Exhibit 10.35
PARTNERSHIP INTEREST PURCHASE AGREEMENT
AGREEMENT, dated September 29, 2008, between DIAGNOSTIC MANAGEMENT, LLC, a New
York limited liability company (the "Purchaser") and RAYMOND V. DAMADIAN, M.D.
MR SCANNING CENTERS MANAGEMENT COMPANY, a Delaware corporation (the "Seller").
1. Sale and Purchase of General Partnership Interest. The Seller will sell,
convey, transfer, assign and deliver to the Purchaser, and the Purchaser will
purchase from the Seller, for the consideration provided for in Section 2 below,
the Seller's general partnership interests in Bensonhurst MRI Associates Limited
Partnership, a New York limited partnership (the "Partnership"), including but
not limited to all of the Seller's rights to income, gains, distributions and
losses of the Partnership and the right to exercise all of the powers of the
general partner as provided in the limited partnership agreement ("Partnership
Agreement") of the Partnership and under applicable law (the "GP Interests").
2. Purchase Price. The consideration for the GP Interests of the Seller in the
Partnership to be sold to the Seller hereunder shall be $2,307,500.
3. Effective Date. The purchase and sale of the GP Interests shall be effective
as of the date of the Closing or such other time as the parties may agree in
writing (the "Effective Date").
4. Closing. The Closing of the purchase and sale shall take place at the offices
of the Seller at 110 Marcus Drive, Melville, New York 11747 concurrently with
the execution and delivery of this Agreement, or at such other time and place as
the Purchaser and the Seller may mutually agree in writing (such time and date
is herein called the "Closing Date").
At the Closing:
(a) Sale of GP Interests by the Seller. The Seller will deliver to the Purchaser
an assignment of the GP Interests, duly executed.
(b) Payment of Consideration by Purchaser. The Purchaser shall deliver to the
Seller the sum of $2,307,500 in consideration for the shares of the Company
Stock in cash or by check.
(c) Sale of Scanner. Fair Haven Services, Inc. will sell the Fonar Stand- Up(R)
MRI Scanning System to the Seller which is presently being leased to Stand-Up
MRI of Bensonhurst, P.C.
(d) Sale of Interests by Limited Partners. Such of the limited partners in the
Partnership as shall be agreed upon by the Purchaser and the Seller shall sell
their limited partnership interests to the Purchaser.
(e) Cash and Accounts Receivable. All cash balances of the Partnership remaining
at the time of the Closing will be distributed to the Seller and the limited
partners in the Partnership in accordance with their respective interests in the
Partnership as such interests existed immediately prior to the Closing. The
accounts receivable of the Partnership shall remain assets of the Partnership
and the Seller and the selling limited partners in the Partnership shall have no
further rights or interest therein.
5. Representations and Warranties by the Seller. The Seller represents and
warrants to the Purchaser as follows:
(a) Organization and Standing of The Partnership. The Partnership is a limited
partnership duly organized and in good standing under the laws of the State
of New York.
(b) Authorization. The Seller has full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
(c) Interest in the Partnership. The GP Interest constitutes all of the general
partnership interests in the Partnership. The GP Interest constitutes a
92.3% interest in the Partnership. The limited partners hold a 7.7%
interest in the Partnership (the "Limited Partners") as set forth on the
signature page of this Agreement.
(d) GP Interest. The Seller is the sole record and beneficial owner of the GP
Interest subject to no pledge, security interest, lien, mortgage, charge,
option, call, or other contract or encumbrance ("Liens"), except as set
forth in this Agreement, and the Partnership has no obligation or
commitment to issue additional partnership interests or other securities.
(e) Management Agreement. The Partnership is party to a Management Agreement
with Stand-Up MRI of Bensonhurst, P.C.
(f) Litigation. There is no litigation, proceeding or investigation pending or
threatened against the Seller or the Partnership which questions the
validity of this Agreement or of any action taken or to be taken pursuant
to or in connection with the provisions of this Agreement.
(g) Compliance with Other Instruments, Et Cetera. Neither the execution and
delivery of this Agreement nor the carrying out of the transactions
contemplated hereby will result in any violation, or be in conflict with
any term, of the Partnership Agreement, or other governing agreement or
document applicable to the Seller. The consummation of the transactions
contemplated hereby will not result in any violation of or be in conflict
with any contract or other instrument to which the Seller is a party, or of
any contract, other instrument, judgement, decree, order, statute rule or
regulation by which the Purchaser is bound.
(h) Governmental and Other Consents. No consent, approval, authorization or
order of, or registration, qualification, designation, declaration or
filing with, any governmental authority on the part of the Seller is
required in connection with the execution and delivery of this Agreement or
the carrying out of any transaction contemplated hereby, except as set
forth in this Agreement. No other consents are required to be obtained by
the Seller in connection with the purchase and sale contemplated hereby
except the consent of a majority in interest of the Limited Partners.
(i) Tax Returns and Payments. All tax returns and reports of each of the
Partnership have been duly filed, and all taxes, assessments, fees and
other governmental charges upon any properties, assets, income or
franchises of the Partnership or for which the Partnership is otherwise
liable, which are due and payable have been paid, other than those
presently payable without penalty or interest and which have been disclosed
in writing to the Purchaser. The charges, accruals and reserves on the
books of the Partnership with respect to taxes for all fiscal periods are
adequate and the Partnership not know of any actual or proposed tax
assessment for any fiscal period or of any basis therefor other than as so
reflected on their respective books and records. No extension of time for
the assessment of deficiencies in any federal or state tax has been
requested of or granted by the Partnership. The Seller shall file or cause
to be filed when due (or as may be extended) the Federal, State and local
income tax returns for the Partnership for all periods up to the Closing
Date, shall pay all taxes, interest and penalties as may be due for such
periods and shall be entitled to any refunds for any such periods up to the
Closing Date.
(j) Compliance with Law and Government Regulations. To the best of Purchaser's
knowledge, the Partnership is in compliance with all applicable statutes,
regulations, decrees, orders, restrictions, guidelines and standards,
imposed by the United States of America, New York State and any other
state, county, municipality or agency of any thereof, and any foreign
country or government to which it or any of its operations may be subject,
in respect of the conduct of its business as currently and historically
conducted and the ownership and operation of its respective properties.
6. Representations and Warranties of the Purchaser. The Purchaser represents and
warrants to the Seller as follows:
(a) Organization and Authorization. The Purchaser is a limited liability
company duly organized, validly existing and in good standing under the
laws of the State of New York. The Purchaser has all requisite power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby, and the execution and delivery of this Agreement and
the sale and all other transactions contemplated hereby have been duly
authorized by all necessary action on the part of the Purchaser. No
consents are necessary to authorize transactions contemplated hereby under
any contract, indenture or other agreement to which the Purchaser is a
party of by which it is bound.
(b) Litigation. There is no litigation, proceeding or investigation pending or
threatened against the Purchaser which questions the validity of this
Agreement or of any action taken or to be taken pursuant to or in
connection with the provisions of this Agreement.
(c) Purchase for Own Account; Restrictions. The Purchaser is purchasing the GP
Interests for its own account, and has been advised and understands that
the GP Interests are not registered under the Securities Act of 1933, as
amended and cannot be resold without such registration or an exemption
therefrom.
(d) Compliance with Other Instruments. Neither the execution and delivery of
this Agreement nor the carrying out of the transactions contemplated hereby
will result in any violation of or be in conflict with any term of the
articles of organization of the Purchaser, any other governing agreement or
document applicable to the Purchaser, or any contract or other instrument
to which the Purchaser is a party, or of any contract, other instrument,
judgment, decree, order, statute, rule or regulation by which the Purchaser
is bound.
(e) Governmental Consent, Et Cetera. No consent, approval, authorization or
order of, or registration, qualification, designation, declaration or
filing with, any governmental authority on the part of the Purchaser is
required in connection with the execution and delivery of this Agreement or
the carrying out of any transaction contemplated hereby, except as provided
in this Agreement.
7. Access, Information and Documents. The Purchaser acknowledges that the Seller
has given it and its counsel, accountants or other authorized representatives
full access to all of the Partnership's assets and properties, to the
Partnership's key personnel and persons with whom the Partnership does business
and to all books, contracts, commitments and records of the Partnership and has
delivered to the Purchaser all such documents and copies of documents and
information with respect to the Partnership's properties and business as the
Purchaser has from time to time requested. The Purchaser acknowledges that it
has performed his own investigation of the Partnership and is satisfied with the
results thereof. The Purchaser acknowledges that it is not relying on any
representations of the Seller or the Partnership, other than as set forth in
this Agreement, or any other person in connection with his purchase of the GP
Interests and the transactions contemplated hereby.
8. Books and Records. Following the Closing, the Purchaser shall have access to
all customer lists, physician lists, books of account, patient files and
records, inventory records, personnel records and other books and records,
including without limitation tax records and returns and all other books and
records of the Partnership.
9. Covenant of the Purchaser. The Purchaser covenants and agrees that after the
Closing, the Purchaser will permit the Seller and its representatives, at such
reasonable times as they may request, to inspect and make extracts from any
books and records turned over to the Purchaser at the Closing for the purpose of
preparing any tax returns, complying with other governmental requirements, or
any other valid purpose.
10. Conditions of Purchaser's Obligations. The obligations of the Purchaser
under this Agreement are subject to the fulfillment to the Purchaser's
reasonable satisfaction, prior to or at the Closing, of each of the following
conditions:
(a) Representations and Warranties True at Closing. The representations and
warranties made by the Purchaser in this Agreement and in any certificate
or document delivered pursuant to the provisions hereof shall be true at
and as of the time of Closing as though such representations and warranties
were made at and as of such time.
(b) Performance. The Seller shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
(c) No Government Opposition. No governmental entity shall have made known,
formally or informally, any opposition to, or questioning of, the
consummation of the transactions contemplated hereby.
(d) No Private Opposition. No private party shall have commenced an action or
filed suit against either of the parties questioning in any way the
validity of this Agreement or the transactions contemplated hereby.
(e) Sale of Scanner. Fair Haven Services, Inc. shall have sold or at the
Closing will sell, the Fonar Stand-Up(R) MRI scanning system to the Seller,
which is presently being leased to Stand-Up MRI of Bensonhurst, P.C., on
terms and conditions acceptable to the Purchaser.
(f) Sale of Interests by Limited Partners. Such of the Limited Partners agreed
upon by the Purchaser and the Seller shall have sold or at the Closing will
sell, their interests in the Partnership to the Purchaser.
(g) Consent of Limited Partners. A majority in interest of the Limited Partners
shall have consented to the sale of the GP Interests to the Purchaser.
11. Conditions of the Seller's Obligations. The obligations of the Seller under
this Agreement are subject to the fulfillment to Seller's reasonable
satisfaction, prior to or at the Closing, of each of the following conditions:
(a) Representations and Warranties True at Closing. The representations and
warranties made by the Purchaser in this Agreement and in any certificate
or document delivered pursuant to the provisions hereof shall be true at
and as of the time of Closing as though such representations and warranties
were made at and as of such time.
(b) Performance. The Purchaser shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing.
(c) Consent of Limited Partners. A majority in interest of the Limited Partners
shall have consented to the sale of the GP Interests to the Purchaser.
12. Expenses. Except as otherwise provided herein, the Seller will pay all costs
and expenses attributable to the performance of and compliance with all
agreements and conditions contained in this Agreement to be performed or
complied with by the Seller, and the Purchaser will pay all costs and expenses
attributable to the performance of and compliance with all agreements and
conditions contained in this Agreement to be performed or complied with by the
Purchaser.
13. Representations and Warranties. Any statements, representations and
warranties and agreements made by the Seller contained in this Agreement or any
certificate or other instrument delivered by the Seller pursuant to this
Agreement, or otherwise made by the Seller in writing as a condition of, or
otherwise in connection with, the transactions contemplated hereby, shall
survive the Closing.
14. Prior Liabilities. To the extent that the Purchaser shall be personally
liable or suffer any personal loss or damage as a result of any claim, debt,
liability, lawsuit, litigation or other matter arising prior to the Closing,
other than obligations, liabilities and indebtedness arising in the ordinary
course of the Partnership's business or which were specifically disclosed in
writing to the Purchaser, the Seller will indemnify and hold the Purchaser
harmless from and against such matter.
15. Assignment. No assignment of rights or obligations hereunder shall be made
by either party without the express written prior approval of the other party.
16. Notices, Et Cetera. All notices, hereunder shall be in writing and shall be
deemed to have been given when delivered or mailed by first-class, registered or
certified mail, postage prepaid, addressed to the party to which it is given as
follows: if to the Seller, c/o Fonar Corporation, 110 Marcus Drive, Melville,
New York 11747 or if to the Purchaser, to Diagnostic Management, LLC, 125 Newton
Road, Plainview, New York 10801 or to such other address as a party hereto may
furnished to the other by the giving of notice.
17. Additional Documents. Each party shall execute and deliver to the other, at
the other party's request, such additional instruments and documents as may be
necessary or appropriate to further evidence or effectuate the transactions
contemplated pursuant to this Agreement, including but not limited to an
amendment of the Certificate of Limited Partnership of the Partnership
reflecting the withdrawal of the Seller as the General Partner of the
Partnership and the substitution of the Purchaser as the General Partner.
18. Limited Partner Approval. The Limited Partners of the Partnership executing
this Agreement are consenting to the sale by the Seller to the Purchaser of the
Seller's entire partnership interest in the Partnership, the withdrawal by the
Seller as the general partner of the Partnership and the substitution of the
Purchaser as the general partner of the Partnership. Said limited partners are
not making any representations or warranties, or undertaking or assuming any
liability or obligation, to any party hereto by reason of the granting such
consent.
19. Miscellaneous. This Agreement embodies the entire agreement and
understanding between the parties hereto with respect to the subject matter
hereof, and shall be binding upon and inure to the benefit of and be enforceable
by the successors and assigns of such parties. This Agreement may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against whom enforcement of such change, waiver, discharge or termination
is sought. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law. The headings of this Agreement are for reference only,
and shall not limit or otherwise affect any of the terms or provisions hereof.
This Agreement may be executed in several counterparts and may be executed by
the respective parties hereto on separate counterparts, each of which shall be
an original but all of which together shall constitute one and the same
instrument. This Agreement shall be construed in accordance with and governed by
the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered in the manner legally binding upon them as of the date
first above written.
DIAGNOSTIC MANAGEMENT, LLC
By:/s/Timothy Damadian
RAYMOND V. DAMADIAN, M.D.
MR SCANNING CENTERS MANAGEMENT COMPANY
By:/s/Raymond V. Damadian, President
CONSENTED TO BY:
LIMITED PARTNERS
SOKOLER FAMILY LIMITED PARTNERSHIP
2.5% Partnership Interest
By:/s/Robert Sokoler
MRI ENTERPRISES, INC.
2.0% Partnership Interest
By:/s/ Luciano Bonanni
/s/GILBERT LING, M.D.
0.2% Partnership Interest
/s/ROBERT J. JANOFF
2.5% Partnership Interest
/s/JAMES J. NASH
0.5% Partnership Interest
EXHIBIT A
ASSIGNMENT OF GENERAL PARTNERSHIP INTEREST
Reference is made to the Partnership Interest Purchase Agreement dated September
29, 2008 (the "Agreement") between RAYMOND V. DAMADIAN, M.D. MR SCANNING CENTERS
MANAGEMENT COMPANY (the "Seller") and DIAGNOSTIC MANAGEMENT, LLC (the "Buyer"),
pursuant to which the Seller is transferring to the Buyer Seller's equity
interest in Bensonhurst MRI Associates Limited Partnership (the "Interest").
For good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Seller does hereby sell, grant, transfer, assign and
convey to the Buyer, its successors and assigns, title to the Interest free and
clear of any all Liens (as defined in the Agreement) other than any provided in
the Agreement or arising through or under the Buyer.
RAYMOND V. DAMADIAN, M.D. MR
SCANNING CENTERS MANAGEMENT COMPANY
By:/s/Raymond V. Damadian, President
DIAGNOSTIC MANAGEMENT, LLC
By:/s/Timothy Damadian, Manager