment of principal or interest
or otherwise, and whether by Xxxxxx and Xxxxxxxx or others, including the
Corporations, with respect to any of the liabilities of Xxxxxx and Marciano, if
the statute of limitations in favor of Xxxxxx and Xxxxxxxx against HMCA shall
have commenced to run, shall toll the running of such statute of limitations,
and, if the period of such statute of limitations shall have expired, prevent
the operation of such statute of limitations.
No delay on the part of HMCA in exercising any of its options, powers or rights,
or partial or single exercise thereof, shall constitute a waiver thereof. No
waiver of any of its rights hereunder, and no modification or amendment of this
Guaranty, shall be deemed to be made by HMCA unless the same shall be in
writing, duly signed on behalf of HMCA, and each such waiver, if any, shall
apply only with respect to the specific instance involved, and shall in no way
impair the rights of HMCA or the obligations of the Corporations to HMCA in any
other respect at any other time. This Guaranty may not be modified orally or by
course of conduct.
The Corporations represent and warrant to HMCA that the Corporations are not
insolvent and will not be rendered insolvent by the execution and delivery of
this Guaranty. The Corporations acknowledge and confirm to HMCA that, except as
otherwise set forth in a writing, the Corporations have not been induced to
execute and deliver this Guaranty as a result of, and are not relying upon, any
representations, warranties, agreements or conditions, whether express or
implied or written or oral, by any other person. HMCA shall not be required to
reserve its rights against the Corporations in connection with any settlement,
compromise or release of any liability hereby guaranteed or any security
therefor. For purposes of this paragraph "insolvent" shall mean "unable to pay
debts as they mature".
This Guaranty shall inure to the benefit of any assignee of HMCA of all or any
part of the Obligations.
The Corporations hereby consent to the jurisdiction of any court of record of
New York State or of the United States District Courts for the Southern and
Eastern Districts of New York over the Corporations.
This Guaranty shall be governed in accordance with the laws of the State of New
York.
This Guaranty is a guaranty of payment and not one of collection, and it shall
be binding upon the Corporations and their respective representatives,
successors and assigns in favor HMCA and its successors and assigns.
This Guaranty shall not be binding upon Corona Medical Offices, P.C., Liberty
Medical Offices, P.C. or Ridgewood Medical Care, P.C. until such time as the
Corporation is reinstated and all of the issued and outstanding shares of said
Corporation are transferred to Xxxxxx and/or Marciano or their permitted
assignees.
A&A SERVICES, INC.
By: _______________________________
XX. XXXXXXXX XXXXXXXX &
XX. XXXXX XXXXXX, PHYSICIANS, P.C.
By: ______________________________
CORONA MEDICAL OFFICES, P.C.
By: ______________________________
LIBERTY MEDICAL OFFICES, P.C.
By: ______________________________
RIDGEWOOD MEDICAL CARE, P.C.
By: ______________________________
HEALTH MANAGEMENT CORPORATION OF AMERICA, P.C.
By: _______________________________
EXHIBIT D
RELEASES
EXHIBIT D-1
RELEASE
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the undersigned, XX. XXXXX XXXXXX and XX. XXXXXXXX
XXXXXXXX, for themselves, their heirs, successors and assigns, (both
individually and together, RELEASORS), hereby release and discharge DAMADIAN MRI
IN FOREST HILLS, P.C. ("Damadian MRI"), XXXXXXX X. XXXXXXXX ("RVD") and their
respective current and former parents, subsidiaries, affiliates, (with the
exception of Health Management Corporation of America and Fonar Corporation)
stockholders, directors, officers, employees, owners, principals, successors and
assigns (together, RELEASEES) from any and all claims, demands, controversies,
debts, liabilities, contracts, obligations, causes of action, lawsuits and
judgments, both in law and in equity, which the RELEASORS or any one or more of
them has, has had or may hereafter have against RELEASEES, or any of them,
whether asserted or unasserted, by reason of any matter, act or thing whatsoever
from the beginning of the world to the date hereof.
This release shall include, but not be limited to any claims or obligations
arising out of or relating to a certain Stock Repurchase and Settlement
Agreement dated April 8, 2003 pursuant to which this Release has been given, or
any other agreement, instrument or document that has been entered into pursuant
to said Stock Repurchase and Settlement Agreement, it being understood as
provided in the Stock Repurchase and Settlement Agreement, Health Management
Corporation of America shall assume and pay any liability which RVD or Damadian
MRI would otherwise have for any breach by them of the Stock Repurchase and
Settlement Agreement or any misrepresentation by them contained therein.
IN WITNESS WHEREOF, the RELEASORS have executed and delivered this Release
as of this 8th day of April, 2003
--------------------------------- ------------------------------
XXXXXXXX XXXXXXXXX, D.O. XXXXX XXXXXX, D.O.
State of New York)
) SS.
County of Suffolk)
On April 8, 2003 personally appeared the above named XXXXX XXXXXX and
the above named XXXXXXXX XXXXXXXX, to me known to be the individual described,
who executed the foregoing Release.
------------------------------
Notary Public
EXHIBIT D-1 (A)
RELEASE
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the undersigned, A&A SERVICES, INC., XX. XXXXX XXXXXX &
XX. XXXXXXXX XXXXXXXX PHYSICIANS, P.C., CORONA MEDICAL OFFICES, P.C., LIBERTY
MEDICAL OFFICES, P.C. and RIDGEWOOD MEDICAL CARE, P.C. for themselves, their
successors and assigns, (both individually and together, RELEASORS), hereby
release and discharge DAMADIAN MRI IN FOREST HILLS, P.C. ("Damadian MRI"),
XXXXXXX X. XXXXXXXX ("RVD") and their respective current and former parents,
subsidiaries, affiliates, (with the exception of Health Management Corporation
of America and Fonar Corporation) stockholders, directors, officers, employees,
owners, principals, successors and assigns (together, RELEASEES) from any and
all claims, demands, controversies, debts, liabilities, contracts, obligations,
causes of action, lawsuits and judgments, both in law and in equity, which the
RELEASORS or any one or more of them has, has had or may hereafter have against
RELEASEES, or any of them, whether asserted or unasserted, by reason of any
matter, act or thing whatsoever from the beginning of the world to the date
hereof.
This release shall include, but not be limited to any claims or
obligations arising out of or relating to a certain Stock Repurchase and
Settlement Agreement dated April 8, 2003 pursuant to which this Release has been
given, or any other agreement, instrument or document that has been entered into
pursuant to said Stock Repurchase and Settlement Agreement, it being understood
as provided in the Stock Repurchase and Settlement Agreement, Health Management
Corporation of America shall assume and pay any liability which RVD or Damadian
MRI would otherwise have for any breach by them of the Stock Repurchase and
Settlement Agreement or any misrepresentation by them contained therein.
IN WITNESS WHEREOF, the RELEASORS have executed and delivered this
Release as of this 8th day of April, 2003
A&A SERVICES, INC.
By: _____________________________
By: _____________________________
XX. XXXXXXXX XXXXXXXX & XX.
XXXXX XXXXXX, PHYSICIANS, P.C.
By: ______________________________
By: ______________________________
CORONA MEDICAL OFFICES, P.C.
By: ______________________________
By: ______________________________
LIBERTY MEDICAL OFFICES, P.C.
By: ______________________________
By: ______________________________
RIDGEWOOD MEDICAL CARE, P.C.
By: ______________________________
By: ______________________________
State of New York)
) SS.
County of Suffolk)
On April 8, 2003, before me personally appeared XXXXX XXXXXX and XXXXXXXX
XXXXXXXX, to me known, and being duly deposed did say that they executed this
Release in the name and on behalf of A&A Services, Inc. and Xx. Xxxxxxxx
Xxxxxxxx & Xx. Xxxxx Xxxxxx, Physicians, P.C., being duly authorized to do so
and being the sole stockholders, directors and officers of said corporations.
---------------------------------
Notary Public
State of New York)
) SS.
County of Suffolk)
On _____________, before me personally appeared XXXXX XXXXXX and XXXXXXXX
XXXXXXXX, to me known, and being duly deposed did say that they executed this
Release in the name and on behalf of Corona Medical Offices, P.C., Liberty
Medical Offices, P.C. and Ridgewood Medical Care, P.C., being duly authorized to
do so and being the sole stockholders, directors and officers of said
corporations.
---------------------------------
Notary Public
EXHIBIT D-2
RELEASE
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the undersigned, XX. XXXXX XXXXXX and XX. XXXXXXXX
XXXXXXXX, for themselves, their heirs, successors and assigns, (both
individually and together, RELEASORS), hereby release and discharge HEALTH
MANAGEMENT CORPORATION OF AMERICA ("HMCA"), FONAR CORPORATION ("FONAR") and
their current and former subsidiaries, directors, officers, employees,
successors and assigns (together, RELEASEES) from any and all claims, demands,
controversies, debts, liabilities, contracts, obligations, causes of action,
lawsuits and judgments, both in law and in equity, which the RELEASORS or any
one or more of them has, has had or may hereafter have against RELEASEES, or any
of them, whether asserted or unasserted, by reason of any matter, act or thing
whatsoever from the beginning of the world to the date hereof.
This release does not include, any obligations of HMCA or FONAR under the
certain Stock Repurchase and Settlement Agreement dated April 8, 2003 pursuant
to which this Release has been given, or any other agreement, instrument or
document that has been entered into pursuant to said Stock Repurchase and
Settlement Agreement or to any claims arising out of any one or more breaches
thereof.
IN WITNESS WHEREOF, the RELEASORS have executed and delivered this Release
as of this 8th day of April, 2003
--------------------------------- -------------------------------
XXXXXXXX XXXXXXXX, D.O. XXXXX XXXXXX, D.O.
State of New York)
) SS.
County of Suffolk)
On April 8, 2003 personally appeared the above named XXXXX XXXXXX and the
above named XXXXXXXX XXXXXXXX, to me known to be the individual described, who
executed the foregoing Release.
-------------------------------
Notary Public
EXHIBIT D-2 (A)
RELEASE
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the undersigned, A&A SERVICES, INC., XX. XXXXX XXXXXX &
XX. XXXXXXXX XXXXXXXX PHYSICIANS, P.C., CORONA MEDICAL OFFICES, P.C., LIBERTY
MEDICAL OFFICES, P.C. and RIDGEWOOD MEDICAL CARE, P.C. for themselves, their
successors and assigns, (both individually and together, RELEASORS), hereby
release and discharge HEALTH MANAGEMENT CORPORATION OF AMERICA ("HMCA"), FONAR
CORPORATION (`FONAR") and their respective current and former subsidiaries,
directors, officers, employees, successors and assigns (together, RELEASEES)
from any and all claims, demands, controversies, debts, liabilities, contracts,
obligations, causes of action, lawsuits and judgments, both in law and in
equity, which the RELEASORS or any one or more of them has, has had or may
hereafter have against RELEASEES, or any of them, whether asserted or
unasserted, by reason of any matter, act or thing whatsoever from the beginning
of the world to the date hereof.
This release does not include, any obligations of HMCA or FONAR under the
certain Stock Repurchase and Settlement Agreement dated April 8, 2003 pursuant
to which this Release has been given, or any other agreement, instrument or
document that has been entered into pursuant to said Stock Repurchase and
Settlement Agreement or to any claims arising out of any one or more breaches by
them thereof.
IN WITNESS WHEREOF, the RELEASORS have executed and delivered this Release
as of this 8th day of April, 2003
A&A SERVICES, INC.
By: _____________________________
By: _____________________________
XX. XXXXXXXX XXXXXXXX & XX.
XXXXX XXXXXX, PHYSICIANS, P.C.
By: ______________________________
By: ______________________________
CORONA MEDICAL OFFICES, P.C.
By: ______________________________
By: ______________________________
LIBERTY MEDICAL OFFICES, P.C.
By: ______________________________
By: ______________________________
RIDGEWOOD MEDICAL CARE, P.C.
By: ______________________________
By: ______________________________
State of New York)
) SS.
County of Suffolk)
On April 8, 2003, before me personally appeared XXXXX XXXXXX and
XXXXXXXX XXXXXXXX, to me known, and being duly deposed did say that they
executed this Release in the name and on behalf of A&A Services, Inc. and Xx.
Xxxxxxxx Xxxxxxxx & Xx. Xxxxx Xxxxxx, Physicians, P.C., being duly authorized to
do so and being the sole stockholders, directors and officers of said
corporations.
---------------------------------
Notary Public
State of New York)
) SS.
County of Suffolk)
On ___________, before me personally appeared XXXXX XXXXXX and XXXXXXXX
XXXXXXXX, to me known, and being duly deposed did say that they executed this
Release in the name and on behalf of Corona Medical Offices, P.C., Liberty
Medical Offices, P.C. and Ridgewood Medical Care, P.C., being duly authorized to
do so and being the sole stockholders, directors and officers of said
corporations.
----------------------------------
Notary Public
EXHIBIT D-3
RELEASE
For good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the undersigned, DAMADIAN MRI IN FOREST HILLS, P.C.,
XXXXXXX X. XXXXXXXX, FONAR CORPORATION and HEALTH MANAGEMENT CORPORATION OF
AMERICA, for themselves, their heirs, successors and assigns, (individually and
together, RELEASORS), hereby release and discharge XX. XXXXX XXXXXX, XX.
XXXXXXXX XXXXXXXX, A&A SERVICES, INC., XX. XXXXX XXXXXX & XX. XXXXXXXX XXXXXXXX
PHYSICIANS, P.C., CORONA MEDICAL OFFICES, P.C., LIBERTY MEDICAL OFFICES, P.C.
and RIDGEWOOD MEDICAL CARE, P.C. and their respective current and former
parents, subsidiaries, affiliates, stockholders, directors, officers, employees,
owners, principals, successors and assigns (together, RELEASEES) from any and
all claims, demands, controversies, debts, liabilities, contracts, obligations,
causes of action, lawsuits and judgments, both in law and in equity, which the
RELEASORS or any one or more of them has, has had or may hereafter have against
RELEASEES, or any of them, whether asserted or unasserted, by reason of any
matter, act or thing whatsoever from the beginning of the world to the date
hereof.
This release does not include, any obligations of the RELEASEES under the
Stock Repurchase and Settlement Agreement dated April 8, 2003 pursuant to which
this Release has been given, or any other agreement, instrument or document that
has been entered into pursuant to said Stock Repurchase and Settlement
Agreement, or to any claims arising out of any one or more breaches thereof, and
to extent set forth in the Stock Repurchase and Settlement Agreement, any claims
or obligations arising prior to the date hereof in the event of a breach of said
agreement by RELEASEES.
IN WITNESS WHEREOF, the RELEASORS have executed and delivered this Release
as of this 8th day of April, 2003
---------------------------------
XXXXXXX X. XXXXXXXX, M.D.
State of New York)
) SS.
County of Suffolk)
On April 8, 2003 personally appeared the above named XXXXXXX X. XXXXXXXX,
to me known to be the individual described, who executed the foregoing Release.
--------------------------------
Notary Public
FONAR CORPORATION
By: _____________________________
DAMADIAN MRI IN FOREST HILLS, P.C.
By: ______________________________
HEALTH MANAGEMENT CORPORATION OF
AMERICA
By: _____________________________
State of New York)
) SS.
County of Suffolk)
On April 8, 2003, before me personally appeared XXXXXXX X. XXXXXXXX, to me
known, and being duly deposed did say that he executed this Release in the name
and on behalf of the above corporations, being duly authorized to do so and
being the President of said corporations.
---------------------------------
Notary Public
EXHIBIT E
STIPULATIONS OF DISCONTINUANCE
EXHIBIT X-0
XXXXXXX XXXXX XX XXX XXXXX XX XXX XXXX
XXXXXX OF SUFFOLK
--------------------------------------
HEALTH MANAGEMENT CORPORATION OF Index No. 02-31554
AMERICA and FONAR CORPORATION,
STIPULATION OF
Plaintiffs, DISCONTINUANCE
-against-
XXXXX XXXXXX, D.O. and
XXXXXXXX XXXXXXXX, D.O.,
IT IS HEREBY STIPULATED AND AGREED, by and between the undersigned
attorneys of record for all of the parties to the above entitled action that
whereas no party is an infant, incompetent person for whom a committee has been
appointed or conservatee, and no person not a party has an interest in the
subject matter of the action, the above entitled action is hereby discontinued,
with prejudice and without costs or attorneys' fees to any party. Dated: April
8, 2003
XXXXX & XXXXXX XXXXXXXX AND XXXXX, P.C.
By: ---------------------------- By: ----------------------------
Xxxxxxxx Xxxxx Xxxxxxxx X. Xxxxxxxx
000 Xxxxxxx Xxxxxx, 0xx Floor 000 Xxxxxx Xxxxxx, X.X.X. 0000
Xxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
Attorneys for Plaintiffs Attorneys for Defendants
SO ORDERED:
------------------------------
J.S.C.
EXHIBIT X-0
XXXXXXX XXXXX XX XXX XXXXX XX XXX XXXX
XXXXXX OF SUFFOLK
--------------------------------------
DAMADIAN MRI IN FOREST HILLS, P.C.,
CORONA MEDICAL OFFICES, P.C., Index No. 02-31553
LIBERTY MEDICAL OFFICES, P.C.,
RIDGEWOOD MEDICAL CARE, P.C., STIPULATION OF
XX. XXXXXXXX XXXXXXXX AND DISCONTINUANCE
--------------
XX. XXXXX XXXXXX PHYSICIANS, P.C. and
A&A SERVICES, INC.,
Plaintiffs,
-against-
XXXXX XXXXXX, D.O.,
XXXXXXXX XXXXXXXX, D.O. and
M&M PROPERTIES, L.L.C.,
Defendants.
----------------------------------------
IT IS HEREBY STIPULATED AND AGREED, by and between the undersigned
attorneys of record for all of the parties to the above entitled action that
whereas no party is an infant, incompetent person for whom a committee has been
appointed or conservatee, and no person not a party has an interest in the
subject matter of the action, the above entitled action is hereby discontinued,
with prejudice and without costs or attorneys' fees to any party. Dated: April
8, 2003
XXXXX & XXXXXX XXXXXXXX AND XXXXX, P.C.
By:___________________________ By:___________________________
Xxxxxxxx Xxxxx Xxxxxxxx X. Xxxxxxxx
000 Xxxxxxx Xxxxxx, 0xx Floor 000 Xxxxxx Xxxxxx, X.X.X. 0000
Xxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
Attorneys for Plaintiffs Attorneys for Defendants
SO ORDERED:
------------------------------
J.S.C.
EXHIBIT X-0
XXXXX XXXXX XX XXX XXXX XX XXX XXXX
XXXXXX OF QUEENS
------------------------------------
M&M PROPERTIES, LLC, Index No. L&T 050919
Petitioner (Landlord), STIPULATION OF
DISCONTINUANCE
-against-
A&A SERVICES, INC.
00-00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx
Respondent (Tenant).
IT IS HEREBY STIPULATED AND AGREED, by and between the undersigned
attorneys of record for all of the parties to the above entitled action that
whereas no party is an infant, incompetent person for whom a committee has been
appointed or conservatee, and no person not a party has an interest in the
subject matter of the action, the above entitled action is hereby discontinued,
with prejudice and without costs or attorneys' fees to any party. Dated: April
8, 2003
XXXXX & XXXXXX XXXXXXXX AND XXXXX, P.C.
By:___________________________ By:___________________________
Xxxxxxxx Xxxxx Xxxxxxxx X. Xxxxxxxx
000 Xxxxxxx Xxxxxx, 0xx Floor 000 Xxxxxx Xxxxxx, X.X.X. 0000
Xxx Xxxx, XX 00000 Xxxxxxxxx, XX 00000
(000) 000-0000 (000) 000-0000
Attorneys for Respondent Attorneys for Petitioner
SO ORDERED:
------------------------------
J.S.C.
EXHIBIT F
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of April 8, 2003 between A&A Services, Inc.,
Xx. Xxxxxxxx Xxxxxxxx & Xx. Xxxxx Xxxxxx, Physicians, P.C., Corona Medical
Offices, P.C., Liberty Medical Offices, P.C. and Ridgewood Medical Care, P.C.
(hereinafter sometimes referred to as the "Corporations") and Health Management
Corporation of America (the "Secured Party").
WITNESSETH:
WHEREAS, all of the issued and outstanding stock of the Corporations is
being sold to Xx. Xxxxx Xxxxxx and Xx. Xxxxxxxx Xxxxxxxx (the "Buyers") pursuant
to a Stock Repurchase and Settlement Agreement dated April 8, 2003 (the
"Repurchase Agreement") and in connection therewith and in partial consideration
for said stock, the Buyers have agreed to pay the Secured Party the sum of
$2,500,000 pursuant to a promissory note dated the date hereof (the "Repurchase
Promissory Note") pursuant to the Repurchase Agreement; and
WHEREAS, in order to induce the Secured Party to enter into the Repurchase
Agreement and to accept the Repurchase Promissory Note as part of the
consideration payable to the Secured Party thereunder, the Corporations have
agreed to grant the Secured Party a security interest in all of assets of the
Corporations, whether owned immediately prior to the closing (the "Closing") of
the purchase and sale of the stock of the Corporations or thereafter acquired
(the "Collateral") to secure the payment the Repurchase Promissory Note and the
other obligations of the Buyers and the Corporations arising under or in
connection with the Repurchase Agreement;
NOW THEREFORE, in consideration of the premises, representations, covenants
and agreements contained herein, the parties hereto agree as follows:
1. Security Interest. To secure the payment and performance of the Repurchase
Promissory Note and any other obligations of the Buyers and the Corporations
under the Repurchase Agreement and any agreement, instrument or other document
executed pursuant to the Repurchase Agreement (the "Obligations"), the
Corporations hereby grant and assign to the Secured Party a continuing security
interest in their respective interests in the Collateral. As used herein the
term "Collateral" shall mean all of the assets of the Corporations, whether now
owned or hereafter acquired, whether real, personal, tangible or intangible,
including, without limitation, all accounts receivable, claims, contract rights,
corporate names, intellectual property, furniture, fixtures, office equipment,
office supplies, medical equipment, medical instruments and medical supplies,
all substitutes and accessories thereto, the proceeds thereof and all books and
records of the Corporations.
2. Representations, Warranties and Covenants. The Corporations represent,
warrant and covenant as follows:
a. One or more of the Corporations is the owner of each item of the
Collateral, free and clear of any liens, security interests, mortgages, pledges
or other encumbrances except for "Permitted Encumbrances" (as hereinafter
defined), and the Corporations, jointly and severally, shall keep the Collateral
free and clear of any liens, security interests, mortgages, pledges or other
encumbrances other than Permitted Encumbrances or those in favor of the Secured
Party. For the purposes hereof, the term Permitted Encumbrances shall mean (i)
any lien, security interest, mortgage, pledge or other encumbrance existing at
the time of the Closing, (ii) any agreement between any of the Corporations
pursuant to which any of the Collateral is leased by one Corporation to another,
or the use of the Collateral is provided by one Corporation to another, (iii)
liens for taxes or other governmental assessments which are not yet due or which
are being contested in good faith by appropriate proceedings, (iv) workmen's
liens, materialmen's liens and the like which may arise by statute or operation
of law, provided that the Corporations shall pay any obligations secured thereby
when due, or contest the same by appropriate proceedings and (v) liens, security
interests, conditional sales or title retention agreements securing the purchase
price of any items of Collateral acquired after the Closing.
b. The principal executive offices and places of business of the
Corporations are located and the books and records of the Corporations including
those relating to the Collateral are located in Queens County, New York at the
locations specified in Exhibit B to the Repurchase Agreement.
c. The Corporations will not move any tangible assets included as part of
the Collateral without the written consent of the Secured Party or any of books
and records of the Corporations without first notifying the Secured Party and
executing and delivering to the Secured Party such financing statements as are
necessary in order to enable to Secured Party to perfect its security interest
hereunder at the location where any such Collateral is to be moved.
d. The Corporations will not use the Collateral in violation of any
applicable law, ordinance or regulation.
e. The Corporations will promptly pay any taxes and assessments levied
against the Collateral, unless contested in good faith by appropriate
proceedings.
f. The Corporations will execute and deliver to the Secured Party such
financing statements and other instruments and documents as the Secured Party
may from time to time request which in the opinion of the Secured Party are
necessary or desirable to confirm or to perfect the security interest of the
Secured Party granted hereby.
g. Nothing contained herein shall prevent the Corporations from liquidating
any accounts receivable included in the Collateral and using the proceeds
thereof or any cash on hand in the ordinary course of business, subject to the
provisions of the Repurchase Agreement and any agreements, instruments and
documents executed pursuant to the Repurchase Agreement, as long as no Event of
Default as hereinafter described, has occurred and remains uncured.
h. Unless expressly permitted under the terms of this Agreement, the
Corporations shall not sell, assign, transfer or otherwise dispose of any of the
Collateral without the consent of the Secured Party.
i. The Corporations shall insure the tangible assets included in the
Collateral against fire, theft and other casualty and obtain general liability
insurance in such amounts and to such extent as the Secured Party shall from
time to time deem reasonable and appropriate. Such policy(ies) shall name the
Secured Party as an additional insured, as its interests may appear, and shall
provide for thirty (30) days prior written notice to the Secured Party of any
cancellation. In addition, each of the professional corporations included among
the Corporations shall maintain professional malpractice insurance in amounts as
the Secured Party shall deem reasonable and appropriate, which policies shall
provide for thirty (30) days prior written notice to the Secured Party prior to
any cancellation. The Corporation shall provide the Secured Parties with
certificates evidencing all of the foregoing insurance or copies of such
insurance policies upon request.
3. Sale or Transfer of Collateral. A Corporation shall not assign, sell or
otherwise transfer or convey all or any part of the Collateral to another
Corporation without the consent of the Secured Party; in the event the Secured
Party shall consent to any such transfer, any transferee shall take such
Collateral subject to the security interest of the Secured Party provided herein
and shall assume the obligations of the transferor hereunder with respect to the
Collateral acquired by such transferee and such transferee shall execute and
deliver to the Secured Party such financing statements and other instruments and
documents as the Secured Party may require to preserve its security interest
granted hereunder in such Collateral. Nothing contained herein, however, shall
permit the movement of any tangible assets included as part of the Collateral
other than in accordance with the provisions of Section 2(c) hereof.
4. Default Under Security Agreement. The Corporations shall be in default under
this Security Agreement if any Corporation shall default in the performance of
any of its obligations hereunder and such default is not cured within fifteen
days of the giving of written notice thereof by the Secured Party to the
Corporation or if any Corporation or either of the Buyers shall be in default
under the Repurchase Agreement, the Repurchase Promissory Note or any other
agreement, instrument or document executed pursuant to the Repurchase Agreement
and such default is not cured within any applicable grace or cure period
provided (any of the foregoing being sometimes referred to herein as an "Event
of Default")
5. Rights and Remedies. If any Event of Default shall occur, then the Secured
Party shall have and may exercise the rights and remedies of secured parties
provided under the Uniform Commercial Code or under the Repurchase Agreement or
any agreement, instrument or document executed under the Repurchase Agreement.
6. Power of Attorney. Each of the Corporations hereby appoints HMCA as its true
and lawful agent and attorney-in-fact, with full power of substitution, to
execute or file any financing statements or other instruments or documents in
the name of the Corporation as may be necessary or appropriate to, perfect,
secure or maintain the security interest granted by the Corporation in any of
the Collateral hereunder and to exercise the rights and remedies provided or
referred to in Section 5 hereof in the name of the Corporation or in the name of
the Secured Party, as the Secured Party shall deem necessary or expedient, in
its sole discretion, and to executed any further instruments and documents in
connection therewith as the Secured Party shall deem necessary or expedient in
connection therewith, in the name of the Corporation or the name of the Secured
Party.
7. Governing Law. The Agreement shall be construed and enforced in accordance
with the laws of the State of New York.
8. Miscellaneous. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
This Agreement shall not be assignable by a Corporation without the prior
written consent of the Secured Party. The Secured Party may assign its rights
and benefits under this Agreement to any assignee or holder of the indebtedness
or obligations secured hereby. Any termination, waiver or modification of the
terms and provisions hereof shall be in writing. Any notice required or
permitted hereunder shall be deemed given if in writing and delivered personally
or sent by certified or registered mail, postage prepaid, to the party to which
it is given.
9. Effectiveness. This Security Agreement shall not be binding upon Corona
Medical Offices, P.C., Liberty Medical Offices, P.C. or Ridgewood Medical Care,
P.C. until such time as the corporation is reinstated and all of the issued and
outstanding shares of said corporation are transferred to Xxxxxx and/or Marciano
or their permitted assignees.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in the manner legally binding upon them as of the date first above
written.
A&A SERVICES, INC.
By: ____________________________
XX. XXXXXXXX XXXXXXXX & XX.
XXXXX XXXXXX PHYSICIANS, P.C.
By: ___________________________
CORONA MEDICAL OFFICES, P.C.
By: ___________________________
LIBERTY MEDICAL OFFICES, P.C.
By: ___________________________
RIDGEWOOD MEDICAL CARE, P.C.
By: ___________________________
HEALTH MANAGEMENT
CORPORATION OF AMERICA
By: ___________________________
EXHIBIT G
ASSIGNMENT AND ASSUMPTION AGREEMENT
ASSIGNMENT and ASSUMPTION AGREEMENT dated this 8th day of April, 2003 by
and among A&A Services, Inc., Xx. Xxxxxxxx Xxxxxxxx & Xx. Xxxxx Xxxxxx,
Physicians, P.C., Corona Medical Offices, P.C., Ridgewood Medical Care, P.C. and
Liberty Medical Offices, P.C. having their principal places of business in
Queens, New York ("the Assignors") and Health Management Corporation of America,
having a place of business at 0 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000
("Assignee").
WITNESSETH:
WHEREAS, the Assignors and the Assignee are parties to a Stock Repurchase
and Settlement Agreement dated April 8, 2003 (the "Repurchase Agreement")
pursuant to which the Assignee and Xxxxxxx X. Xxxxxxxx sold all of their
respective shares of the capital stock of the Assignors to Drs. Xxxxx Xxxxxx and
Xx. Xxxxxxxx (the "Buyers"); and
WHEREAS, pursuant to the terms of the Repurchase Agreement the Assignors
have agreed to assign their cash on hand and Accounts Receivable, as hereinafter
defined, as of the date hereof to Assignee, and Assignee has agreed to assume
the Accounts Payable, as hereinafter defined, of Assignor as of the date hereof
on the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the premises, covenants and agreements
contained herein, the parties hereto agree as follows:
1. The Assignors hereby assign all of their rights to all of their cash on
hand and Accounts Receivable to the Assignee as the same exist on the date
hereof.
2. The Assignee hereby assumes and agrees to pay the Accounts Payable of
the Assignor as the same exist on the date hereof.
3. For the purposes hereof the term Accounts Receivable shall mean
obligations of any clients, patients, insurance companies, HMO's, PPO's, other
third party payors and all other persons to pay for goods, supplies, tests,
treatments and services provided by the Assignors. Capitation payments (whether
or not received as of the Closing Date) for the month of April, 2003 shall be
prorated on a per diem basis for the month of April, 2003. The portion thereof,
23/30, allocable to the period following the Closing, shall not be considered
Accounts Receivable.
4. For the purposes hereof, the term Accounts Payable shall have the same
meaning as set forth in Paragraph 5 of the Repurchase Agreement.
5. For the purposes hereof, neither Accounts Receivable nor Accounts
Payable shall include any Accounts Receivable or Accounts Payable between one or
more of the Assignors.
6. Concurrently herewith, the Assignors are delivering to the Assignee
checks representing any remaining cash balances in all of the Assignors'
accounts.
7. All notices required or permitted under this Agreement shall be in
writing and shall be deemed given when delivered personally or when mailed, by
certified or registered mail, return receipt requested, to the address of the
party to which it is given set forth at the outset hereof or to such other
address as may have been provided by such party by the giving of notice thereof
to the other party hereto. In the case of the Assignors, notices may be sent to
00-00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000.
8. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. This Agreement
constitutes the entire agreement between the parties hereto with respect to the
subject matter hereof and may not be amended, waived or terminated except in
writing. The headings herein are for convenience of reference only and shall not
affect the interpretation of this Agreement.
9. This Security Agreement shall not be binding upon Corona Medical
Offices, P.C., Liberty Medical Offices, P.C. or Ridgewood Medical Care, P.C.
until such time as the corporation is reinstated and all of the issued and
outstanding shares of said corporation are transferred to Xxxxxx and/or Marciano
or their permitted assignees.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered in the manner legally binding upon them as of the date
and year first set forth above.
A&A SERVICES, INC.
By: _________________________
XX. XXXXXXXX XXXXXXXX & XX.
XXXXX XXXXXX, PHYSICIANS, P.C.
By: _________________________
CORONA MEDICAL OFFICES, P.C.
By: __________________________
LIBERTY MEDICAL OFFICES, P.C.
By: __________________________
RIDGEWOOD MEDICAL CARE, P.C.
By: __________________________
HEALTH MANAGEMENT CORPORATION
OF AMERICA
By: __________________________
Attachment
EXHIBIT H
ASSIGNED ACCOUNTS RECEIVABLE
COLLECTION AGREEMENT
This Agreement, made and entered into as of the 8th day of April, 2003, by
and between HEALTH MANAGEMENT CORPORATION OF AMERICA, a corporation formed under
the laws of the State of Delaware, having an address at 0 Xxxxxxxxx Xxxxxx
Xxxxx, Xxxxxxxx, Xxx Xxxx 00000 (hereinafter the "HMCA") and A&A Services, Inc.
("A&A") and Xx. Xxxxxxxx Xxxxxxxx & Xx. Xxxxx Xxxxxx, Physicians, P.C.,
("Physicians").
WHEREAS, the parties hereto are parties to a Stock Repurchase and
Settlement Agreement (the "Repurchase Agreement"), pursuant to which, among
other things, the accounts receivable of Physicians arising up to the date of
the Closing (the "Receivables") have been assigned to HMCA pursuant to an
Assignment and Assumption Agreement dated the date hereof (the "Assignment and
Assumption Agreement");
WHEREAS, in order to enable HMCA to collect the Receivables, it will be
necessary for Physicians and A&A to enter into this Billing and Collection
Agreement;
NOW THEREFORE, in consideration of the premises, agreements and covenants
contained herein, the parties hereto hereby agree as follows:
1. BILLING AND CLAIM PROCESSING AUTHORIZATION
(a) In order to enable HMCA to collect the Receivables and throughout the
term of this Agreement, Physicians hereby grants to HMCA an exclusive special
power of attorney and appoints HMCA as Physicians' exclusive true and lawful
agent and attorney-in-fact, with full power of substitution, and HMCA hereby
accepts such special power of attorney and appointment, for the following
purposes only:
(i) To xxxx Physicians patients, in the name of Physicians and on
behalf of Physicians, for all billable professional services provided or
arranged by Physicians to patients prior to April 8, 2003.
(ii) To xxxx, in Physicians' name and on Physicians' behalf, all
claims for reimbursement or indemnification from Blue Cross/Blue Shield,
insurance companies, Medicare, Medicaid, and all other third-party payors
or fiscal intermediaries for all covered billable medical services provided
by Physicians to patients prior to April 8, 2003.
(iii) To collect and receive, in Physician's name and on Physician's
behalf, all accounts receivable generated by such xxxxxxxx and claims for
reimbursement and to administer such accounts by taking such action as HMCA
shall deem appropriate, including, but not limited to,
(A) extending the time of payment of any such accounts for cash,
credit or otherwise;
(B) discharging or releasing the obligors of any such accounts;
(C) assigning or selling at a discount such accounts to
collection agencies, except for Medicare and Medicaid receivables; or
(D) initiating legal proceedings in the name of Physicians to
collect any of the Receivables, to enforce the rights of Physicians as
creditor under any contract or in connection with the rendering of any
service in connection with the Receivables and to contest adjustments
and denials by HMO's, PPO's, insurance companies, governmental
agencies (or their fiscal intermediaries) and others as third-party
payors with respect to the Receivables;
(E) taking other measures to require the payment of any
Receivables.
(iv) To collect and deposit in a bank account in the name of the
Physicians, hereinafter described (the "Receivables Account") all
Receivables collected in Physicians' name. Physicians and A&A covenant to
transfer and deliver to HMCA for deposit into the Receivables Account any
funds received by Physicians or A&A from patients or third party payors for
medical services rendered by Physicians which are included among the
Receivables.
(v) To take possession of, endorse in the name of Physicians (and/or
in the name of an individual physician providing the services on behalf of
Physicians), and deposit into Physicians' Receivables Account any notes,
checks, money orders, insurance payments, and any other instruments
received in payment for services (Physicians shall obtain a
power-of-attorney from any such individual physician to enable HMCA to take
such actions in the name of such physician).
(vi) To sign checks, drafts, bank notes or other instruments on behalf
of Physicians, and to make withdrawals and payments from the Receivables
Account.
(b) Upon request of HMCA, Physicians and A&A shall execute and
deliver to the financial institution wherein the Receivables Account
is maintained, such additional documents or instruments as may be
necessary to evidence or effect the special and limited powers of
attorney granted to HMCA by Physicians pursuant to this Agreement. The
special and limited power of attorney granted herein shall be coupled
with an interest and shall be irrevocable. The irrevocable powers of
attorney shall expire following the termination of this Agreement
after all Receivables have been collected or written off by HMCA and
the Receivables Account is closed.
2. THE RECEIVABLES ACCOUNT
In the event Physicians receives any payments of Receivables directly,
Physicians agrees to promptly remit the same to HMCA for deposit in the
Receivables Account.
HMCA shall have complete access to the Receivables Account for the purposes
stated herein. The Receivables Account shall be account number 865500604165 at
Chase Manhattan Bank or such other account as may be mutually agreed upon by the
parties in a writing to be signed by the parties and attached hereto (if any
substitute account is established, the term Receivables Account as used herein
shall apply to that account). Physicians shall ensure that Xxxxxxx X. Xxxxxxxx,
or one of HMCA's officers, as designated by HMCA, shall be the sole signatory on
the Receivables Account.
3. DISBURSMENT OF RECEIVABLES
The funds in the Receivables Account shall be the property of HMCA and may be
used or withdrawn by HMCA for any purpose, provided, however, that if by error
accounts receivable not assigned by Physicians to HMCA are deposited in the
Receivables Account, such accounts shall be promptly remitted to Physicians.
During the term of this Agreement Physicians shall not take any action to
attempt to change the signatories on the Receivables Account, close the
Receivables Account or take any other action with respect to the Receivables
Account without the consent of HMCA.
4. TERM
The term of this Agreement will continue until the earlier of six (6) years
from the date hereof or until all Receivables have been collected or written off
by HMCA and HMCA closes the Receivables Account. The termination of this
Agreement will not affect, however, HMCA's right in any then pending litigation
to any uncollected Receivables.
5. CONFIDENTIALITY OF PATIENT INFORMATION
Both HMCA and Physicians will keep patients' medical information
confidential, as required by law.
6. SPECIAL COVENANTS
Neither Physicians nor A&A shall sell, assign, transfer, grant a security
interest in or otherwise encumber the Receivables and shall at all times keep
the Receivables free and clear of all liens and encumbrances, other than those
arising through HMCA.
HMCA shall direct the payment of the Receivables to such address as HMCA
may from time to time determine and neither Physicians nor A&A shall have any
right to change such address.
Physicians and A&A agree from time to time, at their expense, to promptly
execute and deliver all further instruments and documents, and take all further
action that may be necessary, or that HMCA may reasonably request, in order to
evidence or confirm the assignment of the Receivables to HMCA, the ownership
thereof by HMCA and the right of HMCA to xxxx for and collect the Receivables.
Physicians irrevocably authorizes HMCA to notify patients and third-party
payors to make payment directly to HMCA of any Receivables, and agree that a
copy of this Agreement shall constitute sufficient authorization to any such
payors to make payment to HMCA. Physicians expressly waives any right to seek
recovery of any Receivables from a third party or patient which are paid to
HMCA.
7. INDEMNIFICATION BY HMCA
HMCA shall indemnify and hold harmless Physicians and its affiliates,
shareholders, directors, officers, employees and agents (together, the
"Indemnified Parties") from all losses, liabilities, obligations, claims,
lawsuits, judgments, costs and expenses (including reasonable attorneys fees
incurred in respect of any such claims or liability) arising from any billing or
collection practices of HMCA used in connection with the Receivables ("Claims").
In the event of any Claim with respect to which an Indemnified Party intends to
seek indemnification hereunder, the Indemnified Party shall give HMCA prompt
written notice of such Claim and HMCA shall have the right to assume the defense
of the Claim with counsel of its own choosing reasonably acceptable to the
Indemnified Party provided that such defense is conducted with diligence and
continuity and provided further the Indemnified Party shall have the right to
participate in the defense of such Claim with counsel of its choosing at its
expense. The parties shall cooperate in the defense of any such Claim and
neither HMCA nor the Indemnified Party shall have the right to settle or pay any
such Claim without the consent of the other, unless the party or parties
settling the Loss secure the release of the other parties from any liability for
the Claim.
8. RELATIONSHIP OF THE PARTIES
The relationship of the HMCA to A&A and Physicians hereunder shall be that
of independent contractors. HMCA is not and shall not hold itself out as a
partner, joint venturer or employee of A&A or Physicians.
9. HEADINGS
Paragraph headings are for convenience of reference only and shall not be
deemed to have any substantive effect.
10. PARTIES BOUND
This Agreement shall be binding not only on the parties to this Agreement
but also their respective heirs, legatees, administrators, executors,
successors, assigns, transferees and all other lawfully constituted
representatives or assigns.
11. ENTIRE AGREEMENT
This Agreement, including any exhibits or other documents referred to
herein, contains the entire agreement and understanding of the parties with
respect to the subject matter of this Agreement, and it supersedes all prior
understandings and agreements, whether written or oral, and all prior dealings
of the parties with respect to the subject matter hereof.
12. MODIFICATION AND WAIVER
(a) This Agreement may not be changed, modified or amended, except in
writing signed by the parties. Oral changes, modifications or amendments shall
not be binding.
(b) No waiver of any party's rights of this Agreement shall be enforceable
unless in writing signed by that party.
(c) No waiver of any default or breach of this Agreement shall be deemed a
continuing waiver or a waiver of any other breach or default.
13. GOVERNING LAW AND VENUE
This Agreement shall be governed by and construed in accordance with the
laws, statutes, codes, rules and regulations of the State of New York and where
applicable, Federal law. The venue for any legal action or proceeding arising
under this Agreement shall be in the State of New York in any State or Federal
court of competent jurisdiction.
14. NOTICE
(a) Any notice or other communication hereunder shall be in writing and be
sent either
(i) by registered or certified mail, postage prepaid, return receipt
requested, or
(ii) by delivery in person or by overnight courier, with receipt
acknowledged:
If to HMCA, to:
0 Xxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
If to any one or more of A&A or Physicians, to:
Xx. Xxxxxxxx Xxxxxxxx & Xx. Xxxxx Xxxxxx, Physicians, P.C.
00-00 Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
or to such other address or addresses as a party may designate by giving notice
thereof to the other parties hereto.
(b) Each notice mailed shall be deemed given on the third (3rd) business
day following the date of mailing the same, except that any notice delivered in
person or by overnight courier shall be deemed given when delivered.
15. EXECUTION AND COUNTERPARTS
This Agreement may be executed in any number of counterparts. It is not
necessary that all parties sign all or any one of the counterparts, but each
party must sign at least one (1) counterpart of this Agreement to be effective.
16. ASSIGNABILITY
No party shall assign, convey, sublet or transfer this Agreement or any of
its rights, duties, obligations, title or interest hereunder without the prior
written consent of the other parties, except that HMCA may assign its rights
hereunder without the consent of the other parties hereto.
WHEREFORE, the parties have executed this Agreement as of the date first
written above.
HEALTH MANAGEMENT CORPORAITON
OF AMERICA
By:__________________________
A&A SERVICES, INC.
By:__________________________
XX. XXXXXXXX XXXXXXXX & XX. XXXXX
XXXXXX, PHYSICIANS, P.C.
By:__________________________
State of New York)
) SS.
County of Suffolk)
On this 8th day of April, 2003, before me personally appeared XXXXX XXXXXX
and XXXXXXXX XXXXXXXX, to me known, and being duly deposed did say that they
executed this Agreement in the name and on behalf of A&A Services, Inc. and Xx.
Xxxxxxxx Xxxxxxxx & Xx. Xxxxx Xxxxxx, Physicians, P.C., being duly authorized to
do so and being the sole stockholders, directors and officers of said
corporations.
-----------------------------
Notary Public
EXHIBIT I
PLEDGE AGREEMENT
PLEDGE AGREEMENT dated as of April 8, 2003 between Xx. Xxxxx Xxxxxx
("Muraca") and Xx. Xxxxxxxx Xxxxxxxx ("Xxxxxxxx"), having an office at 00-00
Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx 00000 and Health Management Corporation of
America (the "Secured Party"), a Delaware corporation having its principal
office at 0 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxx 00000.
WITNESSETH:
WHEREAS, Xxxxxx and Marciano are indebted to the Secured Party in the
principal amount of $2,500,000, as evidenced by a promissory note (the
"Repurchase Promissory Note") dated the date hereof;
WHEREAS, the Repurchase Promissory Note was executed and delivered to the
Secured Party as partial consideration by the Buyers under a Stock Repurchase
and Settlement Agreement dated April 8, 2003 (the "Repurchase Agreement")
pursuant to which the shares of A&A Services, Inc., Xx. Xxxxxxxx Xxxxxxxx & Xx.
Xxxxx Xxxxxx, Physicians, P.C., Corona Medical Offices, P.C., Liberty Medical
Offices, P.C. and Ridgewood Medical Care, P.C. (the "Corporations") were sold to
Xxxxxx and Xxxxxxxx;
WHEREAS, Xxxxxx and Marciano are the sole stockholders of the Corporations;
WHEREAS, in order to induce the Secured Party to accept the Repurchase
Promissory Note and to secure the payment of the Repurchase Promissory Note and
any obligations arising thereunder or otherwise by Xxxxxx and Xxxxxxxx to
Secured Party under the Repurchase Agreement and any agreement, instrument or
document executed and delivered under the Repurchase Agreement (the
"Indebtedness"), Xxxxxx and Marciano have agreed to grant the Secured Party a
security interest in all of the shares of the issued and outstanding stock of
the Corporations (the "Pledged Shares").
NOW THEREFORE, in consideration of the premises, representations, covenants
and agreements contained herein, the parties hereto agree as follows:
1. Pledge and Security Interest. To secure the payment of the Indebtedness,
Xxxxxx and Xxxxxxxx hereby pledge the Pledged Shares and grant and assign to the
Secured Party a continuing security interest in the Pledged Shares. As used
herein, the term Pledged Shares shall include the Pledged Shares and the
proceeds thereof. Simultaneously herewith, Xxxxxx and Xxxxxxxx are delivering to
the Secured Party the certificates representing the Pledged Shares, with stock
powers duly executed in blank. Any dividends or distributions in cash, stock or
other property paid on the Pledged Shares, as well as any different type or
number of shares of stock into which the Pledged Shares may be changed, shall be
delivered to the Secured Party to be held hereunder to secure the payment of the
Indebtedness and shall be included within the definition of Pledged Shares. 2.
Representations, Warranties and Covenants. Xxxxxx and Xxxxxxxx represents,
warrants and covenants as follows:
x. Xxxxxx and Marciano or either of them are the owners of the Pledged
Shares, free and clear of any pledges, liens, security interests, mortgages or
other encumbrances, and Xxxxxx and Xxxxxxxx shall keep the Pledged Shares free
and clear of any pledges, liens, security interests, mortgages or other
encumbrances. The Pledged Shares constitute all of the issued and outstanding
shares of the Corporations.
x. Xxxxxx and Marciano will promptly pay any taxes and assessments levied
against the Pledged Shares, unless contested in good faith by appropriate
proceedings.
x. Xxxxxx and Xxxxxxxx shall ensure that the Corporations will not issue
any additional shares of capital stock or other securities, warrants or options,
or enter into any agreements to do so.
x. Xxxxxx and Marciano shall ensure that the Corporations will not merge or
consolidate with any other entity, liquidate or dissolve, amend their respective
certificates of incorporation or declare or make any dividend or distribution of
any kind with respect to their outstanding shares of stock.
x. Xxxxxx and Xxxxxxxx shall ensure that the Corporations will not sell or
otherwise transfer or dispose of any of their assets other than in accordance
with the applicable provisions of any agreements between the Corporations and
Secured Party.
x. Xxxxxx and Marciano will execute and deliver to the Secured Party such
financing statements and other instruments and documents as the Secured Party
may from time to time request which may be necessary to perfect the security
interest of the Secured Party granted hereby.
3. Events of Default. The happening of any of the following events shall
constitute an event of default hereunder ("Event of Default"): the occurrence of
an event of default or a default under the Repurchase Promissory Note or any
other obligation of Xxxxxx and Xxxxxxxx to the Secured Party under the
Repurchase Agreement, this Stock Pledge Agreement or any other agreement,
instrument or document executed pursuant to the Repurchase Agreement.
4. Remedies. Upon the occurrence of any such Event of Default and at any time
thereafter, the Secured Party may, without notice to Xxxxxx and Marciano,
declare all of the Indebtedness or any part thereof immediately due and payable
and shall have the remedies of a secured party under the Uniform Commercial Code
or other applicable law. The Secured Party will give Xxxxxx and Xxxxxxxx
reasonable notice of the time and place of any public sale of the Pledged Shares
or of the time after which any private sale or any other intended disposition of
the Pledged Shares is to be made. The Secured Party or any one or more of its
affiliates, if legally qualified, may purchase the Pledged Shares at any such
public or private sale. The requirements of reasonable notice shall be met if
such notice is mailed postage prepaid to the address of Xxxxxx and Marciano
shown at the beginning of this Agreement at least five (5) days before the time
of sale or disposition. Expenses of sale shall include the Secured Party's
reasonable attorney's fees and legal expenses. The Secured Party may apply the
proceeds from any sale of the Pledged Shares to any Indebtedness secured thereby
in such order and such amounts as the Secured Party in its sole discretion may
elect. Xxxxxx and Xxxxxxxx shall be liable for any deficiency remaining after
sale of the Pledged Shares and application of the proceeds to the Indebtedness
and to the expenses allowed hereunder and by applicable law.
5. Alternative Remedy. Alternatively, upon the occurrence of an Event of
Default, the Secured Party may transfer all or any part of the Pledged Shares
into its name or the name of its assignee and thereafter the Secured Party or
any such assignee may exercise all of the rights of the sole stockholder of the
Corporations of which it holds the shares, including but not limited to the
election and removal of directors or the sale of the assets of the Corporations.
Upon the taking of control of the Corporations, the Secured Party or its
assignee may enter upon the premises and take possession of and use the assets
of the Corporations to operate and conduct the business conducted by the
Corporations on said premises in the name of the Secured Party or its assignee
or in the name of the Corporations, as the Secured Party or its assignee may
elect. In such case, the net proceeds collected by the Secured Party or its
assignee, after the deduction of expenses, may be retained by the Secured Party
or its assignee and applied to any outstanding Indebtedness. In the event that
Secured Party shall elect to exercise the remedy provided in this Paragraph 5,
nothing contained herein shall obligate the Secured Party or its assignee to pay
or perform any debts or obligations of the Corporations to third parties,
although the Secured Party or its assignee may elect to do so for the account of
the Corporations. In such case, the Secured Party or its assignee shall have no
liability to the Corporations or the Corporations for payment of any expenses
incurred in connection with operating the business or for payment of any
obligations or claims believed by the Secured Party or its assignee in good
faith to be obligations of the Corporations. The election by Secured Party of
the remedy provided in this Paragraph 5 shall not preclude the Secured Party
from subsequently electing to pursue other remedies provided herein or otherwise
under other agreements or by law.
6. Power of Attorney. To enable the Secured Party to exercise its rights and
remedies hereunder, each of Xxxxxx and Marciano hereby appoints and constitutes
the Secured Party, with full power of substitution, as his true and lawful
attorney to exercise all rights and privileges with respect to the Pledged
Shares and to receive all benefits therefrom, to the same extent as Xxxxxx and
Xxxxxxxx would be entitled.
And each of Xxxxxx and Marciano does hereby ratify and confirm all that
said attorneys shall lawfully do, or cause to be done, in and about the
premises, by virtue hereof.
This power of attorney is coupled with an interest and shall be irrevocable
until such time as the Indebtedness secured by this Stock Pledge Agreement is
paid in full.
7. Governing Law and Jurisdiction. The Agreement shall be construed and enforced
in accordance with the laws of the State of New York. The Courts of the State of
New York for New York County and Suffolk County and the Federal Courts for the
Eastern and Southern Districts of the State of New York shall have exclusive
jurisdiction in any litigation relating to or arising from this Agreement.
8. Miscellaneous. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
This Agreement shall not be assignable by Xxxxxx and Xxxxxxxx without the prior
written consent of the Secured Party. The Secured Party may assign its rights
and benefits under this Agreement to any assignee, including the assignment of
its rights and interests in any Pledged Shares of a professional corporation to
a physician licensed under the laws of the State of New York. Any termination,
waiver or modification of the terms and provisions hereof shall be in writing.
Any notice required or permitted hereunder shall be deemed given if in writing
and delivered personally or sent by certified or registered mail, postage
prepaid, addressed to the party to which it is given at the address for such
party specified at the outset hereof.
9. Effectiveness. This Pledge Agreement shall not be applicable to the shares of
Corona Medical Offices, P.C., Liberty Medical Offices, P.C. or Ridgewood Medical
Care, P.C. until such time as the corporation is reinstated and all of the
issued and outstanding shares of said corporation are transferred to Xxxxxx
and/or Marciano or their permitted assignees.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement in the manner legally binding upon them as of the date first above
written.
-----------------------------
XXXXX XXXXXX, D.O.
-----------------------------
XXXXXXXX XXXXXXXX, D.O.
HEALTH MANAGEMENT CORPORATION
OF AMERICA
By: _________________________
EXHIBIT J
Leases of Real Property
Lease Date Landlord Tenant Premises
Aug. 1, 1996 Carlo Ginganelli A & A Services 00-00 Xxxxxx Xxx.
Xxxxxxxxx
Jan. 1, 1995* Xxxxx Xxxxxxxxxx Physicians 00-00 Xxxxxxx Xxx.
Woodhaven
May 3, 1994 Italo Baluluvich Physicians 000-00 Xxxxxx Xxx.
Xxxxxxxxx Xxxxxx Xxxxxx
Xxx. 00, 0000 Xxxx Xxxxx Physicians 000-00 Xxxxxxx Xxx.
Xxxxxxxx Xxxx
June 1, 2000 86-20 Owners LLC A&A Services 00-00 Xxxxxxx Xxx.
Xxxxxxxxx
(0xx Xxxxx & Basement)
Month to Month Tenancy
First Floor and Basement of 00-00 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx by
M&M Properties, LLC to A&A Services
*Lease has expired, but Landlord and Xxxxx Xxxxxx have advised HMCA that it has
been extended. HMCA has not been able to get a copy of the extension.
EXHIBIT K
Bank Accounts
All are with Chase Manhattan Bank
[Account information omitted]
XX. XXXXX XXXXXX & XX. XXXXXXXX XXXXXXXX PHYSICIANS, P.C.
A&A SERVICES, INC.
CORONA MEDICAL OFFICES, P.C.
LIBERTY MEDICAL OFFICES, P.C.
RIDGEWOOD MEDICAL CARE, P.C.
EXHIBIT L
The following items of personal property is owned by HMCA and are not
included unless the parties agree under separate agreement.
1. Copier at Woodhaven Office - Approximate $13,000 value
2. Routers for billing at Liberty and Woodhaven offices
3. Computers with printers
In addition, there is a copier at the Liberty Office which was leased by
Xxxxx Xxxxxx on behalf of A&A. The lease was not authorized and HMCA assumes no
responsibility for any past due or future payments. HMCA has delivered a copy of
the lease in its possession to the Buyers.
EXHIBIT M
Contracts
1. Physician and Physician Assistant Employment Contracts, copies supplied
under separate cover, with:
a) Xxxxxxx Xxxxxx, P.A.
b) Xxxxx Xxxxxx, D.O.
c) Memorandum increasing Xxxxxx' salary
d) Xxxxxxxxx Xxxxxxxxxx
e) Amendment to Agreement with Xxxxxxxxxx
f) Xxxxxxx X. Xxxxxxxx, M.D.
2. Agreements and Plans with Third Party Payors
Schedule provided under separate cover
Actual documents to be delivered at Closing
3. Leases: See schedule on Exhibit J.
Copies provided.
4. Lease of Copier at Liberty Office
See Exhibit L. Copy Provided.
5. Copies of Agreements with Drs. Xxxxxx and Marciano are not being provided.
EXHIBIT N
See Attached Schedule of Employees
EXHIBIT O
Litigation
1. Xxxxxxxx X. Xxxxx, Executrix of the Xxxxx X. Xxxxx, and Xxxxxxxx X. Xxxxx,
Individually, x. Xxxxxxxx & Muraca, P.C., Xxxxxxxx Xxxxxxxx, Xxxxx Xxxxxx,
Xxxxxxx Xxxxxx and Xxxxxxx X. Xxxx.
Supreme Court of the State of New York, County of Queens
Index No. 2434-01
Disposition: Active
2. Xxxxxxxx Xxxxxxxx v. Nassau County
Supreme Court of the State of New York, County of Nassau
Index No. 333247-02 Disposition: Active
3. The Dissolved Corporations were dissolved for failure to file New York
State franchise tax returns or pay the franchise taxes.
4. Investigators have asked questions of physicians on "superbills"
(approximately 1997 - 1998). No known disposition.
5. Fire Xxxxxxxx and Environmental Violation tickets issued to Liberty and M&M
Properties Inc. As per advice of Xxxx Xxxxxx, Esq., these matters as they
relate to Liberty have been resolved.
6. Fine against M&M Properties relating to construction, including removal of
walls between 86-14 and 00-00 Xxxxxxx Xxxxxx. Resolution unknown.
7. Xxxx Xxxxxxxx v. Xxxxx Xxxxxx
Supreme Court of the State of New York, County of Nassau Index No.
013860-87
Disposition: Settled Before Trial (2/16/90)
8. Lands End Homeowner's Assoc. v. Xxxxxxxx Xxxxxxxx Supreme Court of the
State of New York, County of Nassau Index No. 019574-97 Disposition:
Disposed (2/15/00)
9. Xxxxxxxx Xxxxxxxx v. County of Nassau
Supreme Court of the State of New York, County of Nassau Index No.
326912-97
Disposition: Settlement Pre Note of Issue (2/5/98)
10. M. Xxxxxxx Xxxxxxxx v. Xxxxxxxx Xxxxxxxx
Supreme Court of the State of New York, County of Nassau Index No.
003206-98
Disposition: Settlement Pre Note of Issue (8/18/99)
11. Xxxxxx Xxxxxxxxx v. A&A Services, Inc.
New York State Workers' Compensation Board Index No. 09838855-00
Disposition: Dismissed w/Prejudice
12. Antonio M/O Telo v. Xx. Xxxxx Xxxxxx, et al
Supreme Court of the State of New York, County of Nassau Index No.
011963-00
Disposition: Disposed (7/26/00)
13. Xxxxxxx Xxxxxx v. Health Care Management Corporation of America, Xx.
Xxxxxxxx Xxxxxxxx and Xx. Xxxxx Xxxxxx, Physicians, P.C., Xxxxxxxx
Xxxxxxxx, individually and Xxxxx Xxxxxx individually
Supreme Court of the State of New York, County of Bronx Index No. 17095-02
Disposition: Dismissed w/Prejudice
EXHIBIT P
INSURANCE SCHEDULE
1. CNA Renewed Business Account Package Policy
Policy No. 2064548784
Policy Period: 8/16/2002 - 8/16/2003
Coverage Provided by
Transcontinental Insurance Co.
XXX Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Copy previously provided
2. Workers Compensation and Employers Liability Insurance Policy
Policy No. 3498820
Policy Period 9/28/02 - 9/28/03
Coverage provided by Graphic Arts Mutual Insurance Co.
Copy previously provided
3. Workers Compensation Board Disability Benefits Law
Policy No. 1616494-019
Payable quarterly in arrears; paid through March 31, 2003
Copy previously provided and updated copy provide herewith.
4. Malpractice Policies
a) Xxxxxxxx Xxxxxxxx - Physicians Reciprocal Insurers
Policy No. 00000-00-00
Family Practice
Period of Coverage: 2/13/03 - 5/12/03
b) Xxxxx Xxxxxx - Physicians Reciprocal Insurers
Policy No. 00000-00-00
Family Practice
Period of Coverage: 2/11/03 - 5/11/03
c) Xxxxxxxxx Xxxxxxxxxx - Physicians Reciprocal Insurers
Policy No. 00000-00-00
Family Practice
Period of Coverage: 3/22/03 - 6/22/03
d) Xxxxx Xxxxxx - Physicians Reciprocal Insurers
Policy No. 00000-00-00
Family Practice
Period of Coverage: 1/10/03 - 4/10/03
e) Xxxxxxxx Xxxxxxxx - Physicians Reciprocal Insurers
Policy No. 00000-00-00
Family Practice
Period of Coverage: 3/8/03 - 6/8/03
f) Xxxxxxx Xxxxxx - Physicians Reciprocal Insurers
Policy No. 00000-00-00
Physician's Assistant
Period of Coverage: 7/8/02 - 7/02/03
Copies of the Malpractice Insurance Policies are not in HMCA's possession;
Policies are in possession of professionals; HMCA pays bills directly, except in
the case of Xxxxxxx Xxxxxx, whom HMCA reimburses.
