ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered
into this 8th day of January, 2001 by and among CARD GUARD TECHNOLOGIES, INC., a
Delaware corporation (the "Purchaser"), MATRIA HEALTHCARE, INC., a Delaware
corporation ("Matria"), and QUALITY DIAGNOSTIC SERVICES, INC., a Delaware
corporation ("QDS" or the "Seller").
BACKGROUND:
A. The Seller is engaged in the business of providing telemedicine heart
monitoring and recording and related services (the "Business").
B. Subject to the terms and conditions contained herein, as set forth
in this Agreement, the Seller sells to Purchaser, and Purchaser purchases from
the Seller, as of the Closing Date (as defined in Section 2.1), the Business as
a going concern together with substantially all of the Seller's assets (other
than cash and accounts receivable).
C. It is the intent of the parties that this Agreement reflect and document
the terms of the above transfer of the Business and the assets of the Business
from the Seller to the Purchaser as of the Closing Date.
NOW, THEREFORE, FOR AND IN CONSIDERATION of the premises, the mutual
promises, covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
1. PURCHASE AND SALE OF ASSETS.
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1.1 Transfer of Assets. Upon the terms and subject to the conditions
contained herein, QDS hereby sells, conveys and delivers to Purchaser, and
Purchaser hereby purchases from QDS, as of the Closing Date, all the "Assets"
(as defined in Section 1.2 hereof), free and clear of any and all liens,
charges, security interests, mortgages, claims and encumbrances of any kind
(each a "Lien"), other than the Liens listed on Schedule 1.1 hereto (the
"Permitted Liens") and subject only to specified liabilities as described in
Section 1.4 herein.
1.2 Assets. For purposes of this Agreement, "Assets" means all assets,
properties and rights of QDS, other than the "Excluded Assets" (as defined in
Section 1.3 hereof). Without limiting the generality of the foregoing, Assets
includes the following assets of QDS, except to the extent that such assets are
Excluded Assets:
(a) the Business as a going concern and the goodwill pertaining thereto;
(b) all machinery, equipment, supplies, inventories, computer equipment,
office equipment, furniture, vehicles and other personal property;
(c) all copyrightable works, copyrights, trademarks, service marks, logos,
trade dress, trade names, patents, patent applications, processes, inventories,
computer programs, trade secrets, confidential business information, goodwill
and other intellectual property (and any applications for any of the above)
owned, used or held for use by QDS and all of QDS's rights in and to any QDS
intellectual property licensed to QDS by third parties, including, without
limitation, the names "Quality Diagnostic Services" and "QDS" and all of
Seller's rights under confidentiality, assignment of inventions and other
similar rights, agreements and undertakings of any person, including, without
limitation, under Seller's policies (collectively, "Intellectual Property");
(d) all notes receivable and all documents, records and other agreements
relating thereto, including, without limitation, (i) that Note, dated August 23,
2000, in the principal amount of $108,000, issued by Telemed Technologies
International in favor of Quality Diagnostic Services, Inc. and (ii) that Note,
dated November 15, 2000, in the principal amount of $100,000, issued by Telemed
Technologies International in favor of Quality Diagnostic Services, Inc.
(e) to the extent assignable, all licenses, franchises, approvals, permits,
registrations and other similar rights obtained from governmental agencies or
authorities (and all applications therefor), other than Medicare or Medicaid
provider numbers;
(f) all of QDS's rights under all contracts, open purchase orders (i.e.,
any purchase orders listed or described therein (or any additional purchase
orders issued after December 31, 2000 and prior to the Closing Date for an
aggregate amount not to exceed $40,000) for which the ordered supplies were not
delivered or with respect to which invoices were not received for as of the
Closing Date), agreements, covenants, options, leases, guaranties and other
similar arrangements (whether oral or written) listed on Schedule 1.2(f) hereof;
(g) all prepaid property and expenses and ad valorem taxes, interest and
other expenses;
(h) all medical equipment and monitors;
(i) all telephone and facsimile numbers, to the extent assignable, and all
domain names owned by or to which Seller has any rights;
(j) all catalogs, brochures, customer lists, files, training materials,
marketing materials, and other books and records;
(k) all non-compete, non-solicitation and confidentiality agreements with
any person to the extent assignable;
(m) all claims, refunds, causes of action, choses in action, rights of
recovery, rights of set off and rights of recoupment against any other person or
entity, including, without limitation, Purchaser or any of its affiliates (other
than those arising under this Agreement or any agreement ancillary hereto); and
(n) all Assets purchased or received by QDS in the ordinary course of the
Business, during the period from the date hereof through the Closing Date (the
"Interim Period").
1.3 Excluded Assets. Only the assets of QDS as set forth on Schedule
1.3A, including, without limitation, all cash and accounts receivable and all
documents, records and other agreements relating thereto (the "Excluded
Assets"), are retained by QDS and not sold to Purchaser pursuant to this
Agreement.
1.4 Assumed Liabilities. Upon the terms and subject to the conditions
contained herein, at the "Closing" (as defined in Section 2.1 hereof) Purchaser
shall execute and deliver to the Seller the "Assumption Agreement" (as defined
in Section 2.3(b) hereof), pursuant to which Purchaser assumes and agrees to
perform and discharge the following debts, liabilities and obligations of Seller
(collectively, the "Assumed Liabilities"), as of the Closing:
(a) all debts, liabilities and obligations arising after the
Closing Date under the contracts and open purchase orders (i.e., any purchase
orders listed or described therein (or any additional purchase orders issued
after December 31, 2000 and prior to the Closing Date for an aggregate amount
not to exceed $40,000) for which the ordered supplies were not delivered or with
respect to which invoices were not received for as of the Closing Date) for
which the ordered supplies were not delivered or with respect to which invoices
were not received for as of the Closing Date) assigned to Purchaser pursuant to
Section 1.2(f) and listed and described on Schedule 1.2(f) (but excluding any
liabilities or obligations under such contracts arising from any acts or
omissions occurring prior to or on the Closing Date), including, without
limitation, the Seller's obligations to provide heart monitoring services
thereunder; and
(b) trade payables and accrued vacation pay and sick leave
payable by Seller to only the employees hired by Purchaser pursuant to Section
5.2 hereof, all as described in the unaudited balance sheet of QDS dated as of
November 30, 2000 (the "November 30 Balance Sheet"; and the "Balance Sheet
Date") and as such may be incurred in the ordinary course of the Business from
the Balance Sheet Date and until the Closing Date but specifically excluding any
liabilities listed as Excluded Liabilities in Sections 1.5(a) through 1.5(s)
hereof.
1.5 Excluded Liabilities. Notwithstanding anything else contained
herein to the contrary, all liabilities and obligations of Matria or the Seller
(whether known or unknown, liquidated or unliquidated, contingent or fixed)
other than the Assumed Liabilities (collectively, the "Excluded Liabilities")
shall remain the liabilities and obligations of Matria and Seller, respectively,
and are not assumed by Purchaser pursuant hereto (regardless of whether any such
liabilities or obligations are disclosed in this Agreement). Seller hereby
agrees that it shall fully and timely pay, perform and discharge all of its
Excluded Liabilities in accordance with their respective terms. Without limiting
the generality of the foregoing, Excluded Liabilities include the following,
whether or not reflected on the November 30 Balance Sheet:
(a) any liability or obligation arising under any contract not listed on
Schedule 1.2(f) hereof;
(b) any liability or obligation related to the Excluded Assets;
(c) any liability or obligation to any employee or independent contractor
sales representative (or former employee or independent contractor sales
representative) of Matria or Seller (including, without limitation, any
liability or obligation arising out of any person's employment/contracting or
termination of employment or contract) except as described in Sections 1.4 and
5.3(a) (including, without limitation, any commission or other payments
concerning any revenues received or to be received by Seller or booked prior to
the Closing) and any liability or obligation of Matria or Seller under any
Benefit Plan or with respect to any worker's compensation claims arising out of
any injury sustained or occupational disease contracted prior to the Closing
Date;
(e) any liability or obligation under any litigation, arbitration,
investigation or other proceeding brought against Seller with respect to any
matter occurring prior to the Closing Date (regardless of whether it is pending
as of or has been threatened or asserted prior to the Closing Date), including,
without limitation, the lawsuits entitled Health Monitoring Services of America,
Inc. vs. Matria Healthcare, Inc., Quality Diagnostic Services, Inc., Endeavor
Technology, Inc. and Kim Erickson (No. 2000-29751); and the EEOC claims entitled
Mrs. Drema K. Hutson vs. Matria Healthcare, Inc. (No. 110A03589); and Michelle
L. Klinger vs. Matria Healthcare, Inc. (No. 110A03618) and the matters described
in Schedule 3.13 herein (collectively, the "Lawsuits");
(f) any liability or obligation for any income taxes owed by Matria or
Seller (including, without limitation, for any revenues of the Business during
the Interim Period) and any liability or obligation for any sales, use or other
taxes arising in connection with the consummation of the transactions
contemplated by this Agreement;
(g) any tax liability that may be imposed, with respect to the Assets, by
any federal, state or local government on the ownership, sale, operation or use
of the Assets, relating to any period ending on or before the Closing Date;
(h) any liability or obligation of Seller relating to any breach of
contract, breach of warranty, tort, infringement or violation of law;
(i) any liability or obligation payable to Matria or any other affiliate of
Seller (including, without limitation, the amount of $3,152,000 which is
reflected as the "Intercompany" line item on the November 30 Balance Sheet);
(j) any liability or obligation of Matria or Seller to indemnify any
person by reason of the fact that such person was an employee, officer,
director or agent of Matria or Seller (or such person was serving as an
employee, officer, director or agent of any other entity at the request of
Matria or Seller) prior to the Closing Date;
(k) any liability or obligation of Matria or Seller for costs and
expenses incurred in connection with this Agreement and the transactions
contemplated hereby;
(l) any liability, obligation, guarantee or undertaking of Matria or
Seller relating to any debt of Matria or Seller;
(m) any liability or obligation of Matria or Seller relating to (i)
that certain Lease by and between Parkway 75 Office Associates, Ltd. and
Healthdyne, Inc. dated May 2, 1986, as amended, for the premises located at
1850 Parkway Place, Marietta, Cobb County, Georgia; and (ii) that certain
Lease by and between Matria Healthcare, Inc. and David L. Kuniansky, Amy
Kuniansky and Clark and Douglas S. Kuniansky dated April 5, 1996, for the
premises located at number 1210-A Kennestone Circle, Cobb County, Georgia;
(n) any liability or obligation of Matria or Seller to Cardiocomm
Solutions, Inc. pursuant to the Software License and Modification Agreement
dated April 12, 2000, or otherwise;
(o) any liability covered by insurance maintained by Matria or Seller
immediately prior to the Closing Date, to the extent of such coverage;
(p) any amounts due by Seller to Card Guard USA, Inc. or the
Instromedix Division of Card Guard Technologies, Inc. (such amounts
hereinafter referred to as the "Purchaser Payables");
(q) any liability or obligation to provide any loan or any other
funding to Telemed Technologies International or any of its divisions
("Telemed") and any liability or obligation arising out of Matria's or
Seller's relationship with Telemed or out of any events occurring prior to
the Closing pursuant to or in connection with the Joint Development
Marketing and Program Administration Agreement between Seller and Telemed,
dated February 4, 2000 (the "Telemed Agreement"), including, without
limitation, the non-performance of Seller's obligations thereunder (all
such liabilities and/or obligations, collectively, the "Telemed
Liabilities"), except that if Matria or Seller shall make any loan to
Telemed between the date hereof and the Closing Date, Purchaser shall
assume Matria's or Seller's position as creditor under such loan and shall
reimburse Matria or Seller for any such amount loaned, up to an aggregate
maximum of $150,000;
(r) any liability or obligation payable to Matria or any other
affiliate of Seller; and
(s) any other liability or obligation of Seller not specifically set
forth in Section 1.4 hereof.
1.6 Procedures for Assets Not Transferable. Seller and Matria shall use
all reasonable business efforts to obtain at the earliest practicable date, by
instruments in form and substance reasonably satisfactory to Purchaser, all
approvals and consents without any conditions materially adverse to Purchaser or
material obligations imposed on Purchaser not specified in the agreement for
which consent is being obtained, required for the transfer to Purchaser of the
Assets set forth on Schedule 3.2. Such efforts shall include contacting and
facilitating the communications between any parties to such contracts and
Purchaser (except if the relationship with such party is managed by any employee
of QDS hired by Purchaser) and preparing and sending the relevant documentation
required for such approvals and consents. If any of the contracts or other
property or rights included in the Assets are not assignable or transferable
either by virtue of the provisions thereof or under applicable law without the
consent of some other person or entity and such consents are not obtained by
Seller by the Closing Date, Seller shall notify Purchaser thereof at the Closing
or by indicating such fact on a Schedule to the Agreement. With respect to any
such required consent not obtained prior to the Closing, this Agreement and the
related instruments of transfer shall not constitute an assignment or transfer
thereof, and Purchaser shall not assume such Seller's obligations thereunder.
Instead, Seller and Matria shall use all reasonable efforts to obtain any such
required consents not previously obtained as soon as reasonably possible after
the Closing.
1.7 Purchase Price. Subject to the terms and conditions contained
herein, at the Closing Purchaser shall pay to Seller an aggregate purchase price
for the Assets in the amount of $18,000,000 less the Net Book Value of the
assets listed on Schedule 1.3A (20) attached herein as of the Closing Date (the
"Purchase Price"), subject to any adjustments as described in Section 1.8
herein, all in accordance with Section 2.3(a) hereof. The Purchase Price shall
be paid by (i) cancellation of any outstanding Purchaser Payables, whether or
not payments are due at such time; and (ii) cash.
1.8 Closing Date Adjustments.
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(a) Within 30 days following the Closing Date, (i) Purchaser
shall inform Seller in writing ("Purchaser's Adjustment Letter") of the
aggregate amount (the "Purchaser's Adjustment") that Purchaser believes
represents the value of (x) Assets not assigned to Purchaser at Closing, not
retained in the Business or not used in the ordinary course of the Business
(other than contracts and agreements that were not assigned to Purchaser at
Closing due to the absence of third party consent to such assignment); and (y)
Assets transferred by Seller, during the Interim Period, otherwise than in the
ordinary course of the Business.
(b) Within 5 days following the receipt by Seller of
Purchaser's Adjustment Letter, Seller shall pay to Purchaser the amount of all
undisputed Purchaser's Adjustment (or transfer to Purchaser any such disputed
assets) and shall object in writing as to any items thereon with which Seller
disagrees.
(c) In the event of a dispute or disagreement between
Purchaser and Seller as to any portion of the Purchaser's Adjustment which
Purchaser and Seller are unable to resolve either Purchaser or Matria may elect
that the items remaining in dispute be submitted for resolution to Deloitte &
Touche LLP or such other national independent certified public accounting firm
selected by mutual agreement of Purchaser and Matria (the member of which who
will be primarily responsible for resolving such dispute will have had
substantial audit experience and substantial experience in arbitration or other
dispute resolution proceedings concerning accounting issues) (the
"Accountants"). The Accountants will, within 30 days after submission,
determine, based solely on presentations by Purchaser and Matria and not by
independent review, and render a written report to the parties upon such
remaining disputed items and the resultant calculation of the Purchaser's
Adjustment in accordance with the provisions hereof, and such determination will
be final, binding and conclusive on the parties hereto. In resolving any
disputed item, the Accountants may not assign a value to such item greater than
the greatest value for such item claimed by either party or less than the
smallest value for such item claimed by either party. The fees and disbursements
of the Accountants will be paid equally by the Purchaser and Matria. Purchaser
and Matria hereby agree to cooperate and work in good faith and as expeditiously
as reasonably possible to resolve any and all disputes and disagreements.
(d) Upon resolution of any disagreements with respect to
Purchaser's Adjustment, Seller shall pay to Purchaser the amount of any disputed
Purchaser's Adjustment determined to be correct pursuant to Section 1.8(c)
above.
2. THE EXECUTION.
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2.1 Place of Closing. Subject to the satisfaction of the conditions set
forth in Section 6 hereof, the closing of the transactions contemplated hereby
(the "Closing") shall occur on February 1, 2001 or at such other time, place or
date agreed upon by the parties herein (the "Closing Date") at the offices of
Proskauer Rose LLP, 1585 Broadway, New York, New York, 10036 but in no event
later than February 15, 2001. If the Closing shall not occur prior to February
15, 2001 either party may terminate this Agreement.
2.2 Deliveries by Seller and Matria. At the Closing, Seller shall
deliver to Purchaser the following:
(a) a Bill of Sale and Assignment (the "Bill of Sale"),
substantially in the form attached hereto as Exhibit A, and such other
assignments and other instruments of transfer and conveyance necessary or
appropriate to transfer and assign the Assets, free and clear of any and all
liens, charges, security interests, mortgages, claims and encumbrances other
than the Permitted Liens to Purchaser, on the Closing Date;
(b) an opinion of Troutman, Sanders, LLP, counsel to Seller
and Matria, dated as of the Closing Date, addressed to Purchaser, in form and
substance reasonably satisfactory to Purchaser, addressing such matters as the
Purchaser may reasonably request;
(c) a copy of resolutions of the board of directors of Seller
and Matria authorizing the execution, delivery and performance of this Agreement
and any ancillary agreements by Seller and Matria, and a certificate of the
secretary or an assistant secretary of Seller and Matria, dated the Closing
Date, that such resolutions were duly adopted and are in full force and effect;
(d) the certificates referred to in Section 6.1(e);
(e) a Noncompetition and Nonsolicitation Agreement (the
"Noncompetition and Nonsolicitation Agreement"), substantially in the form
attached hereto as Exhibit B, executed by each of Seller and Matria;
(f) a Transition Services Agreement (the "Transition Services
Agreement"), substantially in the form attached hereto as Exhibit C, executed by
each of Seller and Matria;
(g) each of the SubLease and the SubLease (Warehouse Space)
agreements between Matria and Purchaser (collectively, the "SubLease
Agreements"), substantially in the form attached hereto as Exhibits D1 and D2,
executed by Matria;
(h) the Financial Statements (as defined in Section 3.3 herein);
(i) the "Disclosure Letter" (as defined in Section 3
hereof); and
(j) such other certificates or documents reasonably
requested by Purchaser.
2.3 Deliveries of Purchaser. At the Closing, Purchaser shall deliver to
Matria and the Seller the following (each of which shall be in form and
substance reasonably satisfactory to Seller):
(a) an amount equal to the Purchase Price less the Net Book
Value of the assets listed on Schedule 1.3A (20) as of the Closing Date (the
amount of which shall be delivered to Purchaser by Seller at least two days
prior to the Closing) less the Purchaser Payables, via wire transfer of
immediately available funds to such bank accounts as Seller has instructed
Purchaser in writing at least two days prior to the Closing;
(b) an Assumption Agreement (the "Assumption Agreement"),
substantially in the form attached hereto as Exhibit
E, executed by Purchaser;
(c) a copy of resolutions of the board of directors of
Purchaser authorizing the execution, delivery and performance of this Agreement
and any ancillary agreements by Purchaser, and a certificate of the secretary or
an assistant secretary of Purchaser, dated the Closing Date, that such
resolutions were duly adopted and are in full force and effect;
(d) the certificate referred to in Section 6.2(d);
(e) the Transition Services Agreement executed by Purchaser;
(f) the SubLease Agreements executed by Purchaser;
(g) an opinion of Proskauer Rose LLP, counsel to Purchaser,
dated as of the Closing Date addressed to Seller, in form and substance
reasonably satisfactory to Seller, addressing such matters as the Seller may
reasonably request; and
(h) such other certificates or documents reasonably
requested by Matria and the Seller.
3. REPRESENTATIONS AND WARRANTIES OF MATRIA AND QDS. Each of the
following representations and warranties is qualified by the disclosure letter,
dated as of the date hereof, as such may be updated prior to the Closing for any
changes occurring from the date hereof and until the Closing Date (the
"Disclosure Letter"), delivered to Purchaser by Seller at the Closing. Matria
and Seller hereby, jointly and severally, represent and warrant, as of the date
hereof and as of the Closing Date, to Purchaser as follows:
3.1 Organization and Qualification. Matria and Seller are corporations
duly organized, validly existing and in good standing under the laws of the
State of Delaware and have the full corporate power and authority to own, lease
and operate their properties as they now do and to carry on their businesses as
they are presently being conducted. Seller's failure to be duly qualified as a
foreign corporation to do business, and to be in good standing, in each
jurisdiction where the character of its properties owned or leased or the nature
of its activities makes such qualification necessary, will not and could not
have a "Material Adverse Effect." As used in this Agreement, the term "Material
Adverse Effect" shall mean a material adverse effect on the Business, financial
condition, results of operations, properties, assets or liabilities of the
Seller taken as a whole, or on the ability of the Seller to enter into this
Agreement and perform its obligations hereunder.
3.2 Authority Relative to this Agreement. Each of Matria and the Seller
has the requisite corporate power and authority to enter into this Agreement,
the Noncompetition and Nonsolicitation Agreement, the Transition Services
Agreement and the SubLease Agreements (collectively, and together with any
certificates, exhibits and schedules herein and therein, the "Transaction
Documents") and to perform its obligations hereunder and thereunder. The
execution and delivery of this Agreement and the other Transaction Documents and
the consummation of the transactions contemplated hereby and thereby have been
duly authorized by all necessary action on the part of each of Matria and the
Seller, and no other corporate proceedings on the part of Matria or Seller are
necessary to authorize this Agreement, the other Transaction Documents and the
transactions contemplated hereby and thereby. This Agreement and the other
Transaction Documents have been duly executed and delivered by each of Matria
and the Seller and constitute the legal, valid and binding obligation of each of
such entities, enforceable in accordance with their terms. Except as set forth
in the Disclosure Letter, neither Matria nor the Seller is subject to or
obligated under any provision of (a) its respective Certificates of
Incorporation or Bylaws, (b) any contract to which it is a party or by which it
is bound, (c) any license, franchise or permit, or (d) any law, regulation,
order, judgment or decree, which would be breached, violated or defaulted (with
or without due notice or lapse of time or both) or in respect of which a right
of termination or acceleration or a loss of a material benefit or agreement or
any encumbrance on any of its assets would be created or suffered by its
execution and performance of this Agreement or the other Transaction Documents,
except (as to clauses (b), (c) or (d) above) where such breach, violation, right
of termination or acceleration, or encumbrance, individually or in the
aggregate, would not have a Material Adverse Effect. Except as set forth in the
Disclosure Letter, neither the execution of the Transaction Documents nor the
consummation of the transactions contemplated herein and therein will require
the consent or approval of or registration or filing with any federal, state or
local government or any court, administrative or regulatory agency or commission
or other governmental authority or agency, domestic or foreign, other than where
the failure to obtain such consents or approvals or to make any such
registration or filing would not have individually or in the aggregate a
Material Adverse Effect on or prevent or materially delay Matria or Seller from
performing its obligations under this Agreement. Schedule 3.2 attached hereto
and made a part hereof, lists all of the contracts, agreements, covenants,
options, leases, guaranties and other similar arrangements (whether oral or
written) which require the consent of any party thereto or any other third
party, to assign such contracts to Purchaser pursuant to the terms of this
Agreement.
3.3 Financial Statements. The (i) unaudited balance sheet, earnings
statement and statement of cash flows of QDS as of and for the six months ended
December 31, 1998, and the years ended December 31, 1999 and December 31, 2000
(such financial statements, together with the November 30 Balance Sheet, being
hereinafter referred to, collectively, as the "Seller Financial Statements");
(ii) audited consolidated financial statements of Matria as of and for the years
ended December 31, 1998 and December 31, 1999; and (iii) the November 30 Balance
Sheet (collectively, the "Financial Statements") (a) were or will be prepared in
accordance with GAAP applied on a consistent basis (except as noted therein and
except that the Seller Financial Statements do not and will not contain any
notes, do not and will not include allocations of assets and services provided
by Matria and do not and will not include accruals of vacation, sick leave or
group health costs and the November 30 Balance Sheet does not reflect usual
quarterly and year-end adjustments.); (b) fairly present or will present the
assets, liabilities and financial position of the Seller as of their respective
dates, and the results of the Seller's operations and the sources and uses of
funds for the periods then ended, except as shown in the Disclosure Letter with
regard to subsequently discovered liabilities and except that the Seller
Financial Statements do not and will not contain any notes, do not and will not
include allocations of assets and services provided by Matria and do not and
will not include accruals of vacation, sick leave or group health costs and the
November 30 Balance Sheet does not reflect usual quarterly and year-end
adjustments. The Disclosure Letter contains a complete and correct copy of the
Financial Statements other than the balance sheet, earnings statement and
statement of cash flows of QDS as of and for the year ended December 31, 2000
which shall be delivered to Purchaser on or prior to Closing. During the Interim
Period, each of Matria and the Seller shall maintain its books and records
related to the Business in the usual, regular and ordinary course of the
Business on a basis consistent with past practices.
3.4 Absence of Certain Events. Except as set forth in the
Disclosure Letter, there has not been since November 30, 2000:
(a) any adverse change in the Business or in the financial
condition, assets, liabilities, earnings or results of operations of the
Business or the Seller that constitutes a Material Adverse Effect;
(b) any damage, destruction or casualty loss (whether or not
covered by insurance) that constitutes a Material Adverse Effect;
(c) any material change in the accounting methods or
business practices followed by the Seller or Matria (with respect
to the Seller);
(d) any direct or indirect redemption or purchase or other
acquisition by the Seller of any shares of its capital stock or
any acquisition or proposed acquisition of real property by
Seller;
(e) any declaration, setting aside or payment of any
dividend or distribution (other than cash) by Seller with respect
to its capital stock;
(f) any increase in any manner of the benefits or other
compensation of any of Seller's employees except normal increases in accordance
with established prior practice; any payment or agreement to pay any pension,
retirement or severance allowance not required by any existing plan or agreement
to any current or former officer or employee of Seller; or any amendment to any
employment agreement or any incentive compensation, profit sharing, stock
purchase, stock option, stock appreciation rights, savings, consulting, deferred
compensation, retirement, pension or other "fringe benefit" plan or arrangement
with or for the benefit of any current or former officer or employee of Seller;
(g) any sale, transfer, lease, assignment or other disposition
by Seller of any of its property, or any tangible or intangible asset used in
the operation of the Business, to any other person or entity, except in the
ordinary course of the Business;
(h) any amendment or termination of any material oral or
written contract, agreement or license to which Seller is a party
or by which it is bound;
(i) any revaluation by Seller of any of its Assets;
(j) any mortgage, pledge, or other encumbrance of any of the Assets
(k) any incurrence of any material liability or obligation
not in the ordinary course of business; or
(l) any agreement (oral or written) by Seller to do any of
the things described in this Section 3.4.
3.5 Accounts Receivable; Accounts Payable.
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(a) The accounts receivable and accounts payable shown on the
November 30 Balance Sheet (as the same have changed since the date thereof)
represent sales made or services provided and expenses incurred in the ordinary
course the Business consistent with past practices. Except as set forth in the
Disclosure Letter, none of such accounts receivable is the subject of a pledge
or assignment to secure debt, is subject to any Liens, or has been placed for
collection with any attorney or collection agency or similar individual or firm.
Except as set forth in the Disclosure Letter, to the "Knowledge" (as defined in
Section 8.13 hereof) of Matria or the Seller, no referral source or payor
accounting for more than 2.5% of the Seller's total revenues during calendar
year 2000 (i) has expressed dissatisfaction with the services of the Seller,
other than those types and immaterial amounts of complaints incurred in the
ordinary course of the Business or (ii) has expressed an intent to reduce
materially its business with the Seller or that any such referral source or
payor will be unable to pay for its purchases.
(b) Schedule 3.5 includes a break-down of Seller's revenues
during the period between January 1, 2000 and November 30, 2000 between (i)
Medicare; (ii) Medicaid; (iii) revenues received from persons with which an
agreement (listed on Schedule 1.2(f)) exists; and (iv) all other persons.
3.6 No Undisclosed Liabilities. Except as set forth in the Disclosure
Letter or as may have been or may be incurred in the ordinary course of business
between the Balance Sheet Date and the Closing Date, or as reflected in or
provided for in the Financial Statements (in each case, as of the date of each
Financial Statement), the Seller has no debts, liabilities or obligations,
whether accrued, absolute, contingent or otherwise, and whether due or to become
due, which individually or in the aggregate are material to the financial
condition, assets, liabilities, earnings, or results of operations of the
Business.
3.7 Litigation. Except as set forth in the Disclosure Letter, there are
no actions, suits, claims, investigations or proceedings (legal, administrative
or arbitrative) pending or, to the Knowledge of Matria or Seller, threatened by
or against (i) Seller or against (ii) any of Seller's affiliates, employees or
consultants relating to the Business or the transactions contemplated hereby,
whether at law or in equity and whether civil or criminal in nature, before or
by any federal, state, municipal or other court, arbitrator, governmental
department, commission, agency or instrumentality, domestic or foreign, nor are
there any judgments, decrees or orders of any such court, arbitrator,
governmental department, commission, agency or instrumentality outstanding
against Seller.
3.8 Title to Properties and Sufficiency of Assets. Except as set forth
in the Disclosure Letter, Seller has good and marketable title to all of the
Assets, free and clear of all Liens other than Permitted Liens. Except as set
forth on the Disclosure Letter, the Assets, together with the Excluded Assets,
constitute all of the assets necessary to conduct the Business as such Business
was conducted prior to and is conducted as of the date hereof, and only the
Assets and Excluded Assets are reflected on the November 30 Balance Sheet. The
Disclosure Letter sets forth all capital expenditures that, to the Knowledge of
Matria or Seller, are necessary in the next 12 months in order to operate the
Business as currently conducted and as currently proposed to be conducted.
3.9 Condition of Tangible Property. Except as set forth in the Disclosure
Letter, all real and personal property, equipment and other tangible property
included in the Assets is in good repair and operating condition (normal wear
and tear excepted).
3.10 Information Technology System. The Seller is currently using the PaceArt
and AS-400 Information Technology Systems. Except as set forth on the Disclosure
Letter, such information technology systems are in good repair and operating
condition and provide the Seller with all Information Technology services and
functions necessary to operate the Business as such Business is conducted as of
the date hereof and as currently proposed to be conducted.
3.11 Lease of Real and Personal Property. Seller does not lease from or
to any person, any real property. The Disclosure Letter sets forth a list of all
leases pursuant to which Seller leases, as lessee, personal property for use in
its Business and which either (i) are or should have been reflected as
liabilities on the November 30 Balance Sheet or (ii) provide for annual rental
payments in excess of $1,000 per annum. Except as set forth in the Disclosure
Letter, as to all leases listed in the Disclosure Letter, the Seller (A) has
performed all material obligations required to be performed by it prior to the
date hereof and (B) is not in default or, to its Knowledge, alleged to be in
default. To the Knowledge of Matria and the Seller, there exists no material
default, or any event which upon the giving of notice or passage of time would
give rise to any material default, in the performance of any obligation to be
performed by any other party to any of such leases.
3.12 Intellectual Property. All patents, copyrights, trademarks,
service marks, trade names or other registrable intellectual property owned,
used or held for use by QDS or any of its affiliates in connection with the
Business are listed in the Disclosure Letter. Except as set forth in the
Disclosure Letter, Seller owns or has the right to use the Intellectual Property
in the manner used or contemplated to be used by it in the Business; there are
no pending or, to Matria's or Seller's Knowledge, threatened claims or
proceedings against Matria or Seller asserting that Seller's use of any
Intellectual Property infringes the rights of any other person or entity; Seller
has no Knowledge of any use by it that may, with notice or passage of time, give
rise to such a claim; and Seller has not licensed or otherwise assigned any
rights in or to the Intellectual Property used in the Business to any other
person or entity. The Intellectual Property comprises all intellectual property
rights needed to operate the Business as such Business was operated prior to and
is operated as of the date hereof. Each of Matria and the Seller has taken all
reasonable precautions to protect all confidential information and trade secrets
of the Business.
3.13 Governmental Authorization and Compliance With Laws. The Seller
has complied in a timely manner with all laws and governmental regulations and
orders relating to any of the Assets, or applicable to the Business, including,
but not limited to, the healthcare, insurance, labor, equal employment
opportunity, occupational safety and health, environmental, hazardous or medical
waste disposal and antitrust laws, except where the failure to so comply would
not, individually or in the aggregate, have a Material Adverse Effect. Seller
has not been charged or received any inquiries, except as set forth in the
Disclosure Letter, in or relating to any violations of any state or federal
statute or regulation involving fraudulent or abusive practices relating to its
reimbursement from third party payors or its participation in state or federally
sponsored reimbursement programs, including but not limited to fraudulent
billing practices, nor, to the Knowledge of Matria or Seller, has Seller been
investigated for such violations. Except as set forth on Schedule 3.13, no
significant amount of funds are now or are expected by Matria or the Seller to
be withheld by any Medicare or Medicaid carrier, state agency or third party
payor, other than pursuant to practices or policies of applicability to multiple
parties within the industry.
3.14 Licenses and Permits.
--------------------
(a) QDS has obtained all licenses and permits necessary to
conduct the Business and to own and operate its assets and such licenses and
permits are valid and in full force and effect except where the failure to
obtain such licenses and permits would not individually or in the aggregate have
a Material Adverse Effect. QDS has all supplier numbers and authorizations
necessary to receive payment for its services from and covered by Part B of the
Medicare Program ("Medicare Authorizations"). No defaults or violations exist or
have been recorded in respect of any license or permit of QDS other than
defaults or violations which would not reasonably be expected individually or in
the aggregate to have a Material Adverse Effect. No proceeding is pending or, to
the best Knowledge of Matria and the Seller, threatened, looking toward the
revocation, limitation or non-renewal or otherwise in connection with any such
license, permit or Medicare Authorizations, except for pending or threatened
proceedings that would not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.
(b) The Seller has delivered or made available for inspection
to Purchaser a true and complete list of each such license and permit, and each
pending application for any license or permit, relating to the Business. All of
such pending applications are in good standing and, to the Knowledge of the
Seller, without challenge of any kind, and each statement, application and other
document submitted or filed by Matria, on behalf of Seller, or Seller to or with
any federal, state or other governmental agency or authority, or to or with any
other person or entity, for purposes of obtaining a new or renewed license,
permit or Medicare Authorization of any type described in this Section 3.14 in
connection with the transactions contemplated hereby is true and complete, and
except as set forth in the Disclosure Letter, none of the rights of Seller under
any license, permit or Medicare Authorization will be impaired by the
consummation of the transactions contemplated hereby, except, as to the
foregoing matters, for such challenges, incompletenesses or inaccuracies,
nondisclosures or impairments which do not relate to the Business or which would
not, individually or in the aggregate, have a Material Adverse Effect.
(c) Neither Seller nor Matria, as with respect to the
Business, has received any written notice from and has not been made a party to
any proceeding brought by any governmental authority alleging that (i) it is, or
may be in violation of, any such law, governmental regulation or order, (ii) it
must change any of its business practices to remain in compliance with such law,
governmental regulation or order, (iii) it has failed to obtain any license,
permit or Medicare Authorization required for the conduct of its business, or
(iv) it is in default under or violation of any license, permit or Medicare
Authorization.
3.15 Benefit Plans. The Disclosure Letter contains a true and complete
list of each pension, retirement, savings, profit sharing, deferred
compensation, incentive compensation, bonus, stock option, severance or
termination pay, medical, dental, life or other insurance, disability plan or
other employee benefit plan or program, agreement or arrangement maintained,
sponsored or contributed to by Seller (or by Matria) covering employees of
Seller, former employees of Seller, or directors or former directors of Seller
(including, but not limited to, any "employee benefit plan", as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), all of the foregoing being herein called "Benefit Plans." With
respect to the Benefit Plans, individually and in the aggregate, Seller has made
available to Purchaser a true and correct copy or description of: (a) the most
recent annual report (Form 5500) filed with the IRS, if any, (b) such Benefit
Plan, (c) any summary plan description relating to such Benefit Plan, (d) each
trust agreement and group annuity contract, if any, relating to such Benefit
Plan, and (e) the most recent actuarial report or valuation relating to each
Benefit Plan subject to Title IV of ERISA (if any).
With respect to the Benefit Plans, individually and in the aggregate,
no event has occurred and, to the Knowledge of Matria or the Seller, there
currently exists no condition or set of circumstances, in connection with which
Seller could be subject to any liability under ERISA, the Code, or any other
applicable statute, order or governmental rule or regulation.
(a) Except as noted in the Disclosure Letter, Seller does not
sponsor or maintain any Benefit Plan or related trust that is intended to be
qualified, respectively, under Section 401(a) and Section 501(a) of the Code.
(b) With respect to the Benefit Plans, individually and in the
aggregate, all required reports and descriptions have been appropriately filed
and distributed.
(c) With respect to the Benefit Plans, individually and in the
aggregate, there has been no prohibited transaction within the meaning of
Section 406 of ERISA or Section 4975 of the Code and there has been no action,
suit, grievance, arbitration or other claim with respect to the administration
or investment of assets of the Benefit Plans (other than routine claims for
benefits made in the ordinary course of plan administration pending or, to the
Knowledge of Matria and the Seller, threatened, and none of Matria or the Seller
has any Knowledge of any facts which are reasonably likely to give rise to any
such action, suit grievance, arbitration or other claim), except in any case for
those which would not have a Material Adverse Effect.
(d) Seller has never sponsored or maintained any Benefit Plan
subject to the provisions of Title IV of ERISA or been subject to any potential
liability under such Title as a result of the sponsorship of any such plan by an
"affiliate" as defined in Section 407(d)(7) of ERISA, and Seller has never been
obligated to make any contributions to any "multiemployer plan" as defined in
Section 3(37) of ERISA.
(e) None of the Benefit Plans includes provisions that would
require Purchaser to assume or would impose upon Purchaser any obligation to
provide benefits thereunder.
3.16 Taxes.
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(a) Except as set forth in the Disclosure Letter, with respect
to the Assets, Seller has duly and timely filed all tax returns required to be
filed by it, and all taxes shown to be due on such tax returns have been paid in
full by it. There are no liens for taxes (other than for taxes not yet assessed
or due and payable) on any of the Assets and there are no rulings or other
agreements executed with any tax authority relating to the Assets that will be
binding upon the Purchaser after the Closing. The Seller has previously
delivered or made available to Purchaser complete and correct copies of its
federal income tax returns for each of the years 1997, 1998 and 1999. For the
purpose of this Agreement, the term "tax" (including, with correlative meaning,
the terms "taxes" and "taxable") shall include all federal, state, local and
foreign income, profits, franchise, gross receipts, payroll, sales, employment,
use, property, withholding, excise and other taxes, duties or assessments of any
nature whatsoever, together with all interest, penalties and additions imposed
with respect to such amounts.
(b) All tax returns filed by the Seller are complete and
accurate in all material respects. Except as set forth in the Disclosure Letter,
Seller is not currently the beneficiary of any extension of time with which to
file any tax return.
(c) To the Knowledge of Matria and the Seller, no claim has
ever been made by an authority in a jurisdiction where Seller does not file tax
returns that Seller is or may be subject to taxation by that jurisdiction.
(d) Seller has withheld and paid all taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, shareholder or other third party who has
performed services in connection with the Business.
(e) Seller has not waived any statute of limitations in
respect of taxes or agreed to any extension of time with respect to a tax
assessment or deficiency.
(f) Except as set forth in the Disclosure Letter, there is no
notice of deficiency, assessment, audit, examination, claim or other dispute
concerning any tax liability of the Seller either (i) raised by any governmental
entity in writing or (ii) as to which Matria or Seller has any Knowledge based
upon any contact with any agent of any governmental entity.
3.17 Environmental Matters. The operations of the Business are
currently in compliance with federal and state and local laws, ordinances,
regulations and orders relating to the protection of the environment applicable
to its operations and business at such facility, except for such non-compliance
as would not reasonably be expected to have a Material Adverse Effect. To
Seller's and Matria's Knowledge, Seller has received no written notice from any
governmental authority of any material non-compliance with such laws,
ordinances, regulations or orders by Seller.
3.18 Labor Relations. Except as set forth in the Disclosure
Letter:
(a) Seller has paid or made provision for payment of all
salaries, wages, and vacation pay accrued through the Closing Date, is in
compliance in all material respects with all federal and state laws respecting
employment and employment practices, terms and conditions of employment, wages
and hours and non-discrimination in employment, and is not engaged in any unfair
employment practice;
(b) There is no charge pending or, to the Knowledge of the
Seller, threatened before any court or agency alleging unlawful discrimination
in employment practices or any unfair labor practice by Seller nor, to the
Knowledge of the Seller, is there a basis for any such claim;
(c) There is no labor strike, dispute, slowdown or stoppage
actually pending or, to the Knowledge of Matria or the Seller,
threatened against or involving Seller;
(d) There are no collective bargaining agreements binding on
Seller;
(e) No collective bargaining agreement has been requested by
any employee representative or labor organization or is currently
being negotiated by Seller;
(f) Seller has not experienced work stoppage or any other
material labor difficulty since its inception; and
(g) No employees of Seller are represented by any labor or
trade union and to the Knowledge of Seller and Matria, no movement to designate
a collective bargaining unit to represent any of the employees of Seller exists
or is threatened.
3.19 Insurance. The Disclosure Letter sets forth a true and complete
list, showing company, type and amount of coverage, of all insurance policies
for the benefit of the Seller, its employees or third parties which are carried
by or cover the Seller. Each such policy is in full force and effect and shall
continue to provide coverage to the Business and the Assets through the Closing
Date. Seller is not in material default with respect to any provision of any of
its insurance policies nor has it failed to give any notice or present any claim
thereunder in due or timely fashion or as required by any of such insurance
policies which would result in failure to recover under such policies. Seller
has materially complied with the insurance requirements of all leases to which
it is a party. None of Matria or the Seller has received any actual notice of
cancellation or indication of intention not to renew any insurance policy.
3.20 Certain Contracts. Except as listed in the Disclosure Letter:
-----------------
(a) Neither Seller nor Matria has any employment agreement or
incentive compensation, profit sharing, stock option, stock appreciation rights,
stock purchase, savings, consultant, deferred compensation, retirement, pension
or other plans or other benefit arrangements or practices with or for the
benefit of any officer, employee or any other person who performs services in
connection with the Business, or any consulting agreement or arrangement with
any officer, employee, former officer or former employee who performs services
in connection with the Business;
(b) Other than any agreement listed on Schedule 1.2(f), no
officer or director of Seller or any other affiliate of Seller or Matria has any
agreement (oral or written) with Seller or any interest in any of the real,
personal or Intellectual Property used in or pertaining to the Business;
(c) Seller is not a party to or bound by any contract,
purchase order or sales order, other than those listed or described in Schedules
1.2(f) or 1.3A hereof, pursuant to which any party thereto is obligated to make
payments (not yet made) aggregating more than $10,000 in any 12 month period;
(d) All agreements listed on Schedule 1.2(f) and all mortgages
and liens to which Seller is a party, or by which any of its assets or
properties are bound or affected, are in full force and effect and binding
obligations of the parties thereto, and no event or condition has occurred or
exists, or to the Knowledge of Matria and the Seller, is alleged by any of the
other parties thereto to have occurred or existed, which constitutes, or with
the lapse of time or giving of notice or both might constitute, a material
default or a basis for acceleration of any obligation, or other claim of
non-performance thereunder or in respect thereof on the part of Seller;
(e) Seller is not a party to any agreement and has no policy,
program or arrangement (whether or not in writing), providing for severance or
termination payments, or payments by Seller in connection with any change in
control of Seller; and
(f) Seller is not a party or subject to any non-competition
agreement, obligation or commitment, or any other agreement, obligation or
commitment restricting its ability to do business.
3.21 Names and Addresses; Compensation. Set forth in the Disclosure
Letter is a complete and accurate list of the names and annual compensation of
all employees and independent contractor sales representatives of Seller and who
are paid $30,000 or more in base salary per annum and/or other cash compensation
(the "Key Employees"). Also set forth in the Disclosure Letter is a list of
names of employees of QDS and all QDS independent contractor sales
representatives. The location of employment records, if any, pertaining to the
Key Employees is set forth in the Disclosure Letter. The Disclosure Letter also
contains a list of all written agreements and summaries of all existing oral
agreements with any consultants and agents of the Seller.
3.22 Warranties. Seller does not make, and has not made any
warranties to any person with respect to its services or
otherwise.
3.24 Operation of the Business. During the Interim Period, Matria, as
with respect to only the Business, and the Seller have operated the Business in
the usual, regular and ordinary course in accordance with past practices and
operations, have preserved intact the present organization of the Business, and
have used all commercially reasonable efforts to keep available the services of
the present officers and employees of the Business and to preserve the Business'
goodwill and the Business' relationships with its, customers, suppliers and
others having business dealings with it.
3.25 Full Disclosure. No statement contained in (a) this Agreement, (b)
the Disclosure Letter, or (c) any of the Transaction Documents or other writing
delivered to Purchaser pursuant to the provisions of any of them, taken as a
whole, upon execution and as of the Closing Date contains or will contain any
untrue statement of a material fact or omits to state any material fact
necessary, in the light of the circumstances under which it was made, to make
the statements therein not misleading.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants, as of the date
hereof and as of the Closing Date, to Matria and QDS as
follows:
4.1 Organization and Qualification. Purchaser is a
corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware.
4.2 Authority Relative to this Agreement. Purchaser has the requisite
corporate power and authority to enter into this Agreement and each of the other
Transaction Documents and to perform its obligations hereunder and thereunder.
The execution and delivery of this Agreement and the other Transaction Documents
and the consummation of the transactions contemplated hereby and thereby have
been duly authorized by all necessary action on the part of Purchaser, and no
other corporate proceedings on the part of Purchaser are necessary to authorize
this Agreement, the other Transaction Documents and the transactions
contemplated hereby and thereby. This Agreement and the other Transaction
Documents have been duly executed and delivered by Purchaser and constitute the
legal, valid and binding obligation of Purchaser, enforceable in accordance with
their terms. Purchaser is not subject to or obligated under any provision of (a)
its Certificate of Incorporation or Bylaws, (b) any contract to which it is a
party or by which it is bound, (c) any license, franchise or permit, or (d) any
law, regulation, order, judgment or decree, which would be breached, violated or
defaulted (with or without due notice or lapse of time or both) or in respect of
which a right of termination or acceleration or a loss of a material benefit or
agreement or any encumbrance on any of its assets would be created or suffered
by its execution and performance of this Agreement or the other Transaction
Documents, except (as to clauses (b), (c) or (d) above) where such breach,
violation or right which would not individually, or in the aggregate, prevent or
materially delay Purchaser from performing its obligations under this Agreement.
Neither the execution of the Transaction Documents nor the consummation of the
transactions contemplated herein and therein will require the consent or
approval of or registration or filing with any federal, state or local
government or any court, administrative or regulatory agency or commission or
other governmental authority or agency, domestic or foreign, other than where
the failure to obtain such consents or approvals or to make any such
registration or filing would not have individually or in the aggregate a
Material Adverse Effect on or prevent or materially delay Purchaser from
performing its obligations under this Agreement.
5. ADDITIONAL AGREEMENTS.
---------------------
5.1 Expenses. All fees and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such fees or expenses.
5.2 Operation of the Business. From the date of this
Agreement through the Closing Date, except with the prior
written consent of Purchaser:
(a) Seller and Matria shall operate the Business in the
ordinary course and consistent with past practice and in substantial conformity
with all laws, ordinances, regulations, rules or orders, and all leases,
commitments and other agreements, and all licenses, permits, and other
instruments;
(b) Seller and Matria shall use all reasonable commercial
efforts to preserve the goodwill and business of the customers, suppliers and
others having significant business relations with the Business;
(c) Seller and Matria shall not, except in the ordinary
course of business and consistent with past practice:
(i) enter into any transaction for or which results in
the sale or transfer of control of the Business or any part
of it and Seller shall not, directly or indirectly, make,
solicit or encourage proposals from, hold discussions with
or furnish information to any person concerning the above;
(ii) enter into any material agreement with respect to
the Intellectual Property;
(iii) sell or transfer any of the Assets, except that
items may be sold provided such items are replaced with
items of equal or greater value;
(iv) except to the extent required by applicable law or
as required by the terms of any currently effective
employment agreement, grant or agree to grant any general
increases in the rates of salaries or compensation or
bonuses payable to its employees;
(v) except to the extent required by applicable law,
required by the terms of any currently effective employment
agreement, or as otherwise contemplated by this Agreement,
hire or terminate the employment of any Key Employee; or
(vi) except to the extent required by applicable law or
as required by the terms of any currently effective
employment agreement, provide for any new pension,
retirement or other employment benefits for any of the
employees of the Seller or any increase in any existing
benefits;
(d) Seller and Matria shall not, except in the ordinary course
of business consistent with past practice: (i) enter into or renew any material
lease, agreement or commitment relating to the Business that, if entered into
prior to the date of this Agreement, would have been listed on Schedule 1.2(f)
herein or (ii) cause or take any action to allow any agreement listed on such
schedule to be assumed by Purchaser pursuant to this Agreement to lapse (other
than in accordance with its terms) or to be modified in any materially adverse
respect; and
(e) Seller shall maintain all of its assets relating to the
Business in customary repair, maintenance and condition, except to the extent of
normal wear and tear, replace all items of equipment at time intervals, in the
ordinary course consistent with past practice, and repair or replace any asset
that may be materially damaged or destroyed in the ordinary course consistent
with past practice.
5.3 Employees and Employee Benefits.
-------------------------------
(a) Matria and Seller shall use all reasonable business
efforts to retain the services of the Key Employees through the Closing Date and
to assist and support Purchaser in hiring all Key Employees and all other
employees of the Seller that Purchaser shall seek to hire as of the Closing
Date. Prior to or at the Closing, Purchaser may offer employment to some or all
employees of the Seller other than the employees listed on Schedule 5.3 attached
hereto, in the Purchaser's sole discretion, upon such terms and conditions as
shall be determined by Purchaser in its sole discretion. The Seller will retain
all of the Benefit Plans currently maintained by the Seller as of the date of
this Agreement, and Purchaser will not assume any obligations under any such
plans. Matria and Seller will indemnify, defend and hold harmless Purchaser (and
its directors, officers, employees and affiliates) with respect to such Benefit
Plans for and against any and all claims, actions, judgments or causes of action
based upon or arising out of or otherwise in respect of any such plan. All
employees of the Seller hired by Purchaser shall be given full credit for all
time worked for the Seller for purposes of determining their participation and
vesting under the employee benefit plans and programs of Purchaser applicable to
such employees. Unless prohibited by law, the Seller shall provide to Purchaser
all personnel records for the employees of the Seller hired by Purchaser,
including, without limitation, names, social security numbers, dates of hire,
dates of birth, number of hours worked each year, and salary history. Matria and
Seller hereby agrees not to employ, directly or indirectly, for a period of 12
months after the Closing Date, any employee of Seller to whom Purchaser has
offered employment prior to or on the Closing Date and who decides not to accept
employment with Purchaser.
(b) Without limiting any of the provisions herein, Purchaser
will not assume any of the Benefit Plans, or any rights, duties, obligations or
liabilities thereunder, nor shall it become a successor employer or be
responsible in any way for Seller's or a common control entity's (as such term
is defined under section 4.14(a) or (b) of the Internal Revenue Code of 1986, as
such term may be amended from time to time) participation in or obligations or
responsibilities with respect to any Benefit Plan, nor shall it be obligated by
this Agreement to make any provision with respect to employee benefits after the
Closing Date, except as required by this Section 5.3 and by Section 1.4(b). No
assets of any Benefit Plan shall be transferred to Purchaser or to any plan of
Purchaser. Seller shall, after the Closing Date, comply with the continuation
coverage requirements of Section 601 through 609 of ERISA and Section 4980B of
the Code with respect to the employees; provided, however, that any such
continuing coverage obligations resulting from a qualifying event that occurs
after such employees are enrolled in Purchaser's health plan shall be the
responsibility of Purchaser.
(c) To the extent permitted by law, Purchaser will be
permitted reasonable access to records of employees of Seller and Matria prior
to Closing for the purpose of setting up Purchaser's benefit plans for such
employees.
(d) With respect to any persons who received "equity based"
incentives calculated based upon the fair market value of shares of WebMD, Inc.
(f/k/a Endeavor Technologies, Inc.) (the "WebMD benefits") and who are hired by
Purchaser pursuant to Section 5.3 herein, Matria shall provide that solely for
the purposes of determining eligibility and the exercise rights of such persons
with respect to any such WebMD Benefits, the employment of such persons with
Purchaser (or any of its assigns) shall be deemed to be continued employment by
Seller. .
5.4 Further Assurances. Upon the reasonable request of any party to
this Agreement, each party agrees to take any and all actions, including,
without limitation, the execution of certificates, documents, or instruments
necessary or appropriate to give effect to the terms and conditions set forth in
this Agreement.
5.5 Bulk Sales Law. As an inducement to Purchaser to waive compliance
with the provisions of any applicable bulk sales or transfer laws, Seller hereby
agrees that all of its debts, obligations and liabilities which are not
expressly assumed by Purchaser under this Agreement will be paid and discharged
by Seller as and when they become due and payable in the ordinary course of the
Business. Matria and the Seller, jointly and severally, further agree to
indemnify and hold Purchaser harmless from any and all liabilities incurred by
Purchaser by reason of or arising out of claims made by creditors with respect
to any non-compliance with any applicable bulk sales or transfer laws (except to
the extent such claims constitute Assumed Liabilities).
5.6 Corporate Name Changes. On the Closing Date, immediately after the
Closing hereof, QDS shall change its corporate name, at Matria's expense, to
another name which is not confusingly similar to "Quality Diagnostic Services,
Inc.," "QDS" or any similar name. Matria and Seller further agree that after the
Closing Date they shall no longer use any of such names without the prior
written consent of Purchaser in each instance, except in connection with the
collection of accounts receivable and payment of Excluded Liabilities.
5.7 Operations of QDS. After the Closing, QDS agrees to discontinue any
or all businesses or operations, except for (i) the performance of any
obligations QDS may have to Purchaser pursuant to and in accordance with the
terms of this Agreement or the Transition Services Agreement, including
obligations with respect to Excluded Liabilities; and (ii) the collection of
accounts receivable of QDS as of the date of the Closing.
5.8 Notice of Employee's Termination. After the transition of the
payroll from Matria and Seller to Purchaser, if Matria so requests in writing
and identifies therein the employees of the Seller hired by Purchaser pursuant
to this Agreement which have balances in their 401(k) accounts maintained by
Seller or Matria as of the Closing Date, Purchaser shall inform Matria of any
termination of any such employee's employment with Purchaser within a reasonable
period of time after such termination. In addition, with respect to the
employees listed on Schedule 5.8 attached hereto, if at any time from the
Closing and until December 31, 2001 Matria inquires, Purchaser shall disclose to
Matria whether or not such employees are still employed by Purchaser, provided
that Matria shall not make such inquiry other than in connection with the WebMD
Benefits.
5.9 Further Action. Upon the terms and subject to the conditions of this
Agreement, each of Matria and the Seller shall use all commercially reasonable
efforts to take or cause to be taken all actions and to do or cause to be done
all things necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by this
Agreement. Without derogating from the above, Matria shall cause Seller to take
all actions and meet all obligations under this Agreement.
5.10 Additional Financial Information. Matria and QDS shall provide Purchaser,
as soon as possible but no later than the Closing Date, the unaudited balance
sheet, cash flow and income statement of QDS for the period ending or as of
December 31, 2000. In addition, if and to the extent Purchaser shall decide to
create audited financials for QDS for any period prior to the Closing, Seller
and Matria shall provide any relevant information and, at Purchaser's expense,
assist Purchaser in creating such financials.
5.11 Access to Information Prior to Closing. Prior to the Closing Date and to
the extent permitted by applicable law, Purchaser and its representatives may
make such reasonable investigation of the Assets and the Business as it may
reasonably request and Seller and Matria shall give to Purchaser and to its
counsel, accountants and other representatives reasonable access during normal
business hours throughout the period prior to the Closing to all of the Assets,
books, commitments, agreements, records, employees, customers, suppliers and
files of Seller relating solely to the Business and the Assets.
5.12 Records.
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(a) After the Closing Purchaser's management shall have access
(to the same extent Seller's management had such access prior to the Closing
Date) to all files and records retained by Matria or Seller, in paper,
electronic or any other form, concerning the Assets or the Business, that are
necessary to operate the Business after the Closing Date as the Business was
operated prior to the Closing Date provided that, such right of access shall
terminate upon fulfillment of Seller's obligations under Section 5.12(b) below.
(b) On or prior to Closing, Purchaser shall deliver to Seller a description of
all information retained by Seller or Matria and that is required by Purchaser
in order to operate the Business after the Closing Date as the Business was
operated prior to the Closing Date, and the format in which Purchaser requests
to receive such information. Within 30 days of the Closing, Seller shall deliver
to Purchaser such requested information in the requested format.
5.13 Access to Information After Closing.
- --------------------------------------------
(a) At any time after the Closing Date Seller and Matria shall give to Purchaser
and to its counsel, accountants and other representatives reasonable access
during normal business hours and upon reasonable notice to all books,
commitments, agreements, records and files of Seller retained by Seller and/or
Matria relating to the Business and the Assets.
(b) At any time after the Closing Date Purchaser shall give to Matria and Seller
and to its counsel, accountants and other representatives reasonable access
during normal business hours and upon reasonable notice to all books,
commitments, agreements, records and files of QDS assigned or transferred to
Purchaser and relating to the operation of Seller before the Closing and after
the Closing as described in Section 5.7 herein.
5.14 Supplemental Notices. Matria and Seller shall promptly notify Purchaser in
writing of, and furnish any information that Purchaser may reasonably request
with respect to any claim, litigation, proceeding or governmental investigation
threatened or asserted by or against Seller relating to the Business or the
Assets or any material development with respect to any such claim, litigation,
proceeding or investigation or any other material event affecting the Business.
Each party shall notify the other party in writing of any event or condition
that would cause any of the conditions to such party's obligation to consummate
the transaction not to be fulfilled or that would have been required to have
been disclosed to the other party under this Agreement if such event or
situation would have occurred or existed prior to the execution of this
Agreement.
5.15 Sales and Transfer Taxes. Seller shall be responsible for paying any and
all state and local sales and use taxes payable in connection with the sale of
the Assets and any stamp or transfer taxes in connection with the transactions
contemplated herein.
5.16 Collection of Receivables. From and after the Closing Date, each party
shall inform of and transfer to the other party any amounts received by such
party and that such party believes represent payments due to the other party for
services provided by the other party.
5.17 Referrals; Communications. From the date of the Closing, Matria or Seller
will promptly refer to Purchaser any clients, suppliers or any other person who
may contact Seller with respect to the Business by person, telephone, faxes,
e-mails, Seller's Web site or otherwise and send to Purchaser any assets,
enrollment forms or any other materials or communications received from
customers or users of any of the Assets or otherwise in connection with the
Business (other than with respect to any Excluded Assets or Excluded
Liabilities). In addition, to the extent Seller's telephone and facsimile
numbers are not assignable to Purchaser, Matria and Seller shall allow Purchaser
exclusive use of such telephone and facsimile numbers (and Purchaser shall
reimburse Seller for such use) for as long as Purchaser remains in the premises
in which Seller has operated the Business prior to Closing.
5.18 Telemed Technologies International. Notwithstanding any other provision of
this Agreement but subject to Section 7 and the last sentence of 7.4(c) herein,
neither Matria nor Seller shall have any liability to Purchaser based on any
repudiation or termination by Telemed of the Telemed Agreement or by Telemed's
non-performance thereunder; nor shall any such repudiation, termination or
non-performance, or any actual or threatened litigation with Telemed, constitute
a failure of a condition to Purchaser's obligation to consummate the purchase of
the Assets or provide a basis for any adjustment to the Purchase Price.
6. Conditions Precedent to Closing.
-------------------------------
6.1 Conditions Precedent to the Obligations of Purchaser. Purchaser's
obligation to consummate the purchase of the Assets under this Agreement is
subject to the fulfillment, at or prior to the Closing, of each of the following
conditions (any of which may be waived in writing by Purchaser):
(a) each representation and warranty of Seller and Matria
contained in this Agreement, the breach of which, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect, shall
be true at and as of the time of the Closing with the same effect as though such
representation and warranty had been made again at and as of that time (except
for changes contemplated by this Agreement, and except for any representation
and warranty made as of a specific date, which shall be true as of such date);
(b) Seller and Matria shall have performed and complied in all
material respects with each obligation, covenant and condition required by this
Agreement to be performed or complied with by each of them prior to or at the
Closing;
(c) there shall not be in effect any injunction or restraining
order issued by a court of competent jurisdiction prohibiting the consummation
of the transactions contemplated by this Agreement, and there shall not be any
judicial, administrative or arbitral actions, claims, suits investigations,
proceedings or governmental proceeding pending or, to the Knowledge of
Purchaser, threatened against Purchaser, preventing the consummation of the
transactions contemplated by this Agreement;
(d) there shall have been no change in the condition
(financial or otherwise) or results of operations of the Business since the date
of this Agreement that would reasonably be expected to have a Material Adverse
Effect;
(e) Purchaser shall have been furnished with certificates of
executive officers of each of Seller and Matria, dated the Closing Date, in form
and substance reasonably satisfactory to Purchaser, certifying as to the
fulfillment of the conditions set forth in clauses (a) and (b); and
(f) Purchaser shall have received all government
approvals required to consummate the transactions
contemplated by this Agreement; and
(g) Seller and Matria shall have received all necessary
approvals, waivers and consents under the Credit Agreement, dated as of January
19, 1999 among Matria Healthcare, Inc., certain lenders named therein and First
Union National Bank, as administrative agent (the "Credit Agreement"), in order
for Seller to consummate the transactions contemplated by this Agreement, and
the lenders thereunder shall have released their lien on the Assets and executed
such UCC-3 termination statements or other documents necessary to evidence such
release.
6.2 Conditions Precedent to the Obligations of Seller. Seller's
obligation to consummate the sale of the Assets under this Agreement is subject
to the fulfillment, at or prior to the Closing, of each of the following
conditions (any of which may be waived in writing by Seller):
(a) each representation and warranty of Purchaser contained in
this Agreement shall be true at and as of the time of the Closing, with the same
effect as though such representation and warranty had been made again at and as
of that time (except for changes contemplated by this Agreement, and except for
any representation and warranty made as of a specific date, which shall be true
as of such date);
(b) Purchaser shall have performed and complied in all
material respects with each obligation, covenant and condition required by this
Agreement to be performed or complied with by Purchaser prior to or at the
Closing;
(c) there shall not be in effect any injunction or restraining
order issued by a court of competent jurisdiction prohibiting the consummation
of the transactions contemplated by this Agreement, and there shall not be any
judicial, administrative or arbitral actions, claims, suits investigations,
proceedings or governmental proceeding pending or, to the Knowledge of Seller or
Matria, threatened against Seller or Matria, preventing the consummation of the
transactions contemplated by this Agreement;
(d) Seller shall have been furnished with a certificate of an
executive officer of Purchaser, dated the Closing Date, in form and substance
reasonably satisfactory to Seller, certifying to the fulfillment of the
conditions set forth in clauses (a) and (b);
(e) Seller shall have received all necessary approvals,
waivers and consents under the Credit Agreement in order for Seller to
consummate the transactions contemplated by this Agreement, and the lenders
thereunder shall have released their lien on the Assets and executed such UCC-3
termination statements or other documents necessary to evidence such release;
and
(f) Seller shall have received all governmental
approvals required to consummate the transactions
contemplated by this Agreement.
7. INDEMNIFICATION.
7.1 Survival of Representations and Warranties. The representations and
warranties contained in Articles 3 and 4 of this Agreement shall survive the
Closing for a period of 18 months; provided, however, that the representations
and warranties contained in Sections 3.1, 3.2, 3.12, 3.13 and 3.16 hereto shall
survive the Closing until the expiration of the applicable statute of
limitations therefor.
7.2 Indemnification by Matria and the Seller. Subject to the provisions
of this Article 7, Matria and the Seller, jointly and severally, agree to
indemnify and hold harmless Purchaser and its parents, subsidiaries and
affiliates and their respective stockholders, officers, directors, agents and
employees from and against any and all claims, damages, losses and expenses made
against, sustained or incurred by any such party (whether as a result of third
party claims, demands, suits, causes of action, proceedings, investigations,
judgments, liabilities, or other otherwise) including, without limitation, costs
of investigation and defense, court costs and reasonable attorneys fees (all of
the foregoing being hereinafter referred to collectively as "Losses"), with
respect to or arising out of (a) any breach of any representation or warranty of
Matria or Seller contained herein or in any of the Transaction Documents,
including, without limitation the representation and warranty included in
Section 8.1 herein; (b) any breach of any covenant or agreement of Matria or
Seller contained herein or in any of the Transaction Documents; (c) any Excluded
Liabilities (including, without limitation, any liability that Purchaser incurs
under any applicable bulk sales or transfer law, any doctrine of de facto merger
or successor liability, or otherwise by operation of law); and (d) the failure
to obtain any required consents in connection with the SubLease Agreements and
the sublease of the relevant premises therein.
7.3 Indemnification by Purchaser. Purchaser hereby agrees to indemnify,
defend and hold harmless each of Matria and QDS and their respective
stockholders, officers, directors, affiliates, agents and employees from and
against any and all Losses incurred or sustained by any of them with respect to
or arising out of (a) any breach of any representation, warranty, covenant or
agreement of Purchaser contained herein or in any of the Transaction Documents,
including, without limitation the representation and warranty included in
Section 8.1 herein; and (b) any Assumed Liability.
7.4 Limitation on Liability.
-----------------------
(a) Notwithstanding anything else contained herein to the
contrary, but subject to Section 7.4(c) hereof, no party hereto shall be
entitled to indemnification under the provisions of this Article 7, unless and
until the aggregate amount of all Losses for which such party is entitled to
indemnification under this Article 7 exceeds $200,000, in which event all Losses
shall be recoverable (the "Indemnity Threshold").
(b) Notwithstanding anything contained herein to the contrary,
the maximum aggregate liability of the Seller and Matria on the one hand and
Purchaser on the other hand pursuant to this Article 7 shall be an amount equal
to $12,000,000 (the "Indemnity Cap").
(c) Notwithstanding anything contained herein to the contrary,
the following items shall not be subject to the Indemnity Threshold or the
Indemnity Cap and the indemnity provided in Section 7.2 or Section 7.3, as the
case may be, with respect to such items shall not be limited in any way: (i) the
Lawsuits; (ii) any Excluded Liabilities (including, without limitation, any
liability that Purchaser incurs under any applicable bulk sales or transfer law,
any doctrine of de facto merger or successor liability, or otherwise by
operation of law) or Assumed Liabilities; (iii) any Purchaser's Adjustment, as
provided for in Section 1.8 hereof; and (iv) the failure to obtain any required
consents in connection with the SubLease Agreements and the sublease of the
relevant premises therein. In addition and notwithstanding anything herein to
the contrary (including, without limitation Section 5.18) the Telemed
Liabilities shall not be subject to the Indemnity Cap or the Indemnity
Threshold.
7.5 Administration of Third Party Claims.
------------------------------------
(a) Whenever any claim shall arise for indemnification under
this Article 7, the party entitled to indemnification (the "Indemnified Party")
shall promptly notify the other party or parties obligated to provide
indemnification under this Agreement (each an "Indemnifying Party") of the claim
and, when known, the facts constituting the basis for such claim. In the event
of any claim for indemnification hereunder resulting from or in connection with
any claim or legal proceeding by a person who is not a party to this Agreement
(a "Third Party Claim"), such notice shall also specify, if known, the amount or
a good faith estimate of the amount of the Losses arising therefrom and shall
identify with reasonable specificity the basis for the Third Party Claim, the
facts giving rise to the Third Party Claim, and the amount of the Third Party
Claim (or, if such amount is not yet known, a reasonable estimate of the amount
of the Third Party Claim). The Indemnified Party shall make available to the
Indemnifying Party copies of all relevant documents and records in its
possession. Failure to give prompt or accurate notice shall not relieve the
Indemnifying Party of its obligation to indemnify except to the extent that the
Indemnifying Party is actually prejudiced by the delay in giving notice.
(b) The Indemnified Party shall not settle or compromise or
voluntarily enter into any binding agreement to settle or compromise, or consent
to entry of any judgment arising from, any such claim or proceeding except in
accordance with this Section 7.5. With respect to any Third Party Claim, if the
Indemnifying Party acknowledges in writing its obligation to indemnify the
Indemnified Party against any Losses that may result from such Third Party
Claim, the Indemnifying Party shall undertake the defense thereof by
representatives of its own choosing reasonably satisfactory to the Indemnified
Party. The Indemnified Party or any other Party shall have the right to
participate in any such defense of a Third Party Claim with advisory counsel of
its own choosing at its own expense. Assuming they have received reasonably
adequate advance notice of a covered claim, in the event the Indemnifying Party,
within 15 days of receiving notice of any Third Party Claim, fails to assume the
defense as described in Section 7.5(a) above, the Indemnified Party will have
the right to undertake the defense, compromise or settlement of such Third Party
Claim on behalf of, and for the account of, the Indemnifying Party, at the
expense and risk of the Indemnifying Party.
8. GENERAL PROVISIONS.
------------------
8.1 Brokers. Each of Matria and the Seller represents and warrants to
Purchaser, and Purchaser represents and warrants to Matria and the Seller, that
no broker, finder or investment banker is entitled to any brokerage, finder's or
other fee or commission in connection with the transactions contemplated by this
Agreement.
8.2 Notices.
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All notices and other communications required or permitted hereunder to
be given to a party to this Agreement shall be in writing and shall be
telecopied or mailed, postage prepaid, or otherwise delivered by hand or by a
nationally recognized overnight courier, addressed to such party's address as
set forth below or at such other address as the party shall have furnished to
each other party in writing in accordance with this provision:
If to Matria or Seller: Matria Healthcare, Inc.
1850 Parkway Place
12th Floor
Marietta, Georgia 30067
Attention: General Counsel
Facsimile: 770.767.7769
with a copy to: Troutman Sanders LLP
(which shall not 600 Peachtree Street, N.E.
constitute notice) Suite 5200
Atlanta, Georgia 30308-2216
Attention: James L. Smith, III, Esq.
Facsimile: 404.962.6566
If to Purchaser: Card Guard Technologies, Inc.
10221 Wateridge Circle
San Diego, CA 92121-1579
Attention: President
Facsimile: 858.458.6266
with a copy to: Proskauer Rose LLP
(which shall not 1585 Broadway
constitute notice) New York, NY 10036-8299
Attention: Jeffrey A. Horwitz, Esq.
Facsimile: 212.969.2900
All such notices and communications shall be effective when delivered
by hand, or, in the case of mail, upon receipt of such mail, or, in the case of
facsimile transmission, upon receipt of confirmation of delivery at the sender's
fax machine.
8.3 Entire Agreement. This Agreement, including the Transaction
Documents and all Exhibits and Schedules hereto and thereto and the Disclosure
Letter (all of which are incorporated herein by this reference) contains the
entire agreement and understanding concerning the subject matter hereof between
the parties hereto and supersedes any previous or contemporaneous agreements,
schedules, understandings, documents, negotiations and discussions, whether oral
or written relating to that subject matter.
8.4 Waiver; Amendment. No waiver, termination or discharge of this
Agreement, or any of the terms or provisions hereof, shall be binding upon any
party hereto unless confirmed in writing. No waiver by any party hereto of any
term or provision of this Agreement or of any default hereunder shall affect
such party's rights thereafter to enforce such term or provision or to exercise
any right or remedy in the event of any other default, whether or not similar.
This Agreement may not be modified or amended except by a writing executed by
all parties hereto.
8.5 Severability. If any provision of this Agreement shall be held
void, voidable, invalid or inoperative, no other provision of this Agreement
shall be affected as a result thereof, and, accordingly, the remaining
provisions of this Agreement shall remain in full force and effect as though
such void, voidable, invalid or inoperative provision had not been contained
herein.
8.6 Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the principles of conflicts of law. The parties hereto irrevocably and
exclusively submit to the jurisdiction of the courts of the state of Delaware
and the federal courts of the United States located in Delaware, and any
appellate court from any thereof, with respect to any suit, action or proceeding
pertaining to this Agreement.
8.7 Assignment. No party hereto may assign this Agreement, in whole or
in part, without the prior written consent of the other parties hereto, and any
attempted assignment not in accordance herewith shall be null and void and of no
force or effect. Provided, however, that Purchaser may assign this Agreement, in
whole or in part, to an affiliate of Purchaser, without the consent of the other
parties hereto, in which case Purchaser shall nonetheless remain liable for the
performance of all of its obligations hereunder.
8.8 Binding Effect. This Agreement shall be binding upon and shall
inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
8.9 Cumulative Remedies. All rights and remedies of each party hereto
are cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise of
other rights or remedies.
8.10 Headings. The titles, captions and headings contained in this
Agreement are inserted for convenience of reference only and are not intended to
be a part of or to affect in any way the meaning or interpretation of this
Agreement.
8.11 Reference with Agreement. Numbered or lettered articles, sections,
paragraphs, subsections, Schedules and Exhibits herein contained refer to
articles, sections, paragraphs, subsections, Schedules and Exhibits of this
Agreement unless otherwise expressly stated. The words "herein," "hereof,"
"hereunder," "hereby," "this Agreement" and other similar references shall be
construed to mean and include this Agreement and all Exhibits and Schedules and
all amendments to any of them unless the context shall clearly indicate or
require otherwise.
8.12 Interpretation. This Agreement shall not be construed more
strictly against any party hereto regardless of which party is responsible for
its preparation, it being agreed that this Agreement was fully negotiated by all
parties hereto.
8.13 Definition of Knowledge. Any reference in this Agreement or in any
certificate delivered pursuant hereto to a party's "Knowledge" (whether to "the
best of" such party's knowledge or other similar expressions relating to the
knowledge or awareness of any party) shall include all matters which any of such
party's officers or directors actually knew or should have known acting in their
capacity as an officer or director of such party.
8.14 No Third Party Beneficiaries. There are no third party
beneficiaries of this Agreement and nothing else in this Agreement, express or
implied, is intended to or shall confer upon any person other than the parties
hereto and their respective successors and permitted assigns, any rights,
remedies, obligations or liabilities.
8.15 Counterparts; Fax Signatures. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute the same Agreement. Any signature page of any such
counterpart, or any electronic facsimile thereof, may be attached or appended to
any other counterpart to complete a fully executed counterpart of this
Agreement, and any telecopy or other facsimile transmission of any signature
shall be deemed an original and shall bind such party
8.16 Publicity. No party shall issue any press release or other public statement
regarding the transactions contemplated by this agreement without the prior
written consent of the other, except that each party may make such disclosures
to the public or to governmental agencies as are required by applicable Federal
or state laws or by the rules of any self regulated body to which such party is
subject. The parties shall cooperate as to the timing and contents of any such
press release or public announcement.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Agreement under seal as of the
Closing Date, to be effective as of the Closing Date.
MATRIA HEALTHCARE, INC.
By:-----------------------------------------------
Title:--------------------------------------------
QUALITY DIAGNOSTIC SERVICES, INC.
By:-----------------------------------------------
Title:--------------------------------------------
CARD GUARD TECHNOLOGIES, INC.
By:----------------------------------------------
Title:-------------------------------------------