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EXHIBIT 10.10
THE PARTIES ACKNOWLEDGE THAT THIS SUBSCRIPTION AGREEMENT AND THE SHARES BEING
SOLD HEREUNDER HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE
"ACT") OR SECURITIES LAWS OF ANY STATE AND THIS TRANSACTION IS BEING CONDUCTED
IN RELIANCE ON EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND
SUCH LAWS. THE SHARES HAVE NOT BEEN FILED WITH, PASSED UPON, NOR APPROVED OR
DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR OTHER REGULATORY AUTHORITY.
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT, dated this 4th day of June, 1996, by and among
Vision 21, Inc., a Florida corporation with its principal place of business
located at 0000 Xxxxx Xxxxx Xxxx, Xxxxx, Xxxxxxx 00000 ("Corporation"),
Xxxxxxxx X. Xxxxxxxx, located at 0000 Xxxxx Xxxxx Xxxx, Xxxxx, Xxxxxxx 00000
("Xxxxxxxx"), and Xxxxx X. Xxxxxxxx located at Xxxx Xxxxxx Xxx 0000, Xxxxxxxx,
Xxxxxxx 00000 ("Purchaser").
WHEREAS Purchaser desires to purchase from Corporation, and
Corporation desires to sell to Purchaser, shares of the Corporation's Common
Stock equal to ten percent of the Common Stock outstanding on the date hereof
(the "Shares"), upon the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein, the parties hereto hereby agree as follows:
1. Purchaser hereby agrees to pay to the Corporation for the
Shares a total consideration equal to (i) the payment of Seven Hundred Fifty
Thousand Dollars ($750,000), which is being paid by wire transfer of
immediately available funds to an account designated by the Corporation
simultaneously with the execution of this Agreement, and (ii) the transfer of
his shares of common stock of Vision 21 Managed Eyecare of Tampa Bay, Inc.,
recently acquired for a purchase price of Two Hundred Fifty Thousand Dollars
($250,000.00), at the time of the reorganization described in paragraph 4(a).
In consideration of such payment and the contribution of such shares,
simultaneously with execution of this Agreement the Corporation shall deliver
to Purchaser stock certificate number C2 representing Five Hundred Seventy-
Eight, Eight Hundred Nineteen Thousand (578,819) Shares and an opinion of its
legal counsel in the form annexed hereto.
2. Purchaser acknowledges, represents and warrants to the
Corporation that:
a. The Shares are being purchased by him in his own name
solely for his own beneficial interest, and not as nominee for, or on behalf
of, or for the beneficial interest of, or with the intention to transfer to,
any other person, trust or organization;
b. He is in a financial position to hold the Shares for
an indefinite period of time, is able to bear the economic risk of an
investment in the Shares and may withstand a complete loss of his investment in
the Shares;
c. He is an "accredited investor" within the meaning of
the Act and has had significant prior investment experience, including
investment in non-listed securities;
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d. Either alone or together with the assistance of his
own professional advisor or advisors, he has the knowledge and experience in
business and financial matters that make him capable of reading and
interpreting financial statements of and concerning the Corporation and of
evaluating the merits and risks of an investment in the Shares;
e. He has obtained, to the extent he deems necessary,
his own personal professional advice with respect to the risks inherent in an
investment in the Shares and the suitability of an investment in the Shares in
light of his financial condition and investment needs;
f. He understands that an investment in the Shares is
highly speculative but he believes that an investment in the Shares is suitable
for him based upon his investment objectives and financial needs, and he has
adequate means for providing for his current financial needs and personal
contingencies and has no need for liquidity of investment with respect to the
Shares;
g. He has been given access to full and complete
information regarding the Corporation and has utilized that access to his
satisfaction for the purpose of obtaining information concerning the
Corporation, an investment in the Shares and the terms and conditions of this
offering of the Shares, and has either attended or been given reasonable
opportunity to attend a meeting with representatives of the Corporation for the
purpose of asking questions of, and receiving answers from, these
representatives concerning the Corporation, an investment in the Shares and the
terms and conditions of this offering of the Shares, and for the purpose of
obtaining any additional information to the extent reasonably available that is
necessary to verify the information provided;
h. He recognizes that an investment in the Shares
involves a high degree of risk including, but not limited to, the risk of
economic loss from the operations of the Corporation due to the limited
operation history of the Corporation and its past limited profitability, he
fully understands the Corporation's business and risks associated therewith and
has the financial ability to undertake these risks;
i. He realizes that (i) the purchase of the Shares is a
long-term investment; (ii) he must bear the economic risk of investment for an
indefinite period of time because the Shares have not been registered under the
Act or the securities laws of any state, and, therefore, cannot be sold unless
they are subsequently registered under these laws or exemptions from
registrations are available; (iii) there presently is no public market for the
Shares (nor any assurances that a public market will ever develop) and he may
not be able to liquidate his investment in the Shares in the event of an
emergency or pledge the Shares as collateral for loans; and (iv) the
transferability of the Shares is restricted and (A) requires the written
consent of the Corporation, (B) requires conformity with the restrictions set
forth below, and (C) will be further restricted by legends placed on the
certificate or certificates representing the Shares referring to the applicable
restrictions on transferability and by stop transfer orders or notations on the
Corporation's records referring to the restrictions on transferability. In
this connection, Purchaser consents to the placement of the following
restrictive legend on the certificate(s) representing the Shares:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
THE SECURITIES LAWS OF ANY STATE. THE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, OFFERED FOR SALE
OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY
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APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL
SATISFACTORY IN FORM AND SUBSTANCE TO COUNSEL FOR THE
CORPORATION THAT THE TRANSACTION WILL NOT RESULT IN A
VIOLATION OF FEDERAL OR STATE SECURITIES LAWS."
j. He realizes that the Shares do not carry any
preemptive rights and will be subject to certain restrictions on transfer to be
set forth in a Shareholders' Agreement to be entered into among the
shareholders of the Corporation on mutually acceptable terms.
k. He certifies, under the penalties of perjury, that he
is NOT subject to the backup withholding provisions of Section 3406(a)(1)(c) of
the Internal Revenue Code of 1986. (NOTE: you are subject to backup
withholding if (i) you fail to furnish your Social Security number or taxpayer
identification number in this subscription; (ii) the Internal Revenue Service
notifies the Corporation that you furnished an incorrect Social Security number
or taxpayer identification number; (iii) you are notified that you are subject
to backup withholding; or (iv) you fail to certify that you are not subject to
backup withholding or you fail to certify your Social Security number or
taxpayer identification number);
l. He agrees to execute normal and customary lockup
agreements in the event such agreements are required or requested pursuant to
an underwritten public offering of the Corporation's securities; and
m. He agrees to indemnify and hold the Corporation
harmless from and against any claim, liability, cost or expense, including
reasonable attorneys' fees, arising from any alleged unlawful sale or offer to
sell or transfer any of the Shares.
3. Purchaser has been advised that the Shares have not been
registered under the Act or applicable state securities laws, that the Shares
are being offered and sold pursuant to exemptions from the registration
requirements of these laws, and that the reliance of the Corporation on these
exemptions is predicated in part on his representations to the Corporation
contained in this Agreement. Purchaser represents and warrants that the Shares
are being purchased for his own account for investment and without the
intention of reselling or redistributing the Shares, that he has not made any
agreement with any other person or entity regarding any of the Shares, and that
his financial condition is such that it is not likely that it will be necessary
for him to dispose of the Shares in the foreseeable future. Purchaser is aware
that, in the view of the Securities and Exchange Commission, a purchase of the
Shares with an intent to resell the Shares by reason of any foreseeable
specific contingency or anticipated change in market values, or any change in
the condition of the Corporation or its business, or in connection with a
contemplated liquidation or settlement of any loan obtained for the acquisition
of the Shares and for which the Shares were pledged as security, would
represent an intent that is inconsistent with the representations set forth
above. Purchaser further represents and agrees that if, contrary to his above
stated intentions, he later should desire to dispose of or transfer any of the
Shares in any manner, he will not do so without first obtaining (i) an opinion
of independent counsel reasonably satisfactory to the Corporation to the effect
that the proposed disposition or transfer lawfully can be made without
registration of the Shares pursuant to the Act and applicable state securities
laws, or (ii) such registration (it being expressly understood that the
Corporation will have no obligation to register the securities for this
purpose).
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4. The Corporation and Xxxxxxxx jointly represent and warrant to
Purchaser as follows:
a. The Corporation is duly organized, existing and in
good standing under the laws of the State of Florida with the requisite
corporate power and authority to conduct its business as currently being
conducted. Upon the reorganization of its affiliated companies (which is
anticipated to be completed by July 1, 1996 and which will be completed no
later than December 31, 1996) (the "Reorganization") the Corporation will own
all of the issued and outstanding shares of capital stock of Vision 21
Physician Practice Management Company, Inc. and Vision 21 Managed Eyecare, Inc.
(collectively, the "Subsidiaries"). The Subsidiaries are duly organized,
existing and in good standing in their respective jurisdictions of
incorporation with the requisite corporate power and authority to conduct their
respective business as currently being conducted;
b. The Corporation has an authorized capitalization of
20,000,000 shares consisting of 10,000,000 shares of common stock, par value
$.001 per share, and 10,000,000 shares of preferred stock, par value $.001 per
share. Upon the Reorganization 5,465,673 shares of common stock will be issued
and outstanding. No shares of preferred stock are issued and outstanding on
the date hereof and no such shares will be issued and outstanding upon the
Reorganization. The Shares have been duly authorized and validly issued, and
are fully paid, non-assessable and free and clear of any and all liens and
encumbrances;
c. The execution, delivery and performance of this
Agreement has been duly authorized by all necessary corporate action,
constitutes the legal, valid and binding obligation of the Corporation,
enforceable against it in accordance with its terms, subject to any bankruptcy,
insolvency or other similar laws affecting the enforcement of creditors' rights
generally and the availability of equitable remedies, and does not conflict
with or create an event of default under any other agreement to which the
Corporation is bound;
d. The Corporation and the Subsidiaries have all
licenses, permits and other governmental approvals necessary to conduct their
business as currently being conducted;
e. The Combined Financial Statement at March 31, 1996, a
copy of which has been delivered to and reviewed by Purchaser, fairly presents
the financial condition and discloses all material liabilities of the
Corporation, the Subsidiaries and related entities as at the date indicated
therein and there has not been any material adverse change in the financial
condition or material liabilities of the Corporation, the Subsidiaries and
related entities since March 31, 1996;
f. As of the date hereof the Corporation and the
Subsidiaries (i) have paid all material federal, state and local taxes
currently due and owing by them; (ii) are not engaged in any action, suit,
proceeding at law or in equity with any person or entity which, if adversely
determined, would have a material adverse effect on them; (iii) are not the
subject of any unfair labor practice, discrimination or other employee
grievance or complaint; and (iv) own all of their respective assets free and
clear of all material liens and encumbrances other than those disclosed by UCC
searches conducted as of a recent date, copies of which are annexed hereto; and
g. The transfer by the Purchaser to the Corporation of
the shares of stock described in paragraph 1(ii) of this Agreement at the time
of the Reorganization, in part in exchange for the Shares, will qualify for
nonrecognition treatment under applicable provisions of the Internal Revenue
Code of 1986, as amended.
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5. Each of the parties acknowledge that they are aware of the
meaning and legal consequences of the representations and warranties contained
in this Agreement, and agree to indemnify and hold harmless the other party
from and against any and all loss, damage or liability due to or arising out of
any material inaccuracy or omission in or a breach of any representation or
warranty of such party contained in this Agreement. Each of such
representations and warranties shall survive this Agreement.
6. This Agreement constitutes the entire agreement of the parties
hereto with respect to the matters set forth herein and supersedes any prior
understanding or agreement, oral or written, with respect thereto. There are
no agreements, understandings, restrictions, representations or warranties
among the parties except as set forth herein.
7. The terms and provisions of this Agreement shall be binding
upon, and inure to the benefit of the successors, personal representatives,
estates, heirs and legatees of the respective parties.
8. This Agreement shall not be changed, modified or amended
except by a writing signed by the parties to be charged, and this Agreement may
not be discharged except by performance in accordance with its terms or by a
writing signed by the party to be charged.
9. This Agreement and its validity, construction and performance
shall be governed in all respects by the laws of the State of Florida and the
venue for the prosecution of any legal action brought hereunder shall be in
Polk County, Florida. In the event any party hereto brings an action against
the other party on any dispute arising out of this Agreement, the prevailing
party in such action shall be entitled to an award of reasonable attorneys'
fees and expenses in all proceedings on all levels.
10. This Agreement may not be assigned by either party.
11. THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE FLORIDA
SECURITIES ACT IN RELIANCE UPON EXEMPTION PROVISIONS CONTAINED THEREIN. ANY
SALE MADE PURSUANT TO SUCH EXEMPTION PROVISIONS IS VOIDABLE BY THE PURCHASER
WITHIN THREE DAYS AFTER THE FIRST TENDER OF CONSIDERATION IS MADE BY THE
PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER OR AN ESCROW AGENT. A
WITHDRAWAL WITHIN SUCH THREE DAY PERIOD IS WITHOUT FURTHER LIABILITY TO
PURCHASER. TO ACCOMPLISH SUCH WITHDRAWAL, PURCHASER NEED ONLY SEND A LETTER OR
TELEGRAM TO CORPORATION AT THE ADDRESS SET FORTH IN THIS DOCUMENT, INDICATING
INTENTION TO WITHDRAW.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Subscription
Agreement on the date first above written.
"Purchaser"
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
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Social Security Number
"Corporation"
Vision 21, Inc.
By: /s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxxxxx X. Xxxxxxxx, President
"Xxxxxxxx" (with respect to Paragraph 4 only)
/s/ Xxxxxxxx X. Xxxxxxxx
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Xxxxxxxx X. Xxxxxxxx, Individually
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