1
EXHIBIT 2.6
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AGREEMENT
This Agreement (this "AGREEMENT") is dated effective as of April 27,
2001, by and among PER-SE TECHNOLOGIES, INC., a Delaware corporation ("PER-SE"),
PER-SE TRANSACTION SERVICES, INC., an Indiana corporation ("PURCHASER"),
OFFICEMED.COM LLC, a Georgia limited liability company (the "Company"),
SOFTLINC, INC., a Georgia corporation ("SOFTLINC"), and DANIEL MANSFIELD, an
individual resident of the State of Georgia ("MANSFIELD") (SoftLinc and
Mansfield are each an "OWNER" and collectively, the "OWNERS"). Per-Se, the
Purchaser, the Company, and the Owners are collectively referred to herein as
the "PARTIES".
Reference is hereby made to that certain Asset Purchase Agreement by
and among the Parties dated effective April 30, 2001 (the "Asset Purchase
Agreement"), and those certain certificates and agreements executed in
connection with the Contemplated Transactions as set forth in the Asset Purchase
Agreement (the "Transaction Documents"). Capitalized terms used herein but not
otherwise defined shall have the meanings ascribed to them in the Asset Purchase
Agreement.
Notwithstanding the date or effective date set forth in the Asset
Purchase Agreement or any Transaction Document, the effective date of the Asset
Purchase Agreement, the Transaction Documents, and the Closing shall be April
27, 2001.
IN WITNESS WHEREOF, the parties have executed, sealed and delivered
this Agreement as of the date first written above.
PER-SE:
Per-Se Technologies, Inc.
By: /s/ CHRIS E. PERKINS
---------------------------------------
Chris E. Perkins
Executive Vice President and Chief
Financial Officer
PURCHASER:
Per-Se Transaction Services, Inc.
By: /s/ CHRIS E. PERKINS
---------------------------------------
Chris E. Perkins
Executive Vice President and Chief
Financial Officer
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
2
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
COMPANY:
officemed.com LLC
By: /s/ DANIEL MANSFIELD
------------------------
Name: Daniel Mansfield
----------------------
Title: Member
---------------------
OWNERS:
SoftLinc, Inc.
By: /s/ EDWARD RIEKER
------------------------
Name: Edward Rieker
----------------------
Title: President
---------------------
/s/ DANIEL MANSFIELD
---------------------------
Daniel Mansfield
3
ASSET PURCHASE AGREEMENT
BY AND AMONG
PER-SE TECHNOLOGIES, INC.,
PER-SE TRANSACTION SERVICES, INC.,
OFFICEMED.COM LLC,
AND
SOFTLINC, INC., AND DANIEL MANSFIELD
EFFECTIVE AS OF APRIL 30, 2001
4
TABLE OF CONTENTS
PAGE
----
1. DEFINITIONS.................................................................................. 1
2. ACQUISITION OF ACQUIRED ASSETS AND ASSUMPTION OF ASSUMED LIABILITIES......................... 11
2.1. Calculation of Estimated Net Working Capital of the Company......................... 11
2.2. Purchase and Sale of Acquired Assets; Assumption of Liabilities..................... 11
2.3. Asset Purchase Consideration........................................................ 12
2.4. Payment of Asset Purchase Consideration............................................. 12
2.5. Time and Place of Closing........................................................... 12
2.6. Deliveries at the Closing........................................................... 12
2.7. Minimum Net Working Capital Adjustment to Asset Purchase Consideration.............. 13
2.8. Allocation of Asset Purchase Consideration.......................................... 14
2.9. Escrow.............................................................................. 14
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE OWNERS................................. 14
3.1. Organization and Good Standing...................................................... 15
3.2. Authority; No Conflict.............................................................. 15
3.3. Financial Statements................................................................ 16
3.4. Books and Records................................................................... 16
3.5. Title to Properties; Security Interests............................................. 16
3.6. Condition and Sufficiency of Assets................................................. 17
3.7. Accounts Receivable................................................................. 17
3.8. No Undisclosed Liabilities.......................................................... 17
3.9. Taxes............................................................................... 18
3.10. No Material Adverse Change.......................................................... 18
3.11. Employee Benefits................................................................... 19
3.12. Compliance with Legal Requirements; Governmental Authorizations..................... 20
3.13. Legal Proceedings; Orders........................................................... 21
3.14. Absence of Certain Changes and Events............................................... 22
3.15. Contracts; No Defaults.............................................................. 23
3.16. Insurance........................................................................... 25
3.17. Environmental Matters............................................................... 25
3.18. Real Property....................................................................... 27
3.19. Employees........................................................................... 27
3.20. Labor Relations; Compliance......................................................... 28
3.21. Intellectual Property............................................................... 28
3.22. Software............................................................................ 30
3.23. No Infringement..................................................................... 32
3.24. Certain Payments.................................................................... 32
3.25. ENVOY............................................................................... 32
3.26. Disclosure.......................................................................... 32
3.27. Relationships with Related Persons.................................................. 33
5
3.28. Brokers or Finders.................................................................. 33
3.29. Charter Provisions, Etc............................................................. 33
4. REPRESENTATIONS AND WARRANTIES OF PER-SE AND THE PURCHASER................................... 33
4.1. Organization and Good Standing...................................................... 33
4.2. Authority; No Conflict.............................................................. 33
4.3. Certain Proceedings................................................................. 34
4.4. Brokers or Finders.................................................................. 34
4.5. Disclosure.......................................................................... 34
5. COVENANTS.................................................................................... 35
5.1. Access and Investigation............................................................ 35
5.2. Operation of the Business of the Company............................................ 35
5.3. Negative Covenant................................................................... 36
5.4. Required Approvals.................................................................. 36
5.5. Indebtedness........................................................................ 36
5.6. No Negotiation...................................................................... 36
5.7. Best Efforts........................................................................ 36
5.8. Confidentiality..................................................................... 36
5.9. Litigation Support.................................................................. 37
5.10. Transition.......................................................................... 37
5.11. Assignment of Interests in Acquired Assets.......................................... 37
5.12. Use of Company Name................................................................. 38
5.13. Tax Matters......................................................................... 38
6. CONDITIONS PRECEDENT TO PER-SE'S AND THE PURCHASER'S OBLIGATION TO CLOSE..................... 39
6.1. Accuracy of Representations......................................................... 39
6.2. Performance of Company and Owners................................................... 39
6.3. Consents............................................................................ 40
6.4. Release of Security Interests....................................................... 40
6.5. Additional Documents................................................................ 40
6.6. No Proceedings...................................................................... 40
6.7. No Claim Regarding Ownership or Sale Proceeds....................................... 41
6.8. No Prohibition...................................................................... 41
6.9. Due Diligence....................................................................... 41
7. CONDITIONS PRECEDENT TO THE COMPANY'S AND THE OWNERS' OBLIGATION TO CLOSE.................... 41
7.1. Accuracy of Representations......................................................... 41
7.2. Per-Se's and Purchaser's Performance................................................ 41
7.3. Additional Documents................................................................ 42
7.4. No Injunction....................................................................... 42
8. TERMINATION.................................................................................. 42
8.1. Termination Events.................................................................. 42
8.2. Effect of Termination............................................................... 43
ii
6
9. INDEMNIFICATION; REMEDIES.................................................................... 43
9.1. Survival............................................................................ 43
9.2. Indemnification and Payment of Damages by the Company and the Owners................ 44
9.3. Indemnification and Payment of Damages by Per-Se and Purchaser...................... 44
9.4. Time Limitations.................................................................... 44
9.5. Limitations on Amount - Company and Owners.......................................... 45
9.6. Limitations on Amount - Per-Se and Purchaser........................................ 45
9.7. Procedure for Indemnification -- Third Party Claims................................. 45
9.8. Procedure for Indemnification -- Other Claims....................................... 46
9.9. Subrogation......................................................................... 46
10. GENERAL PROVISIONS........................................................................... 47
10.1. Expenses............................................................................ 47
10.2. Public Announcements................................................................ 47
10.3. Notices............................................................................. 47
10.4. Jurisdiction; Service of Process.................................................... 48
10.5. Further Assurances.................................................................. 48
10.6. Waiver.............................................................................. 49
10.7. Entire Agreement and Modification................................................... 49
10.8. Disclosure Schedule................................................................. 49
10.9. Assignments, Successors, and No Third-Party Rights.................................. 49
10.10. Severability........................................................................ 50
10.11. Section Headings; Construction...................................................... 50
10.12. Time of Essence..................................................................... 50
10.13. Governing Law....................................................................... 50
10.14. Counterparts........................................................................ 50
10.15. Arbitration......................................................................... 50
iii
7
EXHIBITS
Exhibit A Purchase Price Allocation
Exhibit B Form of Noncompetition and Assignment and Inventions Agreement
Exhibit C Form of Escrow Agreement
Exhibit D Required Consents
Exhibit E Form of Opinion of Parker, Hudson, Rainer & Dobbs LLP
Exhibit F Form of Landlord Estoppel Certificate
Exhibit G Form of Opinion of Powell, Goldstein, Frazer & Murphy LLP
Exhibit G Form of Opinion of Robert Q. Jones, Jr.
SCHEDULES
Schedule 1(a) - Leased Real Property
Schedule 1(b) - Assumed Contracts
Schedule 3.1 - Organization and Good Standing
Schedule 3.2(b) - No Contravention
Schedule 3.9(a) - Tax Returns
Schedule 3.9(b) - Tax Adjustments
Schedule 3.12(a) - Compliance with Legal Requirements
Schedule 3.12(b) - Governmental Authorization
Schedule 3.13 - Legal Proceedings; Orders
Schedule 3.14 - Absence of Certain Changes and Events
Schedule 3.15(a) - Contracts
Schedule 3.15(d) - Compliance with Assumed Contracts; No Defaults; etc.
Schedule 3.16 - Insurance
Schedule 3.17 - Environmental Matters
Schedule 3.18 - Real Property
Schedule 3.19 - Employees
Schedule 3.21(b) - Intellectual Property Assets
Schedule 3.21(f) - Copyrights
Schedule 3.22(a) - Owned or Licensed Software
Schedule 3.22(c) - Source Code
Schedule 3.22(d) - Claims of Software Defects
Schedule 3.22(g) - Termination of Software Agreements
Schedule 3.25 - ENVOY
Schedule 3.27 - Related Persons
iv
8
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "AGREEMENT") is dated effective as
of April 30, 2001, by and among PER-SE TECHNOLOGIES, INC., a Delaware
corporation ("PER-SE"), PER-SE TRANSACTION SERVICES, INC., an Indiana
corporation ("PURCHASER"), OFFICEMED.COM LLC, a Georgia limited liability
company (the "Company"), SOFTLINC, INC., a Georgia corporation ("SOFTLINC"), and
DANIEL MANSFIELD, an individual resident of the State of Georgia ("MANSFIELD")
(SoftLinc and Mansfield are each an "OWNER" and collectively, the "OWNERS").
Per-Se, the Purchaser, the Company, and the Owners are collectively referred to
herein as the "PARTIES".
RECITALS
The Company is in the business of providing (i) Internet application
services for real-time delivery of healthcare insurance transactions consisting
of eligibility benefits lookups, patient referrals and claim status, (ii) for
the manual entry of data for the processing of those transactions, (iii) a
proprietary application programming interface for eligibility lookups which can
be utilized over the Internet, intranets, or dial-up services, and (iv) a method
for the rapid enrollment of healthcare providers to process these specific
transactions.
The Owners are the holders of all of the issued and outstanding limited
liability company interests of the Company.
This Agreement contemplates a transaction in which the Company shall
sell, transfer, assign and deliver to the Purchaser substantially all of the
assets owned or used by, and certain of the liabilities of, the Company, and the
Purchaser shall purchase and accept such assets, and assume such liabilities,
and in connection therewith, the Company will receive consideration in the form
of cash.
AGREEMENT
In consideration of the premises and the mutual promises herein made,
and in consideration of the representations, warranties, and covenants herein
contained, the Parties hereto, intending to be legally bound, hereby agree as
follows:
1. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings
specified or referred to in this Section 1:
"ACCOUNTS RECEIVABLE" - as defined in Section 3.7.
"ACQUIRED ASSETS" -- all right, title, and interest in and to all of
the assets of the Company used or usable in the conduct of the Business of the
Company (except for those assets described below as Excluded Assets), including,
without limitation, all of the Company's right, title and interest in and to:
9
(a) all leases with respect to the Leased Real Property, and all
improvements, fixtures, and fittings thereon, and easements, rights-of-way, and
other appurtenants with respect thereto (such as appurtenant rights in and to
public streets);
(b) all tangible personal property (such as machinery, equipment,
inventories of raw materials and supplies, manufactured and purchased parts,
goods in process and finished goods, furniture, automobiles, trucks, tractors,
trailers, and the like);
(c) all Intellectual Property Assets, goodwill associated
therewith, licenses and sublicenses granted and obtained with respect thereto,
and rights thereunder, remedies against infringements thereof, and rights to
protection of interests therein under the laws of all jurisdictions;
(d) all Owned Software and all Licensed Software;
(e) all agreements (including but not limited to employment
agreements, confidentiality agreements, and noncompetition agreements),
contracts, real property leases, personal property leases, subleases, and rights
thereunder (the "ASSUMED CONTRACTS");
(f) all insurance policies of the Company;
(g) any current asset of the Company relating to the operation of
the Company prior to the Closing Date, including but not limited to accounts
receivables, inventories, prepaid expenses, and other current assets, but
excluding cash in the Company's payroll account as of the Closing Date necessary
to satisfy the Company's payroll obligations to its employees up to and through
the Closing Date, Company's bank accounts and cash distributions to Owners of
excess cash not needed to satisfy the minimum Net Working Capital requirement
set forth in Section 2.7 herein;
(h) all claims, deposits, prepayments, refunds, causes of action,
choses in action, rights of recovery, rights of set off, and rights of
recoupment;
(i) all franchises, approvals, permits, licenses, orders,
registrations, certificates, variances, and similar rights obtained from
governments and governmental agencies;
(j) all books, records, ledgers, files, documents, correspondence,
lists, plats, architectural plans, drawings, and specifications, creative
materials, advertising and promotional materials, studies, reports, and other
printed or written materials relating to the Business, except those excluded
below as Excluded Assets; and
(k) all goodwill and similar intangible property of the Company.
PROVIDED, HOWEVER, that notwithstanding the foregoing, the Acquired Assets shall
not include (the following shall be referred to as the "EXCLUDED ASSETS"):
(i) any rights or interests in and with respect to any
Company Plan;
2
10
(ii) any rights or interests in any indentures, mortgages,
lines of credit, instruments, security interests, guaranties, other
similar arrangements constituting Indebtedness, and rights thereunder,
of the Company (the "EXCLUDED CONTRACTS");
(iii) the corporate charter, qualifications to conduct
business as a foreign limited liability company, arrangements with
registered agents relating to foreign qualifications, taxpayer and
other identification numbers, seals, minute books, equity interests
transfer books, original Tax Returns and other documents relating to
the organization, maintenance, and existence of the Company as a
limited liability company;
(iv) any and all of the rights of the Company under this
Agreement; or
(v) any right, title, or interest in and to the Company's
payroll account.
"ARBITRATOR" - as defined in Section 2.7(c).
"ASSET PURCHASE CONSIDERATION" - as defined in Section 2.3.
"ASSUMED LIABILITIES" -- (except to the extent such liabilities are
expressly excluded as Excluded Liabilities described below):
(a) those current Liabilities of the Company which are
reflected as current liabilities on the Closing Date Balance Sheet;
(b) Liabilities of the Company as tenant arising under
the leases for the Leased Real Property set forth on Schedule 1(a) with
respect to performance obligations that arise and become due and owing
following the Closing, which Liabilities relate to the conduct of the
business of the Purchaser with respect to such leases for the Leased
Real Property after the Closing Date, and which do not relate to the
conduct of the Business prior to the Closing Date; and
(c) all Liabilities of the Company with respect to
performance obligations that arise and become due and owing following
the Closing under those Assumed Contracts set forth on Schedule 1(b),
which Liabilities relate to the conduct of the business of the
Purchaser with respect to such Assumed Contracts after the Closing
Date, and which do not relate to the conduct of the Business prior to
the Closing Date.
PROVIDED, HOWEVER, that notwithstanding the foregoing, the Assumed Liabilities
shall not include (the following shall be referred to herein as the "EXCLUDED
LIABILITIES"):
(i) any Liability of the Company relating to the
operation of the Company prior to the Closing Date resulting
from, arising out of, or caused by any (i) breach of contract,
(ii) tort, (iii) infringement, or (iv) violation of law;
3
11
(ii) any Liability of the Company relating to
employees of the Company for the period prior to the Closing
Date, including but not limited to employee compensation,
bonuses, commissions, incentive compensation, sick pay,
severance pay, workers' compensation, and payroll and other
employer-related withholding obligations, and any entitlements
due to any employees, whether by contractual obligation or
normal business expectation, or pursuant to any stock
appreciation or phantom stock plan or program;
(iii) any Liabilities under those contracts,
agreements, leases, subleases, and instruments included among
the Acquired Assets arising prior to the Closing Date which by
their nature or amount should be reflected on the Closing Date
Balance Sheet but are not so reflected;
(iv) any Liabilities arising under the Excluded
Contracts;
(v) any Liability of the Company for
Indebtedness of any kind;
(vi) Liabilities under the leases with respect to
the Leased Real Property arising prior to the Closing Date;
(vii) any Liability of the Company for Taxes, and
any penalties, interest and other additions to Tax arising out
of the failure to pay prior to Closing any Taxes that were due
prior to Closing;
(viii) any Liability of the Company with respect to
any of the Company Plans or for any post-Closing retirement
benefits for employees of the Company;
(ix) any Liability of the Company arising under
or with respect to any Equity Rights of the Company;
(x) any Liability of the Company for costs and
expenses incurred in connection with this Agreement and the
transactions contemplated hereby;
(xi) any Liability of the Company under this
Agreement for failure to perform its obligations hereunder;
(xii) any Liability arising from any use of or
defect in any Company products sold prior to the Closing Date
(regardless of the date of any loss, bodily injury, or
property damage claimed to have resulted from such uses or
defects);
(xiii) any Environmental Health and Safety
Liabilities of the Company, including but not limited to
liabilities arising from any Environmental Law, which arise or
result, directly or indirectly, from conditions existing or
operations conducted at any facility owned, operated, leased
or used by the Company prior to the Closing Date;
4
12
(xiv) any liability or obligation arising under
the violation of any law, regulation, or ordinance by the
Company prior to or on the Closing Date, including but not
limited to any violation of any immigration law, regulation,
or ordinance; or
(xv) other than the Assumed Liabilities, any
other Liability of the Company, whether absolute, contingent
or otherwise, known or unknown, accrued or unaccrued, asserted
or unasserted, or otherwise.
"BEST EFFORTS" -- the efforts that a prudent Person desirous of
achieving a result would use in similar circumstances to ensure that such result
is achieved as expeditiously as possible.
"BUSINESS" -- the business conducted by the Company prior to and as of
the Closing Date.
"CLOSING" -- as defined in Section 2.5.
"CLOSING DATE" -- as defined in Section 2.5.
"CLOSING DATE BALANCE SHEET" - as defined in Section 2.7(b).
"COMPANY GROUP" -- as defined in Section 3.11(a).
"COMPANY PLAN" -- as defined in Section 3.11(b).
"CONFIDENTIAL INFORMATION" -- (a) confidential data and confidential
information relating to the business of any Party (the "PROTECTED PARTY") which
is or has been disclosed to another Party (the "RECIPIENT") or of which the
Recipient became aware as a consequence of or through its relationship with the
Protected Party and which has value to the Protected Party and is not generally
known to its competitors and which is designated by the Protected Party as
confidential or otherwise restricted; and (b) information of the Protected
Party, without regard to form, including, but not limited to, Intellectual
Property Assets, Software, technical or nontechnical data, algorithms, formulas,
patents, compilations, programs, devices, methods, techniques, drawings,
processes, financial data, financial plans, product or service plans or lists of
customers or suppliers which is not commonly known or available to the public
and which information (i) derives economic value from not being generally known
to, and not being readily ascertainable by proper means by, other Persons who
can obtain economic value from its disclosure or use, and (ii) is the subject of
efforts that are reasonable under the circumstances to maintain its secrecy.
Notwithstanding anything to the contrary contained herein, Confidential
Information shall not include any data or information that (v) has been
voluntarily disclosed to the public by the Protected Party, (w) has been
independently developed and disclosed to the public by others, (x) otherwise
enters the public domain through lawful means, (y) was already known by
Recipient prior to such disclosure (as evidenced by written documentation) or
was lawfully and rightfully disclosed to Recipient by another Person, or (z)
that is required to be disclosed by law or order without the availability of
applicable protective orders or treatment.
"CONSENT" -- any approval, consent, ratification, waiver, or other
authorization (including any Governmental Authorization).
5
13
"CONTEMPLATED TRANSACTIONS" -- all of the transactions contemplated by
this Agreement, including but not limited to (a) the acquisition of the Acquired
Assets, and the assumption of the Assumed Liabilities, by the Purchaser from the
Company, the Purchaser's exercise of control over the Business of the Company
following the Closing, and the payment of the Asset Purchase Consideration
therefor; (b) the execution, delivery, and performance of each Noncompetition
Agreement, and the Escrow Agreement; and (c) the performance by Per-Se,
Purchaser, the Company, and the Owners of their respective covenants and
obligations under this Agreement.
"CONTRACT" -- any agreement, contract, obligation, promise, or
undertaking (whether written or oral and whether express or implied) that is
legally binding.
"COPYRIGHTS" - as defined in Section 3.21(a).
"DAMAGES" -- as defined in Section 9.2.
"DISCLOSURE SCHEDULE" - as defined in Section 3.
"EMPLOYEES" - as defined in Section 3.11(b).
"ENVIRONMENT" -- soil, land surface or subsurface strata, surface
waters (including navigable waters, ocean waters, streams, ponds, drainage
basins, and wetlands), groundwaters, drinking water supply, stream sediments,
ambient air (including indoor air), plant and animal life, and any other
environmental medium or natural resource.
"ENVIRONMENTAL, HEALTH, AND SAFETY LIABILITIES" -- any cost, damages,
expense, liability, obligation, or other responsibility arising from or under
Environmental Law or Occupational Safety and Health Law, including fines,
penalties, financial responsibility for cleanup costs, corrective action,
removal, remedial actions and response actions, and any other compliance,
corrective, investigative, or remedial measures required under Environmental Law
or Occupational Safety and Health Law. The terms "removal," "remedial," and
"response action," include the types of activities covered by the United States
Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.
ss. 9601 et seq., as amended ("CERCLA").
"ENVIRONMENTAL LAW" -- any Legal Requirement that requires or relates
to releases of pollutants or hazardous substances or materials, violations of
discharge limits, or other prohibitions that could have significant impact on
the Environment; preventing or reducing to acceptable levels the release of
pollutants or hazardous substances or materials into the Environment; reducing
the quantities, preventing the release, or minimizing the hazardous
characteristics of wastes that are generated; reducing to acceptable levels the
risks inherent in the transportation of hazardous substances, pollutants, oil,
or other potentially harmful substances; cleaning up pollutants that have been
released, preventing the threat of release, or paying the costs of such clean up
or prevention; or making responsible parties pay private parties, or groups of
them, for damages done to their health or the Environment, or permitting
self-appointed representatives of the public interest to recover for injuries
done to public assets.
"ENVOY" - as defined in Section 3.25.
6
14
"EQUITY RIGHTS" - any and all plans permitting the issuance of the
limited liability company interests of the Company, options to acquire limited
liability company interests of the Company; and/or other rights to acquire
limited liability company interests of the Company, that are valued in whole or
in part by reference to the limited liability company interests of the Company
or that may be settled in limited liability company interests of the Company.
"ERISA" - as defined in Section 3.11(b)(i).
"ESCROW" - as defined in Section 2.9.
"ESCROW AGREEMENT" - means that certain Escrow Agreement by and among
Per-Se, the Purchaser, the Owners, and SunTrust Bank, N.A. as Escrow Agent (the
"ESCROW AGENT"), substantially in the form of Exhibit C hereto.
"ESTIMATED ADJUSTMENT SCHEDULE" - as defined in Section 2.1.
"FACILITIES" -- any real property, leaseholds, or other interests
currently or formerly owned or operated by the Company and any buildings,
plants, structures, or equipment (including motor vehicles and trucks) currently
or formerly owned or operated by the Company.
"FINAL ADJUSTMENT SCHEDULE" - as defined in Section 2.7(b).
"GAAP" -- United States generally accepted accounting principles,
consistently applied, as in effect on the date hereof.
"GOVERNMENTAL AUTHORIZATION" -- any approval, consent, license, permit,
waiver, or other authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Body or pursuant to any
Legal Requirement.
"GOVERNMENTAL BODY" -- any federal, state, local, municipal, foreign,
or other government; or governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official, or
entity and any court or other tribunal).
"HAZARDOUS MATERIALS" -- any waste or other substance that is listed,
defined, designated, or classified as, or otherwise determined to be, hazardous,
radioactive, or toxic or a pollutant or a contaminant under or pursuant to any
Environmental Law, and specifically including petroleum and all derivatives
thereof or synthetic substitutes therefor and asbestos or asbestos-containing
materials.
"INDEBTEDNESS" - (i) all indebtedness for borrowed money or for the
deferred purchase price of property or services (including, without limitation,
reimbursement and all other obligations with respect to surety bonds, letters of
credit and bankers' acceptances, whether or not matured), including the current
portion of such indebtedness, (ii) all obligations evidenced by notes, bonds,
debentures or similar instruments, and (iii) all capital lease obligations.
"INDEMNIFIED PERSON" - as defined in Section 9.2.
"INTELLECTUAL PROPERTY ASSETS" -- as defined in Section 3.21.
7
15
"INTERIM BALANCE SHEET" -- as defined in Section 3.3.
"IRC" -- the Internal Revenue Code of 1986 or any successor law, and
regulations issued by the IRS pursuant to the Internal Revenue Code or any
successor law.
"IRS" -- the United States Internal Revenue Service and, to the extent
relevant, the United States Department of the Treasury.
"KNOWLEDGE" -- an individual will be deemed to have "Knowledge" of a
particular fact or other matter if:
(a) such individual is actually aware of such fact or
other matter; or
(b) a prudent individual could be expected to discover or
otherwise become aware of such fact or other matter in the course of
conducting a reasonable investigation concerning the existence of such
fact or other matter.
"Knowledge" with respect to the Company shall mean the Knowledge of Ed Rieker,
Daniel Mansfield, SoftLinc, Inc., and each officer, member, and management
employee responsible for the applicable functional area.
"LEASED REAL PROPERTY" - as defined in Section 3.18.
"LEGAL REQUIREMENT" -- any federal, state, local, municipal, foreign,
international, multinational, or other administrative order, constitution, law,
ordinance, principle of common law, regulation, statute, or treaty.
"LIABILITY" -- any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for Taxes.
"LICENSED SOFTWARE" - as defined in Section 3.22(a).
"MARKS" - as defined in Section 3.21(a).
"NET WORKING CAPITAL" - the excess of total current assets, including
without limitation cash, accounts receivable, net inventories (calculated in a
first-in, first-out basis), prepaid expenses, and other current assets, in each
case to the extent such are Acquired Assets, less total current liabilities,
including without limitation accounts payable, accrued benefits, accrued
liabilities, and other current liabilities (but excluding liabilities for
accrued interest, deferred employee compensation, accrued Tax liability,
deferred income, and any Indebtedness) to the extent such are Assumed
Liabilities, in each case determined in accordance with GAAP. All accounting
entries will be made regardless of their amount and all detected errors and
omissions will be corrected regardless of their materiality.
"NONCOMPETITION AGREEMENTS" -- as defined in Section 6.2(b)(i).
8
16
"OCCUPATIONAL SAFETY AND HEALTH LAW" -- any Legal Requirement designed
to provide safe and healthful working conditions and to reduce occupational
safety and health hazards, and any program, whether governmental or private
(including those promulgated or sponsored by industry associations and insurance
companies), designed to provide safe and healthful working conditions.
"ORDER" -- any award, decision, injunction, judgment, order, ruling,
subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
"ORDINARY COURSE OF BUSINESS" -- an action taken by a Person will be
deemed to have been taken in the "Ordinary Course of Business" only if such
action is consistent with the past practices of such Person and is taken in the
ordinary course of the normal day-to-day operations of such Person.
"ORGANIZATIONAL DOCUMENTS" -- (a) the articles or certificate of
incorporation and the bylaws of a corporation; (b) the partnership agreement and
any statement of partnership of a general partnership; (c) the limited
partnership agreement and the certificate of limited partnership of a limited
partnership; (d) the certificate of formation and operating agreement of a
limited liability company; (e) any trust agreement adopted in connection with
any trust; and (f) any amendment to any of the foregoing.
"OWNED SOFTWARE" - as defined in Section 3.22(a).
"PATENTS" - as defined in Section 3.21(a).
"PENSION BENEFIT PLAN" - as defined in Section 3.11(f).
"PERSON" -- any individual, corporation (including any non-profit
corporation), general or limited partnership, limited liability company, joint
venture, estate, trust, association, organization, labor union, or other entity
or Governmental Body.
"PROCEEDING" -- any action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal, administrative, investigative, or
informal) commenced, brought, conducted, or heard by or before, or otherwise
involving, any Governmental Body or arbitrator.
"PURCHASE PRICE ADJUSTMENT" - as defined in Section 2.7(a).
"PURCHASE PRICE ALLOCATION" - as defined in Section 2.8.
"PURCHASER'S ADVISORS" - as defined in Section 5.1.
"RELATED PERSON" -- with respect to a particular individual: (a) each
other member of such individual's Family; (b) any Person that is directly or
indirectly controlled by such individual or one or more members of such
individual's Family; (c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material Interest;
and (d) any Person with respect to which such individual or one or more members
of such individual's Family serves as a director, officer, partner, executor, or
trustee (or
9
17
in a similar capacity). With respect to a specified Person other than an
individual: (A) any Person that directly or indirectly controls, is directly or
indirectly controlled by, or is directly or indirectly under common control with
such specified Person; (B) any Person that holds a Material Interest in such
specified Person; (C) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity); (D)
any Person in which such specified Person holds a Material Interest; (E) any
Person with respect to which such specified Person serves as a general partner
or a trustee (or in a similar capacity); and (F) any Related Person of any
individual described in clause (B) or (C).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, and (b) "Material Interest" means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934,
as amended) of voting securities or other voting interests representing at least
10% of the outstanding voting power of a Person or equity securities or other
equity interests representing at least 10% of the outstanding equity securities
or equity interests in a Person.
"RELEASE" -- any spilling, leaking, emitting, discharging, depositing,
escaping, leaching, dumping, or other releasing into the Environment, whether
intentional or unintentional.
"REPRESENTATIVE" -- with respect to a particular Person, any director,
manager, officer, employee, agent, consultant, advisor, or other representative
of such Person, including legal counsel, accountants, and financial advisors.
"SECURITY INTEREST" -- means any charge, claim, community property
interest, condition, equitable interest, encumbrance, mortgage, lien, option,
pledge, security interest, right of first refusal, or restriction of any kind,
including any restriction on use, voting, transfer, receipt of income, or
exercise of any other attribute of ownership.
"SOFTWARE" - as defined in Section 3.22(a).
"TAX" -- shall mean all tax (including but not limited to income tax,
capital gains tax, value added tax, sales tax, property tax, gift tax or estate
tax), levy, assessment, tariff, duty (including but not limited to customs
duty), deficiency or other fee and any related charge or amount (including but
not limited to fine, penalty and interest) imposed, assessed or collected by or
under the authority of any Governmental Body.
"TAX RETURN" -- any return (including but not limited to any
information return), report, statement, schedule, notice, form, or other
document or information filed with or submitted to, or required to be filed with
or submitted to, any Governmental Body in connection with the determination,
assessment, collection, or payment of any Tax or in connection with the
administration, implementation, or enforcement of or compliance with any Legal
Requirement relating to any Tax.
"THREATENED" -- a claim, Proceeding, dispute, action, or other matter
will be deemed to have been "Threatened" if any demand or statement has been
made (orally or in writing) or any notice has been given (orally or in writing),
or if any other event has occurred or any other
10
18
circumstances exist, that would lead a prudent Person to conclude that such a
claim, Proceeding, dispute, action, or other matter is likely to be asserted,
commenced, taken, or otherwise pursued in the future.
"TRADE SECRETS" - as defined in Section 3.21(a).
"2000 BALANCE SHEET" -- as defined in Section 3.3.
2. ACQUISITION OF ACQUIRED ASSETS AND ASSUMPTION OF ASSUMED LIABILITIES
2.1. Calculation of Estimated Net Working Capital of the Company.
Not earlier than three (3) days prior to the Closing Date, and prior to
Closing, the Company, Per-Se, and Purchaser shall jointly calculate the
estimated Net Working Capital of the Company as of the Closing Date (such
calculation shall be referred to herein as the "ESTIMATED ADJUSTMENT SCHEDULE").
2.2. Purchase and Sale of Acquired Assets; Assumption of
Liabilities.
(a) The Purchaser agrees to purchase from the Company,
and the Company agrees to sell, transfer, convey, assign and deliver to the
Purchaser, all of the Acquired Assets at the Closing for the consideration
specified in Section 2.3 below, free and clear of any Security Interest.
(b) On and subject to the terms and conditions of this
Agreement, the Purchaser agrees to assume and become responsible for the Assumed
Liabilities at the Closing for the consideration specified in Section 2.3 below.
The Purchaser will not assume or have any responsibility, however, with respect
to any Liability or obligation of the Company or the Owners which is not
included among the Assumed Liabilities or which is an Excluded Liability.
(c) In the event of any claim against the Purchaser with
respect to any of the Assumed Liabilities, without limiting Purchaser's remedies
or defenses, the Purchaser shall have, and the Company hereby assigns to the
Purchaser, any defense, counterclaim, or right of setoff which would have been
available to the Company if such claim had been asserted against the Company.
(d) The assumption by the Purchaser of the Assumed
Liabilities, and the transfer thereof by the Company, shall in no way expand the
rights or remedies of any third party against Per-Se, the Purchaser or the
Company or their respective officers, directors, employees, stockholders,
managers, members, and advisors as compared to the rights and remedies which
such third party would have had against such parties had the Purchaser not
assumed such Liabilities. Without limiting the generality of the preceding
sentence, the assumption by the Purchaser of the Assumed Liabilities shall not
create any third-party beneficiary rights. The Company shall pay and discharge
when due, or contest in good faith, all of those liabilities of the Company
which the Purchaser has not specifically agreed to assume pursuant to the
provisions of this Agreement.
11
19
2.3. Asset Purchase Consideration.
At Closing, in consideration for the sale, transfer, conveyance,
assignment, and delivery of the Acquired Assets by the Company to the Purchaser,
and the assumption by the Purchaser of the Assumed Liabilities from the Company,
the Company shall be entitled to receive, in the manner described in Section 2.4
below, Three Million Two Hundred Fifty Thousand Dollars ($3,250,000.00), subject
to post-Closing adjustment as provided in Section 2.7 below (the "ASSET PURCHASE
CONSIDERATION").
2.4. Payment of Asset Purchase Consideration.
At Closing, the Purchaser shall pay the Asset Purchase Consideration as
follows:
(a) that amount, if any, of the Asset Purchase
Consideration necessary to be paid to applicable lenders and other creditors of
the Company to pay off Indebtedness or obtain clear title to the Acquired
Assets, shall be paid to such lenders and other creditors in accordance with the
payoff letters provided by such creditors;
(b) to the extent that the estimated Net Working Capital
of the Company as of the Closing is, according to the Estimated Adjustment
Schedule, less than $40,000, the Purchaser shall deduct from the Asset Purchase
Consideration that amount which equals the difference between $40,000 and the
estimated Net Working Capital of the Company according to the Estimated
Adjustment Schedule;
(c) One Hundred Fifty Thousand Dollars ($150,000.00)
shall be paid to the Escrow Agent pursuant to the terms of the Escrow Agreement,
to be held and disbursed as provided in Section 2.9 below and the Escrow
Agreement; and
(d) The balance of the Asset Purchase Consideration shall
be paid to a bank or other account designated by the Company in writing to the
Purchaser at least two business days prior to the Closing Date by wire transfer
or other immediately available funds.
2.5. Time and Place of Closing.
The closing of the transactions contemplated by this Agreement (the
"CLOSING") shall take place at the offices of Powell, Goldstein, Frazer & Murphy
LLP, 191 Peachtree Street, NE, 16th Floor, Atlanta, Georgia 30303, no later than
9:00 a.m. on April 30, 2001, or such other date and time, or in such other
manner, as the Parties may agree (the "Closing Date"). Subject to the provisions
of Section 8, failure to consummate the purchase and sale provided for in this
Agreement on the date and time and at the place determined pursuant to this
Section 2.5 will not result in the termination of this Agreement and will not
relieve any party of any obligation under this Agreement.
2.6. Deliveries at the Closing.
At the Closing, the Company and the Owners will deliver to Per-Se and
the Purchaser the various certificates, instruments, and documents referred to
in Section 6 below; Per-Se and the Purchaser will deliver to the Company the
various certificates, instruments, and documents
12
20
referred to in Section 7 below; the Company and the Owners will execute,
acknowledge (if appropriate), and deliver to Per-Se and the Purchaser such
documents as Per-Se and the Purchaser and their counsel may reasonably request;
Per-Se and the Purchaser will execute, acknowledge (if appropriate), and deliver
to the Company such documents as the Company and its counsel reasonably may
request; and the Purchaser will deliver Asset Purchase Consideration in
accordance with Section 2.4 above.
2.7. Minimum Net Working Capital Adjustment to Asset Purchase
Consideration.
(a) The Asset Purchase Consideration shall be reduced on
a dollar-for-dollar basis to the extent that the Net Working Capital of the
Company as of the commencement of business on the Closing Date is less than
$40,000. Any decrease in the Asset Purchase Consideration pursuant to this
Section 2.7 shall be referred to as a "PURCHASE PRICE ADJUSTMENT".
(b) No later than forty five (45) days after the Closing
Date, Per-Se and the Purchaser shall deliver to the Company (i) a balance sheet
and a statement of operations of the Company for the period ended as the
commencement of business on the Closing Date (the "CLOSING DATE BALANCE SHEET"),
and (ii) a separate statement calculating Net Working Capital of the Company as
of the commencement of business as of the Closing Date based on the Closing Date
Balance Sheet, showing any calculations with respect to any necessary Purchase
Price Adjustment, including any necessary adjustments to reflect any previous
adjustments based on the Estimated Adjustment Schedule (the "FINAL ADJUSTMENT
SCHEDULE").
(c) The Company shall, within thirty (30) days following
its receipt of the Closing Date Balance Sheet and the Final Adjustment Schedule,
accept or reject the Purchase Price Adjustment submitted by Per-Se and the
Purchaser. If the Company disagrees with such calculation, it shall give written
notice to the Purchaser of such disagreement and any reason therefor within such
thirty (30) day period. Should the Company fail to notify Per-Se and the
Purchaser of a disagreement within such thirty (30) day period, the Company
shall be deemed to agree with Per-Se and the Purchaser's calculation. Any
disagreement with respect to the determination of any Purchase Price Adjustment
shall be referred to the Atlanta, Georgia office of Ernst & Young LLP (the
"ARBITRATOR"). The Arbitrator shall act as an arbitrator and shall issue its
report as to the Net Working Capital and the determination of the Purchase Price
Adjustment reflected in the Final Adjustment Schedule within sixty (60) days
after such dispute is referred to the Arbitrator. The Company on the one hand,
and Per-Se and the Purchaser on the other hand, shall bear all costs and
expenses incurred by it in connection with such arbitration, except that the
fees and expenses of the Arbitrator hereunder shall be borne by the Company on
the one hand, and Per-Se and the Purchaser on the other hand, in such proportion
as the Arbitrator shall determine based on the relative merit of the position of
the parties. This provision for arbitration shall be specifically enforceable by
Per-Se and the Purchaser and the decision of the Arbitrator in accordance with
the provisions hereof shall be final and binding with respect to the matters so
arbitrated and there shall be no right of appeal therefrom.
(d) If, based on the Adjustment Schedule as finally
determined, the Net Working Capital of the Company is less than $40,000, the
Company and the Owners shall pay to the Purchaser such deficit, less the amount
deducted by the Purchaser pursuant to Section 2.4(b)
13
21
above. Final amounts due hereunder shall be paid no later than five (5) business
days following the Company's agreement with Per-Se's and the Purchaser's
calculation of the Purchase Price Adjustment, or in the event of a disagreement,
following the resolution of such disagreement by written agreement of Per-Se,
the Purchaser and the Company, or the determination of the Arbitrator pursuant
to Section 2.7(c) above.
2.8. Allocation of Asset Purchase Consideration.
The Asset Purchase Consideration will be allocated for all purposes
(including Tax and financial accounting purposes) as set forth (or in accordance
with the methodology set forth) in Exhibit A hereto (the "PURCHASE PRICE
ALLOCATION"). Each of the Parties hereto will not take a position on any Tax
Return, before any Governmental Body charged with the collection of any Tax, or
in any Proceeding, that is in any way inconsistent with the Purchase Price
Allocation and will cooperate with each other in timely filing consistent with
such allocation on applicable forms with the IRS.
2.9. Escrow.
At Closing, the Purchaser shall pay One Hundred Fifty Thousand Dollars
($150,000.00) (the "ESCROW") to the Escrow Agent pursuant to the terms of the
Escrow Agreement. The Escrow Agent shall disburse one-sixth (1/6th) of the
Escrow to the Company upon each one-month anniversary of the Closing Date until
the six-month anniversary of the Closing Date; provided, however, that (i) in
the event that Ed Rieker shall have voluntarily terminated his consulting or
similar services for any reason with the Purchaser on or prior to any such
payment date, sixty percent (60%) of each disbursement from the Escrow following
such termination shall be made to the Purchaser, and forty percent (40%) of each
disbursement from the Escrow following such termination shall be made to the
Company, (ii) in the event that Daniel Mansfield shall have voluntarily
terminated his consulting or similar services for any reason with the Purchaser
on or prior to any such payment date, forty percent (40%) of each disbursement
from the Escrow following such termination shall be made to the Purchaser, and
sixty percent (60%) of each disbursement from the Escrow following such
termination shall be made to the Company, and (iii) in the event that each of Ed
Rieker and Daniel Mansfield shall have voluntarily terminated their consulting
or similar services for any reason with the Purchaser on or prior to any such
payment date, one hundred percent (100%) of the amount remaining in the Escrow
following such termination shall be disbursed to the Purchaser within three (3)
days thereafter.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE OWNERS
The Company and the Owners, jointly and severally, represent and
warrant to Per-Se and the Purchaser that the statements contained in this
Section 3 are true, correct and complete as of the date hereof, and will be
true, correct and complete as of the Closing Date, except as specified to the
contrary in the corresponding section of the disclosure schedule prepared by the
Company and the Owners accompanying this Agreement and initialed by Per-Se, the
Purchaser and the Company (the "DISCLOSURE SCHEDULE"). The Disclosure Schedule
will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Section 3.
14
22
3.1. Organization and Good Standing.
Schedule 3.1 contains a complete and accurate list of (i) the
jurisdiction of organization of the Company and (ii) the other jurisdictions in
which the Company is authorized to do business. The Company is a limited
liability company duly organized, validly existing, and in good standing under
the laws of its jurisdiction of organization, with full limited liability
company power and authority to conduct its business as it is now being
conducted, to own or use the properties and assets that it purports to own or
use, and to perform all its obligations under the Assumed Contracts. The Company
is duly qualified to do business as a foreign limited liability company and is
in good standing under the laws of each state or other jurisdiction in which
either the ownership or use of the properties owned or used by it, or the nature
of the activities conducted by it, requires such qualification.
3.2. Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and
binding obligation of the Company and each Owner, enforceable against the
Company and each Owner in accordance with its terms. Upon the execution and
delivery by the Company and each Owner of, the Noncompetition Agreements, and
the Escrow Agreement (collectively, the "COMPANY CLOSING DOCUMENTS"), the
Company Closing Documents to which the Company and the Owners are a party will
constitute the legal, valid, and binding obligations of the Company and each
Owner, enforceable against the Company and each Owner in accordance with their
respective terms (except as enforceability may be restricted, limited or delayed
by bankruptcy, insolvency, moratorium or similar laws affecting or relating to
the enforcement of creditors' rights in general and except as the enforceability
is subject to general principles of equity, regardless of whether enforceability
is considered in a proceeding at law or in equity). All of the members of the
Company have approved and authorized this Agreement and the Contemplated
Transactions, in each case without condition, limitation or restriction. The
Company and each Owner has the respective right, power, authority, and capacity
to execute and deliver this Agreement and the Company Closing Documents to which
it is a party and to perform each of their obligations under this Agreement and
the Company Closing Documents to which it is a party.
(b) Except as set forth in Schedule 3.2(b), neither the
execution and delivery of this Agreement nor the consummation or performance of
any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational Documents
of the Company, or (B) any resolution adopted by the members
of the Company;
(ii) contravene, conflict with, or result in a
violation of, or give any Governmental Body or other Person
the right to challenge any of the Contemplated Transactions;
(iii) contravene, conflict with, or result in a
violation of any of the terms or requirements of, or give any
Governmental Body the right to revoke,
15
23
withdraw, suspend, cancel, terminate, or modify, any material
Governmental Authorization that is held by the Company;
(iv) cause the Company to become subject to, or
to become liable for the payment of, any material Tax;
(v) contravene, conflict with, or result in a
violation or breach of any provision of, or give any Person
the right to declare a default or exercise any remedy under,
or to accelerate the maturity or performance of, or to cancel,
terminate, or modify, any Assumed Contract; or
(vi) result in the imposition or creation of any
Security Interest upon or with respect to any of the Acquired
Assets or the Assumed Liabilities.
3.3. Financial Statements.
The Company has delivered to Per-Se and the Purchaser: (a) unaudited
balance sheet of the Company as at December 31, 2000 (the "2000 BALANCE SHEET"),
and December 31, 1999, and the related unaudited statement of income, retained
earnings, and cash flows for each of the fiscal years then ended, and (b) an
unaudited balance sheet of the Company as at March 31, 2001 (the "INTERIM
BALANCE SHEET") and the related unaudited statements of income, retained
earnings and cash flows and supplementary data for the three months then ended.
Such financial statements and notes fairly present the financial condition and
the results of operations and cash flows of the Company as at the respective
dates of and for the periods referred to in such financial statements, all in
accordance with GAAP, subject, in the case of the Interim Balance Sheet, to
normal recurring year-end adjustments (the effect of which will not,
individually or in the aggregate, be materially adverse); the financial
statements referred to in this Section 3.3 reflect the consistent application of
such accounting principles throughout the periods involved. The Company has not
been advised by any attorney representing it that there are any "loss
contingencies" (as defined in Statement of Financial Accounting Standards No. 5
issued by the Financial Accounting Standards Board of March, 1975), which would
be required to be disclosed or accrued in financial statements of the Company
was such statements prepared as of the date hereof. No financial statements of
any Person other than the Company is required by GAAP to be included in the
financial statements of the Company.
3.4. Books and Records.
The books of account, minute books, equity interest record books, and
other records of the Company, including but not limited to those which
constitute Acquired Assets, are complete and correct and have been maintained in
accordance with sound business practices, including the maintenance of an
adequate system of internal controls, and the Company has not taken any action
not reflected in the minutes which would have a material adverse effect on the
Company.
3.5. Title to Properties; Security Interests.
The Company owns all the properties and assets (whether real, personal,
or mixed and whether tangible or intangible) that are reflected as owned in the
2000 Balance Sheet and the Interim Balance Sheet, and the other books and
records of the Company, including but not
16
24
limited to all of the Acquired Assets and the Assumed Liabilities. All
properties and assets which are Acquired Assets are free and clear of all
Security Interests, and in the case of the Leased Real Property, to the
Knowledge of the Company and the Owners, are not subject to any contractual or
of record rights of way, building use restrictions, exceptions, variances,
reservations, or limitations of any nature, except as disclosed on Schedule
3.15(a).
3.6. Condition and Sufficiency of Assets.
The equipment of and used by the Company which constitutes the Acquired
Assets is in good operating condition and repair, and is adequate for the uses
to which it is being put, and none of such equipment is in need of maintenance
or repairs except for ordinary, routine maintenance and repairs that are not
material in nature or cost. The equipment of the Company which constitutes the
Acquired Assets is sufficient for the continued conduct of the Business of the
Company as presently conducted after the Closing in substantially the same
manner as conducted prior to the Closing. To the Knowledge of the Company, the
buildings, facilities and structures used by the Company are in good operating
condition and repair, and are adequate for the uses to which they are being put,
and none of such buildings, facilities or structures is in need of maintenance
or repairs except for ordinary, routine maintenance and repairs that are not
material in nature or cost, and such buildings, facilities and structures are
sufficient for the continued conduct of the Business of the Company after the
Closing in substantially the same manner as conducted prior to the Closing.
3.7. Accounts Receivable.
All accounts receivable of the Company that are reflected on the 2000
Balance Sheet or the Interim Balance Sheet or on the Closing Date Balance Sheet
(collectively, the "ACCOUNTS RECEIVABLE") represent or will represent valid
obligations arising from sales actually made or services actually performed in
the Ordinary Course of Business. Unless paid prior to the Closing Date, the
Accounts Receivable are or will be as of the Closing Date current and
collectible net of the respective reserves shown on the 2000 Balance Sheet or
the Interim Balance Sheet or on the Closing Date Balance Sheet (which reserves
are adequate and calculated consistent with past practice and, in the case of
the reserve as of the Closing Date, will not represent a greater percentage of
the Accounts Receivable as of the Closing Date than the reserve reflected in the
Interim Balance Sheet represented of the Accounts Receivable reflected therein
and will not represent a material adverse change in the composition of such
Accounts Receivable in terms of aging). Subject to such reserves, each of the
Accounts Receivable either has been or will be collected in full, without any
set-off, within ninety days after the Closing.
3.8. No Undisclosed Liabilities.
The Company does not have any liabilities or obligations of any nature
(whether known or unknown and whether absolute, accrued, contingent, or
otherwise) except for liabilities or obligations reflected or reserved against
in the 2000 Balance Sheet or the Interim Balance Sheet and current liabilities
incurred in the Ordinary Course of Business since the respective dates thereof.
17
25
3.9. Taxes.
(a) The Company and, with respect to the Company, the
Owners, have filed or caused to be filed all Tax Returns that are or were
required to be filed by or with respect to it pursuant to applicable Legal
Requirements. The Company has delivered to Per-Se and Purchaser copies of, and
Schedule 3.9(a) contains a complete and accurate list of, all filings prepared
by the Company and, with respect to the Company, the Owners, with respect to
income for federal income tax purposes since December 31, 1997. The Company and,
with respect to the Company, the Owners, have paid, or made provision for the
payment of, all Taxes that have or may have become due pursuant to Tax Returns
or otherwise, or pursuant to any assessment received by the Company and, with
respect to the Company, the Owners, except such Taxes, if any, as are listed in
Schedule 3.9(a) and are being contested in good faith and as to which adequate
reserves (determined in accordance with GAAP) have been provided in the 2000
Balance Sheet and the Interim Balance Sheet. There are no unpaid Taxes that
could constitute a Security Interest on the Acquired Assets, the Assumed
Liabilities, the Business, or the other assets or properties of the Company.
(b) The United States federal and state income Tax
Returns of the Company and, with respect to the Company, the Owners, subject to
such Taxes have not been audited by the IRS or relevant state tax authorities.
Schedule 3.9(b) describes all adjustments to the United States federal income
Tax Returns filed by the Company and, with respect to the Company, the Owners,
or any group of corporations including the Company for all taxable years since
1997, and the resulting deficiencies proposed by the IRS. Neither the Company
nor, with respect to the Company, the Owners, have been given or been requested
to give waivers or extensions (or is or would be subject to a waiver or
extension given by any other Person) of any statute of limitations relating to
the payment of Taxes of the Company and, with respect to the Company, the
Owners, or for which the Company or, with respect to the Company, the Owners,
may be liable.
(c) The charges, accruals, and reserves with respect to
Taxes on the books of the Company is adequate (determined in accordance with
GAAP). There exists no actual, or to the Knowledge of the Company, proposed, tax
assessment against the Company or, with respect to the Company, the Owners. No
consent to the application of Section 341(f)(2) of the IRC has been filed with
respect to any property or assets held, acquired, or to be acquired by the
Company or, with respect to the Company, the Owners. All Taxes that the Company
and, with respect to the Company, the Owners, are or were required by Legal
Requirements to withhold or collect have been duly withheld or collected and, to
the extent required, have been paid to the proper Governmental Body or other
Person.
(d) All Tax Returns filed by the Company and, with
respect to the Company, the Owners, are true, correct, and complete. There is no
tax sharing agreement that will require any payment by the Company or, with
respect to the Company, the Owners, after the date of this Agreement.
3.10. No Material Adverse Change.
Since the date of the Interim Balance Sheet, there has not been any
material adverse change in the Acquired Assets, the Assumed Liabilities, the
Business, or any of the operations,
18
26
properties, assets, working capital or condition of the Company, and no event
has occurred or circumstance exists that may result in such a material adverse
change.
3.11. Employee Benefits.
(a) No corporation, trade, business, or other entity,
other than the Company, would now or in the past constitute a single employer
with the Company within the meaning of Section 414 of the IRC. The Company and
any other entities which now or in the past constitute a single employer within
the meaning of IRC Section 414 are hereinafter collectively referred to as the
"COMPANY GROUP."
(b) The Company has none, and has never had any, of the
following agreements or plans which cover employees of any member of the Company
Group ("EMPLOYEES"), and the Company does not maintain or contribute to on
behalf of any of its Employees with respect to any of the following:
(i) Any employee benefit plan as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), and any trust or other funding
agency created thereunder, or under which any member of the
Company Group, with respect to Employees, has any outstanding,
present, or future obligation or liability, or under which any
Employee or former Employee has any present or future right to
benefits which are covered by ERISA; or
(ii) Any other pension, profit sharing,
retirement, deferred compensation, stock purchase, stock
option, incentive, bonus, vacation, severance, disability,
hospitalization, medical, life insurance, split dollar or
other employee benefit plan, program, policy, or arrangement,
whether written or unwritten, formal or informal, which any
member of the Company Group maintains or to which any member
of the Company Group has any outstanding, present or future
obligations to contribute or make payments under, whether
voluntary, contingent or otherwise.
The plans, programs, policies, or arrangements described in
subparagraph (i) or (ii) above are hereinafter collectively referred to as the
"COMPANY PLANS." The Company does not maintain, nor has it at any time
established or maintained, nor has it at any time been obligated to make, or
otherwise made, contributions to or under or otherwise participated in any
Company Plan.
(c) No member of the Company Group maintains or
contributes to or has maintained or contributed to an "employee benefit pension
plan" within the meaning of ERISA Section 3(2) that is or was subject to Title
IV of ERISA.
(d) No member of the Company Group has any past, present
or future obligation or liability to contribute or has contributed to any
multiemployer plan as defined in ERISA Sections 3(37) and 4001(a)(3).
(e) Since the date of the 2000 Balance Sheet, the Company
has not (i) increased the rate of compensation payable or to become payable to
any of the employees of
19
27
the Company, other than in the normal course of business and consistent with
past practice; (ii) has not made any commitment and has not incurred any
liability to any labor union; (iii) has not paid or agreed to pay any bonuses or
severance pay; and (iv) has not adopted any new plan, program, policy or
arrangement, which if it existed as of the Closing Date, would constitute a
Company Plan.
(f) The Company has not made representations or
warranties (whether written or oral, express or implied) contractually or
otherwise to any client or customer of the Company that Employees rendering
services to such client or customer are not "leased employees" (within the
meaning of Section 414(n) of the Code) or that such Employees would not be
required to participate under any pension benefit plan (within the meaning of
Section 3(2) of ERISA) (a "PENSION BENEFIT PLAN") of such client or customer
relating either to (i) providing benefits to employees of the Company under a
Pension Benefit Plan or (ii) making contributions to or reimbursing such client
or customer for any contributions made to a Pension Benefit Plan of such client
or customer on behalf of Employees.
3.12. Compliance with Legal Requirements; Governmental
Authorizations.
(a) Except as set forth in Schedule 3.12(a):
(i) The Company has complied with each Legal
Requirement that is or was applicable to it or to the conduct
or operation of the Business of the Company or the ownership
or use of any of the Acquired Assets or Assumed Liabilities,
the failure to comply with which could result in Liabilities
in excess of $5,000;
(ii) No event has occurred or circumstance exists
that (with or without notice or lapse of time) may constitute
or result in a violation by the Company of, or a failure on
the part of the Company to comply with, any Legal Requirement,
the failure to comply with which could result in Liabilities
in excess of $5,000; and
(iii) The Company has not received any notice or
other communication (whether oral or written) from any
Governmental Body or any other Person regarding any actual,
alleged, possible, or potential violation of, or failure to
comply with, any material Legal Requirement.
(b) Schedule 3.12(b) contains a complete and accurate
list of each Governmental Authorization that is held by the Company or that
otherwise relates to the Business of, or to any of the Acquired Assets or
Assumed Liabilities owned or used by, the Company or that is necessary for the
conduct of the Business by the Company. Each Governmental Authorization listed
or required to be listed in Schedule 3.12(b) is valid and in full force and
effect. Except as set forth in Schedule 3.12(b):
(i) The Company has complied with all of the
terms and requirements of each Governmental Authorization
identified or required to be identified in Schedule 3.12(b);
20
28
(ii) No event has occurred or circumstance exists
that may (with or without notice or lapse of time) constitute
or result directly or indirectly in a violation of or a
failure to comply with any term or requirement of any
Governmental Authorization listed or required to be listed in
Schedule 3.12(b);
(iii) The Company has not received any notice or
other communication (whether oral or written) from any
Governmental Body regarding any actual, alleged, possible, or
potential violation of or failure to comply with any term or
requirement of any Governmental Authorization; and
(iv) all applications required to have been filed
for the renewal of the Governmental Authorizations listed or
required to be listed in Schedule 3.12 have been duly filed on
a timely basis with the appropriate Governmental Bodies, and
all other filings required to have been made with respect to
such Governmental Authorizations have been duly made on a
timely basis with the appropriate Governmental Bodies.
3.13. Legal Proceedings; Orders.
(a) There is no pending Proceeding:
(i) that has been commenced by or against the
Company or that could impair the Company's use of any of its
assets, including the Acquired Assets and the Assumed
Liabilities; or
(ii) that challenges, or that may have the effect
of preventing, delaying, making illegal, or otherwise
interfering with, any of the Contemplated Transactions.
To the Knowledge of the Company and the Owners, (1) no such Proceeding has been
Threatened, and (2) no event has occurred or circumstance exists that may give
rise to or serve as a basis for the commencement of any such Proceeding. The
Proceedings listed in Schedule 3.13 will not have a material adverse effect on
the Acquired Assets, Assumed Liabilities, or any of the operations, condition,
or prospects of the Business of the Company.
(b) Except as set forth in Schedule 3.13:
(i) there is no Order to which the Company, or
any of the assets owned or used by the Company, including the
Acquired Assets and the Assumed Liabilities, is subject; and
(ii) to the Knowledge of Company and the Owners,
no officer, manager, agent, or employee of the Company is
subject to any Order that prohibits such officer, manager,
agent, or employee from engaging in or continuing any conduct,
activity, or practice relating to the Business of the Company.
21
29
3.14. Absence of Certain Changes and Events.
Except as set forth in Schedule 3.14, since the date of the 2000
Balance Sheet, the Company has conducted its Business only in the Ordinary
Course of Business and there has not been any:
(a) change in the Company's authorized or issued limited
liability company interests; grant of any option or right to purchase limited
liability company interests of the Company; issuance of any security convertible
into such limited liability company interests; grant of any registration rights;
purchase, redemption, retirement, or other acquisition by the Company of any
limited liability company interests; or declaration or payment of any dividend
or other distribution or payment in respect of limited liability company
interests;
(b) amendment to the Organizational Documents of the
Company;
(c) payment or increase by the Company of any bonuses,
salaries, or other compensation to any member, officer, or (except in the
Ordinary Course of Business) employee or entry into any employment, severance,
or similar Contract with any member, officer, or employee;
(d) adoption of, or increase in the payments to or
benefits under, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan for or with any
employees of the Company;
(e) damage to or destruction or loss of any asset or
property of the Company, including any Acquired Asset or Assumed Liability,
whether or not covered by insurance, adversely affecting the Acquired Assets,
Assumed Liabilities, or other properties, assets, business, financial condition,
or prospects of the Company;
(f) entry into, termination of, or receipt of notice of
termination of any license, distributorship, dealer, sales representative, joint
venture, credit, or similar agreement;
(g) sale (other than sales of inventory in the Ordinary
Course of Business), lease, or other disposition of any Acquired Asset or
Assumed Liability, or any other material asset or property of the Company or
imposition of any Security Interest on any Acquired Asset, Assumed Liability, or
other material asset or property of the Company;
(h) cancellation or waiver of any material claims or
rights;
(i) commitment by the Company to expend funds
individually in an amount in excess of $10,000, or when considered in the
aggregate, in excess of $25,000;
(j) change in the accounting methods used by the Company;
or
(k) except for that certain Letter of Intent between the
Company and Per-Se dated March 21, 2001, agreement, whether oral or written, by
the Company to do any of the foregoing.
22
30
3.15. Contracts; No Defaults.
(a) Schedule 3.15(a) contains a complete and accurate
list, and the Company has delivered to Per-Se and Purchaser true and complete
copies, of:
(i) each Contract that involves performance of
services or delivery of goods or materials by the Company of
an amount or value in excess of $10,000;
(ii) each Contract that involves performance of
services or delivery of goods or materials to the Company of
an amount or value in excess of $5,000;
(iii) each Contract pursuant to which the Company
licenses other persons to use any of the Software or has
agreed to support, maintain, upgrade, enhance, modify, or
consult with respect to any of the Software, or pursuant to
which other persons license Company to use the Licensed
Software;
(iv) each Contract by which the Company has
agreed to design, develop, author or create any new custom, or
customized software for any third party;
(v) each Contract that was not entered into in
the Ordinary Course of Business and that involves expenditures
or receipts of the Company in excess of $10,000;
(vi) each lease, rental or occupancy agreement,
license, installment and conditional sale agreement, and other
Contract affecting the ownership of, leasing of, title to, use
of, or any leasehold or other interest in, any real or
personal property (except personal property leases and
installment and conditional sales agreements having a value
per item or aggregate payments of less than $5,000 and with
terms of less than one year);
(vii) each Contract with respect to Intellectual
Property Assets, and each form of Contract with former
employees, consultants, or contractors regarding the
appropriation or the non-disclosure of any of the Intellectual
Property Assets;
(viii) each collective bargaining agreement and
other Contract to or with any labor union or other employee
representative of a group of employees;
(ix) each joint venture, partnership, and other
Contract (however named) involving a sharing of profits,
losses, costs, or liabilities by the Company with any other
Person;
(x) each Contract containing covenants that in
any way purport to restrict the business activity of the
Company or any Owner or limit the freedom of the Company or
any Owner to engage in any line of business or to compete with
any Person;
23
31
(xi) each Contract providing for payments to or
by any Person based on sales, purchases, or profits, other
than direct payments for goods and other than commission
arrangements with sales employees of the Company entered into
in the Ordinary Course of Business;
(xii) each power of attorney that is currently
effective and outstanding;
(xiii) each Contract for capital expenditures;
(xiv) each written warranty, guaranty, and or
other similar undertaking with respect to contractual
performance extended by the Company other than in the Ordinary
Course of Business; and
(xv) each amendment, supplement, and modification
(whether oral or written) in respect of any of the foregoing
Contracts, identified or required to be identified.
(b) No Owner (and no Related Person of any Owner) has or
may acquire any rights under, or has or may become subject to any obligation or
liability under, any Contract that relates to the Business of, or any of the
assets owned or used by, the Company, including any Acquired Asset or Assumed
Liability.
(c) Each Assumed Contract is in full force and effect and
is valid and enforceable in accordance with its terms.
(d) Except as set forth in Schedule 3.15(d):
(i) The Company has complied with all applicable
material terms and requirements of each Assumed Contract under
which the Company has or had any obligation or liability;
(ii) to the Knowledge of the Company, no event
has occurred or circumstance exists that (with or without
notice or lapse of time) may contravene, conflict with, or
result in a violation or breach of, or give the Company or
other Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of,
or to cancel, terminate, or modify, any Assumed Contract; and
(iii) The Company has not given to or received
from any other Person any notice or other communication
(whether oral or written) regarding any actual, alleged,
possible, or potential violation or breach of, or default
under, any Assumed Contract.
(e) There are no renegotiations of, attempts to
renegotiate, or outstanding rights to renegotiate any material amounts paid or
payable to the Company under current or completed Assumed Contracts with any
Person and to the Knowledge of the Company and the Owners no such Person has
made written demand for such renegotiation.
24
32
(f) The Company has no existing obligations, and the
transactions contemplated by this Agreement will not result in the creation of
any obligations, to Imperial Bank pursuant to (i) that certain Letter Agreement
by and between SoftLinc, Inc. and Imperial Bank dated September 1, 1997, (ii)
that certain Software License Agreement by and between SoftLinc, Inc. and
Imperial Bank dated October 15, 1997, or (iii) that certain Software Bailment
Agreement by and between SoftLinc, Inc., Fort Knox Escrow Services, Inc., and
Imperial Bank dated October 15, 1997.
3.16. Insurance.
(a) Schedule 3.16 contains a complete and correct list of
all policies of insurance of any kind or nature covering Company, including,
without limitation, policies of life, fire, theft, employee fidelity and other
casualty and liability insurance, indicating the type of coverage, name of
insured, the insurer, the premium, the expiration date of each policy and the
amount of coverage.
(b) Except as set forth on Schedule 3.16:
(i) All policies to which the Company is a party
or that provide coverage to the Company or any member, or
officer of the Company:
(A) are valid, outstanding, and
enforceable;
(B) are issued by an insurer that is
financially sound and reputable; and
(C) do not provide for any
retrospective premium adjustment or other experienced-based
liability on the part of the Company.
(ii) The Company has not received (A) any refusal
of coverage or any notice that a defense will be afforded with
reservation of rights, or (B) any notice of cancellation or
any other indication that any insurance policy is no longer in
full force or effect or will not be renewed or that the issuer
of any policy is not willing or able to perform its
obligations thereunder.
(iii) The Company has paid all premiums due, and
has otherwise performed all of its obligations, under each
policy to which the Company is a party or that provides
coverage to the Company or any manager or member thereof.
(iv) The Company has given notice to the insurer
of all claims that may be insured thereby.
3.17. Environmental Matters.
Except as set forth in Schedule 3.17:
25
33
(a) The Company is, and at all times has been, in
compliance with, and has not been and is not in violation of or liable under,
any Environmental Law. The Company does not have any basis to expect, nor has
the Company or any Owner received, any actual or Threatened order, notice, or
other communication from (i) any Governmental Body or private citizen acting in
the public interest, or (ii) the current or prior owner or operator of any
Facilities, of any actual or potential violation or failure to comply with any
Environmental Law, or of any actual or Threatened obligation to undertake or
bear the cost of any Environmental, Health, and Safety Liabilities with respect
to any of the Facilities or any other properties or assets (whether real,
personal, or mixed) in which the Company has had an interest, or with respect to
any property or Facility at or to which Hazardous Materials were generated,
manufactured, refined, transferred, imported, used, or processed by the Company
or any other Person for whose conduct it is or may be held responsible, or from
which Hazardous Materials have been transported, treated, stored, handled,
transferred, disposed, recycled, or received.
(b) There are no pending or, to the Knowledge of the
Company or the Owners, Threatened claims, Security Interests, or other
restrictions of any nature, resulting from any Environmental, Health, and Safety
Liabilities or arising under or pursuant to any Environmental Law, with respect
to or affecting any of the Facilities or any other properties and assets in
which the Company has or had an interest.
(c) Neither the Company nor the Owners have any Knowledge
of any basis to expect, nor has any of them received, any citation, directive,
inquiry, notice, Order, summons, warning, or other communication that relates to
Hazardous Materials, or any alleged, actual, or potential violation or failure
to comply with any Environmental Law, or of any alleged, actual, or potential
obligation to undertake or bear the cost of any Environmental, Health, and
Safety Liabilities with respect to any of the Facilities or any other properties
or assets in which the Company had an interest, or with respect to any property
or facility to which Hazardous Materials generated, manufactured, refined,
transferred, imported, used, or processed by the Company or any other Person for
whose conduct it is or may be held responsible, have been transported, treated,
stored, handled, transferred, disposed, recycled, or received.
(d) Neither the Company nor any Owner has incurred any
Environmental, Health, and Safety Liabilities with respect to the Facilities or
with respect to any other properties and assets in which the Company (or any
predecessor) had an interest.
(e) To the Knowledge of the Company and the Owners, there
are no Hazardous Materials present on or in the Environment at the Facilities
except in compliance with all applicable Environmental Laws.
(f) To the Knowledge of the Company and the Owners, there
has been no Release of any Hazardous Materials at or from the Facilities or at
any other locations where any Hazardous Materials were generated, manufactured,
refined, transferred, produced, imported, used, or processed from or by the
Facilities, or from or by any other properties and assets (including the
Acquired Assets and the Assumed Liabilities) in which the Company had an
interest.
26
34
(g) The Company has not possessed or initiated any
reports, studies, analyses, tests, or monitoring pertaining to Hazardous
Materials or Hazardous Activities in, on, or under the Facilities, or concerning
compliance by the Company or any other Person for whose conduct it is or may be
held responsible, with Environmental Laws.
3.18. Real Property.
The Company does not own any real property. Schedule 3.18 lists and
describes briefly all real property leased to the Company (the "LEASED REAL
PROPERTY"). The Company has delivered to Per-Se and the Purchaser true, correct
and complete copies of the leases for the Leased Real Property (as amended to
date). With respect to each lease for Leased Real Property:
(a) the lease or sublease is legal, valid, binding,
enforceable against the Company, and in full force and effect;
(b) the Company is not, and to the Knowledge of the
Company, no party to the lease or sublease is, in breach or default, and no
event has occurred which, with notice or lapse of time, would constitute a
breach or default or permit termination, modification, or acceleration
thereunder;
(c) the Company has not, and to the Knowledge of the
Company, no party to the lease or sublease has, repudiated any provision
thereof;
(d) there are no disputes, oral agreements, or
forbearance programs in effect as to the lease; and
(e) all facilities leased thereunder have received all
approvals of governmental authorities (including licenses and permits) required
to be obtained by the Company and, to the Knowledge of the Company, all other
approvals of governmental authorities (including licenses and permits) required
to be obtained by third Persons, in connection with the operation thereof and
have been operated and maintained in all material respects in accordance with
applicable laws, rules, and regulations.
3.19. Employees.
(a) Schedule 3.19 contains a list of the following
information for each full-time, part-time or temporary employee or manager of
the Company, including each employee on leave of absence or layoff status: name;
job title; current employment status and current compensation. The Company is
not a party to any written contracts of employment.
(b) To the Knowledge of the Company and the Owners, no
employee or member of the Company is a party to, or is otherwise bound by, any
agreement or arrangement, including any confidentiality, noncompetition, or
proprietary rights agreement, between such employee or member and any other
Person that in any way adversely affects or will affect (i) the performance of
his duties as an employee or member, or (ii) the ability to conduct the Business
of the Company. To the Knowledge of the Company and the Owners, no member,
officer, or other key employee of the Company intends to terminate his
employment.
27
35
(c) There are no retired employees of the Company, or
their dependents, receiving benefits or scheduled to receive benefits in the
future.
3.20. Labor Relations; Compliance.
(a) The Company is not a party to any collective
bargaining or other labor Contract. There has not been, there is not presently
pending or existing, and to the Knowledge of the Company and the Owners there is
not threatened, (a) any strike, slowdown, picketing, work stoppage, or employee
grievance process, (b) any pending proceeding against or affecting the Company
relating to the alleged violation of any legal requirement pertaining to labor
relations or employment matters, including any charge or complaint filed by an
employee or union with the National Labor Relations Board, the Equal Employment
Opportunity Commission, or any comparable Governmental Body, organizational
activity, or other labor or employment dispute against or affecting the Company,
or (c) any application for certification of a collective bargaining agent. No
event has occurred or circumstance exists that could provide the basis for any
work stoppage or other labor dispute. There is no lockout of any employees by
the Company, and no such action is contemplated. The Company has complied in all
respects with all legal requirements, the failure to comply with which could
result in Liabilities in excess of $5,000, relating to employment, equal
employment opportunity, nondiscrimination, immigration, wages, hours, benefits,
collective bargaining, the payment of social security and similar Taxes,
occupational safety and health, and plant closing. The Company is not liable for
the payment of any compensation, damages, Taxes, fines, penalties, or other
amounts, however designated, for failure to comply with any of the foregoing
legal requirements, or for any other legal requirement relating to the
employer-employee relationship.
(b) The Company is not a party to any employment-related
lawsuits or governmental administrative proceedings, including but not limited
to, any proceedings before the Equal Employment Opportunity Commission, the
National Labor Relations Board, the Occupational Safety and Health Agency and
the Department of Labor, and any state counterparts to such agencies.
3.21. Intellectual Property.
(a) Intellectual Property Assets--The term "INTELLECTUAL
PROPERTY ASSETS" includes:
(i) The name, all fictional business names,
trade names, styles, registered and unregistered trademarks,
service marks, and applications that are owned, used, or
licensed by the Company as licensee or licensor (collectively,
"MARKS");
(ii) all patents, patent applications, and
inventions and discoveries that may be patentable that are
owned, used, or licensed by the Company as licensee or
licensor (collectively, "PATENTS");
(iii) all copyrights in both published works and
unpublished works that are owned, used, or licensed by the
Company as licensee or licensor (collectively, "COPYRIGHTS");
and
28
36
(iv) all know-how, trade secrets, confidential
information, customer lists, technical information, data,
process technology, plans, drawings, and blue prints
(collectively, "TRADE SECRETS") that are owned, used, or
licensed by the Company as licensee or licensor.
(b) Agreements. Schedule 3.21(b) describes any royalties
paid or received by the Company, under all Contracts relating to the
Intellectual Property Assets, except for licenses for commonly available
software programs under which the Company is the licensee. There are no
outstanding and, to the Knowledge of the Company and the Owners, no Threatened
disputes or disagreements with respect to any such Contract relating to the
Intellectual Property Assets.
(c) Know-How Necessary for the Business. The Intellectual
Property Assets are all those necessary for the operation of the Business as
currently conducted. Other than Intellectual Property Assets licensed by the
Company as licensee, the Company is the owner of all right, title, and interest
in and to each of its Intellectual Property Assets, free and clear of all
Security Interests, and has the right to use without payment to a third party
all of the Intellectual Property Assets.
(d) Patents. The Company owns no Patents. None of the
products manufactured or sold, nor any process or know-how used by the Company,
materially infringes any patent or proprietary right of any other Person.
(e) Trademarks
(i) The Company owns no Marks registered with
the U.S. Patent and Trademark Office.
(ii) To the Knowledge of the Company and the
Owners, there is no potentially interfering trademark or
trademark application of any third party.
(iii) No Mark is infringed or, to the Knowledge of
the Company and the Owners, has been challenged or threatened
in any way. None of the Marks used by the Company infringes or
is alleged to infringe any trade name, trademark, or service
mark of any third party.
(f) Copyrights
(i) Schedule 3.21(f) contains a complete and
accurate list and summary description of all Copyrights
material to the conduct of the Business. The Company is the
owner of all right, title, and interest in and to each of its
Copyrights, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims.
(ii) No Copyright is infringed or, to the
Knowledge of the Company and the Owners, has been challenged
or threatened in any way. None of the subject matter of any of
the Copyrights infringes or is alleged to infringe any
copyright of any third party or is a derivative work based on
the work of a third party.
29
37
(iii) All works encompassed by the Copyrights have
been marked with the proper copyright notice.
(g) Trade Secrets
(i) The Company has taken all reasonable
precautions to protect the secrecy, confidentiality, and value
of its Trade Secrets material to the conduct of the Business.
(ii) The Company has good title and the right to
use its Trade Secrets. The Trade Secrets are not part of the
public knowledge or literature, and, to the Knowledge of the
Company and the Owners, have not been used, divulged, or
appropriated either for the benefit of any Person (other than
the Company) or to the detriment of the Company. No Trade
Secret is subject to any adverse claim or, to the Knowledge of
the Company, has been challenged or threatened in any way.
3.22. Software.
(a) Schedule 3.22(a) sets forth under the caption "Owned
Software" a true, correct and complete list of all computer programs (source
code or object code) which were developed for or on behalf of, or have been
purchased by, the Company and which are currently used internally by Company or
which have been distributed by Company and all computer programs under
development by Company but not currently distributed (collectively, the "OWNED
SOFTWARE"), and Schedule 3.22(a) sets forth under the caption "Licensed
Software" a true, correct and complete list of all computer programs (source
code or object code) licensed to Company by another person which are currently
used internally by Company or which have been distributed by Company, whether as
integrated or bundled with any of Company's computer programs or as a separate
stand-alone product (specifically excluding any off-the-shelf computer program
that is validly and properly licensed under a shrink-wrap license)
(collectively, the "LICENSED SOFTWARE" and, together with the Owned Software,
the "SOFTWARE").
(b) The Company has good and exclusive title to, and the
valid and enforceable power and unqualified right to sell, license, lease,
transfer, use, create derivative works of, or otherwise exploit, all versions
and releases of the Owned Software and all copyrights thereof, free and clear of
all Security Interests. The Company is in actual possession of the source code
and object code for each computer program included in the Owned Software, and
the Company is in possession of all other documentation, including without
limitation all related engineering specifications, program flow charts,
installation and user manuals and know-how necessary for the effective use of
the Software as currently used in Company's business or as offered or
represented to Company's customers or potential customers. The Company is in
actual possession of the object code and user manuals for each computer program
included in the Licensed Software. The Software constitutes all of the computer
programs necessary to conduct the Company's business as now conducted, and
includes all of the computer programs licensed or offered for license to the
Company's customers and potential customers or otherwise used in the
development, marketing, licensing, sale or support of the products and the
services presently offered by the Company. No person other than Company has any
right or interest of any kind or
30
38
nature in or with respect to the Owned Software or any portion thereof or any
rights to sell, license, lease, transfer, use or otherwise exploit the Owned
Software or any portion thereof.
(c) Schedule 3.22(c) sets forth a true, correct and
complete list, by computer program, of (A) all persons other than the Company
that have been provided with the source code or have a right to be provided with
the source code (including any such right that may arise after the occurrence of
any specified event or circumstance, either with or without the giving of notice
or passage of time or both) for any of the Owned Software, and (B) all source
code escrow agreements relating to any of the Owned Software (setting forth as
to any such escrow agreement the source code subject thereto and the names of
the escrow agent and all other persons who are actual or potential beneficiaries
of such escrow agreement). There are no agreements and arrangements pursuant to
which the execution, delivery and performance of this Agreement or the
consummation of the transactions contemplated hereby would entitle any third
party or parties to receive possession of the source code for any of the Owned
Software or any related technical documentation. No Person (other than the
Company) is in possession of, or has or has had access to, any source code for
any computer program included in the Owned Software.
(d) There are no defects in any computer program included
in the Software that would adversely affect the functioning thereof that is
likely to result in losses or damages to the Business individually or in the
aggregate in excess of $5,000, in accordance with any published specifications
therefor or in accordance with any warranties given with respect thereto. Each
computer program included in the Software is in machine readable form and
contains all current revisions. Schedule 3.22(d) sets forth a true, correct and
complete list of current claims of defects by customers of Company under
warranties or support and maintenance agreements. Schedule 3.22(d) sets forth a
true, correct and complete list of and brief description of the status of, any
current developments or efforts with respect to the Owned Software, including
without limitation, the development of new computer programs, enhancements or
revisions to existing computer programs included in the Owned Software and
software fixes in progress for any person to whom or which the Company has sold,
licensed, leased, transferred or otherwise furnished Owned Software or related
products or services.
(e) None of the sale, license, lease, transfer, use,
reproduction, distribution, modification or other exploitation by Company of any
version or release of any computer program included in the Software obligates or
will obligate Company to pay any royalty, fee or other compensation to any other
person.
(f) The Company does not market, nor has the Company
marketed, and the Company has not supported or is obligated to support, any
Licensed Software separate from the Owned Software.
(g) Except as specified in Schedule 3.22(g): (A) no
agreement, license or other arrangement pertaining to any of the Software
(including, without limitation, any development, distribution, marketing, user
or maintenance agreement, license or arrangement) to which Company is a party
will terminate or become terminable by any party thereto solely as a result of
the execution, delivery or performance of this Agreement or the consummation of
the transactions contemplated hereby; and (B) all licenses covering Licensed
Software are of
31
39
perpetual duration (subject to provisions allowing Company to terminate and
provisions allowing the respective licensors to terminate in the event of a
breach by Company).
3.23. No Infringement.
Neither the existence nor the sale, license, lease, transfer, use,
reproduction, distribution, modification or other exploitation by Company or any
of its successors or assigns of any Owned Software or any Intellectual Property
Assets (and, to Company's Knowledge, the Licensed Software), as such Software or
Intellectual Property Assets, as the case may be, is or was, or is currently
contemplated to be sold, licensed, leased, transferred, used or otherwise
exploited by such Persons, does, did or will (A) infringe on any patent,
trademark, copyright or other right of any other Person, (B) constitute a misuse
or misappropriation of any trade secret, know-how, process, proprietary
information or other right of any other Person or a violation of any relevant
agreement governing the license of the Licensed Software to Company, or (C)
entitle any other Person to any interest therein, or right to compensation from
Company or any of its successors or assigns, by reason thereof. The Company has
not received any complaint, assertion, threat or allegation or otherwise has
notice of any lawsuit, claim, demand, proceeding or investigation involving
matters of the type contemplated by the immediately preceding sentence or has
Knowledge of any facts or circumstances that could reasonably be expected to
give rise to any such lawsuit, claim, demand, proceeding or investigation. There
are no restrictions on the ability of Company or any of its successors or
assigns to sell, license, lease, transfer, use, reproduce, distribute, modify or
otherwise exploit any Software or any Intellectual Property Assets.
3.24. Certain Payments.
Neither the Company nor any of its members, officers, agents, or
employees, or any other Person associated with or acting for or on behalf of the
Company, has (a) made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other payment to any Person, private or public, regardless
of form, whether in money, property, or services (i) to improperly obtain
favorable treatment in securing business, (ii) to improperly pay for favorable
treatment for business secured, (iii) to improperly obtain special concessions
or for special concessions already obtained, for or in respect of the Company,
or (iv) in violation of any Legal Requirement, (b) established or maintained any
fund or asset that has not been recorded in the books and records of the
Company.
3.25. ENVOY.
The Company has received from ENVOY Corporation/WebMD corporation
("ENVOY"), and attached as Schedule 3.25 is a copy of, confirmation of ENVOY's
intent to maintain its business relationship with the Company until March 31,
2002, pursuant to that certain Healthcare Subscriber Agreement dated April 11,
1996.
3.26. Disclosure.
(a) No representation or warranty of the Company or the
Owners in this Agreement and no statement in the Disclosure Schedule omits to
state a material fact necessary to make the statements herein or therein, in
light of the circumstances in which they were made, not misleading.
32
40
(b) There is no fact known to the Company or any Owner
that has specific application to either the Business of the Company (other than
general economic or industry conditions) and that materially adversely affects
the Acquired Assets, the Assumed Liabilities, the Business, financial condition,
or results of operations of the Company that has not been set forth in this
Agreement or the Disclosure Schedule.
3.27. Relationships with Related Persons.
Except as set forth in Schedule 3.27, no Related Person of the Company
has or has had, any interest in any property (whether real, personal, or mixed
and whether tangible or intangible), including any Acquired Asset or Assumed
Liability, used in or pertaining to the Business of the Company. No Related
Person of the Company owns or has owned (of record or as a beneficial owner) an
equity interest or any other financial or profit interest in, a Person that has
had business dealings or a material financial interest in any transaction with
the Company.
3.28. Brokers or Finders.
The Company has not incurred any obligation or liability, contingent or
otherwise, for brokerage or finders' fees or agents' commissions or other
similar payment in connection with this Agreement.
3.29. Charter Provisions, Etc.
The Company has taken all action required to be taken by the Company so
that the entering into of this Agreement and the consummation of the
Contemplated Transactions do not and will not result in the grant of any rights
to any Person (other than the Owners) under the Organizational Documents of the
Company or restrict the ability of Per-Se or Purchaser to otherwise exercise the
rights of the Company and the Owners with respect to the Acquired Assets and the
Assumed Liabilities.
4. REPRESENTATIONS AND WARRANTIES OF PER-SE AND THE PURCHASER
Per-Se and the Purchaser represent and warrant to the Company and the
Owners as follows:
4.1. Organization and Good Standing.
Per-Se is a corporation duly organized, validly existing, and in good
standing under the laws of the State of Delaware, and is qualified to do
business as a foreign corporation in the State of Georgia. Purchaser is a
corporation duly organized, validly existing, and in good standing under the
laws of the State of Indiana, and is qualified to do business as a foreign
corporation in the State of Georgia.
4.2. Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and
binding obligation of Per-Se and the Purchaser, enforceable against Per-Se and
the Purchaser in accordance with its terms. Upon the execution and delivery by
Per-Se and Purchaser of the Escrow Agreement, the Escrow
33
41
Agreement will constitute the legal, valid, and binding obligation of Per-Se and
the Purchaser, enforceable against Per-Se and Purchaser in accordance with its
terms. Per-Se and the Purchaser have the right, power, and authority to execute
and deliver this Agreement and to perform their respective obligations under
this Agreement. Per-Se and the Purchaser have the right, power, and authority to
execute and deliver the Escrow Agreement and to perform their respective
obligations under the Escrow Agreement.
(b) Neither the execution and delivery of this Agreement
by Per-Se or Purchaser nor the consummation or performance of any of the
Contemplated Transactions by Per-Se or Purchaser will give any Person the right
to prevent, delay, or otherwise interfere with any of the Contemplated
Transactions pursuant to:
(i) any provision of Per-Se's or Purchaser's
Organizational Documents;
(ii) any resolution adopted by the board of
directors or the stockholders of Per-Se or Purchaser;
(iii) any Legal Requirement or Order to which
Per-Se or Purchaser may be subject; or
(iv) any material Contract to which Per-Se or
Purchaser is a party or by which Per-Se or Purchaser may be
bound.
Neither Per-Se nor Purchaser is required to obtain any Consent from any Person
in connection with the execution and delivery of this Agreement or the
consummation or performance of any of the Contemplated Transactions.
4.3. Certain Proceedings.
There is no pending Proceeding that has been commenced against Per-Se
or Purchaser and that challenges, or may have the effect of preventing,
delaying, making illegal, or otherwise interfering with, any of the Contemplated
Transactions. To Per-Se's and Purchaser's Knowledge, no such Proceeding has been
Threatened.
4.4. Brokers or Finders.
Neither Per-Se, Purchaser, or their respective officers and agents have
incurred any obligation or liability, contingent or otherwise, for brokerage or
finders' fees or agents' commissions or other similar payment in connection with
this Agreement.
4.5. Disclosure.
No representation or warranty of Per-Se or the Purchaser in Section 4
of this Agreement omits to state a material fact necessary to make such
statements, in light of the circumstances in which they were made, not
misleading.
34
42
5. COVENANTS
5.1. Access and Investigation.
Between the date of this Agreement and the Closing Date, the Company
will, and will cause its Representatives to, (a) afford Per-Se, Purchaser, and
their Representatives (collectively, "PURCHASER'S ADVISORS") full and free
access to the Acquired Assets, Assumed Liabilities, the personnel, properties
(including for purposes of subsurface and other environmental testing),
contracts, books and records, and other documents and data of the Company, (b)
furnish Per-Se, Purchaser, and Purchaser's Advisors with copies of all such
contracts, books and records, and other existing documents and data as Per-Se or
Purchaser may reasonably request, and (c) furnish Per-Se, Purchaser, and
Purchaser's Advisors with such additional financial, operating, and other data
and information as Per-Se or Purchaser may reasonably request. In case at any
time after the Closing any further action is necessary to carry out the purposes
of this Agreement, the Company, the Owners, Per-Se, and the Purchaser will take
such further action (including the execution and delivery of such further
instruments and documents) as any other Party reasonably may request, at the
sole cost and expense of the requesting Party (unless the requesting Party is
entitled to indemnification therefor hereunder). The Company and the Owners
acknowledge and agree that from and after the Closing Per-Se and the Purchaser
will have the right to possession of all documents, books, records (including
Tax records), agreements, and financial data of any sort relating to the
Acquired Assets and the Assumed Liabilities; provided, however, that the Owners
shall have the right to obtain access to such documents, books, records
(including Tax records), agreements, and financial data to the extent related to
the period prior to the Closing and make photocopies thereof for a proper
purpose, such as in connection with the preparation of their Tax Returns.
5.2. Operation of the Business of the Company.
Between the date of this Agreement and the Closing Date, the Company
will:
(a) conduct the Business of the Company only in the
Ordinary Course of Business;
(b) use its Best Efforts to preserve intact the current
business organization and net working capital, keep available the services of
the current officers, employees, and agents, and maintain the relations and good
will with suppliers, customers, landlords, creditors, employees, agents, and
others having business relationships with the Company;
(c) confer with Per-Se and Purchaser concerning
operational matters of a material nature; and
(d) otherwise report periodically to Per-Se and Purchaser
concerning the status of the Business, the Acquired Assets, the Assumed
Liabilities, and the operations and finances of the Company.
35
43
5.3. Negative Covenant.
Except as otherwise expressly permitted by this Agreement, between the
date of this Agreement and the Closing Date, the Company will not, without the
prior consent of Per-Se and Purchaser, take any affirmative action, or fail to
take any reasonable action within their or its control, as a result of which any
of the changes or events listed in Section 3.14 could occur. During the period
from March 12, 2001, through the Closing Date, the Company has not committed and
shall not commit to or expend funds individually in an amount in excess of
$10,000, or when considered in the aggregate, in an amount in excess of $25,000,
without the express written consent of Per-Se and the Purchaser.
5.4. Required Approvals.
As promptly as practicable after the date of this Agreement, the
Company and the Owners will make all filings required by Legal Requirements to
be made by it in order to consummate the Contemplated Transactions. Between the
date of this Agreement and the Closing Date, the Company and the Owners will
cooperate with Per-Se and Purchaser with respect to all filings that Per-Se or
Purchaser elects to make or is required by Legal Requirements to make in
connection with the Contemplated Transactions.
5.5. Indebtedness.
The Company will cause all Indebtedness owed by the Company to be paid
in full prior to or simultaneous with Closing.
5.6. No Negotiation.
Until such time, if any, as this Agreement is terminated pursuant to
Section 8, neither the Company nor any Owner will directly or indirectly
solicit, initiate, or encourage any inquiries or proposals from, discuss or
negotiate with, provide any non-public information to, or consider the merits of
any unsolicited inquiries or proposals from, any Person (other than Per-Se and
Purchaser) relating to any transaction involving the sale of the Business, the
Acquired Assets, the Assumed Liabilities, or any of the limited liability
company interests of the Company, or any merger, consolidation, business
combination, or similar transaction involving the Company.
5.7. Best Efforts.
Between the date of this Agreement and the Closing Date, each of the
Parties will use their respective Best Efforts to cause the conditions in
Sections 6 and 7 to be satisfied.
5.8. Confidentiality.
The Company and each Owner will treat and hold as confidential all of
the Confidential Information, refrain from using any of the Confidential
Information and deliver promptly to the Purchaser or destroy, at the request and
option of Per-Se or the Purchaser, all tangible embodiments (and all copies) of
the Confidential Information which are in his or its possession. In the event
that the Company or any Owner is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil
36
44
investigative demand, or similar process) to disclose any Confidential
Information, the Company or such Owner will notify Per-Se and the Purchaser
promptly of the request or requirement so that Per-Se or the Purchaser may seek
an appropriate protective order or waive compliance with the provisions of this
Section 5.8. If, in the absence of a protective order or the receipt of a waiver
hereunder, the Company or such Owner is, on the advice of counsel, compelled to
disclose any Confidential Information to any tribunal or else stand liable for
contempt, the Company or such Owner may disclose the Confidential Information to
the tribunal; provided, however, that the Company or such Owner shall use its
reasonable efforts to obtain, at the reasonable request of Per-Se or the
Purchaser and at Per-Se's or the Purchaser's sole expense, an order or other
assurance that confidential treatment will be accorded to such portion of the
Confidential Information required to be disclosed as Per-Se or the Purchaser
shall designate.
5.9. Litigation Support.
Following the Closing, in the event and for so long as any Party
actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving Per-Se, the Purchaser, the Company, or the Owners,
each of the other Parties will reasonably cooperate with the contesting or
defending Party and his or its counsel in the contest or defense, make available
his or its personnel, and provide such testimony and access to his or its books
and records as shall be necessary in connection with the contest or defense, all
at the sole cost and expense of the contesting or defending Party (unless the
contesting or defending Party is entitled to indemnification therefor under
Section 9 below).
5.10. Transition.
The Company and each of the Owners will use his or its Best Efforts not
to take any action that is designed or intended to have the effect of
discouraging any lessor, licensor, customer, supplier, or other business
associate of the Company from maintaining the same business relationships with
Per-Se and the Purchaser after the Closing as it maintained with the Company
prior to the Closing.
5.11. Assignment of Interests in Acquired Assets.
Nothing in this Agreement shall be deemed to constitute or require an
assignment or an attempt to assign any of the Acquired Assets if the attempted
assignment without the consent of a third party would adversely affect in any
way the rights of either Company, Per-Se, or Purchaser. If any such consent
shall not have been obtained at or prior to the Closing, or the attempted
transfer or assignment of any of the Acquired Assets would have an adverse
effect on Per-Se, Purchaser or Company, Company will cooperate with Per-Se and
Purchaser in any reasonable arrangement designed to provide for Purchaser the
rights and benefits of such Acquired Assets, including, enforcing for the
benefit of Purchaser any or all rights of Company under any agreements against
any other party arising out of the breach or cancellation by such other party,
while permitting Purchaser the possession and use of such Acquired Assets for
Purchaser's account as if such Acquired Assets had been so transferred, assigned
and delivered, or otherwise.
37
45
Pending the obtaining of such consents, approvals or novations, Purchaser will
continue performance of any remaining unfulfilled obligations of Company under
any of the agreements in the same manner as though the same were subcontracted
to Purchaser on the same terms and conditions as contained in the agreements.
5.12. Use of Company Name.
The Company and the Owners acknowledge and agree that all of their
rights in and to, and ownership of, the name of the Company and any names
related or substantially similar thereto shall be transferred hereunder to the
Purchaser. From and after the Closing, the Company and the Owners shall be
prohibited from using such names, except as necessary to effect the change of
its corporate name or to evidence that such change has occurred. No later than
three (3) days following the Closing Date, the Company and the Owners shall have
filed all documents with the appropriate governmental authorities in the State
of Georgia, and such other states as the Company is so qualified and registered,
to change the name of the Company to a name which does not contain the word
"officemed" or any other substantially similar words.
5.13. Tax Matters.
(a) With respect to the transactions contemplated by this
Agreement, Per-Se, the Purchaser, the Company, and the Owners will provide each
other with such cooperation and information as either of them may reasonably
require of the other in connection with the filing of any Tax Return, including
Tax Returns relating to the application of the successor employer rules for
payroll Tax purposes contained in Code Sections 3121(a)(1) and 3306(b)(1), the
determination of a liability for Taxes or a right to a refund for Taxes, or the
preparation for litigation or investigation of any claim for Taxes or a right to
a refund for Taxes, or the preparation for cooperation and information shall
include all relevant Tax Returns, and other documents and records, or portions
thereof relating to or necessary in connection with the preparation of records,
or portions thereof relating to or necessary in connection with the preparation
of such Tax Returns or other determination of Tax Liability. Each Party shall
retain all Tax Returns, schedules, workpapers, and all other materials, records
or documents until the expiration of the statute of limitations for the taxable
years to which such Tax Returns and other documents relate. After expiration of
the statute of limitations, a Party shall notify the each other Party in writing
that it desires to dispose of or destroy the Tax Returns and other documents and
shall provide such other Parties with the right for thirty (30) days after the
tendering of such notice to copy or take possession of such Tax Returns and
other documents. Any information obtained under this provision shall be kept
confidential by the Parties, except as may be necessary in connection with the
filing of such Tax Returns.
(b) Per-Se, the Purchaser and the Company agree to waive
compliance with applicable bulk sales notification statutes and regulations, in
connection with the sale of the Acquired Assets to the Purchaser.
(c) The Parties agree that the Company shall pay all
applicable sales Tax and the transfer Tax on the transfer of personal property
which constitute the Acquired Assets, and the Company shall indemnify, defend
and hold Per-Se and the Purchaser harmless with respect to such Taxes. Each
Party shall file, or cooperate with the other Parties in filing, all necessary
38
46
documentation and Tax Returns with respect to such sales Taxes and transfer
Taxes with respect to the Acquired Assets.
6. CONDITIONS PRECEDENT TO PER-SE'S AND THE PURCHASER'S OBLIGATION TO
CLOSE
Per-Se's and Purchaser's obligation to effect the Closing and to take
the other actions required to be taken by Per-Se and Purchaser at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by Per-Se or Purchaser, in
whole or in part):
6.1. Accuracy of Representations.
The representations and warranties of the Company and the Owners in
this Agreement must have been accurate as of the date of this Agreement, and
must be accurate as of the Closing Date as if made on the Closing Date.
6.2. Performance of Company and Owners.
(a) The covenants and obligations that the Company and
the Owners are required to perform or to comply with pursuant to this Agreement
at or prior to the Closing must have been duly performed and complied with.
(b) The Company must have delivered each of the following
executed documents:
(i) a Noncompetition and Assignment of
Inventions Agreement with a term of two (2) years, in the form
of Exhibit B, executed by each of the Company, SoftLinc, Inc.,
Daniel Mansfield, and Ed Rieker (each, a "NONCOMPETITION
AGREEMENT");
(ii) the Escrow Agreement;
(iii) such instruments and documents as may be
requested by Per-Se or Purchaser in order to complete the
transfer of the Acquired Assets and the Assumed Liabilities to
the Purchaser, including without limitation, a bill of sale
and assignment and assumption agreement, in form and substance
satisfactory to Per-Se and the Purchaser;
(iv) a certificate executed by the Company
representing and warranting to Per-Se and the Purchaser that
each of the Company's and the Owners' representations and
warranties in this Agreement was accurate in all respects as
of the date of this Agreement and is accurate in all respects
as of the Closing Date as if made on the Closing Date; and
(v) a certificate of the Secretary of the
Company as to the incumbency of its managers and officers, a
copy of a certificate evidencing the formation and good
standing of the Company, a copy of the articles of
organization and
39
47
operating agreement of the Company, and a copy of the
resolutions adopted by the managers and members of the Company
with respect to the transactions contemplated by this
Agreement.
6.3. Consents.
Each of the Consents identified in Exhibit D must have been obtained
and must be in full force and effect.
6.4. Release of Security Interests.
The Company shall have satisfied all obligations owed to its creditors
necessary to permit the Purchaser to obtain clear title to the Acquired Assets,
or, in the alternative, shall have obtained payoff letters from such creditors,
in form and substance satisfactory to Per-Se and the Purchaser, which contain
payoff information with respect to the satisfaction such obligations, and
provided such payoff letters to Per-Se and the Purchaser.
6.5. Additional Documents.
Each of the following documents shall have been delivered to Per-Se and
the Purchaser:
(a) an opinion of Parker, Hudson, Rainer & Dobbs LLP,
counsel to the Company and the Owners, dated the Closing Date, in the form of
Exhibit E;
(b) an estoppel certificate executed on behalf of the
landlord of the facility located at 1439 Peachtree Street, Atlanta, GA, dated as
of a date not more than twenty (20) days prior to the Closing Date, in the form
of Exhibit F;
(c) such other documents as Per-Se or the Purchaser may
reasonably request for the purpose of (i) enabling its counsel to provide the
opinion referred to in Section 7.3(a), (ii) evidencing the accuracy of the
representations and warranties of the Company and the Owners, (iii) evidencing
the performance by Company and the Owners of, or the compliance by the Company
and the Owners with, any covenant or obligation required to be performed or
complied with by the Company and the Owners, (iv) evidencing the satisfaction of
any condition referred to in this Section 6, or (v) otherwise facilitating the
consummation or performance of any of the Contemplated Transactions.
6.6. No Proceedings.
Since the date of this Agreement, there must not have been commenced or
Threatened any Proceeding (a) involving any challenge to, or seeking damages or
other relief in connection with, any of the Contemplated Transactions, (b) that
may have the effect of preventing, delaying, making illegal, or otherwise
interfering with any of the Contemplated Transactions, or (c) that involves any
material claim against the Company.
40
48
6.7. No Claim Regarding Ownership or Sale Proceeds.
There must not have been made or Threatened by any Person any claim
asserting that such Person (other than the Company or an Owner) (a) is the
holder or the beneficial owner of, or has the right to acquire or to obtain
beneficial ownership of, any limited liability company interests of, or any
other voting, equity, or ownership interest in, the Company, (b) has any
interest in or right to acquire the Acquired Assets or the Assumed Liabilities,
or (c) is entitled to all or any portion of the Asset Purchase Consideration.
6.8. No Prohibition.
Neither the consummation nor the performance of any of the Contemplated
Transactions will, directly or indirectly (with or without notice or lapse of
time), materially contravene, or conflict with, or result in a material
violation of, or cause Per-Se, Purchaser or any Person affiliated with Per-Se or
Purchaser to suffer any material adverse consequence under, (a) any applicable
Legal Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
Governmental Body.
6.9. Due Diligence.
Per-Se's and Purchaser's due diligence investigation and review and
audit of the Disclosure Schedule shall not reveal any fact or circumstance which
in Per-Se's or Purchaser's judgment would make the completion of the
Contemplated Transactions inappropriate or inadvisable.
7. CONDITIONS PRECEDENT TO THE COMPANY'S AND THE OWNERS' OBLIGATION TO
CLOSE
The Company's and the Owners' obligation to effect the Closing and to
take the other actions required to be taken by the Company and the Owners at the
Closing is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by the Company, in whole or
in part):
7.1. Accuracy of Representations.
Per-Se's and Purchaser's representations and warranties in this
Agreement must have been accurate as of the date of this Agreement and must be
accurate as of the Closing Date as if made on the Closing Date.
7.2. Per-Se's and Purchaser's Performance.
(a) The covenants and obligations that Per-Se and
Purchaser are required to perform or to comply with pursuant to this Agreement
at or prior to the Closing must have been performed and complied with.
(b) Per-Se and the Purchaser must have executed and
delivered the Escrow Agreement and the Noncompetition Agreements.
41
49
7.3. Additional Documents.
Per-Se and Purchaser must have caused the following documents to be
delivered to the Company:
(a) an opinion of Powell, Goldstein, Frazer & Murphy LLP,
and Robert Q. Jones, Jr., counsel to Per-Se and the Purchaser, dated the Closing
Date, in the form of Exhibit G; and
(b) a certificate executed by Per-Se and the Purchaser
representing and warranting to the Company that each of Per-Se's and the
Purchaser's representations and warranties in this Agreement was accurate in all
respects as of the date of this Agreement and is accurate in all respects as of
the Closing Date as if made on the Closing Date;
(c) a certificate of the Secretary of each of Per-Se and
the Purchaser as to the incumbency of its respective officers, a copy of a
certificate evidencing the incorporation and good standing of each of Per-Se and
Purchaser, a copy of the articles or certificate of incorporation and bylaws of
each of Per-Se and the Purchaser, and a copy of the resolutions adopted by the
board of directors of each of Per-Se and the Purchaser with respect to the
transactions contemplated by this Agreement; and
(d) such other documents as the Company or the may
reasonably request for the purpose of (i) enabling their counsel to provide the
opinion referred to in Section 6.5(a), (ii) evidencing the accuracy of any
representation or warranty of Per-Se or Purchaser, (iii) evidencing the
performance by Per-Se or Purchaser of, or the compliance by Per-Se and Purchaser
with, any covenant or obligation required to be performed or complied with by
Per-Se and Purchaser, (iv) evidencing the satisfaction of any condition referred
to in this Section 7, or (v) otherwise facilitating the consummation of any of
the Contemplated Transactions.
7.4. No Injunction.
There must not be in effect any Legal Requirement or any injunction or
other Order that prohibits the Contemplated Transactions.
8. TERMINATION
8.1. Termination Events.
This Agreement may, by notice given prior to or at the Closing, be
terminated:
(a) by either Per-Se or Purchaser on the one hand, or the
Company on the other hand, if a material breach of any provision of this
Agreement has been committed by the other Party and such breach has not been
waived;
(b) (i) by Per-Se or Purchaser if any of the conditions
in Section 6 has not been satisfied as of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the failure of
Per-Se or Purchaser to comply with its respective obligations under this
Agreement) and neither Per-Se nor Purchaser has waived such condition
42
50
on or before the Closing Date; or (ii) by the Company, if any of the conditions
in Section 7 has not been satisfied of the Closing Date or if satisfaction of
such a condition is or becomes impossible (other than through the failure of the
Company or the Owners to comply with their obligations under this Agreement),
and neither the Company nor the Owners has waived such condition on or before
the Closing Date;
(c) by mutual consent of Per-Se, Purchaser, and the
Company; or
(d) by either Per-Se or Purchaser on the one hand, or the
Company on the other hand, if the Closing has not occurred (other than through
the failure of any Party seeking to terminate this Agreement to comply fully
with its obligations under this Agreement) on or before April 30, 2001, or such
later date as the parties may agree upon.
8.2. Effect of Termination.
Each Party's right of termination under Section 8.1 is in addition to
any other rights it may have under this Agreement or otherwise, and the exercise
of a right of termination will not be an election of remedies. If this Agreement
is terminated pursuant to Section 8.1, all further obligations of the parties
under this Agreement will terminate, except that the obligations in Sections
5.8, 10.1, 10.2, 10.4, 10.13 and 10.15 will survive; provided, however, that if
this Agreement is terminated by a party because of the breach of the Agreement
by the other Party or because one or more of the conditions to the terminating
Party's obligations under this Agreement is not satisfied as a result of the
other Party's failure to comply with its obligations under this Agreement, the
terminating Party's right to pursue all legal remedies will survive such
termination unimpaired.
9. INDEMNIFICATION; REMEDIES
9.1. Survival.
All representations, warranties, covenants, and obligations in this
Agreement, the Disclosure Schedule and any other certificate or document
delivered pursuant to this Agreement will survive the Closing. The right to
indemnification, payment of Damages or other remedy based on such
representations, warranties, covenants, and obligations will not be affected by
any investigation conducted with respect to, or any Knowledge acquired (or
capable of being acquired) at any time, whether before or after the execution
and delivery of this Agreement or the Closing Date, with respect to the accuracy
or inaccuracy of or compliance with, any such representation, warranty,
covenant, or obligation. The waiver of any condition based on the accuracy of
any representation or warranty, or on the performance of or compliance with any
covenant or obligation, will not affect the right to indemnification, payment of
Damages, or other remedy based on such representations, warranties, covenants,
and obligations. This Section 9 shall constitute the sole and exclusive remedies
for recovering against the Company, the Owners, Per-Se, or the Purchaser, as the
case may be, based on any misrepresentation or breach of warranty by any such
Party or non-fulfillment of any covenant or agreement to be performed or
complied with by any of them under this Agreement or any document delivered in
connection herewith or the Contemplated Transactions, or for any other matter
for which indemnification under this Section 9 is available against such
Parties, except for any remedy based on a claim of
43
51
fraud against such Party and except for equitable remedies, and except for any
remedy for any failure of Purchaser to fulfill its payment obligations under
Section 2.9 of this Agreement.
9.2. Indemnification and Payment of Damages by the Company and the
Owners.
The Company and the Owners, jointly and severally, will indemnify and
hold harmless Per-Se, Purchaser, and their respective Representatives,
stockholders, controlling persons, and affiliates (collectively, the
"INDEMNIFIED PERSONS") for, and will pay to the Indemnified Persons the amount
of, any loss, liability, claim, damage (including incidental and consequential
damages), expense (including costs of investigation and defense and reasonable
attorneys' fees) or diminution of value, whether or not involving a third-party
claim (collectively, "DAMAGES"), arising, directly or indirectly, from or in
connection with:
(a) any breach of any representation or warranty made by
the Company or the Owners in this Agreement, the Disclosure Schedule, or any
other certificate or document delivered by the Company or Owners pursuant to
this Agreement;
(b) any breach by the Company or Owners of any covenant
or obligation of the Company or Owners in this Agreement;
(c) any Liability of the Company which is not included
among the Assumed Liabilities; and
(d) any of the Excluded Assets.
9.3. Indemnification and Payment of Damages by Per-Se and
Purchaser.
Per-Se and Purchaser will indemnify and hold harmless the Company and
the Owners, and will pay to the Company and the Owners the amount of any Damages
arising, directly or indirectly, from or in connection with (a) any breach of
any representation or warranty made by Per-Se or Purchaser in this Agreement or
in any certificate delivered by Per-Se or Purchaser pursuant to this Agreement,
or (b) any breach by Per-Se or Purchaser of any covenant or obligation of Per-Se
or Purchaser in this Agreement.
9.4. Time Limitations.
If the Closing occurs, neither the Company nor the Owners will have any
liability (for indemnification or otherwise) with respect to any representation
or warranty other than those in Sections 3.1, 3.2, 3.5, 3.6, 3.8, 3.9, 3.10,
3.11, 3.17, 3.26, and 3.28 unless on or before the two (2)-year anniversary of
the Closing Date, Per-Se or Purchaser notifies the Company of a claim specifying
the factual basis of that claim in reasonable detail to the extent then known by
Per-Se or Purchaser; a claim with respect to Sections 3.1, 3.2, 3.5, 3.6, 3.8,
3.9, 3.10, 3.11, 3.17, 3.26 and 3.28 or a claim for indemnification or
reimbursement based upon any other representation or warranty not otherwise
specifically referenced above, or any covenant or obligation to be performed and
complied by the Company or the Owners, may be made at any time.
44
52
9.5. Limitations on Amount - Company and Owners.
(a) The Company and the Owners will not have any
liability (for indemnification or otherwise) with respect to the matters
described in Section 9.2 (other than a breach of Sections 3.1, 3.2, 3.5, 3.6,
3.8, 3.9, 3.10, 3.11, 3.17, 3.26 and 3.28) until the total of all Damages with
respect to such matters exceeds $30,000. The limitation contained in this
Section 9.5(a) shall not apply with respect to any claim with respect to
Sections 3.1, 3.2, 3.5, 3.6, 3.8, 3.9, 3.10, 3.11, 3.17, 3.26 and 3.28 or a
claim for indemnification or reimbursement based upon any other representation
or warranty not otherwise specifically referenced above, or any covenant or
obligation to be performed and complied by the Company or the Owners.
(b) The Company's and the Owners' maximum liability for
Damages with respect to a claim for indemnification or reimbursement based upon
a breach of the representations and warranties contained in Article 3 of this
Agreement shall be limited to and shall not exceed the Asset Purchase
Consideration in the aggregate; provided that, except in the case of fraud,
neither SoftLinc nor Mansfield shall be liable under this Agreement for an
aggregate amount in excess of its or his respective percentage of the Asset
Purchase Consideration, as follows: SoftLinc: 60%; Mansfield: 40%.
9.6. Limitations on Amount - Per-Se and Purchaser.
(a) Neither Per-Se nor Purchaser will have any liability
(for indemnification or otherwise) with respect to the matters described in
Section 9.3 until the total of all Damages with respect to such matters exceeds
$30,000.
(b) Per-Se's and Purchaser's maximum liability for
Damages with respect to a claim for indemnification or reimbursement based on a
breach of representations and warranties contained in Article 4 of this
Agreement shall be limited to and shall not exceed the Asset Purchase
Consideration in the aggregate.
9.7. Procedure for Indemnification -- Third Party Claims.
(a) Promptly after receipt by an indemnified party under
Section 9.2 or 9.3, of notice of the commencement of any Proceeding against it,
such indemnified party will, if a claim is to be made against an indemnifying
party under such Section, give notice to the indemnifying party of the
commencement of such claim, but the failure to notify the indemnifying party
will not relieve the indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the indemnifying party's
failure to give such notice.
(b) If any Proceeding referred to in Section 9.7(a) is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party will be
entitled to participate in such Proceeding and, to the extent that it wishes
(unless (i) the indemnifying party is also a party to such Proceeding and the
indemnified party determines in good faith that joint representation would be
inappropriate, or (ii) the indemnifying party fails to provide reasonable
assurance to the indemnified party of its financial capacity to defend such
Proceeding and provide indemnification with respect to such Proceeding), to
assume the defense of such Proceeding with counsel satisfactory to the
45
53
indemnified party and, after notice from the indemnifying party to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will not, as long as it diligently conducts such defense, be
liable to the indemnified party under this Section 9 for any fees of other
counsel or any other expenses with respect to the defense of such Proceeding, in
each case subsequently incurred by the indemnified party in connection with the
defense of such Proceeding, other than reasonable costs of investigation. If the
indemnifying party assumes the defense of a Proceeding, (i) it will be
conclusively established for purposes of this Agreement that the claims made in
that Proceeding are within the scope of and subject to indemnification; (ii) no
compromise or settlement of such claims may be effected by the indemnifying
party without the indemnified party's consent unless (A) there is no finding or
admission of any violation of Legal Requirements or any violation of the rights
of any Person and no effect on any other claims that may be made against the
indemnified party, and (B) the sole relief provided is monetary damages that are
paid in full by the indemnifying party; and (iii) the indemnified party will
have no liability with respect to any compromise or settlement of such claims
effected without its consent. If notice is given to an indemnifying party of the
commencement of any Proceeding and the indemnifying party does not, within ten
days after the indemnified party's notice is given, give notice to the
indemnified party of its election to assume the defense of such Proceeding, the
indemnifying party will be bound by any determination made in such Proceeding or
any compromise or settlement effected by the indemnified party.
(c) Notwithstanding the foregoing, if an indemnified
party determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such Proceeding, but
the indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).
(d) The Company, the Owners, Per-Se, and the Purchaser
hereby consent to the non-exclusive jurisdiction of any court in which a
Proceeding is brought against any Indemnified Person for purposes of any claim
that an Indemnified Person may have under this Agreement with respect to such
Proceeding or the matters alleged therein, and agree that process may be served
on such Persons with respect to such a claim anywhere in the world.
9.8. Procedure for Indemnification -- Other Claims.
A claim for indemnification for any matter not involving a third-party
claim may be asserted by written notice given to the Party from whom
indemnification is sought.
9.9. Subrogation.
Upon payment in full of any indemnity obligation or the payment of any
judgment or settlement with respect to a claim by a third party, the
indemnifying party shall be subrogated to the extent of such payment to the
rights of the Indemnified Parties against any Person with respect to the subject
matter of such indemnity obligation or third party claim.
46
54
10. GENERAL PROVISIONS
10.1. Expenses.
Except as otherwise expressly provided in this Agreement, each Party to
this Agreement will bear its respective expenses incurred in connection with the
preparation, execution, and performance of this Agreement and the Contemplated
Transactions, including all fees and expenses of agents, representatives,
counsel, and accountants. In the event of termination of this Agreement, the
obligation of each Party to pay its own expenses will be subject to any rights
of such Party arising from a breach of this Agreement by another Party.
10.2. Public Announcements.
Neither the Company nor the Owners shall issue any press release or
make any public announcement relating to the subject matter of this Agreement or
the Contemplated Transactions without the prior written approval of Per-Se or
the Purchaser. Per-Se or Purchaser, upon prior notice to the Company, may make
any public disclosure it believes in good faith is required or permitted by
applicable law or any listing or trading agreement concerning its
publicly-traded securities.
10.3. Notices.
All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when (a)
delivered by hand (with written confirmation of receipt), (b) sent by telecopier
(with written confirmation of receipt), provided that a copy is mailed by
registered mail, return receipt requested, or (c) when received by the
addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to the other Parties):
If to the Company or SoftLinc:
Leftovers LLC or SoftLinc, Inc.
Suite 207
2103 North Decatur Road
Decatur, GA 30033
Telephone: (404) 292-1833
Telecopier: (404) 292-1833
If to Mansfield:
Daniel Mansfield
4842 Scotts Mill Way
Duluth, Georgia 30096
Telephone: (770) 449-6668
Telecopier: (770) 734-0014
47
55
with a copy to:
Parker, Hudson, Rainer & Dobbs LLP
1500 Marquis Two Tower
285 Peachtree Center Avenue, N.E.
Atlanta, Georgia 30303
Attention: Mitchell M. Purvis
Telephone: (404) 420-5520
Telecopier: (404) 522-8409
If to Per-Se or Purchaser, to:
Per-Se Technologies, Inc.
2840 Mt. Wilkinson Pkwy.
Atlanta GA 30339
Attention: Chris Perkins
Telephone: (770) 444-5300
Telecopier: (770) 444-4502
with a copy to:
Powell, Goldstein, Frazer & Murphy LLP
Sixteenth Floor
191 Peachtree Street, N.E.
Atlanta, Georgia 30303
Attention: Thomas R. McNeill
Telephone: (404) 572-6681
Telecopier: (404) 572-6999
10.4. Jurisdiction; Service of Process.
Any action or proceeding seeking to enforce any provision of, or based
on any right arising out of, this Agreement may be brought against any of the
parties in the courts of the State of Georgia, County of Fulton, or, if it has
or can acquire jurisdiction, in the United States District Court for the
Northern District of Georgia, and each of the parties consents to the
jurisdiction of such courts (and of the appropriate appellate courts) in any
such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be
served on any party anywhere in the world.
10.5. Further Assurances.
The parties agree (a) to furnish upon request to each other such
further information, (b) to execute and deliver to each other such other
documents, and (c) to do such other acts and things, all as the other party may
reasonably request for the purpose of carrying out the intent of this Agreement
and the documents referred to in this Agreement.
48
56
10.6. Waiver.
Except as expressly provided herein with respect to the exclusivity of
the indemnity remedy with respect to the Company, the Owners, Per-Se and the
Purchaser, the rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by each other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
10.7. Entire Agreement and Modification.
This Agreement supersedes all prior agreements between the parties with
respect to its subject matter and constitutes (along with the documents referred
to in this Agreement) a complete and exclusive statement of the terms of the
agreement between the parties with respect to its subject matter. This Agreement
may not be amended except by a written agreement executed by the party to be
charged with the amendment.
10.8. Disclosure Schedule.
(a) Except as otherwise expressly described therein, the
disclosures in the Disclosure Schedule relate only to the representations and
warranties in the Section of the Agreement to which they expressly relate and
not to any other representation or warranty in this Agreement.
(b) In the event of any inconsistency between the
statements in the body of this Agreement and those in the Disclosure Schedule
(other than an exception expressly set forth as such in the Disclosure Schedule
with respect to a specifically identified representation or warranty), the
statements in the body of this Agreement will control.
(c) No due diligence conducted by Per-Se or Purchaser
shall limit or be used as a defense by the Company or the Owners with respect to
any claim of breach of a representation, warranty or covenant by the Company or
the Owners under this Agreement.
10.9. Assignments, Successors, and No Third-Party Rights.
No Party may assign any of its rights under this Agreement without the
prior consent of the other Parties, except that Per-Se and Purchaser may assign
any of its rights under this Agreement to any affiliate of Per-Se or Purchaser
upon prior written notice to the Company and the Owners, provided that such
assignee expressly assumes each of Per-Se and Purchaser's rights
49
57
and obligations hereunder in a writing delivered to the Company and the Owners.
Subject to the preceding sentence, this Agreement will apply to, be binding in
all respects upon, and inure to the benefit of the successors and permitted
assigns of the Parties. Nothing expressed or referred to in this Agreement will
be construed to give any Person other than the Parties any legal or equitable
right, remedy, or claim under or with respect to this Agreement or any provision
of this Agreement. This Agreement and all of its provisions and conditions are
for the sole and exclusive benefit of the Parties and their successors and
assigns.
10.10. Severability.
If any provision of this Agreement is held invalid or unenforceable by
any court of competent jurisdiction, the other provisions of this Agreement will
remain in full force and effect. Any provision of this Agreement held invalid or
unenforceable only in part or degree will remain in full force and effect to the
extent not held invalid or unenforceable.
10.11. Section Headings; Construction.
The headings of Sections in this Agreement are provided for convenience
only and will not affect its construction or interpretation. All references to
"Section" or "Sections" refer to the corresponding Section or Sections of this
Agreement. All words used in this Agreement will be construed to be of such
gender or number as the circumstances require. Unless otherwise expressly
provided, the word "including" does not limit the preceding words or terms.
10.12. Time of Essence.
With regard to all dates and time periods set forth or referred to in
this Agreement, time is of the essence.
10.13. Governing Law.
This Agreement will be governed by the laws of the State of Georgia
without regard to conflicts of laws principles.
10.14. Counterparts.
This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original copy of this Agreement and all of which,
when taken together, will be deemed to constitute one and the same agreement.
10.15. Arbitration.
Except as otherwise set forth in this Agreement, all disputes arising
out of or under this Agreement shall be settled by arbitration in a location in
the Atlanta, Georgia mutually acceptable to the Parties before a single
arbitrator pursuant to the rules of the American Arbitration Association.
Arbitration may be commenced at any time by any of the Parties by giving written
notice to each other than such dispute has been referred to arbitration under
this Section 10.15. The arbitrator shall be selected by the joint agreement of
the Parties, but if they do not so agree within twenty (20) days after the date
of receipt of the notice referred to above,
50
58
the selection shall be made pursuant to the rules from the panels of arbitrators
maintained by the American Arbitration Association. Any award rendered by the
arbitrator shall be conclusive and binding upon the Parties hereto; provided,
however, that any such award shall be accompanied by a written opinion of the
arbitrator giving the reason for the award. This provision for arbitration shall
be specifically enforceable by the Parties and the decision of the arbitrator in
accordance herewith shall be final and binding and there shall be no right of
appeal therefrom. The arbitrator shall assess, as part of his award to the
prevailing Party, all or such part as the arbitrator deems proper of the
arbitration expenses of the prevailing Party (including reasonable attorneys'
fees) and of the arbitrator against the Party that is unsuccessful in such
claim, defense or objection.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
51
59
IN WITNESS WHEREOF, the parties have executed, sealed and delivered
this Agreement as of the date first written above.
PER-SE:
Per-Se Technologies, Inc.
By: /s/ CHRIS E. PERKINS
--------------------------------------------
Chris E. Perkins
Executive Vice President and Chief
Financial Officer
PURCHASER:
Per-Se Transaction Services, Inc.
By: /s/ CHRIS E. PERKINS
--------------------------------------------
Chris E. Perkins
Executive Vice President and Chief
Financial Officer
COMPANY:
officemed.com LLC
By: /s/ DANIEL MANSFIELD
--------------------------------------------
Name: Daniel Mansfield
------------------------------------------
Title: Member
-----------------------------------------
OWNERS:
SoftLinc, Inc.
By: /s/ EDWARD RIEKER
--------------------------------------------
Name: Edward Rieker
------------------------------------------
Title: President
-----------------------------------------
/s/ DANIEL MANSFIELD
-----------------------------------------------
Daniel Mansfield