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EXHIBIT 2.01
SECURITIES PURCHASE AGREEMENT
BY AND AMONG
NEOFORMA GAR, INC.
AND
NEOFORMA, INC.
AND
GENERAL ASSET RECOVERY, LLC, XXXX XXXXX AND XXXX XXXXX
DATED AS OF JULY 16TH, 1999
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SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement entered into as of July 16th, 1999
by and among Neoforma GAR, Inc., a Delaware corporation (the "ACQUISITION SUB")
and Neoforma, Inc., a Delaware corporation ("NEOFORMA"), on the one hand, and
General Asset Recovery, LLC, an Illinois limited liability company ("GAR"), Xxxx
Xxxxx ("XXXXX") and Xxxx Xxxxx ("FTIVIN"), on the other.
RECITALS
Xxxxx and FTivin (collectively, the "MEMBERS") are the only members of
GAR and hold all of the Member Interests (defined in Section 2.2 below) in GAR.
The Members desire to sell to the Acquisition Sub, all of the Member
Interests in GAR held by them, and the Acquisition Sub desires to purchase such
Member Interests from the Members (the "SECURITIES PURCHASE"). Xxxxx desires to
assist Neoforma and the Acquisition Sub in operating the business operated by
GAR prior to the Closing Date, with the exception of the industrial auction
business (the "BUSINESS"). The Business shall include all assets used in the
medical equipment auction business of GAR but shall exclude the Excluded Assets
referred to in Section 5.9 below. It is intended by the parties that these
transactions be carried out all upon the terms and conditions set forth in this
Agreement and, in furtherance thereof, each of such parties have approved the
Securities Purchase and entered into this Agreement.
GAR, Xxxxx and Neoforma desire to make certain representations and
warranties and other agreements in connection with the Securities Purchase,
which are set forth in this Agreement.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
intending to be legally bound hereby the parties agree as follows:
ARTICLE I
PURCHASE
1.1 PURCHASE OF SECURITIES. Upon the terms and subject to the
conditions contained in this Agreement, at the Closing, the Members shall sell,
assign, transfer and convey to the Acquisition Sub, and the Acquisition Sub
shall purchase, acquire and accept from the Members, all of the issued and
outstanding Member Interests in GAR held by them, which constitute all of the
issued and outstanding Member Interests of GAR (the "PURCHASED SECURITIES").
1.2 PURCHASE PRICE. The purchase price for the Purchased Securities
(the "PURCHASE PRICE") shall be Nine Million Five Hundred Thousand Dollars
($9,500,000) which amount shall be paid as follows:
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(a) Cash Payment. One Million Seven Hundred Thousand Dollars
($1,700,000) shall be paid the Acquisition Sub to Xxxxx and FTivin on the
Closing Date (defined below) in immediately available funds, provided however
that in the event the amount of GAR's aggregate accounts payable and
indebtedness shall exceed the amount of One Hundred Thousand Dollars ($100,000)
on the Closing Date, the amount of such cash payment payable to Xxxxx shall be
reduced by the amount of such excess.
(b) Promissory Note. Seven Million Eight Hundred Thousand Dollars
($7,800,000) shall be paid to Xxxxx in the form of a promissory note,
substantially in the form attached as Exhibit A hereto, from the Acquisition Sub
to Xxxxx in such principal amount (the "NOTE"), bearing interest at a rate of
seven percent (7%) per annum, which note shall be guaranteed by Neoforma and be
repayable as follows:
(i) During the first twelve months following the Closing Date,
the Acquisition Sub shall make payments beginning on the first day of the month
following the Closing Date and on the first day of each month thereafter in an
amount equal to the amount of interest accrued on the outstanding balance under
the Note during the preceding month plus a principal payment of One Hundred
Eighty Three Thousand Three Hundred Thirty Three Dollars ($183,333); and
(ii) During the thirteenth through the forty-eighth month
following the Closing Date, the Acquisition Sub shall make payments on the first
day of each month in an amount equal to the amount of interest accrued on the
outstanding balance under the Note during the preceding month plus a principal
payment of One Hundred Thirty Seven Thousand Five Hundred Dollars ($137,500).
(iii) During the forty-ninth through the sixtieth month
following the Closing Date, the Acquisition Sub shall make payments on the first
day of each month in an amount equal to the amount of interest accrued on the
outstanding balance under the Note during the preceding month plus a principal
payment of Fifty Four Thousand One Hundred Sixty Seven Dollars ($54,167).
The Note may be prepaid without penalty and shall not be convertible
into shares of Neoforma or the Acquisition Sub. The Note shall be secured by a
first priority security interest in all assets of the Acquisition Sub. Payment
of the Note shall be guaranteed by Neoforma pursuant to a guaranty,
substantially in the form attached as Exhibit B hereto. The Note's terms shall
provide for its immediately becoming due and payable upon the occurrence of one
of the following events: (i) the dissolution or termination of existence of
Neoforma or the Acquisition Sub; or (ii) the making of an assignment for the
benefit of creditors, insolvency, appointment of a receiver (not discharged
within sixty (60) days) of any part of the property of, or the filing of a
petition in bankruptcy, or the commencement of any proceedings under any
bankruptcy or insolvency law or any law relating to the relief of debtors,
readjustment or indebtedness, reorganization, composition or extension, by or
(if not discharged within sixty (60) days) against, Neoforma or the Acquisition
Sub. In the event of the termination of the Employment Agreement (as defined in
Section 5.7 hereof) by the Acquisition Sub or Neoforma without cause, an amount
equal to fifty percent (50%) of the unpaid portion of the Note shall become
immediately payable,
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with the balance of the Note continuing to be payable in the same manner and
over the same time period over the balance of the term of the Note, except that
each monthly principal payment shall be reduced by fifty percent (50%).
1.3 CLOSING. Unless this Agreement is earlier terminated pursuant to
Section 8.1, the closing of the Acquisition (the "CLOSING") will take place as
promptly as practicable, but no later than five (5) business days, following
satisfaction or waiver of the conditions set forth in Article VI, at a location
mutually agreed upon by Neoforma and GAR, unless another place or time is agreed
to by Neoforma and GAR. The date upon which the Closing actually occurs is
herein referred to as the "CLOSING DATE." The parties currently intend that the
Closing Date will occur on or before to September 17, 1999.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF GAR
GAR and Xxxxx hereby jointly and severally represent and warrant to
Neoforma, subject to such exceptions as are specifically disclosed in any
Schedule to this Agreement supplied by GAR or Xxxxx to Neoforma (the "GAR
SCHEDULES") and dated as of the date hereof, as follows:
2.1 ORGANIZATION OF GAR. GAR is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Illinois. GAR also maintains an office in the State of North Carolina. GAR has
the power to own its properties and to carry on its business as now being
conducted. GAR is not qualified as a foreign limited liability company in any
jurisdiction. To the best of Tivin's or GAR's knowledge, GAR is duly qualified
to do business in each jurisdiction in which it operates and in which the
failure to qualify as a foreign limited liability company would have a material
adverse effect on the business, assets (including intangible assets), financial
condition or results of operations of GAR (hereinafter referred to as a "GAR
MATERIAL ADVERSE EFFECT"). GAR has delivered a true and correct copy of its
Organizational Documents, each as amended to date, to Neoforma.
2.2 GAR CAPITAL STRUCTURE.
(a) The authorized capitalization of GAR consists of member
interests issued and outstanding to Xxxxx and FTivin (the "MEMBER INTERESTS"),
which at the Closing shall be conveyed to the Acquisition Sub, free and clear
from any liens or encumbrances. Xxxxx and FTivin shall be permitted to clear any
liens or encumbrances against the Member Interests at the Closing by their
directing the Acquisition Sub to pay a portion of the cash portion of the
Purchase Price to any party holding a lien against or pledge of any Member
Interest. All of the issued and outstanding Member Interests are owned either by
Xxxxx or FTivin. GAR does not have any other class or category of equity
security authorized or outstanding. All of the outstanding Member Interests are
duly authorized, validly issued, fully paid and non-assessable and not subject
to preemptive rights created by statute, any Operating Agreement of General
Asset Recovery, LLC (as in effect, including any amendments or restatements) and
the Articles of Organization (together, the "ORGANIZATIONAL DOCUMENTS") of GAR
or any agreement to which GAR is a party or by which it is bound. All of the
Member Interests have been issued in compliance with the terms of GAR's
Organizational Documents. Upon the transfer of all
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Member Interests owned by Xxxxx and FTivin to the Acquisition Sub, the
Acquisition will have full ownership of all outstanding equity interests in GAR.
(b) There are no options, warrants, calls, rights, commitments or
agreements of any character, written or oral, to which GAR is a party or by
which it is bound obligating GAR to issue, deliver, sell, repurchase or redeem,
or cause to be issued, delivered, sold, repurchased or redeemed, any ownership
interests of GAR (each, a "GAR MEMBER INTEREST EQUIVALENT") or obligating GAR to
grant, extend, accelerate the vesting of, change the price of, otherwise amend
or enter into any such GAR Member Interest Equivalent.
2.3 SUBSIDIARIES. Except as set forth on Schedule 2.3, GAR does not
have and has never had any subsidiaries or affiliated organizations and does not
otherwise own and has never otherwise owned any shares of capital stock or any
interest in, or control, directly or indirectly, any other corporation,
partnership, limited liability, company, association, joint venture or other
business entity. The status with the regard to the existence as of the Closing
Date of each such subsidiary or affiliated organization is set forth on Schedule
2.3.
2.4 AUTHORITY. GAR and Xxxxx have all requisite power and authority to
enter into this Agreement and to consummate the transactions contemplated
hereby. The vote required of GAR's Members to duly approve the Securities
Purchase and this Agreement is a Majority in Interest of the Members (as defined
in the Organizational Documents). The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of GAR. This Agreement has been
duly executed and delivered by GAR and constitutes the valid and binding
obligation of GAR, enforceable in accordance with its terms. The execution and
delivery of this Agreement by GAR and Xxxxx does not, and, as of the Closing,
the consummation of the transactions contemplated hereby (including the
Securities Purchase) will not, conflict with, or result in any violation of, or
default under (with or without notice or lapse of time, or both), or give rise
to a right of termination, cancellation or acceleration of any obligation or
loss of any benefit under (any such event, a "GAR CONFLICT") (i) any provision
of the Organizational Documents of GAR, or (ii) any mortgage, indenture, lease,
contract or other agreement or instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to GAR or its properties or assets. No consent, waiver, approval,
order or authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other federal, state, county,
local or foreign governmental authority, instrumentality, agency or commission
("GOVERNMENTAL ENTITY") or any third party (so as not to trigger any GAR
Conflict) is required by or with respect to GAR in connection with the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby, except for (i) such consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws, and (ii) such other consents,
waivers, authorizations, filings, approvals and registrations as are set forth
on Schedule 2.4.
2.5 FINANCIAL STATEMENTS. Schedule 2.5 sets forth GAR's unaudited
balance sheet as of December 31, 1998 and the related unaudited statement of
income and cash flow for the period from inception to December 31, 1998 (the
"GAR 1998 FINANCIALS") and GAR's unaudited balance sheet as of May 31, 1999 and
the related unaudited statements of income and
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cash flow for the period then ended (the "GAR UNAUDITED FINANCIALS")
(collectively, such financial statements are sometimes referred to herein as
"GAR FINANCIAL STATEMENTS"). The GAR 1998 Financials and GAR Unaudited
Financials present fairly the financial condition, operating results and cash
flows of GAR as of the dates and during the periods indicated therein, subject
in the case of GAR Unaudited Financials, to normal year-end adjustments, which
will not be material in amount or significance. GAR's unaudited balance sheet
dated as of May 31, 1999 shall be referred to as the "GAR CURRENT BALANCE
SHEET". GAR has no reason to believe that any of its accounts receivable are not
fully collectible. Since December 31, 1998, GAR has not changed its methodology
for valuation of accounts receivable.
2.6 NO UNDISCLOSED LIABILITIES. Except as set forth in Schedule 2.6,
GAR does not have any liability, indebtedness, obligation, expense, claim,
deficiency, guaranty or endorsement of any type, whether accrued, absolute,
contingent, matured, unmatured or other (whether or not required to be reflected
in financial statements in accordance with generally accepted accounting
principles), which individually or in the aggregate, (i) has not been reflected
in the GAR Current Balance Sheet, or (ii) has not arisen in the ordinary course
of GAR's business since the date of the GAR Current Balance Sheet, consistent
with past practices.
2.7 NO CHANGES. Except as set forth in Schedule 2.7, since the date of
the GAR Current Balance Sheet, there has not been, occurred or arisen any:
(a) transaction by GAR except in the ordinary course of business as
conducted as of the date of the GAR Current Balance Sheet and consistent with
past practices;
(b) amendments or changes to the Organizational Documents of GAR;
(c) capital expenditure or commitment by GAR, either individually
or in the aggregate, exceeding $5,000;
(d) destruction of, damage to or loss of any material assets,
business or customer of GAR (whether or not covered by insurance);
(e) labor trouble or claim of wrongful discharge or other unlawful
labor practice or action;
(f) change in accounting methods or practices (including any change
in depreciation or amortization policies or rates) by GAR;
(g) revaluation by GAR of any of its assets;
(h) declaration, setting aside or payment of a dividend or other
distribution with respect to any units of GAR, or any direct or indirect
redemption, purchase or other acquisition by GAR of any of its units;
(i) increase in the salary or other compensation payable or to
become payable to any of its officers, directors, employees or advisors, or the
declaration, payment or
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commitment or obligation of any kind for the payment of a bonus or other
additional salary or compensation to any such person except as otherwise
contemplated by this Agreement;
(j) sale, lease, license or other disposition of any of the assets
or properties of GAR, except in the ordinary course of business as conducted on
that date and consistent with past practices;
(k) any Lien placed on any of GAR's assets which remains in
existence on the date hereof and which has not been disclosed in writing to
Neoforma;
(l) amendment or termination of any material contract, agreement or
license to which GAR is a party or by which it is bound;
(m) loan by GAR to any person or entity, the incurrance by GAR of
any indebtedness, the guaranty by GAR of any indebtedness, issuance or sale of
any debt securities of GAR or the guaranty of any debt securities of others,
except for advances to employees for travel and business expenses in the
ordinary course of business, consistent with past practices;
(n) waiver or release of any right or claim of GAR, including any
write-off or other compromise of any account receivable of GAR;
(o) any contingent liabilities incurred by GAR with respect to the
obligations of any other person that would be assumed hereunder;
(p) commencement or notice or threat of commencement of any lawsuit
or proceeding against or investigation of GAR or its affairs;
(q) notice of any claim of ownership by a third party of GAR's
Intellectual Property (as defined in Section 2.11 below) or of infringement by
GAR of any third party's Intellectual Property rights;
(r) issuance or sale by GAR of any of its Member Interests, or
securities exchangeable, convertible or exercisable therefor, or of any other of
its securities;
(s) change in pricing or royalties set or charged by GAR to its
customers or licensees or in pricing or royalties set or charged by persons who
have licensed Intellectual Property to GAR;
(t) event or condition of any character that has or could be
reasonably expected to have a GAR Material Adverse Effect on GAR;
(u) any postponement or delay in payment of any accounts payable or
other liabilities of GAR; or
(v) negotiation or agreement by GAR or any officer or employees
thereof to do any of the things described in the preceding clauses (a) through
(u) (other than negotiations
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with Neoforma and its representatives regarding the transactions contemplated by
this Agreement).
2.8 TAX AND OTHER RETURNS AND REPORTS.
(a) Definition of Taxes. For the purposes of this Agreement, "TAX"
or, collectively, "TAXES", means any and all federal, state, local and foreign
taxes, assessments and other governmental charges, duties, impositions and
liabilities, including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem, transfer,
franchise, withholding, payroll, recapture, employment, excise and property
taxes, together with all interest, penalties and additions imposed with respect
to such amounts and any obligations under any agreements or arrangements with
any other person with respect to such amounts and including any liability for
taxes of a predecessor entity.
(b) Tax Returns and Audits. Except as set forth in Schedule 2.8:
(i) GAR as of the Closing will have prepared and filed all
required federal, state, local and foreign returns, estimates, information
statements and reports ("RETURNS") relating to any and all Taxes concerning or
attributable to GAR or its operations and such Returns are true and correct and
have been completed in accordance with applicable law.
(ii) As of the Closing, GAR (A) will have paid or accrued all
Taxes it is required to pay or accrue, and (B) will have withheld with respect
to its employees all federal and state income taxes, FICA, FUTA and other Taxes
required to be withheld.
(iii) GAR has not been delinquent in the payment of any Tax
nor is there any Tax deficiency outstanding, proposed or assessed against GAR,
nor has GAR executed any waiver of any statute of limitations on or extending
the period for the assessment or collection of any Tax.
(iv) No audit or other examination of any Return of GAR is
currently in progress, nor has GAR been notified of any request for such an
audit or other examination.
(v) GAR does not have any liabilities for unpaid federal,
state, local and foreign Taxes which have not been accrued or reserved against
on GAR Current Balance Sheet, whether asserted or unasserted, contingent or
otherwise, and Xxxxx and GAR have no knowledge of any basis for the assertion of
any such liability attributable to GAR, its assets or operations.
(vi) GAR has made available to Neoforma copies of all federal
and state income and all state sales and use Tax Returns for all periods since
the date of GAR's organization.
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(vii) There are (and as of immediately following the Effective
Date there will be) no liens, pledges, charges, claims, security interests or
other encumbrances of any sort ("LIENS") on the assets of GAR relating to or
attributable to Taxes.
(viii) Xxxxx and GAR have no knowledge of any basis for the
assertion of any claim relating or attributable to Taxes which, if adversely
determined, would result in any Lien on the assets of GAR.
(ix) None of GAR's assets are treated as "tax-exempt use
property" within the meaning of Section 168(h) of the Code.
(x) As of the Closing, there will not be any contract,
agreement, plan or arrangement, including but not limited to the provisions of
this Agreement, covering any employee or former employee of GAR that,
individually or collectively, could give rise to the payment of any amount that
would not be deductible pursuant to Section 280G or 162 of the Code.
(xi) GAR has not filed any consent agreement under Section
341(f) of the Code or agreed to have Section 341(f)(2) of the Code apply to any
disposition of a subsection (f) asset (as defined in Section 341(f)(4) of the
Code) owned by GAR.
(xii) GAR is not a party to a tax sharing or allocation
agreement nor does GAR owe any amount under any such agreement.
(xiii) GAR is not, and has not been at any time, a "United
States real property holding corporation" within the meaning of Section
897(c)(2) of the Code.
(xiv) GAR's tax basis in its assets for purposes of
determining its future amortization, depreciation and other federal income tax
deductions is accurately reflected on GAR's tax books and records.
2.9 RESTRICTIONS ON BUSINESS ACTIVITIES. Except as disclosed in
Schedule 2.9 hereto, there is no agreement (noncompete or otherwise),
commitment, judgment, injunction, order or decree to which GAR is a party or
otherwise binding upon GAR which has or reasonably could be expected to have the
effect of prohibiting or impairing its ability to operate the Business after the
Closing Date, any acquisition of property (tangible or intangible) by GAR or the
conduct of the Business. Without limiting the foregoing, GAR has not entered
into any agreement under which GAR is restricted from selling, licensing or
otherwise distributing any of its products to any class of customers, in any
geographic area, during any period of time or in any segment of the market that
would be applicable to the Business after the Closing Date.
2.10 TITLE TO PROPERTIES; ABSENCE OF LIENS AND ENCUMBRANCES.
(a) GAR owns no real property, nor has it ever owned any real
property. Schedule 2.10(a) sets forth a list of all real property currently, or
at any time in the past, leased by GAR, the name of the lessor, the date of the
lease and each amendment thereto and, with
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respect to any current lease, the aggregate annual rental and/or other fees
payable under any such lease and any security interest in GAR's assets created
by such lease. All such current leases are in full force and effect, are valid
and effective in accordance with their respective terms, and there is not, under
any of such leases, any existing default or event of default (or event which
with notice or lapse of time, or both, would constitute a default). All such
current leases will remain in full force and effect following the Closing Date.
(b) GAR has good and valid title to, or, in the case of leased
properties and assets, valid leasehold interests in, all of its assets, real,
personal and mixed, used or held for use in the Business, free and clear of any
Liens (as defined in Section 2.8(b)(vii)), except as reflected in GAR Financial
Statements or in Schedule 2.10(b) and except for liens for taxes not yet due and
payable and such imperfections of title and encumbrances, if any, which are not
material in character, amount or extent, and which do not materially detract
from the value, or materially interfere with the present use, of the property
subject thereto or affected thereby.
2.11 INTELLECTUAL PROPERTY.
(a) To the best of its knowledge and the knowledge of Tivin, GAR
owns, or is licensed or otherwise possesses legally enforceable rights to use,
all patents, trademarks, trade names, service marks, copyrights, and any
applications therefor, maskworks, net lists, schematics, technology, know-how,
computer software programs or applications (in both source code and object code
form), and tangible or intangible proprietary information or material that are
used in the Business as currently conducted and as proposed to be conducted by
GAR (the "GAR INTELLECTUAL PROPERTY RIGHTS"). Neither GAR or Xxxxx have any
knowledge, nor have they received any written notice, of any violation of any of
the GAR Intellectual Property Rights upon the rights of any other party.
Schedule 2.11(a) sets forth a complete list of all patents, registered and
material unregistered trademarks and service marks, registered copyrights and
trade names, and any applications therefor, included in GAR Intellectual
Property Rights, and specifies, where applicable, the jurisdictions in which
each such GAR Intellectual Property Right has been issued or registered or in
which an application for such issuance and registration has been filed,
including the respective registration or application numbers and the names of
all registered owners.
(b) Schedule 2.11(b) sets forth a complete list of all licenses,
sublicenses and other agreements as to which GAR is a party and pursuant to
which GAR or any other person is authorized to use any GAR Intellectual Property
or trade secrets of GAR, and includes the identity of all parties thereto, a
description of the nature and subject agreement substantially in GAR's standard
forms.
2.12 AGREEMENTS, CONTRACTS AND COMMITMENTS. Except as set forth on
Schedule 2.12, GAR does not have, is not a party to, nor is it bound by, and
Neoforma will not be bound, by virtue of the transactions contemplated hereby,
by:
(a) any consulting or sales agreement, contract or commitment
under which any firm or other organization provides services to GAR,
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(b) any operating agreement or other agreement relating to the
operations of any business organization, including GAR,
(c) any fidelity or surety bond or completion bond,
(d) any lease of personal property having a value individually in
excess of $15,000,
(e) any agreement of indemnification or guaranty,
(f) any agreement, contract or commitment containing any covenant
limiting the freedom of GAR to engage in any line of business or to compete with
any person,
(g) any agreement, contract or commitment relating to capital
expenditures and involving future payments in excess of $15,000,
(h) any agreement, contract or commitment relating to the
disposition or acquisition of assets or any interest in any business enterprise
outside the ordinary course of GAR's business,
(i) any mortgages, indentures, loans or credit agreements,
security agreements or other agreements or instruments relating to the borrowing
of money or extension of credit, including guaranties referred to in clause (i)
hereof,
(j) any purchase order or contract for the purchase of raw
materials involving $15,000 or more,
(k) any construction contracts,
(l) any distribution, joint marketing or development agreement,
(m) any agreement pursuant to which GAR has granted or may grant
in the future, to any party, a source-code license or option or other right to
use or acquire source-code, or
(n) any other agreement, contract or commitment that involves
$15,000 or more or is not cancelable without penalty within thirty (30) days.
Except for such alleged breaches, violations and defaults, and events
that would constitute a breach, violation or default with the lapse of time,
giving of notice, or both, as are all noted in Schedule 2.11(b) or Schedule
2.12, as appropriate, GAR has not breached, violated or defaulted under, or
received notice that it has breached, violated or defaulted under, any of the
terms or conditions of any agreement, contract or commitment required to be set
forth on Schedule 2.11(b) or Schedule 2.12 (any such agreement, contract or
commitment, a "GAR CONTRACT"). Each GAR Contract is in full force and effect
and, except as otherwise disclosed in
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Schedule 2.11(b) or Schedule 2.12, is not subject to any default thereunder of
which Xxxxx or GAR has knowledge by any party obligated to GAR pursuant thereto.
2.13 INTERESTED PARTY TRANSACTIONS. Except as set forth on Schedule
2.13, no officer, director or Member of GAR (nor any ancestor, sibling,
descendant or spouse of any of such persons, or any trust, partnership or
corporation in which any of such persons has or has had an interest), has or has
had, directly or indirectly, (i) an economic interest in any entity which
furnished or sold, or furnishes or sells, services or products that GAR
furnishes or sells, or proposes to furnish or sell, (ii) an economic interest in
any entity that purchases from or sells or furnishes to GAR any goods or
services or (iii) a beneficial interest in any contract or agreement set forth
in Schedule 2.11(b) or Schedule 2.12; provided, that ownership of no more than
one percent (1%) of the outstanding voting stock of a publicly traded
corporation shall not be deemed an "economic interest in any entity" for
purposes of this Section 2.13. Except as disclosed on Schedule 2.13, all
interested party transactions were made on terms no more favorable to such
interested party than could have been obtained on an arm's-length basis.
2.14 COMPLIANCE WITH LAWS. To Tivin's or GAR's knowledge, GAR has
complied in all material respects with, is not in material violation of, and has
not received any notices of violation with respect to, any foreign, federal,
state or local statute, law or regulation. GAR holds all permits, licenses,
variances, exemptions, authorizations, orders and approvals of all Governmental
Agencies (as hereinafter defined, with each being a "PERMIT") that are required
for it to own, lease or operate its properties and assets and to carry on its
business as presently conducted, which Permits are listed on Schedule 2.14
hereto. There is presently no default under any such Permit. GAR is in
compliance in all material respects with (a) all applicable statutes, laws,
ordinances, rules, orders and regulations of any Governmental Agency, and (b)
their own respective internal policies and procedures. Xxxxx holds all Permits
required for the conduct of auctions in each jurisdiction in which the failure
to hold any such Permit would result in a GAR Material Adverse Effect.
Neither Xxxxx nor GAR has received any notification or communication
from any Governmental Agency which has not been fully and finally resolved (a)
asserting that either Xxxxx or GAR is not in substantial compliance with any of
the statutes, regulations, ordinances or guidelines which such Governmental
Agency enforces or administers, or with the internal policies and procedures of
GAR, (b) threatening to revoke any material Permit, (c) requiring or threatening
to require Xxxxx or GAR, or indicating that it may be required, to enter into a
cease and desist order, agreement or memorandum of understanding or any other
agreement, or (d) directing, restricting or limiting, or purporting to direct,
restrict or limit, in any manner the operations of Xxxxx or GAR. Neither Xxxxx
nor GAR has received, consented to or entered into, or is subject to, any
agreement with a Governmental Agency, nor has it been advised by any
Governmental Agency that such Governmental Agency is contemplating issuing or
requesting (or is considering the appropriateness of issuing or requesting) any
such agreement. The term "Governmental Agency" shall mean shall mean any court,
administrative agency or commission, or other governmental authority or
instrumentality, domestic or foreign, including, but not limited to, the United
States Food and Drug Administration.
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2.15 LITIGATION. Except as set forth in Schedule 2.15, there is no
action, suit or proceeding of any nature pending or threatened against GAR, its
properties or any of its officers or directors, in their respective capacities
as such. Except as set forth in Schedule 2.15, there is no investigation pending
or threatened against GAR, its properties or any of its officers or directors
(in their respective capacities as such) by or before any governmental entity.
Schedule 2.15 sets forth, with respect to any pending or threatened action,
suit, proceeding or investigation, the forum, the parties thereto, the subject
matter thereof and the amount of damages claimed or other remedy requested. No
Governmental Agency has at any time challenged or questioned the legal right of
GAR to manufacture, offer or sell any of its products in the present manner or
style thereof.
2.16 INSURANCE. Set forth on Schedule 2.16 is a list of all of GAR's
insurance policies and fidelity bonds. With respect to the insurance policies
and fidelity bonds covering the assets, business, equipment, properties,
operations, employees, officers and directors of GAR, there is no claim by GAR
pending under any of such policies or bonds as to which coverage has been
questioned, denied or disputed by the underwriters of such policies or bonds.
All premiums due and payable under all such policies and bonds have been paid
and GAR is otherwise in material compliance with the terms of such policies and
bonds (or other policies and bonds providing substantially similar insurance
coverage). Xxxxx or GAR has no knowledge of any threatened termination of, or
material premium increase with respect to, any of such policies.
2.17 MINUTE BOOKS. The minute books of GAR, if any, have been made
available to counsel for Neoforma, are the only minute books of GAR and, to the
extent they exist, contain a reasonably accurate summary of all meetings of
directors (or committees thereof) and Members or actions by written consent
since the time of organization of GAR.
2.18 ENVIRONMENTAL MATTERS.
(a) Hazardous Material. GAR has not operated any underground
storage tanks, and has no knowledge of the existence, at any time, of any
underground storage tank (or related piping or pumps), at any property that GAR
has at any time owned, operated, occupied or leased. GAR has not released any
amount of any substance that has been designated by any Governmental Entity or
by applicable federal, state or local law to be radioactive, toxic, hazardous or
otherwise a danger to health or the environment, including, without limitation,
PCBs, asbestos, oil and petroleum products, urea-formaldehyde and all substances
listed as a "hazardous substance," "hazardous waste," "hazardous material" or
"toxic substance" or words of similar import, under any law, including but not
limited to, the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended; the Resource Conservation and Recovery Act of
1976, as amended; the Federal Water Pollution Control Act, as amended; the Clean
Air Act, as amended, and the regulations promulgated pursuant to said laws, (a
"HAZARDOUS MATERIAL"). No Hazardous Materials are present as a result of the
actions or omissions of GAR, or, to GAR's knowledge, as a result of any actions
of any third party or otherwise, in, on or under any property, including the
land and the improvements, ground water and surface water thereof, that GAR has
at any time owned, operated, occupied or leased.
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(b) Hazardous Materials Activities. GAR has not transported,
stored, used, manufactured, disposed of, released or exposed its employees or
others to Hazardous Materials in violation of any law in effect on or before the
Closing Date, nor has GAR disposed of, transported, sold, or manufactured any
product containing a Hazardous Material (any or all of the foregoing being
collectively referred to as "HAZARDOUS MATERIALS ACTIVITIES") in violation of
any rule, regulation, treaty or statute promulgated by any Governmental Entity
in effect prior to or as of the date hereof to prohibit, regulate or control
Hazardous Materials or any Hazardous Material Activity.
(c) Permits. To GAR's knowledge, it currently holds all
environmental approvals, permits, licenses, clearances and consents (the
"ENVIRONMENTAL PERMITS") necessary for the conduct of GAR's Hazardous Material
Activities and other businesses of GAR as such activities and businesses are
currently being conducted.
(d) Environmental Liabilities. No action, proceeding, revocation
proceeding, amendment, procedure, writ, injunction or claim is pending, or to
GAR's knowledge, threatened concerning any Environmental Permit, Hazardous
Material or any Hazardous Materials Activity of GAR. GAR is not aware of any
fact or circumstance which could involve GAR in any environmental litigation or
impose upon GAR any environmental liability.
(e) No Violation. The Business includes the temporary occupancy of
hospitals and other medical facilities by GAR and Xxxxx for the purpose of
auctioning or otherwise liquidating obsolete or excess medical equipment. Such
medical facilities may have had storage tanks, piping or pumps which contained
Hazardous or Toxic Materials located on them. This fact and/or knowledge of the
same by GAR or Xxxxx shall not constitute a breach of any representation,
warranty or other agreement contained herein.
2.19 BROKERS' AND FINDERS' FEES; THIRD PARTY EXPENSES. Except as set
forth on Schedule 2.19, GAR has not incurred, nor will it incur, directly or
indirectly, any liability for brokerage or finders' fees, investment banking
fees, consulting fees or agents' commissions or any similar charges in
connection with this Agreement or any transaction contemplated hereby. Schedule
2.19 sets forth the principal terms and conditions of any agreement, written or
oral, with respect to such fees. Schedule 2.19 also sets forth GAR's current
reasonable estimate of all outside expenses expected to be incurred by GAR in
connection with the negotiation and effectuation of the terms and conditions of
this Agreement and the transactions contemplated hereby.
2.20 EMPLOYEE MATTERS AND BENEFIT PLANS.
(a) Definitions. For purposes of this section, the following terms
shall have the meanings set forth below:
(i) "GAR AFFILIATE" shall mean any other person or entity
under common control with GAR within the meaning of Section 414(b), (c), (m) or
(o) of the Code and the regulations thereunder;
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(ii) "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended;
(iii) "GAR EMPLOYEE PLAN" shall refer to any collective
bargaining agreement or any plan, program, policy, practice, contract, agreement
or other arrangement providing for compensation, performance awards, bonus,
profit sharing, stock options, stock appreciation rights, unit or unit related
awards, severance, termination pay, retirement benefits, pension, fringe
benefits or other employee benefits or remuneration of any kind, whether formal
or informal, funded or unfunded and whether or not legally binding, including
without limitation, each "employee benefit plan", within the meaning of Section
3(3) of ERISA which is or has been maintained, contributed to, or required to be
contributed to, by GAR or any GAR Affiliate for the benefit of any "GAR
Employee" (as defined below), and pursuant to which GAR or any GAR Affiliate has
or may have any material liability contingent or otherwise;
(iv) "GAR EMPLOYEE" shall mean any current, former, or retired
employee, officer, or director of GAR or any GAR Affiliate;
(v) "GAR EMPLOYEE AGREEMENT" shall refer to each contract,
agreement or commitment concerning management, employment, severance,
post-employment liabilities or obligations, consulting, relocation,
repatriation, expatriation, visas, work permit or any similar agreement or
contract between GAR or any Affiliate and any Employee or consultant;
(vi) "IRS" shall mean the Internal Revenue Service;
(vii) "MULTIEMPLOYER PLAN" shall mean any "PENSION PLAN" (as
defined below) which is a "multiemployer plan", as defined in Section 3(37) of
ERISA; and
(viii) "GAR PENSION PLAN" shall refer to each GAR Employee
Plan which is an "employee pension benefit plan", within the meaning of Section
3(2) of ERISA.
(b) Schedule. Schedule 2.20 contains an accurate and complete list
of each GAR Employee Plan and each GAR Employee Agreement, if any, together with
a schedule of all liabilities, whether or not accrued, under each such GAR
Employee Plan or GAR Employee Agreement. GAR does not have any plan or
commitment, whether legally binding or not, to establish any new GAR Employee
Plan or GAR Employee Agreement, to modify any GAR Employee Plan or GAR Employee
Agreement (except to the extent required by law or to conform any such GAR
Employee Plan or GAR Employee Agreement to the requirements of any applicable
law, or as required by this Agreement), or to enter into any GAR Employee Plan
or GAR Employee Agreement, nor does it have any intention or commitment to do
any of the foregoing. Except for such alleged breaches, violations and defaults,
and events that would constitute a breach, violation or default with the lapse
of time, giving of notice, or both, as are all noted in Schedule 2.20, GAR has
not breached, violated or defaulted under, or received notice that it has
breached, violated or defaulted under, any of the terms or conditions of any GAR
Employee Agreement. Each GAR Employee Agreement is in full force and effect and,
except as
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otherwise disclosed in Schedule 2.20, is not subject to any default thereunder
of which Xxxxx or GAR has knowledge by any party obligated to GAR pursuant
thereto.
(c) Documents. GAR has made available to Neoforma (i) correct and
complete copies of all documents embodying or relating to each GAR Employee Plan
and each GAR Employee Agreement including all amendments thereto and written
interpretations thereof; (ii) the most recent annual actuarial valuations, if
any, prepared for each GAR Employee Plan; (iii) the most recent annual report
(Series 5500 and all schedules thereto), if any, required under ERISA or the
Code in connection with each GAR Employee Plan or related trust; (iv) if GAR
Employee Plan is funded, the most recent annual and periodic accounting of GAR
Employee Plan assets; (v) the most recent summary plan description together with
the most recent summary of material modifications, if any, required under ERISA
with respect to each GAR Employee Plan; (vi) all IRS determination letters and
rulings relating to GAR Employee Plans and copies of all applications and
correspondence to or from the IRS or the Department of Labor ("DOL") with
respect to any GAR Employee Plan; (vii) all communications material to any GAR
Employee or GAR Employees relating to any GAR Employee Plan and any proposed GAR
Employee Plans, in each case, relating to any amendments, terminations,
establishments, increases or decreases in benefits, acceleration of payments or
vesting schedules or other events which would result in any material liability
to GAR; and (viii) all registration statements and prospectuses prepared in
connection with each GAR Employee Plan.
(d) Employee Plan Compliance. Except as set forth on Schedule 2.20,
(i) GAR has performed in all material respects all obligations required to be
performed by it under each GAR Employee Plan, and each GAR Employee Plan has
been established and maintained in all material respects in accordance with its
terms and in compliance with all applicable laws, statutes, orders, rules and
regulations, including but not limited to ERISA or the Code; (ii) no "prohibited
transaction", within the meaning of Section 4975 of the Code or Section 406 of
ERISA, has occurred with respect to any GAR Employee Plan; (iii) there are no
actions, suits or claims pending, or, to the knowledge of GAR, threatened or
anticipated (other than routine claims for benefits) against any GAR Employee
Plan or against the assets of any GAR Employee Plan; and (iv) each GAR Employee
Plan can be amended, terminated or otherwise discontinued after the Closing in
accordance with its terms, without liability to GAR, Neoforma or any of its
Affiliates (other than ordinary administration expenses typically incurred in a
termination event); (v) there are no inquiries or proceedings pending or, to the
knowledge of GAR or any affiliates, threatened by the IRS or DOL with respect to
any GAR Employee Plan; and (vi) neither GAR nor any Affiliate is subject to any
penalty or tax with respect to any GAR Employee Plan under Section 402(i) of
ERISA or Section 4975 through 4980 of the Code.
(e) Pension Plans. GAR does not now, nor has it ever, maintained,
established, sponsored, participated in, or contributed to, any Pension Plan
which is subject to Part 3 of Subtitle B of Title I of ERISA, Title IV of ERISA
or Section 412 of the Code.
(f) Multiemployer Plans. At no time has GAR contributed to or been
requested to contribute to any Multiemployer Plan.
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(g) No Post-Employment Obligations. Except as set forth in Schedule
2.20, no GAR Employee Plan provides, or has any liability to provide, life
insurance, medical or other employee benefits to any GAR Employee upon his or
her retirement or termination of employment for any reason, except as may be
required by statute, and GAR has never represented, promised or contracted
(whether in oral or written form) to any GAR Employee (either individually or to
GAR Employees as a group) that such GAR Employee(s) would be provided with life
insurance, medical or other employee welfare benefits upon their retirement or
termination of employment, except to the extent required by statute.
(h) Effect of Transaction.
(i) Except as set forth on Schedule 2.20, the execution of
this Agreement and the consummation of the transactions contemplated hereby will
not (either alone or upon the occurrence of any additional or subsequent events)
constitute an event under any GAR Employee Plan, GAR Employee Agreement, trust
or loan that will or may result in any payment (whether of severance pay or
otherwise), acceleration, forgiveness of indebtedness, vesting, distribution,
increase in benefits or obligation to fund benefits with respect to any GAR
Employee.
(ii) Except as set forth on Schedule 2.20, no payment or
benefit which will or may be made by GAR or Neoforma or any of their respective
affiliates with respect to any Employee will be characterized as an "excess
parachute payment" within the meaning of Section 280G(b)(1) of the Code.
(i) Employment Matters. GAR (i) to its knowledge, is in compliance
in all material respects with all applicable foreign, federal, state and local
laws, rules and regulations respecting employment, employment practices, terms
and conditions of employment and wages and hours, in each case, with respect to
GAR Employees; (ii) has withheld all amounts required by law or by agreement to
be withheld from the wages, salaries and other payments to GAR Employees; (iii)
is not liable for any arrears of wages or any taxes or any penalty for failure
to comply with any of the foregoing; and (iv) is not liable for any payment to
any trust or other fund or to any governmental or administrative authority, with
respect to unemployment compensation benefits, social security or other benefits
or obligations for GAR Employees (other than routine payments to be made in the
normal course of business and consistent with past practice).
(j) Labor. No work stoppage or labor strike against GAR is pending
or, to the best knowledge of GAR, threatened. Except as set forth in Schedule
2.20, GAR is not involved in or, to the knowledge of GAR, threatened with, any
labor dispute, grievance, or litigation relating to labor, safety or
discrimination matters involving any GAR Employee, including, without
limitation, charges of unfair labor practices or discrimination complaints,
which, if adversely determined, would, individually or in the aggregate, result
in liability to GAR. Neither GAR nor any of its subsidiaries has engaged in any
unfair labor practices within the meaning of the National Labor Relations Act
which would, individually or in the aggregate, directly or indirectly result in
a liability to GAR. Except as set forth in Schedule 2.20, GAR is not presently,
nor has it been in the past, a party to, or bound by, any collective bargaining
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agreement or union contract with respect to GAR Employees and no collective
bargaining agreement is being negotiated by GAR.
2.21 REPRESENTATIONS COMPLETE. None of the representations or
warranties made by GAR or Xxxxx (as modified by Schedules), nor any statement
made in any schedule or certificate furnished by GAR or Xxxxx pursuant to this
Agreement, or furnished in or in connection with documents mailed or delivered
to the Members in connection with soliciting their consent to this Agreement and
the Securities Purchase, contains or will contain at the Closing, any untrue
statement of a material fact, or omits or will omit at the Closing to state any
material fact necessary in order to make the statements contained herein or
therein, in the light of the circumstances under which made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF NEOFORMA
Neoforma hereby represents and warrants to GAR and Xxxxx, subject to
such exceptions as are specifically disclosed in any Schedule to this Agreement
supplied by Neoforma to GAR or Xxxxx (the "NEOFORMA SCHEDULES") and dated as of
the date hereof, as follows:
3.1 ORGANIZATION OF NEOFORMA. Neoforma is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware.
Neoforma has the corporate power to own its properties and to carry on their
business as now being conducted. Neoforma is duly qualified to do business and
in good standing as a foreign corporation in each jurisdiction in which the
failure to be so qualified would have a material adverse effect on the business,
assets (including intangible assets), financial condition or results of
operations of Neoforma (hereinafter referred to as a "NEOFORMA MATERIAL ADVERSE
EFFECT"). Neoforma has delivered a true and correct copy of its Certificate of
Incorporation and Bylaws, each as amended to date, to GAR.
3.2 NEOFORMA CAPITAL STRUCTURE. The authorized capital stock of
Neoforma consists of 40,000,000 shares of authorized Common Stock, $0.001 par
value (the "Common Stock"), of which 1,259,961 shares are issued and
outstanding, and 27,420,022 shares of preferred stock, $0.001 par value (the
"Preferred Stock"), of which 27,121,298 shares are issued and outstanding. All
shares of the Preferred Stock are convertible into shares of Common Stock on a
one for one basis. All outstanding shares of the Common Stock and Preferred
Stock are duly authorized, validly issued, fully paid and non-assessable and not
subject to preemptive rights created by statute, the Certificate of
Incorporation or Bylaws of Neoforma or any agreement to which Neoforma is a
party or by which it is bound. The Acquisition Sub, as of the Closing Date,
shall have delivered a true and correct copy of its organizational documents,
amended to date, to GAR. All issued and outstanding shares of the common stock
of the Acquisition Sub are, and shall until such time as the Note is repaid in
full continue to be, owned by Neoforma.
3.3 AUTHORITY. Neoforma has, and as of the Closing Date the Acquisition
Sub shall have, all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The execution
and delivery of this
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Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of Neoforma.
Neoforma's Board of Directors have approved the Securities Purchase and this
Agreement. This Agreement has been duly executed and delivered by Neoforma and
constitutes the valid and binding obligation of Neoforma, enforceable in
accordance with its terms. Except as set forth on Schedule 3.3, the execution
and delivery of this Agreement by Neoforma does not, and, as of the Closing, the
consummation of the transactions contemplated hereby will not, conflict with, or
result in any violation of, or default under (with or without notice or lapse of
time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of any benefit under (any such event, a
"NEOFORMA CONFLICT") (i) any provision of the Certificate of Incorporation or
Bylaws of Neoforma, or (ii) any mortgage, indenture, lease, contract, or other
agreement or instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
Neoforma or its properties or assets. No consent, waiver, approval, order or
authorization of, or registration, declaration or filing with, any Governmental
Entity or any third party (so as not to trigger any Neoforma Conflict) is
required by or with respect to Neoforma in connection with the execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby, except for (i) such consents, waivers, approvals, orders,
authorizations, registrations, declarations and filings as may be required under
applicable federal and state securities laws and (ii) such other consents,
waivers, authorizations, filings, approvals and registrations which are set
forth on Schedule 3.3 of this Agreement.
3.4 REPRESENTATIONS COMPLETE. None of the representations or warranties
made by Neoforma, nor any statement made in any schedule or certificate
furnished by Neoforma pursuant to this Agreement contains or will contain at the
Closing, any untrue statement of a material fact, or omits or will omit at the
Closing to state any material fact necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which made,
not misleading.
ARTICLE IV
CONDUCT PRIOR TO THE CLOSING
4.1 CONDUCT OF BUSINESS OF GAR. During the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Closing, GAR agrees (except to the extent that Neoforma shall otherwise
consent in writing) to carry on its business in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted, to pay its
debts and Taxes when due, to pay or perform other obligations when due, and, to
the extent consistent with such business, to use all reasonable efforts
consistent with past practice and policies to preserve intact its present
business organization, keep available the services of its present officers and
key employees and preserve their relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings with it,
all with the goal of preserving unimpaired its goodwill and ongoing businesses
at the Closing. GAR shall promptly notify Neoforma of any event or occurrence or
emergency not in the ordinary course of its business, and any material event
involving or adversely affecting GAR or its business. Except as set forth on
Schedule 4.1 hereto or as expressly contemplated by this Agreement, GAR shall
not, without the prior written consent of Neoforma:
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(a) Enter into any commitment, activity or transaction not in the
ordinary course of business;
(b) Transfer to any person or entity any rights to any GAR
Intellectual Property Rights;
(c) Enter into or amend any agreements pursuant to which any other
party is granted manufacturing, marketing, distribution or similar rights of any
type or scope with respect to any products of GAR;
(d) Amend or otherwise modify (or agree to do so), except in the
ordinary course of business, or violate the terms of, any of the agreements set
forth or described in GAR Schedules;
(e) Commence any litigation;
(f) Declare, set aside or pay any dividends on or make any other
distributions (whether in cash, equity interests or property) in respect of any
of its units or other evidences of ownership, or split, combine or reclassify
any of its units or issue or authorize the issuance of any other securities in
respect of, in lieu of or in substitution for units or other evidences of
ownership of GAR, or repurchase, redeem or otherwise acquire, directly or
indirectly, any GAR Member Interests (or GAR Member Interest Equivalents);
(g) Issue, grant, deliver or sell or authorize or propose the
issuance, grant, delivery or sale of, or purchase or propose the purchase of,
any units or securities convertible into, or subscriptions, rights, warrants or
options to acquire, or other agreements or commitments of any character
obligating it to issue any such units or other convertible securities;
(h) Cause or permit any amendments to its Organizational Documents;
(i) Acquire or agree to acquire by merging or consolidating with,
or by purchasing any assets or equity securities of, or by any other manner, any
business or any corporation, partnership, limited liability company, association
or other business organization or division thereof, or otherwise acquire or
agree to acquire any assets which are material, individually or in the
aggregate, to the business of GAR;
(j) Sell, lease, license or otherwise dispose of any of its
properties or assets, except in the ordinary course of business and consistent
with past practice;
(k) Incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities of GAR or guarantee any debt
securities of others;
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(l) Grant any severance or termination pay to any director,
officer, employee or consultant, except payments made pursuant to standard
written agreements outstanding on the date hereof (which agreements are
disclosed on Schedule 2.20;
(m) Adopt or amend any employee benefit plan, program, policy or
arrangement, or enter into any employment contract, extend any employment offer,
pay or agree to pay any special bonus or special remuneration to any director,
employee or consultant, or increase the salaries or wage rates of its employees
(other than the two employees of GAR currently under review);
(n) Revalue any of its assets, including without limitation writing
down the value of inventory or writing off notes or accounts receivable in
excess of $10,000 in the aggregate;
(o) Pay, discharge or satisfy, in an amount in excess of $10,000,
in any one case, or $25,000, in the aggregate, any claim, liability or
obligation (absolute, accrued, asserted or unasserted, contingent or otherwise),
other than the payment, discharge or satisfaction in the ordinary course of
business of liabilities reflected or reserved against in GAR Financial
Statements;
(p) Make or change any material election in respect of Taxes, adopt
or change any accounting method in respect of Taxes, enter into any closing
agreement, settle any claim or assessment in respect of Taxes, or consent to any
extension or waiver of the limitation period applicable to any claim or
assessment in respect of Taxes;
(q) Enter into any strategic alliance, joint development or joint
marketing arrangement or agreement;
(r) Fail to pay or otherwise satisfy its monetary obligations as
they become due, except such as are being contested in good faith;
(s) Waive or commit to waive any rights with a value in excess of
$10,000, in any one case, or $25,000, in the aggregate;
(t) Cancel, materially amend or renew any insurance policy other
than in the ordinary course of business;
(u) Alter, or enter into any commitment to alter, its interest in
any corporation, association, joint venture, partnership, limited liability
company or other business entity in which GAR directly or indirectly holds any
interest on the date hereof; or
(v) Take, or agree in writing or otherwise to take, any of the
actions described in Sections 4.1(a) through 4.1(u) above, or any other action
that would prevent GAR from performing or cause GAR not to perform its covenants
hereunder.
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4.2 NO GAR SOLICITATION. Until the earlier of the Closing and the date
of termination of this Agreement pursuant to the provisions of Section 8.1
hereof, GAR will not (nor will GAR permit any of GAR's officers, directors,
Members, agents, representatives or affiliates to) directly or indirectly, take
any of the following actions with any party other than Neoforma and its
designees: (a) solicit, initiate, entertain, or encourage any proposals or
offers from, or conduct discussions with or engage in negotiations with, any
person relating to any possible acquisition of GAR or any of its subsidiaries
(whether by way of merger, purchase of equity securities, purchase of assets or
otherwise), any material portion of its or their capital stock or assets or any
equity interest in GAR or any of its subsidiaries, (b) provide information with
respect to it to any person, other than Neoforma, relating to, or otherwise
cooperate with, facilitate or encourage any effort or attempt by any such person
with regard to, any possible acquisition of GAR (whether by way of merger,
purchase of equity securities, purchase of assets or otherwise), any material
portion of its or their capital stock or assets or any equity interest in GAR or
any of its subsidiaries, (c) enter into an agreement with any person, other than
Neoforma, providing for the acquisition of GAR (whether by way of merger,
purchase of equity securities, purchase of assets or otherwise), any material
portion of its or their capital stock or assets or any equity interest in GAR or
any of its subsidiaries, or (d) make or authorize any statement, recommendation
or solicitation in support of any possible acquisition of GAR or any of its
subsidiaries (whether by way of merger, purchase of equity securities, purchase
of assets or otherwise), any material portion of its or their capital stock or
assets or any equity interest in GAR or any of its subsidiaries by any person,
other than by Neoforma. GAR shall immediately cease and cause to be terminated
any such contacts or negotiations with third parties relating to any such
transaction or proposed transaction. In addition to the foregoing, if GAR
receives prior to the Closing or the termination of this Agreement any offer or
proposal relating to any of the above, GAR shall immediately notify Neoforma
thereof, including information as to the identity of the offeror or the party
making any such offer or proposal and the specific terms of such offer or
proposal, as the case may be, and such other information related thereto as
Neoforma may reasonably request. Except as contemplated by this Agreement,
disclosure by GAR of the terms hereof (other than the prohibition of this
section) shall be deemed to be a violation of this Section 4.2.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 ACCESS TO INFORMATION. GAR shall afford Neoforma and its
accountants, counsel and other representatives, reasonable access during normal
business hours during the period prior to the Closing to (a) all of its
properties, books, contracts, commitments and records, and (b) all other
information concerning the business, properties and personnel (subject to
restrictions imposed by applicable law) of it as Neoforma may reasonably
request. Neoforma shall afford GAR and its accountants, counsel and other
representatives, reasonable access during normal business hours during the
period prior to the Closing to all materials necessary to reasonably permit it
to carry out the due diligence provided for in Section 6.2 (d) of this Agreement
as GAR may reasonably request. No information or knowledge obtained in any
investigation pursuant to this Section 5.1 shall affect or be deemed to modify
any representation or warranty contained herein.
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5.2 CONFIDENTIALITY. Each of the parties hereto hereby agrees to keep
the terms of this Agreement (except to the extent contemplated hereby) and such
information or knowledge obtained in any investigation pursuant to Section 5.1,
or pursuant to the negotiation and execution of this Agreement or the
effectuation of the transactions contemplated hereby, confidential; PROVIDED,
HOWEVER, that the foregoing shall not apply to information or knowledge which
(a) a party can demonstrate was already lawfully in its possession prior to the
disclosure thereof by the other party, (b) is generally known to the public and
did not become so known through any violation of law, (c) became known to the
public through no fault of such party, (d) is later lawfully acquired by such
party without confidentiality restrictions from other sources, (e) is required
to be disclosed by order of court or government agency with subpoena powers
(provided that such party shall have provided the other party with prior notice
of such order or subpoena and an opportunity to object or take other available
action) or (f) which is disclosed in the course of any litigation between any of
the parties hereto.
5.3 EXPENSES. Whether or not the Securities Purchase is consummated,
all fees and expenses incurred in connection with the Securities Purchase
including, without limitation, all legal, accounting, financial advisory,
consulting and all other fees and expenses of third parties ("THIRD PARTY
EXPENSES") incurred by a party in connection with the negotiation and
effectuation of the terms and conditions of this Agreement and the transactions
contemplated hereby, shall be the obligation of the respective party incurring
such fees and expenses.
5.4 PUBLIC DISCLOSURE. Neoforma shall have the right to issue such
press releases or other disclosures regarding the transactions contemplated
hereby in its sole discretion following the execution of this Agreement.
Neoforma shall obtain the prior consent of Xxxxx in the event he is named or
quoted in any such press release or disclosures.
5.5 CONSENTS. Neoforma, GAR and Xxxxx shall use their reasonable best
efforts to obtain the consents, waivers, assignments and approvals under any of
the GAR Contracts as may be required in connection with the Securities Purchase
(all of such consents, waivers and approvals are set forth in GAR Schedules) so
as to preserve and transfer all rights of and benefits to Neoforma thereunder
(or retain such rights and benefits with GAR).
5.6 REASONABLE EFFORTS. Subject to the terms and conditions provided in
this Agreement, each of the parties hereto shall use its reasonable efforts to
ensure that its representations and warranties remain true and correct in all
material respects, and to take promptly, or cause to be taken, all actions, and
to do promptly, or cause to be done, all things necessary, proper or advisable
under applicable laws and regulations to consummate and make effective the
transactions contemplated hereby, to obtain all necessary waivers, consents,
assignments and approvals, to effect all necessary registrations and filings,
and to remove any injunctions or other impediments or delays, legal or
otherwise, to consummate and make effective the transactions contemplated by
this Agreement for the purpose of securing to the parties hereto the benefits
contemplated by this Agreement; PROVIDED, that Neoforma shall not be required to
agree to any divestiture of any business, assets or property of Neoforma or its
subsidiaries or, or the imposition of any material limitation on the ability of
any of them to conduct their businesses or to own or exercise control of such
assets, properties and stock.
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5.7 EMPLOYMENT OF XXXXX. On the Closing Date, the Acquisition Sub,
Neoforma and Xxxxx agree to enter into an employment agreement in substantially
the same form as Exhibit C hereto (the "EMPLOYMENT AGREEMENT") which provides
for Tivin's being employed by the Acquisition Sub for a period of four (4)
years. The Employment Agreement shall provide for a base salary of One Hundred
Thousand Dollars ($100,000) per year, a bonus based upon the Acquisition Sub's
attaining certain sales thresholds to be agreed upon by the parties following
the Closing Date in a minimum amount of Fifty Thousand Dollars ($50,000) per
year, and shall provide for an automobile allowance of Fourteen Hundred Dollars
($1,400) per month.
5.8 CONSULTING AGREEMENT WITH FTIVIN. On the Closing Date, the
Acquisition Sub and FTivin agree to enter into a consulting agreement in
substantially the same form as Exhibit D hereto, which provides for FTivin's
acting as a consultant to the Acquisition Sub for a period of two years in
consideration for a consulting fee in the amount of $150,000 per year, which
consulting agreement shall be guaranteed by Neoforma pursuant to a guaranty in
substantially the same form as Exhibit E hereto.
5.9 TRANSFER OF INDUSTRIAL EQUIPMENT AUCTION ASSETS TO FTIVIN. Neoforma
agrees that ownership of those assets listed on Schedule 5.9 hereto, (the
"EXCLUDED ASSETS") which relate solely to the industrial equipment business
currently being conducted by GAR are being transferred to FTivin or his nominee,
on or before the Closing Date without there being any payment of consideration
to GAR by FTivin. Neoforma shall not consider such transfer to be in breach of
this Agreement. The parties expressly agree that the Excluded Assets shall not
include any assets owned by GAR and used in any manner in the medical equipment
auction business operated by GAR prior to the Closing Date.
5.10 NOTIFICATION OF CERTAIN MATTERS. GAR shall give prompt notice to
Neoforma, and Neoforma shall give prompt notice to GAR, of (a) the occurrence or
non-occurrence of any event, the occurrence or non-occurrence of which is likely
to cause any representation or warranty of GAR, Neoforma, respectively,
contained in this Agreement to be untrue or inaccurate at or prior to the
Closing and (b) any failure of GAR or Neoforma, as the case may be, to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this Section 5.10 shall not limit or otherwise affect any remedies
available to the party receiving such notice.
5.11 ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES. Each party hereto, at
the request of the other party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
ARTICLE VI
CONDITIONS TO THE SECURITIES PURCHASE
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE SECURITIES
PURCHASE. The respective obligations of each party to this Agreement to effect
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the Securities Purchase shall be subject to the satisfaction at or prior to the
Closing of the following conditions:
(a) GAR Member Approval. This Agreement and the Securities Purchase
shall have been approved and adopted by the Members of GAR by the requisite vote
under applicable law and GAR's Organizational Documents.
(b) Neoforma Board Approval. This Agreement and the Securities
Purchase shall have been approved and adopted by the Board of Directors of
Neoforma by the requisite vote under applicable law and Neoforma's
organizational documents.
(c) No Injunctions or Restraints; Illegality. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal or regulatory restraint or
prohibition preventing the consummation of the Securities Purchase shall be in
effect.
(d) Permits. All approvals from government authorities, including
any requisite Blue Sky approvals, which are appropriate or necessary for the
consummation of the Securities Purchase, shall have been obtained.
(e) Litigation. There shall be no BONA FIDE action, suit, claim or
proceeding of any nature pending, or overtly threatened, against Neoforma, GAR
or Xxxxx, their respective properties or any of their officers or directors,
arising out of, or in any way connected with, the Securities Purchase or other
transactions contemplated by the terms of this Agreement.
(f) Schedules. All Schedules and Exhibits to this Agreement and the
Employment Agreement shall have been prepared, agreed to by the parties and
attached to such agreements.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF GAR. The obligations of GAR
and Xxxxx to consummate the Securities Purchase and the transactions
contemplated by this Agreement shall be subject to the satisfaction at or prior
to the Closing of each of the following conditions, any of which may be waived,
in writing, exclusively by GAR and Xxxxx:
(a) Representations and Warranties. The representations and
warranties of Neoforma contained in this Agreement shall be true and correct in
all material respects on and as of the Closing Date, except for changes
contemplated by this Agreement and except for those representations and
warranties which address matters only as of a particular date (which shall
remain true and correct as of such date), with the same force and effect as if
made on and as of the Closing Date, except, in all such cases, for such
breaches, inaccuracies or omissions of such representations and warranties which
have neither had nor reasonably would be expected to have a Material Adverse
Effect on Neoforma; and GAR and Xxxxx shall have received a certificate to such
effect signed on behalf of Neoforma by a duly authorized officer of Neoforma.
(b) Agreements and Covenants. Neoforma shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be
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performed or complied with by them on or prior to the Closing, and GAR and Xxxxx
shall have received a certificate to such effect signed by a duly authorized
officer of Neoforma.
(c) Legal Opinion; Tax Advice. GAR and Xxxxx shall have received a
legal opinion from Pepe & Hazard, LLP, counsel to Neoforma, in form reasonably
satisfactory to their legal counsel.
(d) Financial Due Diligence. GAR shall be satisfied that the
financial statements of Neoforma provided to it are complete and accurately
reflect the financial condition of Neoforma as represented by Neoforma and with
the results of its due diligence investigation of Neoforma.
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF NEOFORMA. The
obligations of Neoforma to consummate the Securities Purchase and the
transactions contemplated by this Agreement shall be subject to the satisfaction
at or prior to the Closing of each of the following conditions, any of which may
be waived, in writing, exclusively by Neoforma:
(a) Representations and Warranties. The representations and
warranties of GAR contained in this Agreement shall be true and correct in all
material respects on and as of the Closing Date, except for changes contemplated
by this Agreement and except for those representations and warranties which
address matters only as of a particular date (which shall remain true and
correct as of such date), with the same force and effect as if made on and as of
the Closing Date, except, in all such cases, for such breaches, inaccuracies or
omissions of such representations and warranties which have neither had nor
reasonably would be expected to have a Material Adverse Effect on GAR or
Neoforma; and Neoforma shall have received a certificate to such effect signed
on behalf of GAR by the chief executive officer and chief financial officer of
GAR.
(b) Agreements and Covenants. GAR and Xxxxx shall have performed or
complied in all material respects with all agreements and covenants required by
this Agreement to be performed or complied with by it on or prior to the
Closing, and Neoforma shall have received a certificate to such effect signed by
a duly authorized officer of GAR and Xxxxx.
(c) Third Party Consents. Neoforma shall have been furnished with
evidence satisfactory to it that GAR has obtained the consents, approvals and
waivers, if any, required to carry out the transactions set forth in this
Agreement.
(d) Legal Opinion. Neoforma shall have received a legal opinion from
Marks, Marks and Xxxxxx, Ltd., legal counsel to GAR and Xxxxx, in form
reasonably satisfactory to its legal counsel.
(e) Material Adverse Change. There shall not have occurred any
material adverse change in the business, assets (including intangible assets)
financial condition or results of operations of GAR since the date of GAR
Balance Sheet.
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(f) Noncompetition Agreements. Each of the persons listed on
Schedule 6.3(f) (which may be provided or supplemented on or before the Closing
Date) shall have executed and delivered to Neoforma on or before the Closing
Date a Noncompetition Agreement in form satisfactory to its legal counsel, and
all of the Noncompetition Agreements shall be in full force and effect.
(g) Employment Agreement. Xxxx Xxxxx shall have entered into the
Employment Agreement.
(h) Consulting Agreement. Xxxx Xxxxx shall have entered into the
Consulting Agreement.
(i) GAR Indebtedness. The total amount of indebtedness owing by GAR
(including accounts payable) shall not exceed One Hundred Thousand Dollars
($100,000).
(j) Due Diligence. Neoforma and its advisors shall be satisfied with
the results of its due diligence investigation of GAR and the Business. Neoforma
agrees to notify GAR of any additional due diligence requested by its investment
bankers, to the extent such due diligence is above or beyond that being
conducted by Neoforma's other advisors, and Neoforma's investment bankers shall
only be permitted to conduct such due diligence upon the consent of Tiven, which
consent shall not be unreasonably withheld.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties of GAR, Xxxxx and Neoforma contained in this
Agreement or in any instrument delivered pursuant to this Agreement (each as
modified by the corresponding Schedules thereto) shall survive the Securities
Purchase and continue until 5:00 p.m., California time, on the two (2) year
anniversary of the Closing Date (the "EXPIRATION DATE").
7.2 INDEMNIFICATION.
(a) Indemnification by GAR and Xxxxx. GAR and Xxxxx jointly and
severally agree to indemnify and hold harmless Neoforma, the Acquisition Sub and
their officers, directors, and shareholders, against any and all loss, cost,
liability, claim, damage, deficiency, and expense whatsoever, including without
limitation legal fees and disbursements ("DAMAGE"), provided that Neoforma or
the Acquisition Sub may not make any claim for any Damage until such time as the
aggregated amount of any such Damage is equal to or exceeds $50,000, and
provided further that such indemnification shall be limited to an amount equal
to the unpaid portion of the Purchase Price (except to the extent otherwise
specifically stated herein), arising out of or resulting from:
(i) any misrepresentation, omission, breach of a
representation or warranty or other breach or non-fulfillment of any covenant on
the part of GAR or Xxxxx under this Agreement or any schedule, certificate or
other instrument furnished to Neoforma or the
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Acquisition Sub hereunder, or under any other agreement entered into in
connection with GAR's or Tivin's consummating the transactions contemplated by
and carrying out the purposes of this Agreement;
(ii) any liabilities arising from events occurring prior to
the Closing which have not been disclosed to Neoforma or the Acquisition Sub and
which have not arisen as the result of any act or omission attributable to
Neoforma or the Acquisition Sub, including but not limited to any tax
assessments (including but not limited to any tax liability related to General
Industrial Tool or Worldwide Auction Services), uninsured liabilities or breach
of contract;
(iii) any brokers' or finders' fees; and
(iv) all demands, assessments, judgments, costs and legal and
other fees and expenses arising from or in connection with any action, suit,
proceeding or claim incident to any of the foregoing.
(b) Neoforma's Procedure. Should any claim be made against Neoforma
or the Acquisition Sub for which indemnification is provided for in Section 7.2
(a) by a person not a party to this Agreement, Neoforma or the Acquisition Sub
shall promptly give GAR (if such claim is brought prior to the Closing) and
Xxxxx written notice of any such claim, and GAR (if such claim is brought prior
to the Closing) and Xxxxx shall thereafter defend or settle any such claim, at
their sole expense, on their own behalf and with counsel of their own choosing.
In such defense or settlement, Neoforma shall cooperate with and assist GAR (if
such claim is brought prior to the Closing) and Xxxxx to the maximum extent
reasonably possible and may participate therein with its own counsel. Any
payment resulting from such defense or settlement, together with the total
expense thereof, shall be binding on GAR (if such claim is brought prior to the
Closing) and Xxxxx. Failure to give notice within a reasonable period of time
shall not constitute a defense, in whole or in part, to any claim for
indemnification by Neoforma or the Acquisition Sub except and only to the extent
that such failure by Neoforma shall result in material prejudice to Xxxxx.
Notwithstanding the foregoing, Neoforma may, after not less than sixty
(60) days written notice to Xxxxx, make settlement of such claim, and such
settlement shall be binding on all such parties for purposes of this Section 7.2
(b); however, if within said sixty (60) day period Xxxxx shall have requested
Neoforma not to settle such claim and to deny such claim at the expense of
Xxxxx, Neoforma shall comply with such request provided that (i) Xxxxx shall
diligently defend such claim as provided above, and (ii) in Neoforma's
reasonable judgment failure to settle the same will not have a material or
adverse affect on the conduct of the business of Neoforma in the normal course.
Any payment resulting from such defense or settlement, together with the total
expense thereof, shall be binding on all parties, for the purposes of this
Section 7.2 (b).
Failure to give notice within a reasonable period of time shall not
constitute a defense, in whole or in part, to any claim for indemnification by
Neoforma, except and only to the extent that such failure by Neoforma shall
result in a material prejudice to GAR (if such claim is brought prior to the
Closing) and Xxxxx. In the event Neoforma or the Acquisition Sub incur, or a
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claim is made seeking, any Damages for which indemnification is allowed pursuant
to Section 7.2 (a) (i), (ii), (iii) or (iv), Neoforma or the Acquisition Sub
shall, in addition to any other remedies, have the right to offset the amount of
any such Damages against any amount which may be owing to Xxxxx under this
Agreement, the Note, or any agreement entered into between Xxxxx and/or GAR, on
the one hand, and the Acquisition Sub and/or Neoforma, on the other hand,
pursuant to this Agreement or otherwise and, to the extent such amount exceeds
any amounts still owing at such time from Neoforma to GAR. Anything herein to
the contrary notwithstanding, in no event shall Neoforma be required to consent
to a non-monetary term or condition to such settlement as a condition to
indemnification hereunder.
(c) Indemnification by Neoforma. Neoforma shall indemnify Xxxxx and
hold Xxxxx harmless at all times after the Closing against and in respect of any
of the following:
(i) any and all liabilities and obligations of Neoforma or GAR
arising after the Closing except to the extent that the same may have been
caused by circumstances existing prior to the Closing;
(ii) any and all Damages resulting from any misrepresentation,
omission, breach of representation or warranty, or non-fulfillment of any
covenant on the part of Neoforma under this Agreement or any schedule to this
Agreement or in any certificate or other instrument furnished to Xxxxx hereunder
or any other agreement entered into in connection with Neoforma consummating the
transactions contemplated by this Agreement;
(iii) any increased tax liability, including without
limitation all penalties and interest, incurred by Xxxxx due to the payments
under the Note being construed as ordinary income as opposed to capital gains;
and
(iv) all demands, assessments, judgments, costs and legal and
other fees and expenses arising from or in connection with any action, suit,
proceeding or claim incident to any of the foregoing.
(d) Tivin's Procedure. Should any claim be made against Xxxxx for
which indemnification is provided for in Section 7.2 (c) by a person not a party
to this Agreement, Xxxxx shall promptly give Neoforma written notice of any such
claim, and Neoforma shall thereafter defend or settle any such claim, at its
sole expense, on its own behalf and with counsel of its own choosing. In such
defense or settlement, Xxxxx shall cooperate with and assist Neoforma and Xxxxx
may participate therein to the maximum extent reasonably possible with his own
counsel. Any payment resulting from such defense or settlement, together with
the total expense thereof, shall be binding on Neoforma. Failure to give notice
within a reasonable period of time shall not constitute a defense, in whole or
in part, to any claim for indemnification by Xxxxx except and only to the extent
that such failure by Xxxxx shall result in material prejudice to Neoforma.
Notwithstanding the foregoing, Xxxxx may, after not less than sixty
(60) days written notice to Neoforma, make settlement of such claim, and such
settlement shall be binding on all such parties for purposes of this Section 7.2
(d); however, if within said sixty (60) day period
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Neoforma shall have requested Xxxxx not to settle such claim and to deny such
claim at the expense of Neoforma, Xxxxx shall comply with such request provided
that (i) Neoforma shall diligently defend such claim as provided above, and (ii)
in Tivin's reasonable judgment failure to settle the same will not have a
material or adverse affect on the conduct of the business of Xxxxx in the normal
course. Any payment resulting from such defense or settlement, together with the
total expense thereof, shall be binding on all parties, for the purposes of this
Section 7.2 (d).
Failure to give notice within a reasonable period of time shall not
constitute a defense, in whole or in part, to any claim for indemnification by
Xxxxx, except and only to the extent that such failure by Xxxxx shall result in
a material prejudice to Neoforma or the Acquisition Sub. In the event a claim is
made seeking any Damages for which indemnification is allowed pursuant to
Section 7.2 (c), Xxxxx shall, in addition to any other remedies, have the right
to offset the amount of any such Damages against any amount which may be owing
to Neoforma under this Agreement, any agreement entered into pursuant to this
Agreement or otherwise. Anything herein to the contrary notwithstanding, in no
event shall Xxxxx be required to consent to a non-monetary term or condition to
such settlement as a condition to indemnification hereunder.
(e) Remedies Cumulative. Except as herein expressly provided, the
remedies provided herein shall be cumulative and shall not preclude the
assertion by one Party of any other rights or the seeking of any other remedies
against the other Party.
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. Except as provided in Section 8.2 below, this
Agreement may be terminated and the Securities Purchase abandoned at any time
prior to the Closing:
(a) by mutual consent of GAR, Xxxxx and Neoforma;
(b) by Neoforma, GAR or Xxxxx if: (i) the Closing has not occurred
before 5:00 p.m. (Pacific time) on September 17, 1999 (provided that the right
to terminate this Agreement under this clause 8.1(b)(i) shall not be available
to any party whose willful failure to fulfill any obligation hereunder has been
the cause of, or resulted in, the failure of the Closing to occur on or before
such date); (ii) there shall be a final nonappealable order of a federal or
state court in effect preventing consummation of the Securities Purchase; or
(iii) there shall be any statute, rule, regulation or order enacted, promulgated
or issued or deemed applicable to the Securities Purchase by any governmental
entity that would make consummation of the Securities Purchase illegal;
(c) by Neoforma if there shall be any action taken, or any statute,
rule, regulation or order enacted, promulgated or issued or deemed applicable to
the Securities Purchase, by any Governmental Entity, which would: (i) prohibit
Neoforma's ownership of GAR or ownership or operation of all or any portion of
the Business or the Acquisition Sub's ownership or operation of all or any
portion of the Business or (ii) compel Neoforma or the Acquisition Sub to
dispose of or hold separate all or a portion of the business or assets of GAR or
Neoforma as a result of the Securities Purchase;
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(d) by Neoforma if it is not in material breach of its obligations
under this Agreement and there has been a breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of GAR
and (i) such breach has not been cured within five (5) business days after
written notice to GAR (provided that, no cure period shall be required for a
breach which by its nature cannot be cured), and (ii) as a result of such breach
the conditions set forth in Section 6.3(a) or 6.3(b), as the case may be, would
not then be satisfied; or
(e) by GAR if it is not in material breach of its obligations under
this Agreement and there has been a breach of any representation, warranty,
covenant or agreement contained in this Agreement on the part of Neoforma and
(i) such breach has not been cured within five (5) business days after written
notice to Neoforma (provided that, no cure period shall be required for a breach
which by its nature cannot be cured), and (ii) as a result of such breach the
conditions set forth in Section 6.2(a) or 6.2(b), as the case may be, would not
then be satisfied.
Where action is taken to terminate this Agreement pursuant to this
Section 8.1, it shall be sufficient for such action to be authorized, in the
case of Neoforma, by the Board of Directors of Neoforma, and in the case of GAR,
by Xxxxx (if prior to the Closing Date).
8.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 8.1, this Agreement shall forthwith become void
and there shall be no liability or obligation on the part of Neoforma, or GAR,
or their respective officers, directors, shareholders or Members, or Xxxxx;
PROVIDED, that each party shall remain liable for any breaches of this Agreement
prior to its termination; and PROVIDED FURTHER, that, the provisions of Sections
5.2 and 5.3 of this Agreement shall remain in full force and effect and survive
any termination of this Agreement.
8.3 AMENDMENT. Except as is otherwise required by applicable law after
the Members of GAR approve this Agreement, this Agreement may be amended by the
parties hereto at any time by execution of an instrument in writing signed on
behalf of each of the parties hereto.
8.4 EXTENSION; WAIVER. At any time prior to the Closing, Neoforma, on
the one hand, and GAR and Xxxxx, on the other, may, to the extent legally
allowed, (a) extend the time for the performance of any of the obligations of
the other party hereto, (b) waive any inaccuracies in the representations and
warranties made to such party contained herein or in any document delivered
pursuant hereto, and (c) waive compliance with any of the agreements or
conditions for the benefit of such party contained herein. Any agreement on the
part of a party hereto to any such extension or waiver shall be valid only if
set forth in an instrument in writing signed on behalf of such party.
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ARTICLE IX
GENERAL PROVISIONS
9.1 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
If to Neoforma, to:
Neoforma, Inc.
0000-0 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Wm. Xxxxxx Xxxxxx, Controller
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
Pepe & Hazard, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to GAR or Xxxxx, to:
General Asset Recovery
0000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
Marks, Marks and Xxxxxx Ltd.
000 Xxxxx Xx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
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9.2 INTERPRETATION. The words "include," "includes" and "including"
when used herein shall be deemed in each case to be followed by the words
"without limitation." The table of contents and headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
9.3 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
9.4 TRANSFER TAXES. GAR shall pay all real property transfer Taxes,
sales Taxes, stock transfer Taxes, documentary stamp Taxes, recording charges
and other similar Taxes resulting from, arising under or in connection with the
transfer of the Member Interests or any other related transaction under the
Agreement.
9.5 ENTIRE AGREEMENT; ASSIGNMENT. This Agreement, the Schedules and
Exhibits hereto, and the documents and instruments and other agreements among
the parties hereto referenced herein: (a) constitute the entire agreement among
the parties with respect to the subject matter hereof and supersede all prior
agreements and understandings, both written and oral, among the parties with
respect to the subject matter hereof; (b) are not intended to confer upon any
other person any rights or remedies hereunder; and (c) shall not be assigned by
operation of law or otherwise except as otherwise specifically provided, except
that Neoforma may assign its respective rights and delegate its obligations
hereunder to its affiliates; PROVIDED, that such affiliates agree to be bound by
the terms hereof.
9.6 SEVERABILITY. In the event that any provision of this Agreement or
the application thereof, becomes or is declared by a court of competent
jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such
provision to other persons or circumstances will be interpreted so as reasonably
to effect the intent of the parties hereto. The parties further agree to replace
such void or unenforceable provision of this Agreement with a valid and
enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of such void or unenforceable provision.
9.7 OTHER REMEDIES. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
9.8 GOVERNING LAW; JURISDICTION AND VENUE. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof. Each of the parties hereto agrees that process may
be served upon them in any manner authorized by the laws of the State of
Delaware for such persons and waives and covenants not to assert or plead any
objection which they might otherwise have to such jurisdiction and such process.
Any
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dispute arising under this Agreement shall be resolved in a court of competent
jurisdiction within the State of California and the parties hereby consent to
the jurisdiction of such court.
9.9 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document. All
Schedules and Exhibits hereto shall be considered incorporated herein by
reference and are made a part hereof.
9.10 SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with their specific terms or were otherwise
breached. It is accordingly agreed that the parties shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any court of the United States
or any state having jurisdiction, this being in addition to any other remedy to
which they are entitled at law or in equity.
IN WITNESS WHEREOF, Neoforma, GAR, and Xxxxx, have caused this
Agreement to be signed by their duly authorized respective officers and
representatives, all as of the date first written above.
GENERAL ASSET RECOVERY, LLC NEOFORMA, INC.
By: _______________________________ By: _______________________________
Name: Name:
Title: Title:
NEOFORMA GAR, INC.
By: _______________________________
Name:
Title:
GAR MEMBER INTEREST HOLDERS
__________________________________ __________________________________
Xxxx Xxxxx, Individually Xxxx Xxxxx, Individually
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EXHIBIT A TO
EXHIBIT 2.01
PROMISSORY NOTE
$7,800,000 August _______, 1999
FOR VALUE RECEIVED, the undersigned, Neoforma GAR, Inc., a Delaware
corporation, with an address c/o Neoforma, Inc., 0000-0 Xxxxx Xxxxxxxxx, Xxxxx
Xxxxx, Xxxxxxxxxx 00000 (the "MAKER"), promises to pay Xxxx Xxxxx of 000 Xxxxxxx
Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxx 00000 ("XXXXX") the principal sum of Seven
Million Eight Hundred Thousand Dollars ($7,800,000) with interest on the unpaid
balance from the date hereof at the rate of Seven Percent (7%) per annum. This
Note is entered into pursuant to the terms of a Securities Purchase Agreement
dated July 16th, 1999 by and among Neoforma, Inc. (the maker's parent company),
Xxxxx and General Asset Management, LLC pursuant to which the maker has acquired
all of the issued and outstanding securities of General Asset Management, LLC
(the "SECURITIES PURCHASE") and shall be subject to the terms and conditions
thereof, including without limitation, (i) the right of the maker to set off
against any amounts of principal and interest due hereunder the amount of any
indemnification which is determined to be payable by Xxxxx under Section 7 of
said Securities Purchase Agreement, and (ii) the partial acceleration of this
Note pursuant to Section 1.2 of said Securities Purchase Agreement as set forth
in Section 4 below.
This Note shall have the following additional terms and provisions:
1. Payment. Principal and interest shall be due and payable as follows:
(a) During the first twelve months following the closing date of the
Securities Purchase (the "CLOSING DATE"), the maker shall make payments
beginning on the first day of the month following the Closing Date and on the
first day of each month thereafter in an amount equal to the amount of interest
accrued on the outstanding balance under this Note during the preceding month
plus a principal payment of One Hundred Eighty Three Thousand Three Hundred
Thirty Three Dollars ($183,333);
(b) During the thirteenth through the forty-eighth month following
the Closing Date, the maker shall make payments on the first day of each month
in an amount equal to the amount of interest accrued on the outstanding balance
under this Note during the preceding month plus a principal payment of One
Hundred Thirty Seven Thousand Five Hundred Dollars ($137,500);
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(c) During the forty-ninth through the sixtieth month following the
Closing Date, the maker shall make payments on the first day of each month in an
amount equal to the amount of interest accrued on the outstanding balance under
this Note during the preceding month plus a principal payment of Fifty Four
Thousand One Hundred Sixty Seven Dollars ($54,167).
2. Prepayment/Conversion. This Note may be prepaid in whole or in part
at any time and from time to time without premium or penalty and without prior
notice to Xxxxx, and any such prepayments may not be directed to be applied to
any subsequent installments of principal. This Note shall not be convertible
into shares of the maker or of any endorser hereon or guarantor hereof.
3. Full Acceleration. This Note shall, at the option of Xxxxx, become
immediately due and payable without notice or demand by Xxxxx to the maker upon
the occurrence of any of the following events (each being an "EVENT OF
DEFAULT"):
(a) Failure of the maker to pay within ten (10) days after notice
thereof by Xxxxx to the maker that any payment of principal or interest herein
required shall have become due and not paid in a timely manner;
(b) Dissolution or termination of existence of the maker or of any
endorser hereon or guarantor hereof; or
(c) The making of an assignment for the benefit of creditors,
insolvency, appointment of a receiver (not discharged within sixty (60) days) of
any part of the property of, or the filing of a petition in bankruptcy, or the
commencement of any proceedings under any bankruptcy or insolvency law or any
law relating to the relief of debtors, readjustment or indebtedness,
reorganization, composition or extension, by or (if not discharged within sixty
(60) days) against, the maker or any endorser hereon or guarantor hereof.
4. Partial Acceleration. In the event of the termination of the
Employment Agreement dated August _____, 1999 between the maker of this Note and
Xxxxx without "cause" as defined in said Employment Agreement, an amount equal
to fifty percent (50%) of the unpaid portion of this Note shall become
immediately payable, with the balance of this Note continuing to be payable in
the same manner and over the same time period over the balance of the term of
this Note, except that each monthly principal payment shall be reduced to an
amount equal to fifty percent (50%) of the payments set forth in Section 1.
5. Notices. Any notice, request or instruction to be given hereunder
shall be in writing and shall be delivered in person or transmitted by facsimile
(with confirmation in writing to be made available upon request) or mailed by
certified mail, return receipt
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requested, postage prepaid, and delivered to the appropriate party and address
as shown above. Either of the addresses specified above may be changed by notice
given as herein provided. All communications will be deemed effective upon
receipt.
6. No Assignment. This Note shall inure solely to the benefit of Xxxxx
and shall not be assignable.
7. Waiver.
(a) The maker and all endorsers and guarantors of this Note hereby
waive presentment, demand, protest and all other demands in connection with the
delivery and enforcement of this Note.
(b) Xxxxx shall not, by any act, delay, omission or otherwise, be
deemed to have waived any of its rights or remedies hereunder, unless such
waiver be in writing and signed by Xxxxx, and then only to the extent expressly
set forth therein. A waiver on any one occasion shall not constitute or be
construed as a bar to or a waiver of any such right or remedy on any future
occasion.
8. Choice of Law. The execution, delivery and performance of this Note
shall be governed by and construed in accordance with the laws of the State of
Delaware.
9. Legal Fees. Maker shall be liable for any and all fees and expenses
incurred by Xxxxx, including legal fees, in connection with his enforcing this
Note.
This Note has been executed under seal on the day and year first above
written.
NEOFORMA GAR, INC.
_____________________________ By:_____________________________
Witness
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EXHIBIT B TO
EXHIBIT 2.01
GUARANTY
THIS GUARANTY ("GUARANTY"), executed as of the ____ day of August, 1999
is by Neoforma, Inc., a Delaware corporation, having a mailing address of 0000-0
Xxxxx Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 ("GUARANTOR") for the benefit of
Xxxx Xxxxx having an address of 000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxx 00000
( the "SELLER").
RECITALS
This Guaranty is given in connection with a promissory note (the "NOTE")
of even date herewith executed by Neoforma GAR, Inc., a Delaware corporation
(the "BUYER") in favor of the Seller in the original principal amount of Seven
Million Eight Hundred Thousand Dollars ($7,800,000) issued pursuant to and as an
inducement to Seller to enter into that certain Securities Purchase Agreement
dated July 16th, 1999, by and among Guarantor, Buyer and Seller (the
"AGREEMENT") which provided for the purchase by the Buyer of the issued and
outstanding securities of General Asset Recovery, LLC, an Illinois limited
liability company.
NOW THEREFORE, in consideration of the transactions contemplated in the
Agreement and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Guarantor hereby makes the
following representations and warranties to Seller and hereby covenants and
agrees with Seller as follows:
1. GUARANTY. Guarantor hereby absolutely, unconditionally and
irrevocably guaranties to Seller the performance and payment when due, whether
at maturity, by acceleration or otherwise, of all liabilities and obligations
now or hereafter owing by, or chargeable to Buyer under the Note, including
without limitation, principal and interest, and all other liabilities and
obligations of Buyer to Seller, which become due, if ever, under the Note (the
foregoing being hereinafter collectively referred to as the "OBLIGATIONS"). Upon
the occurrence of an Event of Default (as defined in the Note), Guarantor shall,
on demand by Seller, immediately pay and perform all Obligations as are then or
may thereafter from time to time become due and owing, without further notice
from Seller.
2. MISCELLANEOUS.
(a) Notices. Any notice, request or instruction to be given
hereunder shall be in writing and shall be delivered in person or
transmitted by facsimile (with confirmation in writing to be made
available upon request) or mailed by certified mail, return receipt
requested, postage prepaid, and delivered to the appropriate party and
address as shown above. Either of the addresses specified above may be
changed by notice given as herein provided. All communications will be
deemed effective upon receipt.
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(b) No Assignment. This Guaranty shall be binding upon Guarantor
and inure solely to the benefit of Seller and shall not be assignable.
(c) Termination. If all sums and indebtedness owing under the
Note shall be fully and indefeasibly paid in cash, this Guaranty shall
terminate and be of no further force or any effect.
(d) Governing Law. The execution, delivery and performance of
this Guaranty shall be governed by the laws of the State of Delaware.
(e) Legal Fees. Guarantor shall be liable for any and all fees
and expenses incurred by Seller, including legal fees, in connection
with its enforcing this Guaranty.
GUARANTOR
Neoforma, Inc.
By:
-------------------------------------
Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
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EXHIBIT C TO
EXHIBIT 2.01
EMPLOYMENT AGREEMENT
This Employment Agreement (the "EMPLOYMENT AGREEMENT") is made this
_____ day of August, 1999, by and between Neoforma GAR, Inc., a Delaware
corporation, (the "COMPANY"), Neoforma, Inc., a Delaware corporation,
("NEOFORMA"), and Xxxx Xxxxx of Buffalo Grove, Illinois (the "EMPLOYEE").
RECITALS
The Company has acquired all of the issued and outstanding securities
(the "SECURITIES PURCHASE") of General Asset Recovery, LLC, ("GAR") pursuant to
the terms of a certain Securities Purchase Agreement dated July 16th, 1999,
which provided for the employment of the Employee by the Company.
The Company and the Employee acknowledge that the Employee's abilities
and services are essential to the prospects of the Company, the Company desires
to hire the Employee as its President, and the Employee desires to accept such
employment.
The parties hereto desire to enter into a comprehensive agreement to
set forth the terms and conditions pursuant to which the Employee shall be
employed by the Company.
NOW, THEREFORE, in consideration of Employee's employment by the
Company, the mutual covenants and agreements hereinafter set forth, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Employee, intending to be legally
bound, agree as follows:
1. Employment. The Company hereby agrees to employ the Employee, and
the Employee hereby accepts employment, all upon the terms, conditions and
covenants set forth in this Employment Agreement which the Company and Employee
agree are reasonable.
2. Duties. The Employee shall serve on a full-time basis as the
Company's President, with all powers and duties customarily associated with such
title and as are otherwise set forth herein, and shall:
(a) faithfully and diligently perform the duties of President of the
Company, and Vice President of Neoforma, the Company's parent company;
(b) comply with the overall reasonable business policies established
by the Chief Executive Officer (the "CHIEF EXECUTIVE OFFICER") of Neoforma, or
by the Board of Directors (the "BOARD OF DIRECTORS") of Neoforma; and
(c) do all things reasonably within his power to promote, develop,
operate and expand the "business of the Company" in a manner designed to meet
with the projections set forth on Schedule A hereto. For the purposes of setting
forth the duties of the Employee in
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this Section 2, the "business of the Company" shall include, (i) the business
operated as GAR prior to its acquisition by the Company, which the Employee
agrees to operate in substantially the same manner as it was operated by him
prior to such acquisition; (ii) a medical equipment auction business, which may
include Neoforma Trade, over which the Employee is given oversight, whether such
business is operated directly through the Company or otherwise; and (iii) the
asset management business operated by Neoforma prior to the acquisition of GAR
by the Company, whether operated through the Company or otherwise.
The Employee agrees to perform such other related duties as may be
delegated to the Employee from time to time by the Chief Executive Officer or by
the Board of Directors. The Employee shall devote his full time and reasonable
business efforts in the performance of his duties and shall not have any outside
employment while employed on a full-time basis by the Company. The Employee
shall report directly to the Chief Executive Officer or a similar level
executive officer of Neoforma appointed by the Board of Directors, and shall be
required to submit a monthly operations report to such Chief Executive Officer
or such other officer on or before the fifteenth day of each month with respect
to the Company's operations for the prior month. The Employee shall not be
required to relocate his base of employment outside of the State of Illinois.
3. Term. The term of this Employment Agreement shall begin on the date
hereof (the "EFFECTIVE DATE") and shall continue until the earlier of December
31, 2001 or the date of any termination hereunder (the "TERM").
4. Compensation. All compensation paid or payable hereunder shall be
deemed to be paid or payable by the Company in accordance with the Company's
general policy, as set forth in the Company's written manuals, unless this
Employment Agreement specifically states otherwise.
(a) Salary. During the Term of this Employment Agreement, the
Company shall pay to the Employee, in consideration for the services provided by
him hereunder, an annual base salary in the minimum of One Hundred Thousand
Dollars ($100,000) per year (the "ANNUAL SALARY"), which amount shall be payable
in accordance with Neoforma's customary payroll practices and shall be prorated
for any partial years of employment hereunder. The Board of Directors shall have
the right but not the obligation to increase the amount of the Annual Salary
based upon the performance of the Company and the Employee.
(b) Bonus. As further compensation, provided Employee remains
employed by the Company, Employee shall be entitled to receive an annual bonus
payable following the completion of each year during the Term, based on the
level of sales attained by the Company, which bonus shall be calculated in the
manner set forth on Schedule B attached hereto but which shall not be less than
Fifty Thousand Dollars ($50,000) per year.
(c) Stock Options. In consideration of his continued employment
hereunder, the Employee shall be granted options to purchase up to Five Hundred
Fifty
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Thousand (550,000) shares of the common stock, $0.001 par value, of Neoforma,
which options shall be exercisable at a price of $0.10 per share. The options
shall vest (i) at a rate of Thirty Three Thousand Three Hundred Thirty Three
(33,333) shares per month during each of months one through twelve following the
closing date of the Securities Purchase (the "CLOSING Date") (on the same date
of each month as the Closing Date), and (ii) at the rate of Four Thousand One
Hundred Sixty Seven (4,167) shares per month during each of months thirteen
through forty-seven, with the balance of the remaining options to vest in month
forty-eight, following the Closing Date (on the same day of each month as the
Closing Date). Notwithstanding the foregoing, in the event Employee ceases to be
employed by the Company during the term of this Employment Agreement, other than
if Employee is terminated by the Company without cause as defined in Section 9,
Employee shall forfeit the right to exercise any options which have not yet
vested. The options being issued hereunder shall be exercisable for a period of
seven years and shall be issued pursuant to Neoforma's 19__ Employee Stock
Option Plan.
5. Benefits. All benefits paid or payable hereunder shall be deemed to
be paid or payable by the Company in accordance with the Company's general
policy, as set forth in the Company's written manuals, unless this Employment
Agreement specifically states otherwise.
(a) Vacation, Paid Holidays. During the Term, the Employee shall be
entitled to take twenty-two (22) days of paid time off, unless otherwise agreed
upon by the Employee and the Company. The Employee shall also be entitled to
paid absence for all holidays provided by the Company to its other employees
plus any other holiday upon which the Company is closed for business. Nothing
herein shall prohibit the Company from changing the holidays which it observes
hereafter.
(b) Other Benefits. During the Term, the Employee shall be entitled
to participate (to the extent that he is eligible) in all other employee
benefits, if any, provided by the Company under the same terms and conditions as
provided for its other executive officers including but not limited to: (i)
health and disability insurance under such policies or plans as the Company may
adopt; (ii) participation in such 401(k) plan as the Company may establish; and
(iii) term life insurance coverage in such amounts and under such policies or
plans as the Company may adopt.
(c) Automobile Allowance. The Employee shall be entitled each month
to an automobile allowance in the amount of One Thousand Four Hundred Dollars
($1,400) which shall be used for automobile related expenses incurred by the
Employee in the performance of his duties hereunder.
6. Reimbursement for Expenses. Upon the submission of appropriate
invoices or vouchers, the Employee shall be entitled to reimbursement for all
reasonable expenses that he incurs in the performance of his duties under this
Employment Agreement in furthering the
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business and policies of the Company, such reimbursement to be paid in
accordance with Neoforma's customary expense reimbursement practices.
7. Key Person Life Insurance. The Company shall have the right but not
the obligation to maintain and pay for a key person life insurance policy on the
life of the Employee, as to which the Company shall be the sole beneficiary and
owner. The Employee agrees upon the execution of this Employment Agreement to
cooperate fully with the Company and to provide the Company with all necessary
documents in order for the Company to obtain such policy.
8. Withholding. The Company shall withhold or deduct from the
Employee's cash compensation any amounts required by law to be so withheld or
deducted.
9. Termination by The Company.
(a) This Employment Agreement may be terminated by the Company upon
the occurrence of any of the following:
(i) the Employee's death. If the Employee dies during the Term,
the Company's obligations under this Employment Agreement shall terminate
immediately and the Employee's estate shall be entitled to all arrearages of
salary and expenses but shall not be entitled to further compensation unless
otherwise specifically provided for under this Employment Agreement.
(ii) the action by the Board of Directors following the
Employee's "disability". For this purpose, "disability" means a physical or
mental illness or other incapacity which renders the Employee unable to perform
substantially all of his duties for a period of six (6) months. For purposes of
this Employment Agreement, disability shall be deemed a continuation of any
prior disability if the disability is related to the prior disability and
commences within twelve (12) months of the termination of the prior disability.
Disability, and any relation to any prior disability, shall be determined by a
physician acceptable to the Company and the Employee provided that if the
Company and the Employee fail to agree on a mutually acceptable physician, a
third physician shall be chosen by each party's physician and any determination
by such third physician shall be binding. If the Employee becomes disabled
during the Term, the Employee may pursue his rights under any disability plan
maintained by the Company.
(iii) the action of Neoforma's Board of Directors for Cause.
"Cause" is defined as the occurrence of any of the following events: (A) fraud,
misappropriation, embezzlement or intentional misconduct on the part of the
Employee, (B) the Employee's willful failure to substantially perform his duties
for the Company when, and to the extent, requested by the Board of Directors, or
its lawfully designated representative, to do so and failure to correct same
within five (5) business days after notice from the Board of Directors or its
lawfully designated representative requesting the Employee to do so, which has a
materially
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adverse effect upon the Company, or (C) the Employee's willful breach of any
material provision of this Employment Agreement and such breach continues for a
period of five (5) business days after notice from the Board of Directors or its
lawfully designated representative of such breach. Termination by the Company
for cause will be effective immediately upon receipt by the Employee of notice
of such termination.
(b) Termination of Benefits. In the event of any termination by the
Company for "cause" pursuant to Section 9 (a) hereof, or any voluntary
termination by the Employee, in addition to the termination of the various
benefits and compensation payable to the Employee hereunder generally, the
benefits provided for pursuant to Section 4 of this Employment Agreement shall,
to the extent not yet accrued or vested, automatically cease and terminate, and
any and all unvested stock options held by Employee in Neoforma shall
automatically expire.
(c) Survival. Notwithstanding anything else in this Employment
Agreement, the provisions of Section 10 (Confidentiality), Section 11
(Non-Competition and Non-Solicitation), Section 12 (Developments), Section 13
(Representations and Warranties) and Section 23 (Equitable Remedies) shall
survive the termination of the Employee's employment with the Company, if by the
Company, for "cause" or by the Employee. In the event the Employee's employment
hereunder is terminated by the Company without cause, or due to the bankruptcy
or insolvency of the Company, or due to any material breach of this Employment
Agreement by the Company, the only provision of this Employment Agreement which
shall survive shall be Section 10 (Confidentiality) to the extent that it deals
with Confidential Information of the Company which existed prior to the date of
this Employment Agreement.
10. Confidentiality. During the Term of this Employment Agreement and
thereafter, the Employee hereby covenants and agrees that he shall not other
than for the benefit of the Company publish, disclose to any third party or in
any way use for his own benefit any confidential information ("Confidential
Information"), including without limitation, any balance sheet or income
statement information (including but not limited to the value, amount or
condition of capital assets and/or inventory, sales figures, profitability,
etc.), or any other financial data, banking information, credit information,
trade secrets, financial statements or related data, customer lists or
information pertaining to customers or any unique distribution, manufacturing,
marketing and research methods of the Company or its parent or affiliates (or
formerly of General Asset Recovery, LLC), and any other Confidential Information
concerning the Company's or its parent or affiliate's, business, structure or
affairs, (or the business, structure or affairs formerly of General Asset
Recovery, LLC). All Confidential Information and copies thereof are the sole
property of the Company and Employee shall deliver promptly to the Company at
the termination of his employment or at any time as the Board of Directors may
request, without retaining copies, any Confidential Information made, compiled,
delivered, made available or otherwise obtained by Employee. Employee shall also
use his best efforts and exercise utmost diligence to protect and safeguard the
Confidential Information of the Company's customers, contractors and others with
whom
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the Company has a business relationship, whether learned or acquired by Employee
during the course of his employment by the Company.
The nondisclosure obligations of this Section 10 shall not apply to:
(a) information that may be disclosed generally or is in the public domain
through no fault of the Employee; (b) information received from a third party
outside the Company that was disclosed without a breach of any confidentiality
obligation; (c) information approved for release by written authorization of the
Company; or (d) information that may be required by law or an order of any
court, agency or proceeding to be disclosed. This Section 10 shall remain in
effect notwithstanding any termination of this Employment Agreement.
11. Non-Competition and Non-Solicitation.
(a) During the time Employee is employed by the Company, Employee
shall devote his full time and efforts to the business of the Company and shall
not participate, directly or indirectly, in any capacity, in any business or
activity that is in competition with the Company. For a period of eighteen (18)
months after the termination of employment with the Company for any reason: (i)
Employee shall not hire or attempt to hire any employee of the Company, or
assist in such hiring by anyone else, or encourage any employee to terminate his
or her employment with the Company; (ii) Employee shall not participate,
directly or indirectly, in any capacity, in any business or activity that is in
competition with the Company in the medical equipment re-sale industry, medical
facility planning industry or in any other business in which the Company is
engaged, in any state in which the Company does business; and (iii) Employee
shall not cause or assist to cause any of the customers of the Company with whom
Employee communicated, dealt with or became acquainted during his term of
employment with the Company to enter into contractual arrangements with himself
or any other person, firm, partnership, corporation or other company in any
business or activity that is in competition with the Company.
(b) "Blue Pencil" Rule. The Employee and the Company desire that
the provisions of this Section 11 be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. If a court of competent jurisdiction, however, determines
that any restrictions imposed on the Employee in this Section are unreasonable
or unenforceable because of duration, area of restriction, or otherwise, the
Employee and the Company agree and intend that the court shall enforce this
Section 11 to whatever extent the court deems reasonable to effect the intent of
this Section 11.
(c) Legitimate Purpose. The Employee has read carefully all of the
terms and conditions of this Section 11 and agrees that the restraints set forth
herein (i) are reasonable and necessary to support the legitimate business
interests and goodwill of the Company, and (ii) will not preclude the Employee
from earning a livelihood during the life of this Section 11.
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12. Developments. All Confidential Information and all other
discoveries, inventions, processes, methods, and improvements conceived,
developed, or otherwise made by Employee at any time, alone or with others, and
in any way relating to the Company's present or future business or products,
whether or not patentable or subject to copyright protection and whether or not
reduced to tangible form or reduced to practice, during the Term of employment
("DEVELOPMENTS"), shall be the sole property of the Company. Employee agrees to
and hereby does assign to the Company all right, title, and interest throughout
the world in and to all Developments and agrees to promptly disclose such
Developments to the Company and take all such actions reasonably requested by
the Company to establish and confirm the Company's ownership of such
Developments. Employee agrees that all such Developments shall constitute works
made for hire under the copyright laws of the United States and hereby assigns
to the Company all copyrights, patents, trademarks and other proprietary rights
the Employee may have in such Developments.
13. Representations and Warranties. Prior to the execution and delivery
of this Employment Agreement, the Employee represents and warrants that he has
terminated all of his obligations under any other employment agreement or other
similar agreement, whether written or oral, with any other party. The Employee
has delivered copies of all such employment or other agreements and evidence
satisfactory to the Company of the termination of such agreements. The Employee
represents and warrants that the execution of this Employment Agreement will not
result in a breach of any written agreement to which the Employee is a party or
by which the Employee is bound. The Employee covenants and agrees to defend,
indemnify and hold harmless the Company, its affiliates and its successors and
assigns against any and all claims, damages, liabilities, suits, actions, costs,
charges and expenses, including, without limitation, attorneys' fees, resulting
from a breach of this Section 13.
14. Notice. All necessary notices, payments, demands and requests shall
be in writing and shall be deemed duly given three (3) days after being mailed
by certified mail, postage prepaid, return receipt requested, or when actually
received if sent by facsimile, overnight delivery or other means, and addressed
as follows:
Company: c/o Neoforma, Inc.
0000-0 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Wm. Xxxxxx Xxxxxx, Controller
Facsimile: (000) 000-0000
With a Copy to: Xxxx X. Xxxxxxxxxxx, Esq.
Pepe & Hazard, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
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Employee: Xxxx Xxxxx
000 Xxxxxxx Xxxxx
Xxxxxxx Xxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to: Xxxxxxx X. Xxxxx, Esq.
Marks, Marks and Xxxxxx, Ltd.
000 Xxxxx Xx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Each addressee may change its address or facsimile number for notice by
giving notice of change of address or facsimile number in the manner set forth
above.
15. Assignment. This Employment Agreement shall be freely assignable by
the Company to, and shall inure to the benefit of and be binding upon, any other
entity which shall succeed to the business presently being operated by the
Company, but, being a contract for personal services, neither this Employment
Agreement nor any rights hereunder shall be assignable by the Employee.
16. Further Execution. The parties agree to execute all documents
necessary to further effectuate the terms of this Employment Agreement.
17. Litigation. In the event of any dispute respecting this agreement,
such dispute shall be resolved in a court of competent jurisdiction in the State
of Illinois, and the parties hereto consent to such venue and jurisdiction. Each
party shall bear the cost of its own fees and expenses.
18. Authority. Each party represents that its undersigned
representative or corporate officer has all requisite power and authority to
enter into this Employment Agreement and to execute any and all instruments and
documents on its behalf necessary to and in performance of their respective
obligations hereunder.
19. Counterparts. This Employment Agreement may be executed in separate
counterparts, each of which shall be deemed original and all of which together
shall constitute one and the same instrument.
20. Waivers. No waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Employment Agreement, nor any waiver on the part of any party of any provisions
or conditions of this Employment Agreement, shall be valid unless made in
writing and signed by the party to be charged therewith, and shall be effective
only to the extent specifically set forth in such writing. No delay or omission
to exercise any right,
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power or remedy inuring to any party, upon any breach or default of any party
under this Employment Agreement, shall impair any such right, power or remedy of
such party nor shall it be construed to be a waiver of any such breach or
default, or an acquiescence therein, or of any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. All remedies either under this Employment Agreement or by law or
otherwise afforded to any party, shall be cumulative and not alternative.
21. Severability. If any provisions of this Employment Agreement shall
be held to be invalid or unenforceable to any extent or in any application, then
the remainder of this Employment Agreement and such terms and conditions, except
to such extent or in such application, shall not be affected thereby, and each
and every term and condition of this Employment Agreement shall be valid and
enforced to the fullest extent and in the broadest application permitted by law.
22. Headings. The paragraph headings contained herein are for
convenience and reference only, and shall be given no effect in the
interpretation of any term or condition of this Employment Agreement.
23. Equitable Remedies. Each party hereto hereby confirms that damages
at law may be an inadequate remedy for the breach or threatened breach of this
Employment Agreement and agrees that, in the event of a breach or threatened
breach by a party of any provision hereof, the other party's rights and
obligations hereunder shall be enforceable by specific performance, injunction,
or other equitable remedy, in addition to and not in lieu of any rights to
damages at law or other rights provided by statute or otherwise for a breach or
threatened breach of any provision hereof. Accordingly, each party hereto hereby
waives and agrees not to assert any objection to such equitable relief based
upon the purported existence of an adequate remedy at law, notwithstanding that
another party may also assert claims for damages at law or other claims as an
alternative to, or in addition to, such equitable relief.
24. Miscellaneous. This Employment Agreement is entered into and shall
be construed under the laws of the State of Illinois applicable to contracts
made and to be entirely performed within that State. This Employment Agreement
shall be amended, modified or terminated only by an instrument in writing,
signed by the party or parties to be charged. This Employment Agreement is the
entire agreement of the parties relating to the employment of the Employee by
the Company and supersedes all previous written or oral agreements.
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IN WITNESS WHEREOF the parties have executed or caused to be executed
this Employment Agreement under seal as of the day and year first above written.
NEOFORMA GAR, INC. NEOFORMA, INC.
By:_______________________________ By:_______________________________
Xxxxx XxXxxxxx, President Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
EMPLOYEE:
__________________________________
Xxxx Xxxxx
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EXHIBIT D TO
EXHIBIT 2.01
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is made this ____ day of
August, 1999, by and between Neoforma GAR, Inc., a Delaware corporation (the
"COMPANY"), and Xxxx Xxxxx of Highland Park, Illinois (the "CONSULTANT").
RECITALS
The Company is a wholly-owned subsidiary of Neoforma, Inc.
("NEOFORMA"), a Delaware corporation, and has acquired all of the issued and
outstanding securities (the "SECURITIES PURCHASE") of General Asset Recovery,
LLC, ("GAR") pursuant to the terms of a certain Securities Purchase Agreement
dated July 16th, 1999, which provided for the Consultant's acting as a
consultant to the Company.
The Company wishes to hire the Consultant as an independent contractor
to perform the services set forth herein, for the period of time, and upon the
terms and subject to the conditions, which are more particularly set forth
below; and
The Consultant desires to perform such services, for such period of
time and upon such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Consulting Period. The Consultant is hereby retained by the Company
to perform, and the Consultant hereby agrees to perform, the services provided
for herein, as an independent contractor, for a period commencing on the date
hereof and ending on the two (2) year anniversary of the date hereof unless
terminated earlier as provided for herein (the "CONSULTING PERIOD").
2. Services and Duties. The Consultant agrees that during the
Consulting Period, he will provide certain services to the Company, consisting
of support and assistance in connection with the operation of the business
previously operated by General Asset Recovery, LLC, as well as such other tasks
and responsibilities which may be delegated to the Consultant by or under the
authority of the President of the Company and/or the Chief Executive Officer of
Neoforma, from time to time (the "CONSULTING SERVICES"). The Consultant shall
report directly to the President of the Company and to the Chief Executive
Officer of Neoforma or to any officer of Neoforma designated by the Board of
Directors of Neoforma.
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The Consultant agrees that he will conduct himself in a professional
and ethical manner at all times during the term of this Agreement and will take
no action that might cause injury to the business or goodwill of the Company.
The Consultant shall not perform consulting or other services for any
entity or person which is directly competitive with Neoforma or the Company
during the Consulting Period without the prior written consent of the Board of
Directors of Neoforma, which shall not be unreasonably withheld. However,
Consultant shall be permitted to perform consulting services for and be employed
by other non-competing businesses. It is the intention of the parties that
Consultant shall not be required to devote his full time and efforts to his
duties under this Consulting Agreement.
3. Compensation/Reimbursement for Expenses. All compensation paid or
payable hereunder shall be deemed to be paid or payable by the Company unless
this Agreement specifically states otherwise.
(a) Consulting Fees. In consideration for the Consulting Services
and subject to the due performance thereof, the Company shall pay to the
Consultant during the Consulting Period a fee of One Hundred Fifty Thousand
Dollars ($150,000) per year (the "CONSULTING FEE") which Consulting Fee shall be
payable during the term of this Agreement in equal semi-monthly installments in
accordance with the Company's customary practices. The Consulting Fee shall be
pro-rated for any partial year during which the Consultant provides Consulting
Services.
(b) Reimbursement for Expenses. At the end of each month during the
Consulting Period, the Company shall reimburse the Consultant for reasonable
items of miscellaneous and travel expenses incurred in furtherance of the
business of the Company, but payment shall be made only against a signed
itemized list of such expenditures.
(c) Automobile Allowance. The Consultant shall be entitled each
month to an automobile allowance in an amount equal to his actual automobile
related expenses, up to the amount of One Thousand Four Hundred Dollars ($1,400)
which shall be used for automobile related expenses incurred by the Consultant
in the performance of his duties hereunder.
4. Key Person Life Insurance. The Company shall have the right but not
the obligation to maintain and pay for a key person life insurance policy on the
life of the Consultant throughout the duration of this Agreement, as to which
the Company shall be the sole beneficiary and owner. The Consultant agrees upon
the execution of this Agreement to
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cooperate fully with the Company and to provide the Company with all necessary
documents in order for the Company to obtain such policy.
5. Status as Independent Consultant. It is the intent and purpose of
this Agreement to create a legal relationship of independent contractor, and not
employment, as between the Company and the Consultant. The Consultant will not
be treated as an employee of the Company for purposes of the Federal Insurance
Contributions Act, the Social Security Act, the Federal Unemployment Tax Act,
income tax withholding at source, or workmen's compensation laws, and will not
be eligible for any employee benefits whatsoever, other than those set forth
herein. The Consultant shall be responsible for the payment of self-employment
and federal income taxes due on all payments hereunder. In the event that any
governmental or administrative agency, whether federal, state or local, shall
subsequently determine that for their purposes, the relationship is one of
employment as between said parties, then in such event Consultant shall bear any
and all loss, costs and expenses of the Company in connection with or arising
out of such determination, whether in the nature of past or future FICA
contributions, Social Security taxes, unemployment taxes or income taxes. The
Consultant shall indemnify the Company and hold it harmless from any liability
to any former Company or to any other party in connection with or arising out of
any such governmental or administrative determination, or otherwise as a
consequence of Consultant's status as an independent contractor rather than an
employee of the Company.
6. Termination.
(a) This Agreement may be terminated upon any of the following:
(i) the Consultant's death;
(ii) the action by the Board of Directors of Neoforma
following the Consultant's "disability". For this purpose, "disability" means a
physical or mental illness or other incapacity which renders the Consultant
unable to perform substantially all of his duties for a period of two (2)
months. For purposes of this Agreement, disability shall be deemed a
continuation of any prior disability if the disability is related to the prior
disability and commences within eight (8) months of the termination of the prior
disability. Disability, and any relation to any prior disability, shall be
determined by a physician acceptable to the Company; or
(iii) the action of the Board of Directors or Chief Executive
Officer of Neoforma or the President of the Company for Cause. "Cause" is
defined as the occurrence of any of the following events: (A) fraud,
misappropriation, embezzlement or intentional misconduct on the part of the
Consultant, (B) the Consultant's willful failure to substantially
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perform his duties for the Company when, and to the extent, requested by the
Board of Directors, or its lawfully designated representative, to do so and
failure to correct same within five (5) business days after notice from the
Board of Directors or its lawfully designated representative requesting the
Consultant to do so, which has a materially adverse effect upon the Company, or
(C) the Consultant's willful breach of any material provision of this Agreement
and such breach continues for a period of five (5) business days after notice
from the Board of Directors or its lawfully designated representative of such
breach. Termination by the Company for cause will be effective immediately upon
receipt by the Consultant of notice of such termination.
(b) Termination of Benefits. In the event of any termination
pursuant to this Section during the term of this Agreement, in addition to the
termination of the various benefits and compensation payable to the Consultant
hereunder generally, the benefits provided for pursuant to Section 3 of this
Agreement shall, to the extent not yet accrued, automatically cease and
terminate.
(c) Survival. Notwithstanding anything else in this Agreement, the
provisions of Section 7 (Confidentiality), Section 8 (Non-Competition and
Non-Solicitation), Section 9 (Developments), and Section 20 (Equitable Remedies)
shall survive the termination of this Agreement, if by the Company, for "cause"
or by the Consultant. In the event this Agreement is terminated by the Company
without cause, or due to the bankruptcy or insolvency of the Company, or due to
any material breach of this Agreement by the Company, the only provision of this
Agreement which shall survive shall be Section 7 (Confidentiality) to the extent
that it deals with Confidential Information of the Company which existed prior
to the date of this Agreement.
7. Confidentiality. During the Consulting Period and thereafter, the
Consultant hereby covenants and agrees that he shall not other than for the
benefit of the Company publish, disclose to any third party or in any way use
for his own benefit any confidential information ("Confidential Information"),
including without limitation, any balance sheet or income statement information
(including but not limited to the value, amount or condition of capital assets
and/or inventory, sales figures, profitability, etc.), or any other financial
data, banking information, credit information, trade secrets, financial
statements or related data, customer lists or information pertaining to
customers or any unique distribution, manufacturing, marketing and research
methods of the Company or its parent or affiliates (or formerly of General Asset
Recovery, LLC), and any other Confidential Information concerning the Company's
or its parent or affiliate's, business, structure or affairs, (or the business,
structure or affairs formerly of General Asset Recovery, LLC). All Confidential
Information and copies thereof are the sole property of the Company and
Consultant shall deliver promptly to the Company at the termination of his
Consulting Period or at any time as
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Neoforma's Board of Directors may request, without retaining copies, any
Confidential Information made, compiled, delivered, made available or otherwise
obtained by Consultant. Consultant shall also use his best efforts and exercise
utmost diligence to protect and safeguard the Confidential Information of the
Company's customers, contractors and others with whom the Company has a business
relationship, whether learned or acquired by Consultant during the course of his
Consulting Period.
The nondisclosure obligations of this Section 7 shall not apply to: (a)
information that may be disclosed generally or is in the public domain through
no fault of the Consultant; (b) information received from a third party outside
the Company that was disclosed without a breach of any confidentiality
obligation; (c) information approved for release by written authorization of the
Company; or (d) information that may be required by law or an order of any
court, agency or proceeding to be disclosed. This Section 7 shall remain in
effect notwithstanding any termination of this Agreement.
8. Non-Competition and Non-Solicitation.
(a) During the time the Consultant is consulting for the Company,
Consultant shall devote his full time and efforts to the business of the Company
and shall not participate, directly or indirectly, in any capacity, in any
business or activity that is in competition with the Company. For a period of
eighteen (18) months after the termination of the Consulting Period with the
Company for any reason: (i) Consultant shall not hire or attempt to hire any
employee of the Company, or assist in such hiring by anyone else, or encourage
any employee to terminate his or her employment with the Company; (ii)
Consultant shall not participate, directly or indirectly, in any capacity, in
any business or activity that is in competition with the Company in the medical
equipment re-sale industry, medical facility planning industry or in any other
business in which the Company is engaged, in any state in which the Company does
business; and (iii) Consultant shall not cause or assist to cause any of the
customers of the Company with whom Consultant communicated, dealt with or became
acquainted during his term of consulting for the Company to enter into
contractual arrangements with himself or any other person, firm, partnership,
corporation or other company in any business or activity that is in competition
with the Company.
(b) "Blue Pencil" Rule. The Consultant and the Company desire that
the provisions of this Section 8 be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. If a court of competent jurisdiction, however, determines
that any restrictions imposed on the Consultant in this Section are unreasonable
or unenforceable because of duration, area of restriction, or otherwise, the
Consultant and the Company agree and intend that the court shall enforce this
Section 8 to whatever extent the court deems reasonable to effect the intent of
this Section 8.
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(c) Legitimate Purpose. The Consultant has read carefully all of
the terms and conditions of this Section 8 and agrees that the restraints set
forth herein (i) are reasonable and necessary to support the legitimate business
interests and goodwill of the Company, and (ii) will not preclude the Consultant
from earning a livelihood during the life of this Section 8.
9. Developments. All Confidential Information and all other
discoveries, inventions, processes, methods, and improvements conceived,
developed, or otherwise made by Consultant at any time, alone or with others,
and in any way relating to the Company's present or future business or products,
whether or not patentable or subject to copyright protection and whether or not
reduced to tangible form or reduced to practice, during the term of this
agreement and for six months thereafter ("Developments"), shall be the sole
property of the Company. Consultant agrees to and hereby does assign to the
Company all right, title, and interest throughout the world in and to all
Developments and agrees to promptly disclose such Developments to the Company
and take all such actions reasonably requested by the Company to establish and
confirm the Company's ownership of such Developments. Consultant agrees that all
such Developments shall constitute works made for hire under the copyright laws
of the United States and hereby assigns to the Company all copyrights, patents,
trademarks and other proprietary rights the Consultant may have in such
Developments.
10. Notices. All necessary notices, payments, demands and requests
shall be in writing and shall be deemed duly given three (3) days after being
mailed by certified mail, postage prepaid, return receipt requested, or when
actually received if sent by facsimile, overnight delivery or other means, and
addressed as follows:
Company: c/o Neoforma, Inc.
0000-0 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attn: Wm. Xxxxxx Xxxxxx, Controller
Facsimile: (000) 000-0000
With a Copy to: Xxxx X. Xxxxxxxxxxx, Esq.
Pepe & Hazard, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Consultant: Xxxx Xxxxx
000 Xxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
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With a Copy to: Marks, Marks and Xxxxxx Ltd.
000 Xxxxx Xx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Esq.
Facsimile No.: (000) 000-0000
Each addressee may change its address or facsimile number for notice by
giving notice of change of address or facsimile number in the manner set forth
above.
11. Assignment. This Agreement shall be freely assignable by the
Company to, and shall inure to the benefit of and be binding upon, any other
entity which shall succeed to the business presently being operated by the
Company, but, being a contract for personal services, neither this Agreement nor
any rights hereunder shall be assignable by the Consultant.
12. Further Execution. The parties agree to execute all documents
necessary to further effectuate the terms of this Agreement.
13. Litigation. In the event of any dispute respecting this agreement,
such dispute shall be resolved in a court of competent jurisdiction in the State
of Illinois, and the parties hereto consent to such venue and jurisdiction. Each
party shall bear the cost of its own fees and expenses.
14. Authority. Each party represents that its undersigned
representative or corporate officer has all requisite power and authority to
enter into this Agreement and to execute any and all instruments and documents
on its behalf necessary to and in performance of their respective obligations
hereunder.
15. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
16. Waivers. No waiver, permit, consent or approval of any kind or
character on the part of any party of any breach or default under this
Agreement, nor any waiver on the part of any party of any provisions or
conditions of this Agreement, shall be valid unless made in writing and signed
by the party to be charged therewith, and shall be effective only to the extent
specifically set forth in such writing. No delay or omission to exercise any
right, power or remedy inuring to any party, upon any breach or default of any
party under this Agreement, shall impair any such right, power or remedy of such
party nor shall it be construed to be a waiver of any such breach or default, or
an acquiescence therein, or of any similar breach or
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default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. All remedies either under this Agreement or by law or
otherwise afforded to any party, shall be cumulative and not alternative.
17. Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, such provision shall be reformed to the
extent necessary to permit enforcement thereof, and the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
18. Titles and Subtitles. The titles of the sections and subsections of
this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
19. Equitable Remedies. Each party hereto hereby confirms that damages
at law may be an inadequate remedy for the breach or threatened breach of this
Agreement and agrees that, in the event of a breach or threatened breach by a
party of any provision hereof, the other party's rights and obligations
hereunder shall be enforceable by specific performance, injunction, or other
equitable remedy, in addition to and not in lieu of any rights to damages at law
or other rights provided by statute or otherwise for a breach or threatened
breach of any provision hereof. Accordingly, each party hereto hereby waives and
agrees not to assert any objection to such equitable relief based upon the
purported existence of an adequate remedy at law, notwithstanding that another
party may also assert claims for damages at law or other claims as an
alternative to, or in addition to, such equitable relief.
20. Miscellaneous. This Agreement is entered into and shall be
construed under the laws of the State of Illinois applicable to contracts made
and to be entirely performed within that state. This Agreement shall be amended,
modified or terminated only by an instrument in writing, signed by the party or
parties to be charged. This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subject
matter hereof, and supersedes all previous oral or written agreements,
correspondence and understandings with regard to such subject matter.
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IN WITNESS WHEREOF the parties have executed or caused to be executed
this Agreement under seal as of the day and year first above written.
CONSULTANT: NEOFORMA GAR, INC.
__________________________________ By:________________________________
Xxxx Xxxxx
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EXHIBIT E TO
EXHIBIT 2.01
GUARANTY
THIS GUARANTY ("GUARANTY"), executed as of the ____ day of August, 1999 is
by Neoforma, Inc., a Delaware corporation, having a mailing address of 0000-0
Xxxxx Xxxxxxxxx, Xxxxx Xxxxx, Xxxxxxxxxx 00000 ("GUARANTOR") for the benefit of
Xxxx Xxxxx having an address of 000 Xxxxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxxxxxx 00000
( the "CONSULTANT").
RECITALS
This Guaranty is given as an inducement for the Consultant to enter into a
consulting agreement (the "CONSULTING AGREEMENT") of even date herewith with the
Guarantor's wholly-owned subsidiary, Neoforma GAR, Inc., a Delaware corporation
(the "BUYER"), pursuant to that certain Securities Purchase Agreement dated July
16th, 1999, by and among Guarantor, Buyer and Consultant which provided for the
purchase by the Buyer of the issued and outstanding securities of General Asset
Recovery, LLC, an Illinois limited liability company.
NOW THEREFORE, in consideration of the Consulting Services (as defined in
the Consulting Agreement) contemplated in the Consulting Agreement and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby covenants and agrees with Consultant as follows:
1. GUARANTY. Guarantor hereby absolutely, unconditionally and irrevocably
guaranties to Consultant the payment when due of the Consulting Fee (as defined
in the Consulting Agreement). Upon the failure of the Buyer to pay within ten
(10) days after the notice thereof by the Consultant to the Buyer that any
payment of the Consulting Fee shall have become due and not paid in a timely
manner, Guarantor shall, on demand by Consultant, immediately pay such portion
of the Consulting Fee as is then or may thereafter from time to time become due
and owing, without further notice from Consultant.
2. MISCELLANEOUS.
(a) Notices. Any notice, request or instruction to be given
hereunder shall be in writing and shall be delivered in person or
transmitted by facsimile (with confirmation in writing to be made
available upon request) or mailed by certified mail, return receipt
requested, postage prepaid, and delivered to the appropriate party and
address as shown above. Either of the addresses specified above may be
changed by notice given as herein provided. All communications will be
deemed effective upon receipt.
(b) No Assignment. This Guaranty shall be binding upon Guarantor and
inure solely to the benefit of Consultant and shall not be assignable.
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(c) Termination. If all sums and indebtedness owing under the
Consulting Agreement shall be fully and indefeasibly paid in cash, this
Guaranty shall terminate and be of no further force or any effect.
(d) Governing Law. The execution, delivery and performance of this
Guaranty shall be governed by the laws of the State of Delaware.
(e) Legal Fees. Guarantor shall be liable for any and all fees and
expenses incurred by Consultant, including legal fees, in connection with
its enforcing this Guaranty.
GUARANTOR
Neoforma, Inc.
By:
-------------------------------------
Xxxxxx X. Xxxxxxx, President and
Chief Executive Officer
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