_______________________________________________________________________
AGREEMENT FOR PURCHASE AND SALE OF
ASSETS BY AND BETWEEN
PHYSICIANS ENTERPRISE SYSTEM, L.L.C. ("PURCHASER")
&
HALIS, INC. ("HALIS") AND
PHYSOURCE LTD. ("SELLER")
_______________________________________________________________________
As of September 30, 1998
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AGREEMENT FOR PURCHASE AND SALE OF ASSETS
THIS AGREEMENT FOR PURCHASE AND SALE OF ASSETS ("Agreement") is
made and entered into as of September 30, 1998, effective as of
October 1, 1998 (the "Effective Date") by and between Physicians
Enterprise System, L.L.C., an Illinois limited liability company (the
"Purchaser"), and Halis, Inc., a Georgia corporation ("Halis"), and
PhySource Ltd., a Georgia corporation ("Seller").
RECITALS
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WHEREAS, Purchaser is an Illinois limited liability company
which, among other things, provides management services to primary
care practices; and
WHEREAS, Seller is the owner of assets used in the operation of a
medical practice whose principal place of business is located at the
Office (as defined below); and
WHEREAS, Seller desires to sell, and Purchaser desires to
acquire, the assets that comprise and are used in the Practice (as
defined below), including but not limited to inventory, supplies,
furniture, fixtures, equipment, as more fully described herein, but
excluding the Excluded Assets (defined below), on terms and conditions
as more fully described herein.
NOW, THEREFORE, in consideration of the terms and conditions and
the representations and warranties herein contained, and of other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:
ARTICLE 1.
DEFINITIONS
1.1 "ASSIGNMENT AND ASSUMPTION AGREEMENT" shall mean the
Assignment and Assumption Agreement in the form attached hereto as
EXHIBIT A conveying to Purchaser the Transferred Contracts.
1.2 "XXXX OF SALE" shall mean the Xxxx of Sale in the form
attached hereto as EXHIBIT B warranting Seller to be the owner of, and
conveying to Purchaser, the Purchased Assets.
1.3 "CLOSING" shall mean the closing of this transaction,
which shall occur at the office of Xxxx & Xxxxxxx on October 1, 1998,
or on such later date as mutually agreed to by the parties in writing,
and which shall be effective as of 12:01 a.m. on the Effective Date.
1.4 "CLOSING DATE" shall mean the date on which the Closing
occurs.
1.5 "EXCLUDED ASSETS" shall mean the assets not sold by
Seller to Purchaser under this Agreement, as described more fully in
Section 2.2.
1.6 "MATERIAL ADVERSE EFFECT" shall mean a violation or other
matter that (considered alone or together with all other matters that
would constitute exceptions to the representations and warranties set
forth in this Agreement) would have a material adverse effect on the
Practice's business, condition, assets, liabilities, operations,
financial performance or prospects.
1.7 "KNOWLEDGE OF SELLER" and phrases of similar import such
as "best of Seller's knowledge" and "best knowledge of Seller" shall
mean the knowledge of the President, Vice President and other senior
officers and managers of Seller and Halis, including, without
limitation, Xxxxx Xxxxxx and Xxxx Xxxxxx. For purposes hereof
"knowledge" means such knowledge as a reasonable and prudent business
person has or should have regarding his or her business.
1.8 "PERMITTED LIENS" shall mean (i) liens set forth on
Schedule 1.8 and (ii) liens for current taxes, not yet due and
payable.
1.9 "OFFICE" means the medical office of the Practice at the
location set forth in Schedule 1.9, which location is used in the
medical practice of Seller.
1.10 "PHYSICIANS" shall mean the physicians whose names are
set forth on Schedule 1.10 hereto.
1.11 "PRACTICE" shall mean the medical practice and medical
supervision of patients conducted by Seller with assets held by Seller
from the Office and the medical practice conducted at the hospitals in
which the Physicians now have privileges listed in Schedule 1.11.
1.12 "PURCHASED ASSETS" shall mean the assets sold by Seller
to Purchaser under this Agreement, as described more fully in Section
2.1.
1.13 "PURCHASE PRICE" shall be the amount paid by Purchaser
for the Purchased Assets, as described more fully in Section 3.1.
ARTICLE 2.
PURCHASE AND SALE OF ASSETS;
NO ASSUMPTION OF LIABILITIES
2.1 PURCHASED ASSETS. Seller agrees to sell, transfer and
convey to Purchaser, and Purchaser agrees to purchase and accept, at
Closing, all of Seller's non-medical assets comprising and pertaining
to the Practice (collectively, the "Purchased Assets"), but excluding
the Excluded Assets (as defined in Section 2.2). All of Seller's
medical assets (which are listed on Schedule 2.1, the "Medical
Assets") shall be transferred to Partners in Primary Care, S.C.
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simultaneously with the closing hereunder pursuant to that certain
Xxxx of Sale of even date herewith, between Partners in Primary Care,
S.C. and Seller (the "Medical Purchase Agreement"). Purchased Assets
include, but are not limited to:
2.1.1 TANGIBLE PERSONAL PROPERTY. All of Seller's
furniture, fixtures, equipment, machinery, instruments, copies of
books, copies of business records, copies of files (other than
original minute books, stock records, and tax returns) and other
non-medical items used in conducting the Practice, such property
to be conveyed free and clear of all liens, pledges, charges,
security interests, encumbrances and claims of any kind other
than Permitted Liens.
2.1.2 PROPRIETARY INFORMATION. All of Seller's
registered trademarks, trade names, service marks, marketing
plans, policies and procedures, trade secrets and other
intangible property and proprietary information of Seller used in
conducting the Practice, such intangible property and proprietary
information to be conveyed free and clear of all liens, pledges,
charges, security interests, encumbrances and claims of any kind,
other than Permitted Liens.
2.1.3 CONTRACTS. All contracts of Seller that are
assignable by Seller to Purchaser and which Purchaser assumes
pursuant to the Assignment and Assumption Agreement ("Transferred
Contracts"). All such contracts shall be set forth in Schedule
2.1.3, and shall be assigned and assumed pursuant to the
Assignment and Assumption Agreement, subject to any consent
required for such assignments.
2.1.4 ACCOUNTS RECEIVABLE.
(a) Subject to paragraph (b) below, the accounts
receivable of Seller set forth in Schedule 2.1.4
(the "Assigned Receivables"), which shall be
assigned to Purchaser pursuant to the Assignment
and Assumption Agreement.
(b) Nothing contained in this Section 2.1.4 or
otherwise in this Agreement shall be construed as
an assignment of medicare or medicaid receivables
in violation of any laws or regulations related
thereto. Seller hereby agrees to have all
medicare and medicaid receivables related to the
Practice placed into a bank account which account
(the "Account") has as joint signatories Seller
and Purchaser. In addition, Seller agrees to
instruct the bank at which the Account is held to
permit Purchaser to sweep the Account on a regular
basis, as determined by Purchaser in its sole and
absolute discretion. In the event Seller fails to
place all medicare and medicaid receivables
related to the Practice in the Account then Seller
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shall indemnify Purchaser, dollar for dollar for
each dollar of such receivables not placed in the
Account.
2.2 EXCLUDED. For purposes of this Agreement, "Excluded
Assets" shall include all furniture, fixtures, equipment and other
items of Seller not used in conducting the Practice as expressly set
forth in Schedule 2.2.
2.3 ASSUMPTION OF LIABILITIES. It is expressly agreed and
understood that Seller shall retain, and be solely responsible for
paying or otherwise discharging or satisfying, all debts, liabilities
and obligations of Seller, including but not limited to those relating
to the Practice and the Purchased Assets, and whether accrued,
contingent known or unknown or otherwise, unless expressly assumed by
Purchaser pursuant to the Assignment and Assumption Agreement.
Purchaser shall not assume or be liable for any debts, liabilities or
obligations relating to Seller or the Practice whether accrued, known
or unknown, unless expressly assumed by Purchaser pursuant to the
Assignment and Assumption Agreement.
ARTICLE 3.
PURCHASE PRICE
3.1 PURCHASE PRICE. As consideration for the Purchased
Assets, Purchaser shall pay to Seller at Closing the sum of FOUR
HUNDRED THOUSAND DOLLARS ($400,000.00) (the "Purchase Price"). In
addition, Purchaser shall pay Seller an amount equal to fifty percent
(50%) of the Assigned Receivables in excess of FOUR HUNDRED THOUSAND
DOLLARS ($400,000.00) (minus a collection of fee of 20%) which are
actually collected by Purchaser within twelve (12) months of the
Closing (the "Receivables Adjustment"). Payment for such shall be
made as provided in Section 3.2.
3.2 CALCULATION OF RECEIVABLES ADJUSTMENT; DISPUTE
RESOLUTION. On or before November 1, 1999, Purchaser shall prepare
and deliver to HALIS and Seller a reasonably detailed calculation of
the Receivables Adjustment (the "Calculation"), which Calculation
shall be made in conformity with generally accepted accounting
principles consistent with the past practices of Seller. HALIS and
Seller shall have the right to examine during normal business hours
such books and records of Purchaser as may be reasonably necessary in
order to verify the Calculation by Purchaser with respect to the
Receivables Adjustment. If neither HALIS nor Seller files with
Purchaser a written notice of disagreement with said Calculation
within fifteen (15) days of the date of receipt by HALIS and Seller of
said Calculation, the Receivables Adjustment shall be paid by
Purchaser within five (5) days following the expiration of said 15-day
period. If HALIS or Seller disagrees with such Calculation, it shall
deliver written notice of such disagreement to Purchaser on or before
the fifteenth (15th) day after the date of receipt by HALIS and Seller
of the Calculation of the Receivables Adjustment. In such event, the
parties agree to submit the dispute to Xxxxxx Xxxxxxxx'x Chicago
Office, who shall determine the accuracy and correctness of
Purchaser's original Calculation within thirty (30) days following
such submission. Said determination of Xxxxxx Xxxxxxxx shall be final
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and binding on the parties hereto. The parties shall each bear one-
half (1/2) of the expenses of Xxxxxx Xxxxxxxx. The Receivables
Adjustment shall be paid by Purchaser within five (5) days following
the resolution of such dispute. If Xxxxxx Xxxxxxxx will not provide
such review, the parties shall mutually agree on another "Big 5"
accounting firm which is not associated with either party.
3.3 ALLOCATION OF PURCHASE PRICE. The parties shall allocate
the Purchase Price as set forth on Schedule 3.2, which indicates the
allocation of the Purchase Price among the various categories of
assets constituting the Purchased Assets. Purchaser and Seller agree
that they shall utilize the allocation set forth in Schedule 3.2 for
purposes of filing their state and federal income tax returns with
respect to the transactions contemplated in this Agreement.
3.4 FORM OF PAYMENT. All sums payable under this Agreement
shall be paid in legal tender of the United States of America in
immediately available funds, or by certified or cashier's check, or by
wire transfer to an account(s) designated by the receiving party.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER. As an
inducement to Seller to enter into this Agreement, Purchaser
represents and warrants that the following are true and correct as of
the Closing Date, and Purchaser acknowledges that Seller is relying on
such representations and warranties in connection with the
transactions contemplated by this Agreement:
4.1.1 ORGANIZATION. Purchaser is a limited liability
company duly organized and validly existing under the laws of the
State of Illinois.
4.1.2 AUTHORIZATION. All actions by Purchaser required
to authorize and approve the entering into and execution,
delivery and performance of this Agreement, and the consummation
by Purchaser of the transactions herein, have been duly taken.
Purchaser has the full power, authority and legal right to enter
into this Agreement and any other agreements required to be
entered into by it under the terms hereof and to consummate the
transactions and perform its obligations contemplated hereby.
Upon execution and delivery of this Agreement and of any other
agreements required of Purchaser hereunder, each will constitute
the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms except as
Purchaser's obligations hereunder and thereunder may be limited
by the availability of equitable remedies, by public policy or by
bankruptcy, insolvency or other laws affecting the enforcement of
creditors' rights.
4.1.3 CONFLICTS. Neither the execution and delivery of
this Agreement or of any other agreements or instruments required
of Purchaser by the terms hereof, nor the performance of or
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compliance by Purchaser with any of the respective terms and
provisions of this Agreement or of such other agreements or
instruments:
(a) Conflicts with or will conflict with, or will
result in the breach of the provisions of the
Articles of Organization or the Operating
Agreement of Purchaser, or any of the material
terms, conditions or provisions of any mortgage,
bond, debenture, note, indenture, loan or credit
agreement, contract, lease, instrument or any
other agreement or restriction to which Purchaser
is a party or by which Purchaser is bound, or
constitutes a default thereunder or gives rise to
any right of termination by any party or violates
any judgment, order, injunction, decree or award
of any court, administrative agency or
governmental body by which Purchaser is bound or
subject, or contravenes any law, rule or
regulation binding on Purchaser; or
(b) Requires the consent or approval of, or any notice
to, any person, bureau, commission, board or
regulatory agency or a license which Purchaser
does not possess.
4.1.4 BROKERS. Purchaser is not a party to or in any
way obligated under any contract or agreement for payment of fees
and expenses to any broker or finder in connection with the
origin, negotiation, execution or consummation of this Agreement
or the transactions contemplated hereby.
4.1.5 FULL DISCLOSURE. To the best of Purchaser's
knowledge, no representation or warranty made by Purchaser in
this Agreement nor any statement or certificate furnished to
Seller in connection with the execution, delivery or performance
of this Agreement or the consummation of the transactions
contemplated hereby contains any untrue statement of material
fact or fails to state a material fact necessary to make the
statements contained therein not misleading.
4.2 REPRESENTATIONS AND WARRANTIES OF SELLER. As an
inducement to Purchaser to enter into this Agreement, HALIS and
Seller, jointly and severally, represent and warrant that the
following are true and correct as of the Closing Date, and Seller
acknowledges that Purchaser is relying on such representations and
warranties in connection with the transactions contemplated by this
Agreement:
4.2.1 ORGANIZATION. Each of Halis, Inc. and Seller is a
corporation duly organized and validly existing under the laws of
the States of Georgia.
4.2.2 LICENSES OF PHYSICIANS. To the knowledge of
Seller, all Physicians have unrestricted licenses to practice
medicine in the state of Illinois.
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4.2.3 LICENSES AND PERMITS. Seller has all material
business and professional licenses, permits and authorizations
required in connection with the ownership and use of the
Purchased Assets and the conduct of the Practice as presently
conducted. None of such licenses, permits or authorizations have
lapsed or been revoked or terminated, and the Practice has at all
times been operated and conducted in accordance and consistent
with all material terms and conditions thereof and with all
federal, state and local laws, rules and regulations.
4.2.4 EXECUTION. All actions by HALIS and Seller
required to enter into and execute, deliver and perform this
Agreement, and consummation of the transactions described herein,
have been duly taken. Each of HALIS and Seller has the full
corporate power, authority and legal right to enter into this
Agreement and any other agreements required to be entered into by
it under the terms hereof and to consummate the respective
transactions and perform its respective obligations contemplated
hereby. Upon execution and delivery of this Agreement and of any
other agreements required of HALIS and Seller hereunder, each
will constitute the legal, valid and binding obligation of HALIS
or Seller, as the case may be, enforceable against HALIS or
Seller, as the case may be, in accordance with its terms except
as HALIS or Seller's obligations hereunder and thereunder may be
limited by the availability of equitable remedies, by public
policy or by bankruptcy, insolvency or other laws affecting the
enforcement of creditors' rights generally.
4.2.5 CONFLICTS. Except as set forth in Schedule 4.2.5,
neither the execution and delivery of this Agreement or of any
other agreements or instruments required of HALIS and Seller by
the terms hereof, nor the performance of or compliance by HALIS
and Seller with any of the respective terms and provisions of
this Agreement or of such other agreements or instruments:
(a) Conflicts with or will conflict with, or will
result in the breach of the respective Articles of
Incorporation or bylaws of HALIS or Seller, or of
any of the terms, conditions or provisions of any
mortgage, bond, debenture, note, indenture, loan
or credit agreement, contract, lease, instrument
or any other agreement or restriction to which
HALIS or Seller is a party or by which HALIS or
Seller and the Purchased Assets are bound, or
constitutes a default thereunder or gives rise to
any right of termination by any party or violates
any judgment, order, injunction, decree or award
of any court, administrative agency or
governmental body by which HALIS or Seller or the
Purchased Assets is bound or subject, or
contravenes any law, rule or regulation binding on
HALIS or Seller; or
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(b) Requires the consent or approval of or any notice
to, any person, legal entity, bureau, commission,
board or regulatory agency.
4.2.6 TITLE TO ASSETS. Seller has good and marketable
title to the Purchased Assets, free and clear of all mortgages,
liens, pledges, charges, security interests, encumbrances or
claims of any kind other than Permitted Liens.
4.2.7 REAL ESTATE PERMITS. Seller, has not, and to the
best of its knowledge, has not received any notice stating that
Seller has, failed to obtain any license, permit, approval,
certificate or other authorizations required by applicable
statutes, laws, ordinances or regulations for the use and
occupancy of the Office and the building and improvements
thereof.
4.2.8 TANGIBLE ASSETS. To the best of Seller's
knowledge, each of the tangible assets described in Schedule
4.2.8 and included in the Purchased Assets is in operating
condition and good repair, ordinary wear and tear excepted.
4.2.9 LIABILITIES. To the best of Seller's knowledge,
Seller has, and there otherwise are, no liabilities or
obligations that are material, either singly or in the aggregate,
whether secured or unsecured, accrued, absolute, contingent or
otherwise, and whether currently due or due in the future,
relating to the Purchased Assets and/or the Practice except for
accounts payable, wages, current taxes, fees and similar
liabilities incurred in the ordinary course of business
consistent with past practices or which if asserted would be
fully insured by liability policies and professional liability
policies in full force and effect; and
4.2.10 ADVERSE CHANGES. Except as set forth on
Schedule 4.2.10 since the date of the Financial
Statements (as defined below);
(a) There has not been any material adverse change in
or to the Purchased Assets or in the business or
financial condition of the Practice;
(b) There has not been any material damage,
destruction or loss to any of the Purchased
Assets, whether or not covered by insurance, that
has affected or impaired, or that might affect or
impair, the value or usefulness of any of the
Purchased Assets or the ability of Purchaser to
conduct the business of the Practice as heretofore
conducted;
(c) None of the Purchased Assets including, but not
limited to, equipment, furniture and fixtures,
accounts receivable, and inventory of supplies,
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have been sold or materially reduced in value
other than in the ordinary course of business;
(d) There has been no material change in the manner of
keeping the books, accounts or records of Seller
or the Practice or in the accounting practices
reflected therein; and
(e) There has been no suspension of termination of
permits or licenses issued to Seller or the
Physicians.
4.2.11 INVENTORY. With the exception of customary
amounts of obsolete and unusable items held by the Seller on the
date hereof (which is consistent with the Practice's past
practice's of holding such items), all items of inventory
(including without limitation all drugs, medicines, supplies and
other consumables and disposables) are of a quality usable and
saleable in the ordinary course of the Practice.
4.2.12 BROKERS. Seller, HALIS and the Physicians
are not party to or in any way obligated under any contract or
agreement for payment of fees and expenses to any broker or
finder in connection with the origin, negotiation, execution or
consummation of this Agreement.
4.2.13 FULL DISCLOSURE. To the best of Seller's
knowledge, no representation or warranty made by Seller in this
Agreement nor any statement or certificate furnished to Purchaser
in connection with the execution, delivery or performance of this
Agreement or the consummation of the transactions contemplated
hereby contains any untrue statement of material fact or fails to
state a material fact necessary to make the statements contained
therein not misleading.
4.2.14 CONTRACTS. Except as disclosed on Schedule
4.2.14, neither Seller nor, to the knowledge of HALIS and Seller,
any Physician is a party to any written or oral (a) managed care
contract, (b) contract for employment by or in connection with
the Practice, which may not be terminated on not more than thirty
(30) days' notice without liability to Seller or Purchaser; (c)
continuing contract or agreement for the purchase or sale of
materials, supplies, services, machinery, or equipment in
connection with the Practice; (d) lease or license of personal
property used in or otherwise relating to the Practice; (e)
agreement for the purchase or sale of equipment or of machinery
in connection with the Practice; or (f) other contract arising
from or in connection with the Practice involving payment by or
to the Seller of more than TEN THOUSAND DOLLARS ($10,000.00) or
performance of which extends beyond ninety (90) days from the
date of this Agreement. Seller and, to the knowledge of Seller
and HALIS, the Physicians are not in default under any contract,
lease, agreement or other instrument to which either is a party.
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4.2.15 LITIGATION. Except as disclosed on Schedule
4.2.15, there are not now pending, and during the preceding five
(5) years from the date hereof have not been, any suits, actions,
arbitrations, investigations or other legal, administrative or
other proceedings pending or, to the knowledge of Seller and
HALIS, threatened against or affecting Seller, the Purchased
Assets, the business or operations of the Practice or, to the
knowledge of Seller and HALIS, the Physicians (including those
related to professional liability), and Seller knows of no basis
for any of the foregoing. Seller and the Physicians are not in
default with respect to any order, writ or injunction or decree
of any federal, state, local or foreign court, agency or
instrumentality relating to the Purchased Assets or the business
or operations of the Practice.
4.2.16 TAXES. All federal, state, local and other
income, employment and other tax returns, reports and
declarations of every kind and nature required to be filed by or
on behalf of Seller prior to the Closing Date with respect to the
assets, business and operations, including with respect to the
Purchased Assets and the business of the Practice, have been
filed, and such returns are complete and accurate in all material
respects and disclose all taxes required to be paid for the
period covered thereby. All taxes shown on such returns, and any
additional taxes, penalties and interest, that are due and
payable, have been paid. To the best knowledge of Seller, Seller
is not delinquent in the payment of any tax assessment or other
governmental charge relating to its assets or business, and/or to
the Purchased Assets or the Practice, and there are no unpaid and
past due deficiencies in taxes or basis for deficiencies, or
other charges proposed or assessed against Seller in connection
therewith. There are no tax liens on any of the Purchased Assets
and Seller knows of no basis for the imposition of any such
liens.
4.2.17 THIRD PARTY PAYERS. Seller has no knowledge
of: (a) any termination, cancellation, limitation, modification,
or change in the business relationships of Seller with any
patient or payer of the Practice or a Physician that would have a
Material Adverse Effect, or (b) any outstanding overpayment
obligations with respect to any third party payers.
4.2.18 LABOR. Seller is not a party to any
collective bargaining agreement, Letters of Understanding, or
other arrangements, formal or informal, with any labor union or
organization which obligates Seller to recognize the labor union
or organization as the bargaining representative of its employees
or to compensate its employees represented by any labor union or
organization. Seller is not aware of any present attempt to
organize such a union, nor are the Practice's employees
represented by any labor union or organization. There are no
labor disputes, administrative or court proceedings, orders,
investigations, petitions or claims pending or threatened,
between Seller and any present or former employees of the
Practice, applicants for employment or any labor union or
organization representing or claiming to represent such
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employees' interests which would affect the business of the
Practice or the Purchased Assets in any material respect, and
further Seller knows of no state of facts exists or event has
been contemplated that is reasonably expected to give rise to any
such claim, dispute or proceedings. Seller is in compliance in
all material respects with all laws, statutes, ordinances,
executive orders, rules and regulations respecting employment and
employment practices, terms and conditions of employment,
including but not limited to wages and hours, and occupational
safety and health programs, and Seller is not engaged in any
violation of any such law, statute, ordinance, executive order,
rule or regulation related to employment, health or safety,
including unfair labor practices or acts of employment
discrimination.
4.2.19 SALES TAXES. Seller has at no time engaged
in the retail sale of tangible personal property so as to create
or give rise to any liability or duty to report, collect or remit
any sales or use tax to the State of Illinois or to any other
state or local taxing body.
4.2.20 UNEMPLOYMENT INSURANCE. Seller has paid in
full any and all obligations due and owing under the Illinois
Unemployment Insurance Act, 820 ILCS 405/100 et seq. and have
provided all required notices thereunder.
4.2.21 OVERPAYMENTS. Seller has no knowledge of,
and has not received, any notice alleging any overpayments by the
Medicare or Medicaid programs to the Practice.
4.2.22 PHYSICIAN PARTICIPATION IN PAYER CONTRACTS.
To the best of Seller's knowledge no Physician has been
terminated from participation in any contracting arrangement with
a third party payor or a managed care payer.
4.2.23 REFUNDS. The Seller does not have liability
for any overpayment, duplicate payments, refunds, discounts or
adjustments due to Medicare, Medicaid, Blue Cross, Blue Shield or
any other reimbursement program or third-party payer.
4.2.24 COMPLIANCE WITH LAWS.
(a) The Seller is in compliance with all applicable
statutes, laws, ordinances, rules, orders and
regulations of all governmental authorities and to
Seller's knowledge, no facts or circumstances
exist that, with or without the passing of time or
the giving of notice or both, might reasonably
serve as the basis for any claim that the Seller
is not in compliance with any applicable statute,
law, ordinance, rule or regulation of any
governmental authority. The Seller has not
received any written communication from a
governmental authority that alleges that it is not
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in compliance with any statute, law, ordinance,
rule or regulation of any governmental authority.
(b) Neither the Seller nor, to the knowledge of Seller
and HALIS, any Physician has ever been charged or
to the Seller's knowledge, investigated in any
violation of any state or federal statute or
regulation involving fraudulent and abusive
practices relating to its participation in state
or federally sponsored reimbursement programs,
including but not limited to fraudulent billing
practices. Seller has properly and legally billed
all intermediaries and third party payers for
services rendered and has maintained its record to
reflect such billing practices. No funds are now
or will be withheld from the Seller by any
Medicare intermediary or third party payor.
Neither the Seller, any shareholder, officer or
director of the Seller nor any Physician has
engaged on behalf of Seller in any of the
following: (i) knowingly or willfully making or
causing to be made a false statement or
representation of a material fact in any
applications for any benefit or payment under the
Medicare or Medicaid program; (ii) knowingly or
willfully making or causing to be made any false
statement or representation of a material fact for
use in determining rights to any benefit or
payment under the Medicare or Medicaid program;
(iii) failing to disclose knowledge by a claimant
of the occurrence of any event affecting the
initial or continued right to any benefit or
payment under the Medicare or Medicaid program on
its own behalf or on behalf of another, with
intent to secure such benefit or payment
fraudulently; or (iv) knowingly and willfully
soliciting or receiving any remuneration
(including any kickback, bribe or rebate),
directly or indirectly, overtly or covertly, in
cash or in kind or offering to pay such
remuneration (a) in return for referring an
individual to any person or entity for the
furnishing or arranging for the furnishing of any
item or service for which payment may be made in
whole or in part by Medicare or Medicaid, or (b)
in return for purchasing, leasing or ordering or
arranging for or recommending the purchasing,
leasing or ordering of any good, facility,
service, or item for which payment may be made in
whole or in part by Medicare or Medicaid.
(c) The Seller has filed all filings of required cost,
government or other reports required to be filed
under the Medicare and Medicaid programs and state
survey programs that are required to be filed
prior to the Closing Date.
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4.2.25 FINANCIAL STATEMENTS. True, correct and
complete copies of the financial statements of Seller (consisting
of the income, retained earnings and cash flows of Seller related
to the Practice) and dated as of June 30, 1998, are attached
hereto as Schedule 4.2.25 (the "Financial Statements"). Such
Financial Statements fairly present in all material respects the
results of the operations and financial position of the Practice
as of the period and as of the date set forth therein. As of the
Closing Date, except for changes resulting from transactions
described or contemplated hereunder, the balance sheet of the
Seller, with respect to the Practice, will not vary in any
material respect from the most recent balance sheet included in
the Financial Statements.
ARTICLE 5.
CLOSING - DELIVERIES
5.1 CLOSING. The Closing shall occur at the offices of Xxxx
& Xxxxxxx, 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx
00000, or at such other location as may be agreed upon by the parties
to this Agreement. The parties shall execute this Agreement at the
Closing, and this Agreement shall be effective as of 12:01 a.m. on the
Effective Date.
5.2 SELLER'S DELIVERIES AT CLOSING. At Closing, Seller shall
deliver to Purchaser the following:
5.2.1 Duly executed Xxxx of Sale.
5.2.2 Duly executed Assignment and Assumption Agreement.
5.2.3 Written consents, as may be necessary, to
assignment of all of the Transferred Contracts pursuant to the
Assignment and Assumption Agreement.
5.2.4 Illinois Uniform Commercial Code search reflecting
that there are no financing statements on file with the Office of
the Secretary of State of Illinois, the County Clerk or Registrar
of Deeds of Xxxx County, Illinois or the Secretary of State of
Georgia, or the county clerk or registrar of deeds in the county
where Halis, Inc. is located in Georgia in the name of Seller,
its shareholders or any Physician affecting any of the Purchased
Assets or releases of any such liens indicated thereon or liens
listed on Schedule 4.2.10.
5.2.5 All of Seller's business records maintained in
connection with the Purchased Assets and the Practice.
5.2.6 Certified copies of all corporate resolutions
required to authorize HALIS and Seller to enter into this
Agreement and consummate the transactions contemplated herein.
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5.2.7 Duly executed Employment Agreements in the form
attached hereto as Schedule 5.2.7 signed by each Physician.
5.2.8 Intentionally Omitted.
5.2.9 Intentionally Omitted.
5.2.10 Duly executed terminations of (i) that
certain Employment Agreement dated as of July 31, 1997, by and between
Seller and Xxxxxxxx X. Xxxx, M.D., (ii) that certain Employment
Agreement by and between Seller and Xxxxxx Xxxxxxxxx, M.D. and (iii)
that certain Employment Agreement dated as of April 11, 1998, by and
between Seller and Xxxxxx Xxx, M.D.
5.2.11 Such other documents as Purchaser's counsel
shall reasonably deem necessary to effectuate the transactions
contemplated by this Agreement.
5.3 PURCHASER'S DELIVERIES AT CLOSING. At Closing, Purchaser
shall deliver to Seller the following:
5.3.1 The Purchase Price.
5.3.2 Duly executed Xxxx of Sale.
5.3.3 Duly executed Assignment and Assumption Agreement.
5.3.4 Certified copies of all resolutions required to
authorize Purchaser to enter into this Agreement and to
consummate the transactions contemplated herein.
5.3.5 Duly executed Employment Agreements in the form
attached hereto as Schedule 5.2.7 with each Physician.
5.3.6 Intentionally Omitted.
5.3.7 Duly executed termination of the Employment
Agreements referred to in Section 5.2.10.
5.3.8 Such other documents as Seller's counsel shall
reasonably deem necessary to effectuate the transactions contemplated
by this Agreement.
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ARTICLE 6.
EMPLOYMENT
6.1 TERMINATION OF EMPLOYEES. The parties acknowledge and
agree that Seller intends to terminate all of its employees
immediately prior to the Closing and Purchaser shall have no
obligation to employ existing employees of Seller whether or not such
employees are terminated by Seller prior to Closing. Purchaser shall
determine in its sole discretion whether to offer employment to any of
Seller's employees and the terms and conditions of such employment
(including, without limitation, compensation and benefits), and, if
such employees accept such offer, then they shall become new employees
of Purchaser.
6.2 EMPLOYMENT OF PHYSICIANS. At Closing, and following
Seller's termination of all of their employees, Purchaser shall enter
into employment agreements in the form attached hereto as Schedule
5.2.7 with all Physicians.
6.3 TERMINATION OF EMPLOYMENT AGREEMENTS. At Closing, Seller
and each of the Physicians shall terminate in writing that the
employment agreements by and between Seller and each Physician
referred to in Section 5.2.10.
ARTICLE 7.
INDEMNIFICATION
7.1 SELLER'S AND HALIS' INDEMNIFICATION OF PURCHASER. HALIS
and Seller, jointly and severally, shall indemnify and hold Purchaser,
its members, managers, employees, officers, agents, representatives,
successors and assigns harmless from and against (a) any uninsured
damage or deficiency resulting from any misrepresentation, breach of
warranty or non-fulfillment of any agreement on the part of Seller
under this Agreement, or from any misrepresentation or omission from
any certificate or other instrument furnished or to be furnished to
Purchaser in accordance with the provisions of this Agreement; (b) any
uninsured liabilities of or claims against Seller, of any nature
whether accrued, absolute, contingent or otherwise arising out of
transactions entered into or services performed by Seller prior to the
Closing except for claims subject to insurance or expressly assumed by
Purchaser pursuant to the Assignment and Assumption Agreement; (c)
Seller's acts and omissions in its operation of the Practice (or
otherwise) prior to Closing; (d) any and all expense, loss, damage or
liability, including reasonable attorneys' fees and court costs, that
Purchaser may suffer as a result of any claims, suits, investigations
or charges asserted by or on behalf of Seller's former employees or
related to their employment arising from events occurring prior to the
Closing related to employment matters, including but not limited to
any matters arising under laws governing wages and hours, wage payment
and collection, employee benefits, employment discrimination and
sexual harassment; (e) Purchaser's satisfaction or payment of any tax
liens set forth on Schedule 4.2.16; (f) Seller's termination of the
Physicians' employment as set forth in Article 6; (g) any and all
liabilities or obligations of Seller arising under the Transferred
Contracts prior to the Closing, and any and all liabilities or
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obligations incurred by Seller or Purchaser in connection with the
assignment (or attempted assignment) of the Transferred Contracts; and
(h) all actions, suits, proceedings, demands, assessments, judgments,
costs and expenses, including reasonable attorney's fees and expenses
incident to any of the foregoing. Except for fraud, this
indemnification shall not apply as to any claim or action brought on
or after the fifth (5th) anniversary of the Closing Date. In
addition, except with respect to any action based on fraud or the bulk
sales law, Halis' and Seller's obligations to make payments under any
indemnification claim by Purchaser hereunder shall not exceed an
amount equal to the Purchase Price plus the amount of the Receivables
Adjustment paid or due to Seller under Sections 3.1 and 3.2 hereunder.
7.2 PURCHASER'S INDEMNIFICATION OF SELLER. Purchaser shall
indemnify and hold Seller, its employees, agents, representatives,
successors and assigns harmless from and against: (a) any uninsured
damage or deficiency resulting from any misrepresentation, breach of
warranty or non-fulfillment of any agreement on the part of Purchaser
under this Agreement, or from any misrepresentation or omission from
any certificate or other instrument furnished or to be furnished to
Seller in accordance with the provisions of this Agreement; (b) any
liability arising out of Purchaser's operation of the Practice
following Closing; (c) the failure of Purchaser to pay, discharge or
perform any liability assumed by Purchaser pursuant to the Assignment
and Assumption Agreement or resulting from any dispute concerning any
such liability; and (d) all actions, suits, proceedings, demands,
assessments, judgments, costs and expenses, including reasonable
attorney's fees and expenses incident to any of the foregoing. Except
for fraud, this indemnification shall not apply as to any claim or
action brought on or after the fifth (5th) anniversary of the Closing
Date. In addition, except with respect to an action based on fraud,
Purchaser's obligation to make payments under any indemnification
claim hereunder shall not exceed an amount equal to the Purchase Price
plus the amount of the Assigned Receivables paid or due to Seller
under Sections 3.1 and 3.2 hereunder.
7.3 DEFENSE OF CLAIMS. In the event that any claim is
asserted against a party to which it is entitled to indemnification
hereunder (the "Indemnified Party"), the Indemnified Party shall
promptly after learning of such claim notify the other party (the
"Indemnifying Party") thereof in writing; provided, however, that the
failure of Indemnified Party to give prompt notice of such claim as
aforesaid shall not relieve the obligation of Indemnifying Party with
respect to such claim. Indemnifying Party shall have the right, by
giving written notice to Indemnified Party within ten (10) calendar
days after receipt from Indemnified Party of notice of such claim, to
conduct at its expense the defense against such claim in its own name,
or, if Indemnifying Party shall fail to give such notice, it shall be
deemed to have elected not to conduct the defense of the subject
claim, and in such event Indemnified Party shall have the right to
conduct such defense and to compromise and settle the claim without
prior consent of Indemnifying Party. In the event that Indemnifying
Party elects to conduct the defense of the subject claim, Indemnified
Party will cooperate with and make available to Indemnifying Party
such assistance and materials as may be reasonably requested by it,
all at the expense of Indemnifying Party, and Indemnified Party shall
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have the right at its expense to participate in the defense, provided
that Indemnified Party shall have the right to compromise and settle
the claim only with the prior written consent of Indemnifying Party.
No legal proceeding in which Indemnified Party is named as a party
shall be settled by Indemnifying Party without Indemnified Party's
prior written consent unless such settlement or compromise (a) affects
no substantive rights of Indemnified Party, (b) involves no admission
of fault by Indemnified Party, and (c)creates no obligations or
liabilities for Indemnified Party. Any judgment entered or settlement
agreed upon in the manner provided herein shall be binding upon
Indemnifying Party, and shall conclusively be deemed to be an
obligation with respect to which Indemnified Party is entitled to
indemnification hereunder.
7.4 NEGATION OF INSURANCE COVERAGE. Notwithstanding anything
to the contrary, a party's obligations with respect to indemnification
for acts described in Article 7 shall not apply to the extent that
such application would nullify any existing insurance coverage of such
party or as to that portion of any claim of loss in which insurer is
obligated to defend or satisfy.
7.5 TAX EFFECT AND INSURANCE. The liability of the
indemnifying party with respect to any claim for indemnification shall
be reduced by the tax benefit actually realized and any insurance
proceeds received by the indemnified party as a result of any damages
upon which such indemnification claim is based, and shall include any
tax detriment actually suffered by the indemnified party as a result
of such damages. The amount of any such tax benefit or detriment
shall be determined by taking into account the effect, if any and to
the extent determinable, of timing differences resulting form the
acceleration or deferral of items of gain or loss resulting from such
damages and shall otherwise be determined so that payment by the
indemnifying party of the indemnification claim, as adjusted to give
effect to any such tax benefit or detriment, will make the indemnified
party as economically whole as is reasonable practical with respect to
the damages upon which the indemnification claim is based.
7.6 SUBROGATION. Upon payment in full of any indemnification
claim, whether such payment is effected by set-off or otherwise, or
the payment of any judgment or settlement with respect to a third
party claim, the indemnifying party shall be subrogated to the extent
of such payment to the right of the indemnified party against any
person or entity with respect to the subject matter of such
indemnification claim or third party claim.
7.7 EXCLUSIVITY. After the Closing, the indemnities set
forth in this Section 7 shall be the exclusive remedies of Purchaser,
HALIS and Seller and their respective officers, directors, employees,
agents and affiliates for any misrepresentation or breach of warranty
set forth in Article 4. This Agreement, and the parties shall not be
entitled to a rescission of this Agreement or to any further
indemnification rights or claims of any nature whatsoever in respect
thereof, all of which are hereby waived.
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7.8 SURVIVAL. Except as otherwise provided in Article 7, the
obligations set forth in this Article 7 shall survive termination of
this Agreement for whatever reason.
ARTICLE 8.
CONFIDENTIALITY
No party shall intentionally disclose the contents of this
Agreement to any third party (and Seller will direct the Physicians
not to disclose same), except as may be reasonably required to obtain
the services of its professional advisors or as may be required by
law. The parties shall notify their professional advisors of the
non-disclosure requirements of this Agreement. The provisions of this
Article 8 shall survive the Closing and/or the termination of this
Agreement.
ARTICLE 9
ACCESS TO PATIENT RECORDS
Following the Closing, Purchaser shall provide Seller with
access, during Purchaser's normal business hours, to patient records
transferred pursuant to this Agreement for the purpose of Seller's
defending against any professional liability claims. Seller shall
provide Purchaser with reasonable notice prior to access. Seller
shall bear the entire cost of reproducing or copying such records.
ARTICLE 10.
COVENANT NOT TO COMPETE
10.1 COVENANTS. Seller agrees that for a period of eight (8)
years following the Closing Date that it will not, directly or
indirectly, alone or in association with others, in its capacity as
partner, shareholder or other legal or beneficial capacity, or
otherwise, or through or in connection with any corporation,
partnership or other form of business entity, without the prior
written consent of Purchaser:
10.1.1 Engage, within a ten (10) mile radius of any
office site of Purchaser, including but not limited to the
Offices "Territory") and any office site opened by Purchaser
during the eight (8) year period during which this Article 10 is
in effect, in any business competitive with or substantially
similar to the business of the Practice or Purchaser;
10.1.2 Solicit, or attempt to solicit, any patient
of the Practice or Purchaser with services which are the same as,
or which are substantially similar in purpose to, the services of
Purchaser;
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10.1.3 Divert or attempt to divert, for its direct
or indirect benefit or for the benefit of any other person, any
patient of the Practice or Purchaser, or any of the business or
patronage of any patient of the Practice or Purchaser;
10.1.4 Influence or attempt to influence any patient
of the Practice or Purchaser to transfer its business or
patronage from Purchaser directly or indirectly to Seller or to
any other person, corporation, partnership, joint venture or sole
proprietorship;
10.1.5 Within the Territory, assist, be or become
involved in or associated with, in any capacity, any person,
corporation, partnership, joint venture, sole proprietorship or
other form of business entity that is engaged in performing
services which are the same as, or which are substantially
similar to, the services of the Practice or Purchaser;
10.1.6 Disclose to any person, corporation,
partnership, joint venture, sole proprietorship or other business
entity the names, addresses, or other confidential information
relating to any patient of the Practice or Purchaser, the prices
charged to patients of Purchaser, or the techniques used by
Purchaser in serving any patient;
10.1.7 In any other manner interfere with, disrupt
or attempt to disrupt the relationship of Purchaser with any of
the Physicians, patients, suppliers, or employees of Purchaser,
including the solicitation of any of the foregoing; or
10.1.8 Transfer, sell, lease, or otherwise convey or
allow the use of any of the trade secrets, proprietary
information, or other assets of Purchaser to any other person,
corporation, or entity to the extent that Seller has any
reasonable basis to believe that such person, corporation or
entity intends to use any of the foregoing to perform any
services which are the same as or substantially similar to any of
the services offered by Purchaser.
10.2 DEFINITION OF PATIENT. For purposes of this Agreement,
the term "patient" shall mean and include any person that was a
patient of the Practice on the date first written above or at any time
during the preceding thirty-six (36) month period or any person who
becomes a patient of the Practice while the Practice is operated by
Purchaser.
10.3 ACKNOWLEDGMENT. Seller acknowledges that it is familiar
with restrictive agreements such as this, has been advised by legal
counsel as it deemed necessary, has concluded that its obligations and
Purchaser's rights hereunder (including without limitation Purchaser's
right to equitable relief as provided herein) are reasonable, and that
it is fully aware of the duties, responsibilities, obligations, and
liabilities imposed upon it by this Agreement.
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10.4 RIGHT TO INJUNCTIVE RELIEF. In the event of a breach of
any provision of this Agreement, Purchaser, as it may elect, shall be
entitled to an injunction restraining Seller from such conduct in
addition to such other remedies as may be available to Purchaser for
such breach.
10.5 SEVERABILITY. If a court of competent jurisdiction
should declare any part of this Agreement unenforceable because of any
unreasonable restriction of duration and/or geographical area, or for
any other reason, then Seller hereby acknowledges and agrees that such
court shall have the express authority to reform the provisions of
this Agreement to provide for reasonable restrictions and/or to grant
Purchaser such other relief at law or in equity as may be reasonably
necessary to protect the interests of Purchaser in its business.
ARTICLE 11.
WAIVER OF BULK TRANSFER COMPLIANCE
Seller and Purchaser agree to waive compliance with the
provisions of any applicable bulk sales or transfer act; provided,
however, that Seller agrees to indemnify and hold Purchaser harmless
for, against and in respect of any and all claims made or assessed
against Purchaser on the grounds that Seller has made a bulk sale or
transfer to Purchaser to which the Illinois Uniform Commercial Code
article on Bulk Transfers applies.
ARTICLE 12.
COLLECTION OF TRANSFERRED CONTRACT REVENUE
Following the Closing, Purchaser shall xxxx for and collect, at
its own expense, amounts that constitute Transferred Contract
revenues. Such amounts shall be paid to Purchaser, or endorsed to
Purchaser, by Seller. Purchaser agrees to provide collections
support, of the same type Purchaser utilizes in the Purchaser's
collection efforts, to collect Transferred Contract revenues on behalf
of the Seller. If any of Seller's Transferred Contract revenues are
or become receivables more than one hundred twenty (120) days old,
Purchaser may transfer, such receivables to a collection agency of the
choice of Purchaser's board of directors'.
ARTICLE 13.
MISCELLANEOUS PROVISIONS
13.1 ASSIGNMENT. This Agreement shall not be assignable by
either party except with the prior express written consent of the
other party, which shall be in the sole discretion of such other party
to grant or withhold; provided, however, that Purchaser may assign
this Agreement to another entity of which Purchaser or Purchasers
members own or control fifty percent (50%) or more of the voting
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securities/interests or to another corporation of which Purchaser
sells its business. Consent to one assignment shall not be construed
as consent to any subsequent assignment.
13.2 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the heirs, successors and permitted assigns of
each party hereto.
13.3 ENTIRE AGREEMENT. This Agreement, including the
schedules and exhibits hereto, and the other agreements executed by
Purchaser and Seller at Closing constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede all
prior oral or written representations, warranties and agreements
between the parties with respect to the subject matter hereof and
thereof.
13.4 NOTICES. All notices and other communications required
or permitted to be given under this Agreement shall be in writing and
shall be considered given and delivered when personally delivered to
the party to whom such notice or communication is addressed or when
delivered by courier or when received by facsimile or when deposited
in the United States mail, postage prepaid, return receipt requested,
properly addressed to a party at the address set forth below, or at
such other address as such party shall have specified by notice given
in accordance with this Section:
If to either Halis or Seller: Halis, Inc.
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: President
With a copy to: Xxxxx, Xxxxxxxx & Xxxxxxx, L.L.P.
Promenade II, Suite 3100
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx
If to Purchaser: Physicians Enterprise System, L.L.C.
000 Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxx, M.D.
With a copy to: Xxxx & Xxxxxxx
000 X. Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, P.C.
13.5 EXPENSES. Each party hereto shall pay its own expenses
incident to this Agreement and the consummation of the transaction
herein described.
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13.6 FURTHER ASSURANCES. At Closing and following, the
parties hereto shall take such further actions and execute and deliver
such additional documents and instruments as may be reasonably
requested by any other party in order to perfect and complete the
purchase and sale of the Purchased Assets as set forth herein, and the
other transactions specifically contemplated herein, and each party
shall bear its own expenses in connection therewith.
13.7 WAIVER. Any term or condition of this Agreement may be
waived at any time by the party or parties entitled to the benefit
thereof, but only by a written notice signed by the party or parties
waiving such terms or conditions. The waiver of any term or condition
shall not be construed as a waiver of any other term or condition of
this Agreement.
13.8 AMENDMENT. This Agreement may be amended, supplemented
or modified at any time, but only by a written instrument duly
executed by HALIS and Seller and by Purchaser, which amendment shall
be effective as of the date specified therein.
13.9 EXHIBITS. The Exhibits and Schedules attached to this
Agreement shall be construed with and as an integral part of this
Agreement to the same extent as if the same had been set forth
verbatim herein. Any fact disclosed on one Exhibit or Schedule hereto
shall be deemed to be disclosed on each other applicable Exhibit or
Schedule and disclosed in this Agreement to the same extent as if the
same had been set forth verbatim herein.
13.10 NO THIRD PARTY RIGHTS. The parties hereto agree that it
is not their intention to create any third party rights by virtue of
this Agreement, except as expressly provided for herein.
13.11 SECTION HEADINGS AND CROSS-REFERENCES. The article and
section headings contained in this Agreement are for reference only
and shall not affect in any way the meaning or interpretation of this
Agreement. All references in this Agreement to article and section
numbers, Exhibits and Schedules refer to articles and sections,
Exhibits and Schedules of this Agreement.
13.12 GOVERNING LAW. This Agreement shall be construed, and
the rights and liabilities of the parties hereto determined, in
accordance with the internal laws of the State of Illinois; provided,
however, that the conflicts of law principles of the State of Illinois
shall not apply to the extent that they would operate to apply the
laws of another state.
13.13 PARTIAL INVALIDITY. In the event that any term or
provision of this Agreement is rendered invalid or unenforceable by
any valid act of Congress or the state legislature, or by any
regulation duly promulgated by officers of the United States or the
State of Illinois acting in accordance with law, or declared null and
void or unenforceable by any court of competent jurisdiction, the
remaining terms and provision of this Agreement shall remain in full
force and effect.
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13.14 DEFINITION OF KNOWLEDGE. Whenever in this Agreement any
representation or warranty of Seller or Purchaser is expressed in
terms of knowledge or best of knowledge, such knowledge shall be
deemed to include matters actually known to the Seller or Purchaser or
matters which should have been known to them in the reasonable
discharge of its duties.
13.15 COST OF LITIGATION. In the event that any party to this
Agreement takes legal action to enforce any of the terms of this
Agreement, the court, arbitrator or other presiding body shall have
the power to, and the parties shall direct the court, arbitrator or
other presiding body to, award reimbursement for the parties'
reasonable expenses, including but not limited to reasonable
attorneys' fees, incurred in connection with such action.
13.16 ARBITRATION.
13.16.1 Any controversy or claim arising out of or
relating to this Agreement or the transactions contemplated hereby,
other than a controversy or claim arising out of or relating to the
Calculation of the Receivables Adjustment as set forth in Section 3.2
hereof, relating to Articles 8 and 10 hereof, which shall be resolved
as provided in Section 3.2, shall be submitted to and be finally
resolved by arbitration pursuant to the provisions of the United
States Arbitration Act (9 U.S.C. Section 1 et seq.), to be conducted
by the American Arbitration Association ("AAA"), with such arbitration
to be held in Chicago, Illinois in accordance with the AAA's
Commercial Arbitration Rules then in effect. Each party hereby
irrevocably agrees that service of process, summons, notices or other
communications related to the arbitration procedure shall be deemed
served and accepted by the other party if given in accordance with
Section 13.4. The arbitrators shall render a judgment of default
against any party who fails to appear in a properly noticed
arbitration proceeding. The arbitration shall be conducted by a panel
of three arbitrators selected pursuant to AAA Rules. Any award or
decision rendered in such arbitration shall be final and binding on
both parties, and judgment may be entered thereon in any court of
competent jurisdiction if necessary.
13.16.2 Notwithstanding Section 13.16.1 above to the
contrary, any party may seek temporary or preliminary injunctive
relief against the other party at any court of proper jurisdiction
with respect to any and all preliminary injunctive or restraining
procedures pertaining to this Agreement or the breach thereof, pending
the outcome of any arbitration proceeding.
13.17. XX. XXXX. In connection with the purchase and sale
hereunder Seller and Halis, jointly and severally, agree that all
obligations of the Practice open and due as of the date hereof and not
assigned by Purchaser hereunder (the "Obligations") shall be paid in a
timely fashion and Xxxxxxxx Xxxx, M.D. and Xxxxxxxx Xxxx, M.D., S.C.
and its officers, directors, shareholders, employees, agents,
- 23 -
successors and assigns, shall be indemnified by Halis and Seller in
the event any such parties incur any loss due to the failure of Halis
or Seller to pay any Obligation. Halis and Seller hereby acknowledge
and agree that for purposes of this Section 13.17, Xx. Xxxx shall be a
third party beneficiary with the right to enforce this Section 13.17
directly against Halis and Seller.
[Remainder of Page Left Blank Intentionally]
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first written above.
PURCHASER:
PHYSICIANS ENTERPRISE SYSTEM,
L.L.C.
By:________________________________
Its:_______________________________
SELLER:
PHYSOURCE LTD.
By:________________________________
Xxxxx Xxxxxx, Vice President
HALIS:
HALIS, INC.
By:________________________________
Xxxxx Xxxxxx, Executive Vice
President
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