EXHIBIT 2.2
PURCHASE AGREEMENT
BY AND AMONG
THE MEMBERS OF
SURGERY CENTER PARTNERS, L.L.C.,
SYMBION AMBULATORY RESOURCE CENTRES, INC.
AND
SMBIMS KIRKWOOD, INC.
TABLE OF CONTENTS
I. PURCHASE AND SALE OF SUBJECT INTEREST......................................................... 1
1.1. Purchase and Sale of Subject Interest........................................... 1
1.2. Consideration................................................................... 1
1.3. Post-Closing Purchase Price Adjustment.......................................... 2
1.4. Assignment...................................................................... 2
1.5. Expenses........................................................................ 2
1.6. Closing......................................................................... 3
1.7. Further Acts and Assurances..................................................... 3
1.8. Interpretation.................................................................. 3
II. REPRESENTATIONS AND WARRANTIES OF SELLERS.................................................... 4
2.1. Authorization and Binding Effect of Sellers..................................... 4
2.2. Organization of the Company..................................................... 4
2.3. Capitalization.................................................................. 4
2.4. Subsidiaries.................................................................... 4
2.5. Ownership of Properties......................................................... 5
2.6. Absence of Certain Recent Changes............................................... 5
2.7. Agreements and Commitments...................................................... 5
2.8. Litigation, Etc. ............................................................... 5
2.9. Court Orders, Decrees and Compliance with Laws.................................. 5
2.10. Taxes........................................................................... 6
2.11. Financial Statements............................................................ 6
2.12. Extraordinary Liabilities and Encumbrances...................................... 6
2.13. Licenses........................................................................ 6
2.14. Regulatory Compliance........................................................... 6
2.15. No Finders or Brokers........................................................... 7
2.16. Pension, Etc. .................................................................. 7
2.17. Employees....................................................................... 8
2.18. Insurance Coverage.............................................................. 9
2.19. Payments to Sellers............................................................. 9
2.20. Appraisal Reports and Surveys................................................... 9
2.21. Absence of Certain Changes...................................................... 9
2.22. Environmental Conditions........................................................ 10
2.23. Medical Waste................................................................... 11
2.24. Certain Representations With Respect to the Center.............................. 12
2.25. No Untrue or Inaccurate Representation or Warranty.............................. 12
III. REPRESENTATIONS AND WARRANTIES OF PURCHASER................................................. 12
3.1. Organization and Standing....................................................... 12
3.2. Authorization and Binding Effect................................................ 12
3.3. Ownership....................................................................... 12
3.4. No Finders or Brokers........................................................... 12
3.5. Adequate Funding................................................................ 12
3.6. No Untrue or Inaccurate Representation or Warranty.............................. 13
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IV. COVENANTS OF PURCHASER....................................................................... 13
4.1. Best Efforts.................................................................... 13
4.2. Short Period Tax Return......................................................... 13
V. COVENANTS OF SELLERS.......................................................................... 13
5.1. Best Efforts.................................................................... 13
5.2. Reserved........................................................................ 13
5.3. Conduct of Business............................................................. 13
5.4. Additional Financial Information................................................ 13
5.5. Notification of Certain Matters................................................. 13
5.6. Exclusivity..................................................................... 14
5.7. Covenant Not to Compete......................................................... 14
5.8. Termination or Merger of Benefit Plans.......................................... 15
VI. CONDITIONS TO CLOSING BY PURCHASER........................................................... 15
6.1. Compliance...................................................................... 15
6.2. Due Diligence Review; Accuracy and Completeness of Schedules.................... 15
6.3. Consents, Authorizations, Etc. ................................................. 15
6.4. No Action or Proceeding......................................................... 16
6.5. Good Standing Certificate....................................................... 16
6.6. No Material Adverse Effect...................................................... 16
6.7. Assignment Agreement............................................................ 16
6.8. Reorganization of Company in Delaware; Adoption of Operating Agreement.......... 16
6.9. Ancillary Transactions.......................................................... 16
6.10. Waiver of Conditions............................................................ 16
VII. CONDITIONS TO CLOSING BY SELLER............................................................. 16
7.1. Compliance...................................................................... 16
7.2. Secretary's Certificate......................................................... 17
7.3. Consent, Authorizations, Etc. .................................................. 17
7.4. No Action or Proceeding......................................................... 17
7.5. Good Standing Certificate....................................................... 17
7.6. Waiver of Conditions............................................................ 17
VIII. INDEMNIFICATION............................................................................ 17
8.1. Indemnification of Purchaser.................................................... 17
8.2. Indemnification of Sellers...................................................... 18
8.3. Notice and Control of Litigation................................................ 18
8.4. Notice of Claim................................................................. 19
8.5. Limitations..................................................................... 19
8.6. Indemnification as Sole Legal Remedy............................................ 20
IX. TERMINATION.................................................................................. 20
9.1. Termination..................................................................... 20
9.2. Notice of Termination........................................................... 20
9.3. Consequences of Termination..................................................... 20
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X. MISCELLANEOUS................................................................................. 21
10.1. Schedules and Other Instruments................................................. 21
10.2. Additional Assurances........................................................... 21
10.3. Consented Assignment............................................................ 21
10.4. Legal Fees and Costs............................................................ 21
10.5. Choice of Law and Venue......................................................... 21
10.6. Benefit/Assignment.............................................................. 21
10.7. Cost of Transaction............................................................. 22
10.8. Confidentiality................................................................. 22
10.9. Public Announcements............................................................ 22
10.10. Waiver of Breach................................................................ 22
10.11. Notice.......................................................................... 23
10.12. Severability.................................................................... 23
10.13. Gender and Number............................................................... 23
10.14. Divisions and Headings.......................................................... 23
10.15. Survival........................................................................ 23
10.16. Entire Agreement/Amendment...................................................... 23
10.17. Waiver of Jury Trial............................................................ 24
10.18. Tax Advice and Reliance......................................................... 24
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PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT ("Agreement"), dated as of November 11, 2004, is
by and among the several members of Surgery Center Partners, L.L.C., a Missouri
limited liability company (the "Company") who are identified on Exhibit A hereto
(each a "Seller" and collectively the "Sellers"), and SMBIMS Kirkwood, Inc., a
Tennessee corporation ("Purchaser"). The Sellers and Purchaser are sometimes
referred to herein individually as a "Party" and collectively as the "Parties."
SYMBION AMBULATORY RESOURCE CENTRES, INC., a Tennessee corporation ("SARC"),
joins herein solely for the purposes of manifesting its agreement with Article
VIII hereof and Section 3.5.
RECITALS:
WHEREAS, as of the date hereof, the Sellers collectively own 95 of the 101
outstanding units of membership interest (such 95 outstanding units being,
collectively, the "Interests") of the Company in the percentages set forth on
Exhibit A hereto; and
WHEREAS, the Company's sole business is to own and operate an outpatient
surgery center known as the Surgery Center of Kirkwood located at 0000 Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx (the "Center"); and
WHEREAS, the Sellers desire to sell to Purchaser, in the proportions set
forth on Exhibit A, a 50.00% membership interest in the Company (the "Subject
Interest"); and
WHEREAS, in addition to the Subject Interest, Purchaser has entered into
two additional agreements (such agreements being the "Xxxxxxx Call Option" and
the "Xxxxxxx Put Option", respectively, and, together, the "Option Agreements")
providing for (1) Purchaser to have the right, but not the obligation, to
acquire from Xxxx X. Xxxxxxx, M.D. ("Xxxxxxx") any remaining interest in the
Company held by Xxxxxxx (the "Xxxxxxx Option Interest"), and (2) Xxxx Xxxxxxx,
M.D. ("Xxxxxxx") to have the right, but not the obligation, to require Purchaser
to purchase from Xxxxxxx three (3) units of Membership Interest in the Company
held by Xxxxxxx (the "Xxxxxxx Option Interest" and, together with the Xxxxxxx
Option Interest, the "Option Interests"); and
WHEREAS, Purchaser is ready, willing and financially able to take such
actions to enable it to purchase such Subject Interest in conformity with the
terms hereof.
NOW, THEREFORE, in consideration of the foregoing and of the promises and
mutual covenants contained herein, the Parties hereby agree as follows:
I. PURCHASE AND SALE OF SUBJECT INTEREST
1.1. Purchase and Sale of Subject Interest. At the Closing (as defined in
Section 1.6 hereof), Purchaser agrees to purchase from Sellers, and each Seller
agrees to sell, assign, transfer and deliver to Purchaser, the Subject Interest,
free and clear of any and all claims, liens, security interests, rights of first
refusal, options, warrants or other encumbrances of any nature ("Encumbrances").
1.2. Consideration. Subject to the terms and conditions hereof, in
reliance upon the representations and warranties of Sellers set forth herein,
and as consideration for the purchase and sale of the Subject Interest as herein
contemplated, Purchaser agrees to tender to Sellers as the purchase price
hereunder (the "Purchase Price"), subject to adjustment as provided in Section
1.3 below, an aggregate amount of
$25,755,000. The Purchase Price, as adjusted in accordance herewith, shall be
payable to Sellers by delivery at the Closing in cash or by checks payable to
each of the Sellers in the amounts set forth on Exhibit A.
1.3. Post-Closing Purchase Price Adjustment.
(a) Not more than 120 days after the Closing Date, Purchaser shall
deliver to Sellers a balance sheet of the Company as of the Closing Date
prepared in accordance with generally accepted accounting principles,
consistently applied (GAAP) (the "Closing Balance Sheet") and prepared on a
basis consistent with the balance sheet of the Company as of July 31, 2004 (the
"Sellers' Balance Sheet") that was prepared by Sellers and is attached hereto as
Exhibit 1.3(a). The Net Working Capital of the Company reflected on the Closing
Balance Sheet is referred to herein as the "Purchaser's Working Capital
Position." Except as provided in Section 1.3(b) hereof, on or before the 160th
day after the Closing Date (the "Adjustment Payment Date") either (i) Sellers
shall pay Purchaser in immediately available funds an amount equal to 50.00% of
the amount by which the Purchaser's Working Capital Position is less than
$2,500,000, or (ii) Purchaser shall pay Sellers in immediately available funds
50.00% of the amount by which the Purchaser's Working Capital Position exceeds
$2,500,000. Any payments to or from Sellers hereunder shall be paid by or to
each Seller in proportion to such Seller's percentage ownership of the Subject
Interest immediately prior to the Closing. All payments under this Section
1.3(a) shall be by wire transfer to an account designated by the party entitled
to receive any such payments. For purposes of this Agreement, "Net Working
Capital" shall mean, as of the date of determination, an amount equal to (a) the
sum of the current assets, including, without limitation, the following items:
(i) cash, (ii) accounts receivable-net, (ii) inventories and supplies, and (iii)
prepaid expenses, minus (b) the sum of the current liabilities, including,
without limitation, the following items: (i) accounts payable, and (ii) accrued
expenses, but excluding the current portion of long-term debt.
(b) Within 30 days after Purchaser's delivery of the Closing Balance
Sheet, Sellers holding not less than a majority of the Subject Interest
immediately prior to the Closing (a "Sellers' Majority") may, in a written
notice to Purchaser, describe in reasonable detail any proposed adjustments to
the Closing Balance Sheet and the reasons therefor, and shall include pertinent
calculations. If Sellers' Majority shall fail to deliver notice of objection to
the Closing Balance Sheet within such 30 day period, then all Sellers shall be
deemed to have accepted the Closing Balance Sheet. In the event that, following
delivery of such a notice, Purchaser and such Sellers' Majority are not able to
agree on the Closing Balance Sheet within 30 days from and after the receipt by
Purchaser of any objections raised by such Sellers, Purchaser and such Sellers'
Majority shall each have the right to require that such disputed determinations
be submitted to Deloitte & Touche LLP or to such other certified public
accounting firm as such Sellers' Majority and Purchaser may then mutually agree
upon in writing, for computation or verification in accordance with the
provisions of this Agreement. The foregoing provisions for certified public
accounting firm review shall be specifically enforceable by the Parties; the
decision of such accounting firm shall be final and binding upon Purchaser and
all Sellers; there shall be no right of appeal from such decision; and such
accounting firm's fees and expenses for each such disputed determination shall
be borne by the Party whose determination has been modified by such accounting
firm's report or by all Parties in proportion to the relative amount each
Party's determination has been modified. Any payments due under this Section 1.3
shall bear interest at eight percent (8%) per annum from the Adjustment Payment
Date.
1.4. Assignment. The sale, assignment, transfer and delivery of each of
the Subject Interest shall be made by each Seller's execution and delivery at
the Closing of an Assignment substantially in the form attached as Exhibit 1.4
hereto (the "Assignment") and such other recordable instruments of assignment,
transfer and conveyance as Purchaser shall request.
1.5. Expenses. All expenses of the preparation of this Agreement and of
the transactions provided for herein shall be borne by the respective Parties
incurring such expense, whether or not such
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transactions are consummated. Notwithstanding the foregoing, Purchaser
understands and agrees that Company may pay expenses of the Sellers incurred in
the transactions or make other distributions to Sellers on account of their
Interests preceding the Closing, which expenses and distributions shall be taken
into account in calculating Purchaser's Working Capital Position for purposes of
Section 1.3 hereof.
1.6. Closing. The sale, purchase and other activities provided for herein
(the "Closing") shall take place at Xxxxxx Xxxxxxx Xxxxxx and Xxxxx, PLLC, 000
Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxxxxxx 00000, or at such other place as
the Parties may agree upon, as soon as practicable following the satisfaction
(or waiver) of all of the conditions to closing set forth in Articles VI and VII
(such date being the "Closing Date"), and the Closing shall be deemed effective
at 12:01 a.m. on the Closing Date.
1.7. Further Acts and Assurances. Sellers shall, at any time and from
time to time at and after the Closing, upon request of Purchaser, take any and
all steps necessary to place Purchaser in possession and operating control of
the Subject Interest and will do, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
deeds, assignments, transfers, conveyances, powers of attorney and assurances as
may be required for the better transferring and confirming to Purchaser or to
its successors or permitted assigns, or for reducing to possession, such Subject
Interest.
1.8. Interpretation. In this Agreement, unless the context otherwise
requires:
(a) references to this Agreement are references to this Agreement and to
the Schedules and Exhibits attached hereto;
(b) references to Articles and Sections are references to articles and
sections of this Agreement;
(c) references to any Party to this Agreement shall include references
to its respective successors and permitted assigns;
(d) references to a judgment shall include references to any order,
writ, injunction, decree, determination or award of any court or tribunal;
(e) references to a person shall include references to any individual,
company, body corporate, association, limited liability company, firm, joint
venture, trust or governmental entity or agency;
(f) the terms "hereof," "herein," "hereby" and derivative or similar
words will refer to this entire Agreement;
(g) references to any document (including this Agreement) are references
to that document as amended, consolidated, supplemented, novated or replaced by
the Parties from time to time;
(h) the word "including" shall mean including without limitation;
(i) each representation, warranty and covenant contained herein
shall have independent significance and, if any party hereto has breached any
representation, warranty or covenant contained herein in any respect, the fact
that there exists another representation, warranty or covenant relating to the
same subject matter (regardless of the relative levels of specificity) which
such party has not breached shall not detract from or mitigate the fact that the
party is in breach of the first representation, warranty or covenant, provided
that indemnification for any such breach shall be only in accordance with and
subject to the limitations of Article VIII hereof; and
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(j) in respect of a party, the term "Affiliate" shall mean any entity
controlling, controlled by or under common control with such party.
II. REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers hereby jointly and severally represent and warrant to
Purchaser as follows:
2.1. Authorization and Binding Effect of Sellers. Each Seller has
all necessary authority and power to execute and deliver this Agreement and
consummate the transactions contemplated hereby and has taken all action
required to be taken to authorize the execution, delivery and performance of
this Agreement. This Agreement constitutes a valid and binding agreement or
commitment against the Sellers in accordance with its terms. The execution of
this Agreement by the Sellers, the performance by the Sellers of their
obligations hereunder and the consummation of the transaction contemplated
hereby by the Sellers will not require any consent, approval or notice under, or
violate, breach, be in conflict with or constitute a default (or an event that,
with notice or lapse of time or both, would constitute a default) under, or
permit termination of, or result in the creation or imposition of any lien upon
any properties, assets or business of the Company under any note, bond,
indenture, mortgage, deed of trust, lease, franchise, permit, authorization,
license, contract, instrument or other agreement or commitment or any order,
judgment or decree to which the Company is a party or by which the Company or
any of its assets or properties is bound or encumbered, except as indicated on
Schedule 2.1 hereof. No notice to, filing or registration with or authorization,
consent or approval of any public body or governmental or regulatory authority
is necessary for the transfer by Sellers of the Subject Interest as contemplated
by this Agreement (and the Option Interests, if acquired pursuant to the Option
Agreements), except as indicated on Schedule 2.14 hereto. Each Seller, except
Xxxxx Xxxxxxxxx ("Xxxxxxxxx"), is an individual licensed to practice medicine
and residing in the State of Missouri. Xxxxxxxxx resides in the State of
Missouri.
2.2. Organization of the Company. The Company is a limited
liability company duly organized and validly existing in good standing under the
laws of the State of Missouri, has full power and authority to own and operate
its property and to carry on its business as now being conducted, and is duly
qualified to do business in each jurisdiction in which the nature of its
property or business requires. Sellers have delivered to Purchaser true,
accurate and complete copies of the Company's Articles of Organization, which
reflect all amendments made thereto at any time prior to the date of this
Agreement. The Company is not in default under or in violation of any provision
of (i) its Articles of Organization, or (ii) any outstanding note, bond,
indenture, mortgage, contract, instrument or other agreement or commitment or
any order, judgment or decree to which either is a party.
2.3. Capitalization. All of the issued and outstanding equity securities
of the Company, other than the Option Interests, are owned by the persons set
forth on Exhibit A hereto under the heading "Units Before Closing." The Subject
Interest constitutes a 50.00% membership interest in the Company. All Interests,
including the Subject Interest and the Option Interests, are validly issued,
fully paid and nonassessable. Sellers are the record and beneficial owners and
holders of the Interests as set forth on Exhibit A. Other than the Option
Agreements, there are no existing agreements, options, warrants, rights, calls
or commitments of any character to which the Company or any Seller is a party or
by which it is bound providing for the issuance of any additional Interests, or
for the repurchase or redemption of any Interests, and there are no outstanding
interests or other instruments convertible into or exchangeable for Interests
and no commitments to issue such Interests.
2.4. Subsidiaries. The Company does not own and is not obligated to
purchase any equity interest in or any other interest convertible into or
exchangeable for an equity interest in any entity.
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2.5. Ownership of Properties.
(a) Attached hereto as Schedule 2.5(a) are state and local UCC
searches on the Company. Except for the real property which is leased by the
Company and except as disclosed in such Schedule 2.5(a), the Company has good
and marketable title to all of the operating assets of the Company necessary or
appropriate for the continued operation of the Center, all of which are listed
on Schedule 2.5(b) (collectively, the "Assets"), free and clear of all liens,
claims or encumbrances, and any mortgages or other indebtedness secured by any
real estate or other property. Schedule 2.5(a) reflects all security interests
relating to the Assets in every place where security interests created or
perfected by filing are legally required to be filed and include copies of all
such financing statements.
(b) All Assets are located at the Center and to the best of Sellers'
knowledge and belief, are in good operating condition and state of repair,
subject only to ordinary wear and tear, which is not such as to affect adversely
the operation of the Assets in the ordinary course of business. Such Assets are
reflected in the Financial Statements at net book value. Except as disclosed on
Schedule 2.5(b), the Assets constitute all of the Assets required to operate the
Center in accordance with historical practice and as the Center is being
operated by Sellers on and as of the Closing Date. No Person has indicated that
any Asset needs to be replaced or that any new item of equipment needs to be
acquired by the Company.
2.6 Absence of Certain Recent Changes. To the best of Sellers'
knowledge, since December 31, 2003, there has not been any law, regulation,
event or condition of any character that has had or is reasonably likely to have
an adverse effect on the business of the Company.
2.7 Agreements and Commitments. Schedule 2.7 sets forth a list of each
Material Provider Contract, as hereinafter defined, and each Business Contract,
as hereinafter defined, to which the Company is a party or by which the Company
is bound or which may have an effect on the Subject Interest or business carried
on by the Company (the "Contracts"). Except as noted in Schedule 2.7, all such
Contracts are in full force and effect, there has been no threatened
cancellation thereof, there are no outstanding disputes thereunder, each (except
the Management Agreement) is with an unrelated third party and was entered into
on an arm's length basis in the ordinary course of business, and all will
continue to be binding in accordance with its terms as of the Closing Date.
"Material Provider Contract" means any contract with a network of healthcare
providers or a third party payor, including, without limitation, employers and
insurance companies, to provide healthcare services to patients and which during
the twelve-month period ending September 30, 2004 reimbursed the Company for
four or more cases performed at the Center. "Business Contract" means any
written or oral commitment, contract, lease agreement or other instrument which
is not with a network of healthcare providers or a third party payor to provide
healthcare services to patients.
2.8. Litigation, Etc. Except as noted in Schedule 2.8, there is no
litigation, arbitration, governmental claim, investigation or proceeding,
pending or, to any Seller's knowledge, threatened, against the Company at law or
in equity, before any court, arbitration tribunal or governmental agency. All
claims and professional liability incident reports relating to the Center have
been submitted to the Company's insurer(s). All claims made or, to each Seller's
knowledge, threatened against the Company or the Center in excess of the
deductible are covered under the Company's current insurance policies. Sellers
have provided Purchaser with a complete list of all general liability incidents,
incident reports and malpractice claims that have occurred at the Center since
July 1, 2003.
2.9. Court Orders, Decrees and Compliance with Laws. There is not
outstanding or, to any Seller's knowledge, threatened, any order, writ,
injunction or decree or any court, governmental agency or arbitration tribunal
against or affecting the Company or the Interests, including the Subject
Interest. The Company is in compliance with all applicable federal, state and
local laws, regulations and administrative orders, except where noncompliance
therewith would not have an adverse effect on the Company or the Interests,
including the Subject Interest, and has received no notices of alleged
violations thereof. To the best
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of Seller's knowledge, no governmental authority is currently conducting an
investigation, there are no proceedings against the Company and no such
investigation or proceeding is being threatened.
2.10. Taxes. All tax returns ("Tax Returns") required to be filed by or on
behalf of the Company or any predecessor entity have been timely filed with the
appropriate tax authorities or requests for extensions have been timely filed
and any such extensions have been granted and have not expired, each such Tax
Return was true, complete and correct in all respects and all Taxes (as defined
below) with respect to taxable periods or portions thereof covered by such Tax
Returns and all other Taxes (without regard to whether a Tax Return was or is
required) for which the Company is otherwise liable have been paid in full or,
to the extent are not yet due, have been adequately reserved against on the
Company's balance sheet. For purposes of this provision, "Taxes" means all
applicable taxes, charges, duties, fees, levies or other assessments, including
income, excise, property, sales, use, gross receipts, recording, insurance,
value added, profits, license, withholding, payroll, employment, net worth,
capital gains, transfer, stamp, social security, environmental, occupation and
franchise taxes, imposed by any governmental entity, and including any interest,
penalties and additions attributable thereto, federal, state, local and foreign
tax returns, reports, declarations, statements and other documents.
2.11. Financial Statements. Schedule 2.11(a) hereto consists of true,
correct and complete copies of internally prepared financial statements of the
Company for the year ended December 31, 2003 and for the nine-month period ended
September 30, 2004 (collectively, the "Financial Statements"). Subject to the
foregoing, the Financial Statements are true, correct and, except as expressly
limited by the reports therein, complete in all respects and, except as provided
in Schedule 2.11(b), have been prepared in accordance with GAAP. The balance
sheets included in the Financial Statements present fairly the financial
position of the Company, as of the respective dates thereof and the other
financial statements included therein present fairly the results of operations
for the periods indicated. The Financial Statements reflect or adequately
provide for all claims against, and all debts and liabilities of, the Company,
fixed or contingent, existing at the dates thereof except as provided on
Schedule 2.11(b). There has not been any change between December 31, 2003 and
the date of this Agreement which has had or is likely to have an adverse effect
on the financial position or results of operations of the Company. Sellers
acknowledge and agree that Purchaser relied upon the financial information set
forth in the Financial Statements in order to determine the consideration paid
under Section 1.2 hereof.
2.12. Extraordinary Liabilities and Encumbrances. Except as disclosed in
Schedule 2.5(a) and Schedule 2.12, there are no Encumbrances on the Interests
(including the Subject Interest) or the Assets, and the Company has no
liabilities of any nature, whether accrued, absolute, contingent or otherwise.
Except as disclosed in Schedule 2.5(a) or Schedule 2.12, there are no facts in
existence on the date hereof known or which should be known to Sellers which
might reasonably serve as the basis for any Encumbrance or other liability or
obligation of the Company.
2.13. Licenses. The Company has all licenses, permits and approvals which
are needed or required by law to operate the business related to or affecting
the business of the Company. Sellers have delivered to Purchaser an accurate
list and summary description (attached as Schedule 2.13 hereto) of all such
licenses and permits and of all other franchises, trademarks, trade names,
service marks, patents, patent applications and copyrights, owned or held by the
Company relating to the ownership, development or operations of any of the
assets, all of which are now and as of Closing shall be in good standing and not
subject to meritorious challenge.
2.14. Regulatory Compliance. The Company is and has at all times been in
compliance with all applicable statutes, rules, regulations, and requirements of
all federal, state, and local commissions, boards, bureaus, and agencies having
jurisdiction over the Company and the operations of the Company, including, but
not limited to, the false claims, false representations, anti-kickback and all
other provisions of the Medicare/Medicaid fraud and abuse laws (42 U.S.C.
Section 1320a-7 et seq.) and the physician self-referral
6
provisions of the Xxxxx Law (42 U.S.C. Section 1395nn). The Company timely filed
all reports, returns, data, and other information required by federal, state,
municipal or other governmental authorities which control, directly or
indirectly, any of the Company's activities to be filed with any commissions,
boards, bureaus, and agencies and has paid all sums heretofore due with respect
to such reports and returns. No such report or return has been knowingly
inaccurate, incomplete or misleading. The Company has not engaged in any
activities that are prohibited under 42 U.S.C. Section 1320a-7b or the
regulations promulgated thereunder, or under any statutes or regulations, or
which are prohibited by rules of professional conduct.
2.15. No Finders or Brokers. No Seller has engaged any finder or broker in
connection with the transactions contemplated hereunder.
2.16. Pension, Etc.
(a) Schedule 2.16 hereto sets forth a true, complete and correct list
(all of which are collectively referred to as the "Benefit Plans") of all
"employee benefit plans," as defined in Section 3(3) of the Employee Retirement
Income Security Act of 1974 ("ERISA"), all specified fringe benefit plans as
defined in Section 6039D of the Internal Revenue Code of 1986, as amended (the
"Code"), and all other bonus, incentive compensation, deferred compensation,
profit sharing, stock option, severance, supplemental unemployment, layoff,
salary continuation, retirement, pension, savings, health, life insurance,
disability, group insurance, vacation, holiday, sick leave, fringe benefit or
welfare plan, or any other similar plan, agreement, policy or understanding
(whether oral or written, qualified or non-qualified) which is currently and
within the past six (6) years has been maintained or contributed to by Seller,
the Company or any of their affiliates for the benefit of the employees of the
Company (or their dependents). Neither Seller, the Company nor any affiliate has
ever contributed to, or had an obligation to contribute to, any multiple
employer plan (other than as set forth on Schedule 2.16), multiemployer plan
(within the meaning of Section 3(37) of ERISA) or any plan subject to Title IV
of ERISA. For purposes of this Section 2.16, the term "affiliate" is any person
or entity which, together with the Seller, would be treated as a single employer
under Sections 414(b), (c), (m) or (o) of the Code.
(b) Contributions required to be made under the terms of any of the
Benefit Plans as of the date hereof have been timely made or, if not yet due,
have been (and will be) properly reflected on the Closing Balance Sheet, as
applicable. No prohibited transaction(s) (within the meaning of the Code) has
occurred in respect of the Benefit Plans.
(c) To the knowledge of Seller and the Company, each Benefit Plan has
been established and administered in all material respects in accordance with
its terms and the applicable provisions of ERISA, the Code and other applicable
laws, rules and regulations. Each Benefit Plan that is intended to be qualified
within the meaning of Section 401(a) of the Code has received a favorable
determination letter as to its qualification, (or, in the case of a standardized
form or paired plan, a favorable opinion or notification letter) and nothing has
occurred, whether by action or failure to act, that could reasonably be expected
to adversely affect the qualified status of any such Benefit Plan or the exempt
status of any such trust. The Benefit Plans do not discriminate in operating in
favor of employees who are officers or highly compensated.
(d) There are no pending or, to the knowledge of Seller and the Company,
threatened claims by or on behalf of the Benefit Plans or by any employee of the
Company alleging a breach or breaches of fiduciary duties or violations of other
applicable state or Federal law which could result in liability on the part of
the Company or the Benefit Plans under ERISA or any other law, nor is there any
reasonable basis for such a claim.
(e) Seller and the Company have at all times complied and currently
comply in all material respects with the applicable continuation coverage
requirements for their welfare benefit plans, including
7
the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA") and any
applicable state statutes mandating health insurance coverage for employees.
(f) Except as required by Title I, Part 6 of ERISA, no Benefit Plan
provides welfare benefits to any person following termination of employment with
Seller or any affiliate and no Seller or affiliate has any obligations (written
or oral) to provide any post-employment or retiree welfare benefits.
(g) Except as set forth on Schedule 2.16 hereto, all returns, reports,
disclosure statements and premium payments required to be made under ERISA and
the Code with respect to the Benefit Plans have been timely filed or delivered.
The Benefit Plans have not been audited or investigated by either the Internal
Revenue Service or the Department of Labor within the last five years, and there
are no outstanding audit issues with reference to the Benefit Plans pending
before said governmental agencies. No event has occurred and no condition exists
that would subject Seller or any affiliate to any material tax, fine, lien,
penalty or other liability imposed by ERISA, the Code or other applicable laws,
rules and regulations with respect to each Benefit Plan.
2.17. Employees.
(a) Schedule 2.17(a) hereto sets forth a true, correct and complete
list, as of the date hereof, of the names of all employees and other such
individuals (independent contractors) who provide service for the Company,
including, without limitation, employees of the Company currently on a leave of
absence or disability leave (the "Employees"). Except as set forth in Schedule
2.17(a), all of Employees are "at will" employees. Except as set forth in
Schedule 2.17(a), Seller is not a party to any oral (express or implied) or
written (i) employment agreement, (ii) consulting agreement, or (iii)
independent contractor agreement with any individual or entity owned entirely by
medical professionals. The Company is in compliance with all federal, state and
local laws and regulations respecting employment and employment practices, labor
practices, terms and conditions of employment and wages and hours. The employee
relations of the Company are good. There is no pending or, to the best knowledge
and belief of Sellers, threatened employee strike, work stoppage or labor
dispute. No union representation question exists respecting any employees of the
Company, no collective bargaining agreement exists or is currently being
negotiated by the Company, no demand has been made for recognition by a labor
organization by or with respect to any employees of the Company, no union
organizing activities by or with respect to any employees of the Company are
taking place, and none of the employees of the Company is represented by any
labor union or organization. There is no unfair practice claim against the
Company before the National Labor Relations Board, or any strike, dispute,
slowdown, or stoppage pending or threatened against or involving the business of
the Company, and none has occurred. The Company is not engaged in any unfair
labor practices. Except as set forth on Schedule 2.17(a), there are no pending
or, to the best knowledge and belief of Sellers, threatened EEOC claims, wage
and hour claims, unemployment compensation claims, workers' compensation claims
or the like against the Company. No employee has provided notice to the Company,
oral or written, of any plans to terminate employment with the Company, except
as noted on Schedule 2.17(a). Seller is in compliance in all material respects
with all federal and state laws respecting employment and employment practices,
terms and conditions of employment, and wages and hours, labor relations, safety
and health. Seller has complied in all material respects with all requirements
of the Immigration and Reform Control Act of 1986. Seller has not experienced
within the past 12 months a "plant closing" or "mass layoff" within the meaning
of the Workers Adjustment and Retraining Notification Act, 29 U.S.C. Sections
2101 et seq.
(b) All payroll, including salaries, benefits and all FICA, FUTA and
other taxes related to payroll (the "Payroll"), due to the Employees, in
accordance with their biweekly payroll program, through the Closing Date has
been paid by the Company. Schedule 2.17(b) sets forth the Payroll of the Company
as of the most recent payroll period for all Employees. There has been no
increase in the Payroll of the Company since December 31, 2003, other than as
set forth on Schedule 2.17(b). Other than as set forth on Schedule 2.17(b) and
except those incurred in the normal course of business, no Employee will have
8
received any bonus or increase in compensation since December 31, 2003 and there
has been no "general increase" in the compensation or rate of compensation
payable to any of the Employees since December 31, 2003, except in the ordinary
course of business. Except in the ordinary course of business, since December
31, 2003, and other than as set forth on Schedule 2.17(b), there has been no
promise to any of the Employees orally or in writing of any bonus or increase in
compensation, whether or not legally binding. Except in the ordinary course of
business, since December 31, 2003, there has been no other change in the
information disclosed on Schedule 2.17(b).
(c) Sellers have delivered to Purchaser an accurate list (Schedule
2.17(c)) of the accrued paid time off, including vacation, holiday and sick pay,
of each of the Employees as of the date hereof.
2.18. Insurance Coverage. The Company maintains in full force and effect,
with no premium arrearages, liability and hazard insurance policies bearing the
numbers, for the terms, with the companies, in the amounts and providing the
coverage set forth on Schedule 2.18. True and correct copies of all such
policies and all endorsements thereto have been delivered to Purchaser.
2.19. Payments to Sellers. Schedule 2.19 sets forth all payments by the
Company to any member of the Company since December 31, 2001, other than
distributions made to members solely in respect of their ownership interests in
the Company and other than management fees paid under the Management Agreement.
2.20. Appraisal Reports and Surveys . Since December 31, 2001, there have
been no appraisal reports, surveys or other documents which evaluate or describe
the Company's business or any of the Assets which have not been delivered to
Purchaser.
2.21. Absence of Certain Changes. Except as permitted or contemplated by
this Agreement, since July 1, 2003, the Company has not:
(a) other than in the ordinary course of business, incurred any
indebtedness or other liabilities (whether accrued, absolute, contingent or
otherwise), sold or disposed of any of its capital assets with a historical cost
of greater than $10,000;
(b) guarantied any indebtedness or sold or disposed of any of its
non-capital assets other than in the ordinary course of business;
(c) suffered any damage, destruction or loss, to any of the tangible
Assets, whether or not covered by insurance with a historical cost of greater
than $10,000;
(d) established or agreed to establish any pension, retirement or
welfare plan for the benefit of its employees not theretofore in effect, except
as noted on Schedule 2.16 or Schedule 2.21(d);
(e) suffered any change in its financial condition, assets, liabilities
or business or to Sellers' knowledge suffered any other event or condition of
any character that individually or in the aggregate has or might reasonably be
expected to have an adverse effect on its business;
(f) experienced any labor organizational efforts, strikes or formal
complaints or entered into any collective bargaining agreements with any union;
(g) made any single capital expenditure that exceeded $10,000 or made
aggregate capital expenditures that exceeded $20,000, except as noted on
Schedule 2.21(g) hereof;
9
(h) disposed of any assets, written down the value of any of the Assets
which are capital assets with a historical cost of greater than $10,000, written
off as uncollectible any account receivable (excluding contractual adjustments
and charity care) in excess of $5,000 or revalued any of the Assets, with a
historical cost of greater than $10,000, except as noted on Schedule 2.21(h)
hereof;
(i) paid, discharged or satisfied any claims, liabilities or obligations
(absolute, accrued, contingent or otherwise) other than in the ordinary course
of business, except as noted on Schedule 2.21(i) hereof;
(j) canceled any debts or waived any claims or rights in either case,
other than an accounts receivables written-off in the ordinary course of its
business;
(k) entered into, amended or terminated any contract, agreement or
license to which it is a party;
(l) made any change in any method of accounting or accounting practice;
(m) canceled, or failed to continue, insurance coverages; or
(n) agreed, whether in writing or otherwise, to take any action
described in Section 2.21(a)-(m).
2.22. Environmental Conditions.
(a) The Company and the Center are currently in compliance with all
Environmental Laws (as hereinafter defined), including, but not limited to, the
possession by the Company of all permits and other governmental authorization
required under applicable Environmental Laws to operate the Center as currently
operated and is in compliance with the terms and conditions thereof.
(b) Neither the Company nor the Center has stored any Hazardous
Substances (as hereinafter defined) on any of the Real Property, except in
compliance with applicable Environmental Laws.
(c) Neither the Company nor the Center has disposed of or released any
Hazardous Substances on any of the Real Property.
(d) Neither the Company nor the Center has utilized any transporters or
disposal facilities for the transport or disposal of Hazardous Substances, other
than Medical Waste (as hereinafter defined), the disposal of which is covered by
Section 2.22 hereof.
(e) Neither the Company nor the Center has received any communication
(written or oral), whether from a governmental authority, citizens' group,
employee or otherwise, that alleges that such entity is not in full compliance
with Environmental Laws, and, to the best knowledge of Sellers, there are no
circumstances that may prevent or interfere with such full compliance in the
future. There is no Environmental Claim (as defined below) pending or, to the
best knowledge of Sellers, threatened against the Company or the Center.
(f) Sellers have no knowledge of any actions, activities,
circumstances, conditions, events or incidents, including, but not limited to,
the release, emission, discharge, presence or disposal of any Hazardous
Substances that could form the basis of any Environmental Claim against the
Company or the Center.
10
(g) The following terms shall have the following meanings:
"Environmental Claim" means any claim, action, cause of action,
investigation or notice (written or oral) by any person or entity alleging
potential liability (including, but not limited to, potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damages, property damages, personal injuries, or penalties) arising
out of, based on or resulting from (a) the presence, or release into the
environment, of Hazardous Substances at any location which is or has been owned,
leased, operated or utilized by the Center or (b) circumstances forming the
basis of any violation, or alleged violation, of any Environmental Law.
"Environmental Laws" means the federal, state (including, but not limited
to, the State of Missouri), regional, county or local environmental, health or
safety laws, regulations, ordinances, rules and policies and common law in
effect on the date hereof and the Closing Date relating to the use, refinement,
handling, treatment, removal, storage, production, manufacture, transportation
or disposal, emissions, discharges, releases or threatened releases of Hazardous
Substances, or otherwise relating to protection of human health or the
environment (including, but not limited to, ambient air, surface water, ground
water, land surface or subsurface strata), as the same may be amended or
modified to the date hereof and the Closing Date.
"Hazardous Substances" means any toxic or hazardous waste, pollutants or
substances, including, without limitations, asbestos containing materials
("ACMs"), polychlorinated biphenyls ("PCBs"), petroleum products, byproducts, or
other hydrocarbon substances, substances defined or listed as a "hazardous
substance", "toxic substance", "toxic pollutant", or similarly identified
substance or mixture, in or pursuant to any Environmental Law.
"Real Property" means any real property leased or owned by the Company.
2.23. Medical Waste. With respect to the generation, transportation,
treatment, storage, and disposal, or other handling of Medical Waste, the
Company and the Center have complied with all Medical Waste Laws (as hereinafter
defined).
"Medical Waste" includes, but is not limited to, (a) pathological waste,
(b) blood, (c) sharps, (d) wastes from surgery or autopsy, (e) dialysis waste,
including contaminated disposable equipment and supplies, (f) cultures and
stocks of infectious agents and associated biological agents, (g) contaminated
animals, (h) isolation wastes, (i) contaminated equipment, (j) laboratory waste,
and (k) various other biological waste and discarded materials contaminated with
or exposed to blood, excretion, or secretions from human beings or animals.
"Medical Waste" also includes any substance, pollutant, material, or contaminant
listed or regulated under the Medical Waste Tracking Act of 1988, 42 U.S.C.
Sections 6992, et seq. ("MWTA").
"Medical Waste Law" means the following, including regulations promulgated
and orders issued thereunder, all as may be amended from time to time: the MWTA,
the U.S. Public Vessel Medical Waste Anti-Dumping Act of 1988, 33 USCA Sections
2501 et seq., the Marine Protection, Research, and Sanctuaries Act of 1972, 33
USCA Sections 1401 et seq., The Occupational Safety and Health Act, 29 USCA
Sections 651 et seq., the United States Department of Health and Human Services,
National Institute for Occupational Self-Safety and Health Infectious Waste
Disposal Guidelines, Publication No. 88-119, and any other federal, state,
regional, county, municipal, or other local laws, regulations, and ordinances
insofar as they purport to regulate Medical Waste, or impose requirements
relating to Medical Waste.
11
2.24. Certain Representations With Respect to the Center.
(a) Complete and accurate copies of all Material Provider Contracts and
Business Contracts have been furnished to Purchaser. The Company is in
compliance with all of the terms, conditions and provisions of all such
contracts.
(b) The Company is qualified for participation in the Medicare program.
Complete and accurate copies of the Company's existing Medicare contracts for
the Center have been furnished to Purchaser. The Company is in compliance with
all of the terms, conditions and provisions of all such contracts.
(c) The Company does not participate in the CHAMPUS program.
(d) The Center is licensed by the State of Missouri Department of Health
and Senior Services as an ambulatory surgery center. The Company is in
compliance in all respects with all the terms, conditions and provisions of such
licenses. The facilities, equipment, and operations of the Center satisfy,
without exception, the applicable ambulatory surgery center licensing
requirements of the State of Missouri.
2.25. No Untrue or Inaccurate Representation or Warranty. No
representation or warranty by Sellers contains or will knowingly contain any
untrue statement of fact, or omits or will omit to state a fact necessary to
make the statements therein not misleading.
III. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Sellers as follows:
3.1. Organization and Standing. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Tennessee and has full corporate power and authority to conduct its business as
now being conducted and is duly qualified to do business in Missouri.
3.2. Authorization and Binding Effect. Purchaser has all necessary
authority and corporate power to execute and deliver this Agreement and
consummate the transactions contemplated hereby and has taken all action
required to be taken by or on the part of Purchaser to authorize the execution,
delivery and performance of this Agreement. This Agreement constitutes a valid
and binding agreement enforceable against Purchaser in accordance with its
terms. The execution of this Agreement by the Purchaser, the performance by the
Purchaser of its obligations hereunder and the consummation of the transaction
contemplated hereby by the Purchaser will not require any consent, approval or
notice under, or violate, breach, be in conflict with or constitute a default
(or an event that, with notice or lapse of time or both, would constitute a
default) under, or permit termination of, or result in the creation or
imposition of any lien upon any properties, assets or business of the Company.
3.3. Ownership. Purchaser is an indirect wholly owned subsidiary of SARC,
which is a wholly owned subsidiary of Symbion, Inc., a Delaware corporation.
3.4. No Finders or Brokers. Purchaser has not engaged any finder or
broker in connection with the transactions contemplated hereunder.
3.5. Adequate Funding. SARC has adequately funded Purchaser to enable
Purchaser to perform its obligations hereunder.
12
3.6. No Untrue or Inaccurate Representation or Warranty. No
representation or warranty by Purchaser contains or will knowingly contain any
untrue statement of fact, or omits or will omit to state a fact necessary to
make the statements therein not misleading.
IV. COVENANTS OF PURCHASER
4.1. Best Efforts. Purchaser hereby covenants and agrees to take all
necessary and timely corporate action and to use its reasonable best efforts to
obtain all consents and approvals required to carry out the transactions
contemplated herein and to satisfy the conditions specified herein.
4.2. Short Period Tax Return. Because Purchaser's acquisition of the
Subject Interest will constitute a technical termination of the existing
partnership, following Closing, Purchaser will shall cooperate in all reasonable
respects to permit the Company's pre-closing accountants to timely prepare and
file, at Company's cost, a final, short period tax return.
V. COVENANTS OF SELLERS
5.1. Best Efforts.Sellers shall take, and shall cause the Company to
take, all necessary action and shall use their reasonable best efforts to obtain
all consents and approvals required to carry out the transactions contemplated
herein and to satisfy the conditions specified herein including, but not limited
to, the reorganization of the Company as a Delaware limited liability company to
occur simultaneously with or immediately upon the Closing. To that end, each
Seller hereby consents and agrees to take any action reasonably necessary to
accomplish such reorganization, including but not limited to, the adoption and
approval of any resolution, certificate or other instrument providing for the
merger of the Company with and into a Delaware limited liability company to
accomplish such reorganization. By execution of this Agreement, all Sellers
shall be deemed to have consented to any such reorganization.
5.2. Reserved.
5.3. Conduct of Business. Between the date hereof and the Closing Date,
except as otherwise approved by Purchaser, the Company shall conduct its
business only in the ordinary course thereof consistent with past practice and
in such a manner that the representations and warranties contained in Article II
hereof shall be true and correct at and as of the Closing Date (except for
changes contemplated, permitted or required by this Agreement) and so that the
conditions to be satisfied by Sellers at the Closing shall have been satisfied.
Sellers have caused the Company, consistent with conducting its business in
accordance with reasonable business judgment, preserve its business intact and
use its best efforts to keep available to Purchaser the services of its current
employees.
5.4. Additional Financial Information. Within 20 days following the end
of each calendar month prior to Closing, Sellers will deliver to Purchaser true
and complete copies of the unaudited balance sheets and the related unaudited
statements of income and cash flow of, or relating to, the Company for each
month then ended, together with a year-to-date compilation and the notes, if
any, related thereto, which presentation shall be true, correct and complete in
all material respects, shall have been prepared from and in accordance with the
books and records of the Company and which shall fairly present the financial
position, results of operations and cash flow of the Company as of the date and
for the period indicated, all in accordance with GAAP, except as set forth on
Schedule 2.11(b).
5.5. Notification of Certain Matters. Until the Closing Date, Sellers
shall promptly advise Purchaser in writing of (i) any change or event that would
cause any condition to closing in Article VI or VII to be unable to be
satisfied, (ii) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement, and (iii) the existence of any
matter arising or discovered which would have been required to
13
be set forth or described in the Exhibits and Schedules to this Agreement. Each
party shall promptly notify the other of any action, suit or proceeding that
shall be instituted or threatened against such party to restrain, prohibit or
otherwise challenge the legality of any transaction contemplated by this
Agreement.
5.6. Exclusivity. During the period from the date of this Agreement until
its termination in accordance with Article IX hereof, Sellers shall not, and
shall cause the Company to not, and will cause each of its and their respective
agents, employees, and affiliates to not, except as expressly contemplated
herein, directly or indirectly, initiate, encourage, conduct or hold discussions
with any corporation, partnership, person or other entity (other than Purchaser
and its Affiliates) concerning:
(a) a purchase, affiliation, joint venture or lease of all, or a
material part of, the Company or Center;
(b) the management of the Center;
(c) the transfer by any Seller of any of its ownership in the Center or
the Company; or
(d) the issuance by the Company of any debt, equity or hybrid
securities.
If a Seller or the Company shall receive any unsolicited offer or correspondence
relating to a transaction of the type described in this Section 5.6, such Seller
or the Company, as the case may be, shall promptly notify Purchaser of any such
transaction or negotiations and disclose the terms of any such proposal.
5.7. Covenant Not to Compete. Each Seller (other than Xxxxxxx) agrees
that for a period of five (5) years following the Closing (the "Restricted
Period"), neither he nor any of his Affiliates shall, directly or indirectly,
own an interest in, lease, manage, joint venture with or be employed by a
Competing Business that is located within a radius of twenty five (25) miles of
the Center (and, solely as to Xxxxxxxxx, fifty (50) miles in the case of those
businesses set forth in (II) of the definition of Competing Business) (the
"Restricted Area"). Nothing in this Section 5.7 is intended to prevent a Seller
or his Affiliate from practicing medicine, being a member of the medical staff
of, or referring patients to, any other hospital or health care facility. Each
Seller agrees that the restrictions contained in this Section 5.7 are reasonable
and necessary to protect the legitimate interests of the Company, the Purchaser
and the Purchaser's Affiliates, and that any violation of this provision would
result in damages to the Company, the Purchaser and the Purchaser's Affiliates
which cannot be compensated by money alone. Each Seller agrees that the
Purchaser and the Purchaser's Affiliates will be entitled to injunctive relief
without proving actual damages or posting any bond. If a court shall hold that
the duration and/or scope (geographic or otherwise) of the agreement contained
in this Section 5.7 is unreasonable, then, to the extent permitted by law, the
court may prescribe a duration and/or scope (geographic or otherwise) that is
reasonable and judicially enforceable. The parties agree to accept such
determination, subject to their rights of appeal, which the parties hereto agree
shall be substituted in place of any and every offensive part of this Section
5.7, and as so modified, this Section 5.7 shall be as fully enforceable as if
set forth herein by the parties in the modified form.
As used herein, a "Competing Business" is:
(I) any health care business which provides a facility in which surgical
procedures are performed and shall include, without limitation, a specialty
hospital, hospital or ambulatory surgery center; provided, however, the private
practice of any Seller will not be a Competing Business as long as substantially
all of the Seller's professional services are rendered through such practice and
such practice only performs surgeries which do not (i) require a separate
license, (ii) require the presence of an anesthesiologist, (iii) involve
conscious sedation or (iv) generate a separate facility fee; provided, further,
fees that are, as of the date hereof, being billed under "professional fee"
codes in connection with in-
14
office surgeries being performed by the private practice of any Seller in the
ordinary course of business shall not be deemed to be a "separate facility fee"
for purposes hereof for each such private practice that is billing such fees as
of the date hereof; or
(II) any business that markets to or seeks referrals from employers,
insurance companies or other third-party payors with respect to surgical
services for workers compensation claims or otherwise holds itself out as having
expertise in or able to provide surgical services related to workers
compensation claims; provided, however, the private practice of any Seller will
not be a Competing Business as long as such activities are solely for the
purpose of obtaining patients for treatment by such private practice.
Solely as to Xxxxxxxxx, Purchaser agrees to consult with Xxxxxxxxx from
time to time as reasonably requested by Xxxxxxxxx, to consider in good faith the
making of, on a case-by-case basis, at Purchaser's sole discretion, one or more
exception to the foregoing covenant if and to the extent Purchaser determines,
in its sole discretion, that the interests of Purchaser and its Affiliates would
not be adversely affected.
5.8. Termination or Merger of Benefit Plans. Notwithstanding anything
herein to the contrary, if requested by Purchaser prior to the Closing Date, the
Sellers hereby covenant and agree to cause Company to merge, freeze, terminate,
amend or take any other action with respect to any Benefit Plan that Purchaser,
in its sole discretion, deems advisable; to take all steps necessary to
accomplish such requests; to provide all the required notices to participants
and appropriate governmental agencies; to adopt all necessary resolutions and
Benefit Plan amendments; and to provide to Purchaser satisfactory evidence of
the executed documents described in this Section 5.8. Notwithstanding the
foregoing, the Company shall only be required to take such action in the event
Purchaser has waived all conditions to Closing provided in Article VI (except
any related to execution of documents at the time of Closing or any requiring
the presentation of documents at Closing) and Purchaser shall indemnify Sellers
and the Company for any damages, losses, liabilities, fines or penalties
incurred as a result of taking any such action.
VI. CONDITIONS TO CLOSING BY PURCHASER
Except as may be waived by Purchaser, the obligations of Purchaser to
purchase the Subject Interest and to consummate the transactions contemplated
hereby on the Closing Date shall be subject to the satisfaction on or prior to
the Closing Date of the following conditions:
6.1. Compliance. All of the representations and warranties of Sellers
contained in Article II of this Agreement shall be true as of the date of this
Agreement and as of the time of the Closing, except as would not individually or
in the aggregate have a material adverse effect on the Company or the results of
operations or financial condition of the Center, and Sellers shall have
performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by it prior to or at the Closing,
except for noncompliance which would not individually or in the aggregate have a
material adverse effect on the Company or the results of operations or financial
condition of the Center. Purchaser shall have been furnished a certificate dated
the Closing Date and signed by each Seller, to the foregoing effect.
6.2. Accuracy and Completeness of Schedules. Purchaser shall not have
determined the Schedules provided by Sellers and attached hereto to be
inaccurate or incomplete in any material respect.
6.3. Consents, Authorizations, Etc. All necessary licenses,
certifications, permits and approvals from federal, state and local governmental
units for the transactions contemplated hereby, and for the continued operation
of the Center as an ambulatory surgery center following the consummation of
15
the transactions contemplated hereby, shall have been issued to the Company in
form and substance reasonably satisfactory to Purchaser.
6.4. No Action or Proceeding. No action or proceeding shall have been
brought or threatened before any court or administrative agency to prevent the
consummation of, or to seek damages in a material amount by reason of, the
transactions contemplated hereby, and no governmental authority shall have
asserted that these transactions constitute a violation of law or give rise to
liability on the part of Purchaser or the Company.
6.5. Good Standing Certificate. Sellers shall have delivered to Purchaser
a good standing certificate issued with respect to the Company, issued by the
Secretary of State of the State of Missouri, dated as of a date that is not more
than 15 days prior to the Closing Date.
6.6. No Material Adverse Effect. The operations of the Company and the
Center shall have been conducted in the ordinary course of business, consistent
with past practice, and from the date of the Financial Statement until the
Closing, no event shall have occurred or have been threatened, which has or
would have a material and adverse effect upon the operations of the Company or
the Center or their respective prospects; and none of the Company, the Assets
and the Center shall have sustained any loss or damage, whether or not insured,
that affects materially and adversely (in the reasonable, good faith opinion of
Purchaser) the value of the Company, the Center or the Assets.
6.7. Assignment Agreement. Each Seller shall have delivered to Purchaser
(a) a duly executed assignment agreement in the form attached hereto as Exhibit
1.4; and (b) any other document or instrument as may be reasonably requested by
Purchaser to evidence the transfer the Subject Interest from Sellers to
Purchaser.
6.8. Reorganization of Company in Delaware; Adoption of Operating
Agreement. All actions necessary to cause the Company to become reorganized as a
Delaware limited liability company shall have been taken, such reorganization to
occur simultaneously with and immediately upon the Closing. The Operating
Agreement of the Company, in the form attached as Exhibit 6.8, shall have been
adopted by each member of the Company.
6.9. Ancillary Transactions. Purchaser shall have:
(a) acquired all of the outstanding capital stock of Dacot, Inc. from
the holders thereof;
(b) entered into the Option Agreements.
6.10. Waiver of Conditions. Purchaser may waive any condition of this
Article VI to the extent permitted by applicable law.
VII. CONDITIONS TO CLOSING BY SELLER
Except as may be waived in writing by Sellers, the obligations of Sellers
to consummate the transactions contemplated hereby on the Closing Date shall be
subject to the satisfaction on or prior to the Closing Date of the following
conditions:
7.1. Compliance. All of the representations and warranties made by
Purchaser contained in Article III of this Agreement shall be true as of the
date of this Agreement and as of the time of Closing, except as would not
individually or in the aggregate have a material adverse effect on Seller's
interests under this Agreement, and Purchaser shall have performed and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by it prior to or at the Closing,
16
except for noncompliance which would not individually or in the aggregate have a
material adverse effect on Seller's interests under this Agreement. Sellers
shall have been furnished with a certificate, dated the Closing Date, of a duly
authorized officer of Purchaser to the foregoing effect.
7.2. Secretary's Certificate. At the Closing, Sellers shall have received
copies of the following, in each case certified as of the Closing Date by a
Secretary or an Assistant Secretary of Purchaser:
(a) resolutions of the board of directors of Purchaser authorizing the
execution, delivery and performance of this Agreement and the other agreements
that Purchaser is required to execute and deliver pursuant to the terms of this
Agreement; and
(b) the signature and incumbency of the officers of Purchaser authorized
to execute and deliver this Agreement and the other agreements and certificates
that Purchaser is required to deliver on or before the Closing Date pursuant to
this Agreement.
7.3. Consent, Authorizations, Etc. All necessary consents,
authorizations, licenses, certifications, permits and approvals from federal,
state and local governmental units for the transactions contemplated hereby, and
for continued operation of the Center as an ambulatory surgery center following
the consummation of the transactions contemplated hereby, shall have been issued
to the Company in form and substance reasonably satisfactory to Seller.
7.4. No Action or Proceeding. No action or proceeding shall have been
brought or threatened before any court or administrative agency to prevent the
consummation of, or to seek damages in a material amount by reason of, the
transactions contemplated hereby, and no governmental authority shall have
asserted that these transactions constitute a violation of law or give rise to
liability on the part of Sellers.
7.5. Good Standing Certificate. Purchaser shall have delivered to Sellers
a good standing certificate issued with respect to Purchaser by the Secretary of
the State of Tennessee. Such good standing certificate shall be dated as of a
date that is not more than 15 days prior to the Closing Date.
7.6. Waiver of Conditions. Sellers may waive any conditions of this
Article VII to the extent permitted by applicable law.
VIII. INDEMNIFICATION
8.1. Indemnification of Purchaser. Sellers, jointly and severally, shall
upon demand indemnify and hold Purchaser harmless against, and reimburse
Purchaser from time to time when and as costs are incurred for, any actual
damage, loss, liability, fine, penalty, charge, administrative or judicial
proceeding or order, judgment, remedial action requirement, enforcement action
of any kind, cost or expense (including reasonable attorneys' fees and other
expenses incurred in investigating or defending any claim against Purchaser for
such damage, loss, cost or expense) (collectively, "Losses"): (i) incurred by
Purchaser or SARC resulting from any breach of Sellers' representations,
warranties or covenants in this Agreement, or any document or instrument
delivered pursuant hereto, or from any misrepresentation in, or omission from,
any information, certificate, license, report or other instrument or agreement
furnished to Purchaser pursuant to this Agreement made by Sellers, other than
any breach, misrepresentation, omission or inaccuracy within "Purchaser's Actual
Knowledge" (as defined below); (ii) resulting from, or in any way related to,
any litigation, debt, lien, charge, encumbrance, damage, cost, claim, expense,
assessment or other liability asserted against Purchaser, SARC, the Company or
the assets of any of them, as a result of, or with respect to, the operation of
the Company's business or the Center prior to the Closing, regardless of when an
action, suit, claim or proceeding is filed or made; (iii) incurred by Purchaser
or SARC in connection with any suit, claim
17
or proceeding of any nature seeking to recover damages for personal injury,
death or property damage due or alleged to be due to occurrences before the
Closing; and (iv) any of the foregoing that results in a decrease in the value
of the Company; provided, however, with respect to Losses that result solely in
a decrease in the value of the Company, the Losses deemed to have been sustained
by Purchaser shall equal the product of (a) 50.00% plus the Sharing Percentage,
if any, represented by the Xxxxxxx Option Interest (but only to the extent the
Xxxxxxx Option is exercised in accordance with its terms) multiplied by (b) of
the aggregate decrease in the value of the Company. Purchaser shall have the
right, with notice, to offset or set off amounts owed to it under this Section
8.1 against amounts owed by Purchaser or its Affiliates to Sellers pursuant to
any other obligations. Purchaser's right to indemnification, payment of damages
or other remedy hereunder based upon Sellers' breach of their representations,
warranties, covenants and obligations herein will not be affected or limited by
any investigation conducted by or on behalf of Purchaser with respect hereto,
any preparation or compilation by or on behalf of Purchaser of schedules to this
Agreement, or any knowledge acquired (or capable of being acquired) by
Purchaser, except the Purchaser's Actual Knowledge, of such breach at any time
before or after the execution and delivery of this Agreement or the Closing Date
with respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant or obligation. As used herein, "Purchaser's
Actual Knowledge" means the actual knowledge of Xxxxxxx X. X. Xxxx, III or
Xxxxxx Xxxxxxx.
8.2. Indemnification of Sellers. Purchaser and SARC jointly and severally
shall upon demand indemnify and hold Sellers harmless against, and reimburse
Sellers from time to time when and as costs are incurred for, any actual damage,
loss, liability, fine, penalty, charge, administrative or judicial proceeding or
order, judgment, remedial action requirement, enforcement action of any kind,
cost or expense (including reasonable attorneys' fees and other expenses
incurred in investigating or defending any claim against Sellers for such
damage, loss, cost or expense) incurred by Sellers resulting from any breach of
Purchaser's representations, warranties or covenants in this Agreement, or any
document or instrument delivered pursuant hereto, or from any misrepresentation
in, or omission from, any information, certificate, license, report or other
instrument or agreement furnished to Sellers pursuant to this Agreement made by
Purchaser and/or SARC, other than any breach, misrepresentation, omission or
inaccuracy within "Sellers' Actual Knowledge" (as defined below). Sellers shall
have the right, with notice, to offset or set off amounts owed to it under this
Section 8.2 against amounts owed by Sellers to Purchaser pursuant to any other
obligations. Sellers' right to indemnification, payment of damages or other
remedy hereunder based upon Purchaser's representations, warranties, covenants
and obligations herein will not be affected or limited by any investigation
conducted by or on behalf of Sellers with respect hereto, any preparation or
compilation by or on behalf of Sellers of schedules to this Agreement, or any
knowledge acquired (or capable of being acquired) by Sellers, except the
Sellers' Actual Knowledge, at any time before or after the execution and
delivery of this Agreement of the Closing Date with respect to the accuracy or
inaccuracy of or compliance with, any such representation, warranty, covenant or
obligation. As used herein, "Sellers' Actual Knowledge" means the actual
knowledge of any Seller.
8.3. Notice and Control of Litigation. If any claim or liability is
asserted in writing by a third party ("Third Party Claim") against a party
entitled to indemnification under this Article VIII (the "Indemnified Party")
which would give rise to a claim under this Article VIII, the Indemnified Party
shall notify the person(s) giving the indemnity (collectively, if more than one,
the "Indemnifying Party") in writing of the same within 15 days of receipt of
such written assertion of a claim or liability. The Indemnifying Party shall
have the right to defend a claim and control the defense, settlement and
prosecution of any litigation; provided that the Indemnifying Party expressly
agrees in a manner reasonably acceptable to the Indemnified Party to be solely
obligated to satisfy and discharge the Third Party Claim unless the interests of
the Indemnified Party and the Indemnifying Party are or are likely to be
adverse, in which case the Indemnified Party shall have the right to hire its
own counsel and undertake the defense and the cost thereof shall be part of the
claim for which the Indemnified Party shall be indemnified. If the Indemnifying
Party, within ten days after notice of such claim, fails to defend such
18
claim, the Indemnified Party will (upon further notice to the Indemnifying
Party) have the right to undertake the defense, compromise or settlement of such
claim on behalf of and for the account and at the risk of the Indemnifying
Party. Anything in this Section 8.3 notwithstanding, (i) if there is a
reasonable probability that a claim may adversely affect the Indemnified Party
(because money damages or other money payments may not be an adequate remedy or
because money damages or payments may be substantial or are not likely to be
collectible from the Indemnifying Party), the Indemnified Party shall have the
right, at its own cost and expense, to defend, compromise and settle such claim,
and (ii) the Indemnifying Party shall not, without the written consent of the
Indemnified Party, settle or compromise any claim or consent to the entry of any
judgment which does not include as an unconditional term thereof the giving by
the claimant to the Indemnified Party of a release from all liability in respect
of such claim. All Parties agree to cooperate fully as necessary in the defense
of such matters. Should the Indemnified Party fail to notify the Indemnifying
Party in the time required above, the indemnity with respect to the subject
matter of the required notice shall continue, but shall be limited to the
damages that would have resulted absent the Indemnified Party's failure to
notify the Indemnifying Party in the time required above after taking into
account such actions as could have been taken by the Indemnifying Party had it
received timely notice from the Indemnified Party.
8.4. Notice of Claim. If an Indemnified Party becomes aware of any breach
of the representations or warranties of the Indemnifying Party hereunder or any
other basis for indemnification under this Article VIII (except as otherwise
provided for under Section 8.3), the Indemnified Party shall notify the
Indemnifying Party in writing of the same within 45 days after becoming aware of
such breach or claim, specifying in detail the circumstances and facts which
give rise to a claim under this Article VIII. Should the Indemnified Party fail
to notify the Indemnifying Party within the time frame required above, the
indemnity with respect to the subject matter of the required notice shall
continue, but shall be limited to the damages that would have nonetheless
resulted absent the Indemnified Party's failure to notify the Indemnifying Party
in the time required above after taking into account such actions as could have
been taken by the Indemnifying Party had it received timely notice from the
Indemnified Party.
8.5. Limitations.
(a) Except as set forth in Section 8.5(b), (i) Sellers shall not be
liable for indemnification pursuant to this Agreement for any claims based on
the breach, misrepresentation, omission or inaccuracy of any representation or
warranty that involves an amount of damage that is individually less than $500
("Excluded Claims") and (ii) Sellers shall be liable for indemnification
pursuant to this Agreement only after the total indemnification claims,
excluding amounts in respect of Excluded Claims, exceed $50,000 (the
"Threshold") in the aggregate. If the Threshold is met, Sellers shall be liable
for the entire amount of all claims which are not an Excluded Claim back to the
"first dollar" of damages.
(b) The limitations contained in Section 8.5(a) will not apply to
amounts payable pursuant to Sections 1.2 or 1.3.
(c) Except as set forth in Section 8.5(d), (i) Purchaser and SARC shall
not be liable for indemnification pursuant to this Agreement for any claims
based on the breach, misrepresentation, omission or inaccuracy of any
representation or warranty that involves an amount of damage that is
individually less than $500 ("Excluded Claims") and (ii) SARC and Purchaser
shall be liable for indemnification pursuant to this Agreement only after the
total indemnification claims, excluding amounts in respect of Excluded Claims,
exceed the Threshold, in the aggregate. If the Threshold is met, Purchaser and
SARC shall be liable for the entire amount of each claim which is not an
Excluded Claim back to the "first dollar" of damages.
19
(d) The limitation contained in Section 8.5(c) will not apply to amounts
payable pursuant to Sections 1.2 or 1.3.
(e) Notwithstanding the provisions of this Agreement, the Sellers shall
not be required to indemnify the Purchaser and SARC pursuant to this Agreement
in an amount or amounts exceeding, in the aggregate, the sum of (I) the Purchase
Price theretofore paid by the Purchaser and SARC, in accordance herewith and
pursuant hereto, and (II) the Option Exercise Price (as defined in the Xxxxxxx
Put Option) for the Xxxxxxx Option Interest if the Xxxxxxx Put Option has been
exercised. Notwithstanding the provisions of this Agreement, no Seller shall be
required to indemnify Purchaser and/or SARC pursuant to this Agreement in an
amount greater than the amount of the Purchase Price received by such Seller (as
adjusted pursuant to Section 1.3) or, in the case of Xxxxxxx, the Option
Exercise Price.
(f) Notwithstanding the provisions of this Agreement, Purchaser and SARC
shall not be required to indemnify Sellers pursuant to this Agreement in an
amount greater than $1,000,000.
8.6. Indemnification as Sole Legal Remedy. The provisions of this Article
VIII shall be the Parties' sole legal remedy for any breach of any of the
representations and warranties set forth in this Agreement.
IX. TERMINATION
9.1. Termination. This Agreement may be terminated and the transaction
abandoned at any time prior to the Closing Date as follows:
(a) By the mutual written consent of Purchaser and Seller;
(b) By Purchaser or Seller, if the Closing has not occurred by November
15, 2004;
(c) by Purchaser if (A) there has been a material violation or breach of
any of the Sellers' agreements, representations or warranties contained in this
Agreement which has not been waived by Purchaser in writing; or (B) Purchaser
shall determine that the conditions set forth in Section 6.2 will not be
satisfied;
(d) by the Sellers' Majority if there has been a material violation or
breach of any of the Purchaser's or SARC's agreements, representations or
warranties contained in this Agreement which has not been waived by such
Sellers' Majority in writing.
9.2. Notice of Termination. In the event of such termination by either
Purchaser or Seller pursuant to Section 9.1 hereof, written notice shall
forthwith be given to the other party or parties hereto.
9.3. Consequences of Termination. In the event this Agreement is
terminated as provided in Section 9.1 above, (a) Purchaser shall deliver to
Sellers all documents (and copies thereof in its possession) concerning the
Company previously delivered by Sellers or the Company to Purchaser; and (b)
none of the parties hereto nor any of their respective shareholders, directors,
officers, agents or consultants shall have any liability to the other party for
costs, expenses, loss of anticipated profits, consequential damages or
otherwise, except for any intentional breach of any of the provisions of this
Agreement.
20
X. MISCELLANEOUS
10.1. Schedules and Other Instruments. Each Schedule and Exhibit to this
Agreement shall be considered a part hereof as if set forth herein in full.
10.2. Additional Assurances. The provisions of this Agreement shall be
self-operative and shall not require further agreement by the Parties except as
may be herein specifically provided to the contrary; provided, however, at the
reasonable request and expense of a Party, the other Party or Parties shall
execute such additional instruments and take such additional actions as the
requesting Party may deem necessary to effectuate this Agreement. In addition
and from time to time after Closing, Sellers shall execute and deliver such
other instruments of conveyance and transfer, and take such other actions as
Purchaser reasonably may request, to effectively convey and transfer full right,
title and interest to, vest in, and place Purchaser in legal, equitable and
actual possession of the Subject Interest. Sellers shall also furnish Purchaser
with such information and documents in that Party's possession or under that
Party's control, or which Sellers can execute or cause to be executed, as will
enable Purchaser to prosecute any and all petitions, applications, claims and
demands relating to or constituting a part of the Subject Interest.
Additionally, each Party hereto shall cooperate with one another and use their
respective reasonable efforts to have their respective present directors,
officers and employees cooperate with one another on and after Closing in
furnishing information, evidence, testimony and other assistance in connection
with any action, proceeding, arrangement or dispute of any nature with respect
to matters pertaining to all periods prior to Closing in respect of the items
subject to this Agreement, provided that any Party hereto will reimburse the
other Parties hereto for all costs and expenses incurred by the other Parties
hereto in connection therewith.
10.3. Consented Assignment. Anything contained herein to the contrary
notwithstanding, this Agreement shall not constitute an agreement to assign any
claim, right, contract, license, lease, commitment, sales order or purchase
order if an attempted assignment thereof without the consent of the other Party
thereto would constitute a breach thereof or in any material way affect the
rights of Sellers, as appropriate, thereunder, unless such consent is obtained.
If such consent is not obtained, or if an attempted assignment would be
ineffective or would materially affect the rights thereunder of Sellers so that
Purchaser would not in fact receive all such rights, the Parties shall cooperate
in any reasonable arrangement designed to provide for the Parties the benefits
under any such claim, right, contract, license, lease, commitment, sales order
or purchase order, including, without limitation, enforcement of any and all
rights of Sellers, against the other party or parties thereto arising out of the
breach or cancellation by such other party or otherwise.
10.4. Legal Fees and Costs. In the event a Party elects to incur legal
expenses to enforce or interpret any provision of this Agreement by judicial
proceedings, the prevailing Party will be entitled to recover such legal
expenses, including, without limitation, reasonable attorney's fees, costs and
necessary disbursements at all court levels, in addition to any other relief to
which such Party shall be entitled.
10.5. Choice of Law and Venue. The Parties agree that this Agreement shall
be governed by and construed in accordance with the laws of the State of
Missouri. The Parties hereto hereby designate all courts of record sitting in
St. Louis City or County, Missouri both state and federal, as forums where any
action, suit or proceeding in respect of or arising out of this Agreement, or
the transactions contemplated by this Agreement shall be prosecuted as to all
Parties, their successors and assigns, and by the foregoing designations the
Parties hereto consent to the jurisdiction and venue of such courts.
10.6. Benefit/Assignment. Subject to provisions herein to the contrary,
this Agreement shall inure to the benefit of and be binding upon the Parties
hereto and their respective legal representatives, successors and assigns;
provided, however, that no Party may assign this Agreement without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld; provided, further,
21
however, that any Party may, without the prior written consent of the other
Party, assign its rights and delegate its duties hereunder to one or more of its
affiliates. This Agreement is intended solely for the benefit of the Parties
hereto and is not intended to, and shall not, create any enforceable third party
beneficiary rights.
10.7. Cost of Transaction. Except as otherwise provided herein,
whether or not the transactions contemplated hereby shall be consummated, the
Parties agree s follows: (i) Sellers will pay the fees, expenses, and
disbursements of Sellers and their agents, representatives, accountants, and
counsel incurred in connection with the subject matter hereof and any amendments
hereto; and (ii) Purchaser shall pay the fees, expenses and disbursements of
Purchaser and its agents, representatives, accountants and counsel incurred in
connection with the subject matter hereof and any amendments hereto. Sellers and
Purchaser shall share, equally, for the costs of any regulatory or licensure
filings under the laws or regulations of the State of Missouri.
10.8. Confidentiality.
(a) The information, documents and instruments delivered to Purchaser
by Sellers or their agents and the information, documents and instruments
delivered to Sellers by Purchaser or its respective agents are of a confidential
and proprietary nature. Each of the Parties hereto agrees that both prior and
subsequent to the Closing it will maintain the confidentiality of all such
confidential information, documents or instruments delivered to it by each of
the other Parties hereto or their agents in connection with the negotiation of
this Agreement or in compliance with the terms, conditions and covenants hereof
and will only disclose such information, documents and instruments to its duly
authorized officers, directors, representatives and agents. Each of the Parties
hereto further agrees that if the transactions contemplated hereby are not
consummated, it will return all such documents and instruments and all copies
thereof in its possession to the other Party to this Agreement. Each of the
Parties hereto recognizes that any breach of this Section would result in
irreparable harm to the other Parties to this Agreement and their affiliates and
that therefore each of them shall be entitled to an injunction to prohibit any
such breach or anticipated breach, without the necessity of posting a bond, cash
or otherwise, in addition to all of their other legal and equitable remedies.
Nothing in this Section 10.8, however, shall prohibit the use of such
confidential information, documents or information for such governmental filings
as in the reasonable opinion of Seller's counsel or Purchaser's counsel are (i)
required by law or governmental regulations or (ii) otherwise appropriate.
(b) The Parties hereto agree that the terms and conditions of this
Agreement, and all other agreements and instruments executed and delivered by
the respective Parties in connection with this Agreement (the "Transaction
Documents") shall remain confidential. Neither Purchaser nor Sellers nor their
respective agents and representatives shall distribute the Transaction Documents
or any drafts thereof, or any part thereof, to any third party unless required
by law to do so.
10.9. Public Announcements. Sellers agree that they shall not release,
publish or otherwise make available to the public in any manner whatsoever any
information or announcement regarding the transactions herein contemplated
without the prior written consent of Purchaser, except for information and
filings reasonably necessary to be directed to governmental agencies to fully
and lawfully effect the transactions herein contemplated or required in
connection with securities and other laws, and Purchaser shall notify Sellers
prior to the time at which Purchaser (or any of its Affiliates) makes any such
public announcement.
10.10. Waiver of Breach. The waiver by any Party of a breach or violation
of any provision of this Agreement shall not operate as, or be construed to
constitute, a waiver of any subsequent breach of the same or any other provision
hereof.
22
10.11. Notice. Any notice, demand or communication required, permitted,
or desired to be given hereunder shall be deemed effectively given upon receipt
or refusal to accept receipt when delivered personally, by telegraphic or other
electronic means (including telecopy and telex) or overnight courier, or five
days after being deposited in the United States mail, with postage prepaid
thereon, or certified or registered mail, return receipt requested, addressed as
follows:
Sellers: (Individuals identified on Exhibit A)
0000 X. Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
With a simultaneous Lashly & Xxxx, P.C.
copy to: 000 Xxxxxx Xxxxxx
Xx. Xxxxx, XX 00000
Attention: Xxxxxxx X.
Xxxxxxx, Esq.
Purchaser or SARC: c/o Symbion, Inc.
00 Xxxxxx Xxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attention: President
With a simultaneous Xxxxxx Xxxxxxx Xxxxxx & Xxxxx, PLLC
copy to: 000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxx, III, Esq.
or to such other address, and to the attention of such other person or officer
as any Party may designate, with copies thereof to the respective counsel
thereof as notified by such Party.
10.12. Severability. In the event any provision of this Agreement is
held to be invalid, illegal or unenforceable for any reason and in any respect,
such invalidity, illegality, or unenforceability shall in no event affect,
prejudice or disturb the validity of the remainder of this Agreement, which
shall be and remain in full force and effect, enforceable in accordance with its
terms.
10.13. Gender and Number. Whenever the context of this Agreement
requires, the gender of all words herein shall include the masculine, feminine
and neuter, and the number of all words herein shall include the singular and
plural.
10.14. Divisions and Headings. The divisions of this Agreement into
sections and subsections and the use of captions and headings in connection
therewith are solely for convenience and shall have no legal effect in
construing the provisions of this Agreement.
10.15. Survival. All of the representations, warranties, covenants and
agreements made by the Parties in this Agreement or pursuant hereto in any
certificate, instrument or document shall survive the consummation of the
transactions described herein and may be fully and completely relied upon by
Sellers and Purchaser, as the case may be, notwithstanding any investigation
heretofore or hereafter made by any of them or on behalf of any of them, and
shall not be deemed merged into any instruments or agreements delivered at
Closing or thereafter.
10.16. Entire Agreement/Amendment. This Agreement supersedes all
previous contracts (other than the Option Agreements), and constitutes the
entire agreement of whatsoever kind or nature (other than the Option Agreements)
existing between or among the Parties respecting the within subject matter and
no Party shall be entitled to benefits other than those specified herein. As
between or among the
23
Parties, no oral statements or prior written material not specifically
incorporated herein shall be of any force and effect. The Parties specifically
acknowledge that in entering into and executing this Agreement, the Parties rely
solely upon the representations and agreements contained in this Agreement and
no others. All prior representations or agreements, whether written or verbal,
not expressly incorporated herein are superseded and no changes in or additions
to this Agreement shall be recognized unless and until made in writing and
signed by all Parties hereto. This Agreement may be executed in two or more
counterparts, each and all of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.
10.17. Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY
AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING FROM ANY SOURCE INCLUDING, BUT
NOT LIMITED TO, THE CONSTITUTION OF THE UNITED STATES OR ANY STATE THEREIN,
COMMON LAW OR ANY APPLICABLE STATUTE OR REGULATIONS. EACH PARTY HERETO
ACKNOWLEDGES THAT IS KNOWINGLY AND VOLUNTARILY WAIVING ITS RIGHTS TO DEMAND
TRIAL BY JURY.
10.18. Tax Advice and Reliance. Except as expressly provided in this
Agreement, none of the Parties (nor any of the Parties' respective counsel,
accountants or other representatives) has made or is making any representations
to any other Party (or to any other Party's counsel, accountants or other
representatives) concerning the consequences of the transactions contemplated
hereby under applicable tax laws. Each Party has relied solely upon the tax
advice of its own employees or of representatives engaged by such Party and not
on any such advice provided by any other Party hereto.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
24
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and year first above written.
SMBIMS KIRKWOOD, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------
Name: Xxxxxxx X. Xxxx
Title: President
MEMBERS
Signatures appear on the following
Counterpart Signature Pages
The undersigned joins herein solely for the purposes of
Article VIII and Section 3.5 hereof.
SYMBION AMBULATORY RESOURCE
CENTRES, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------
Name: Xxxxxxx X. Xxxx
Title: President
25
MEMBERS' COUNTERPART SIGNATURE PAGE TO PURCHASE AGREEMENT
/s/ Xxxx X. Xxxxxx, M.D.
------------------------
Signature of Member
Xxxx X. Xxxxxx, M.D.
Print Name of Member
0000 Xxxxxxxxx Xxxxxxx
Xxxxxxxxxxxx, XX 00000
Address of Member
MEMBERS' COUNTERPART SIGNATURE PAGE TO PURCHASE AGREEMENT
/s/ Xxxxxx Xxxxxxx
------------------------
Signature of Member
Xxxxxx Xxxxxxx
Print Name of Member
0 Xxxxxxxxx Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Address of Member
MEMBERS' COUNTERPART SIGNATURE PAGE TO PURCHASE AGREEMENT
/s/ Xxxxx Xxxxx
------------------------
Signature of Member
Xxxxx Xxxxx
Print Name of Member
00000 Xxxxxx Xxxxx Xxxx
Xxxxxxxx Xxxxxx, XX 00000
Address of Member
MEMBERS' COUNTERPART SIGNATURE PAGE TO PURCHASE AGREEMENT
/s/ Xxxx X. Xxxxxxx, M.D.
-------------------------
Signature of Member
Xxxx X. Xxxxxxx, M.D.
Print Name of Member
00000 Xxxxx Xxxxx
Xxxxxxxxxxxx, XX 00000
Address of Member
MEMBERS' COUNTERPART SIGNATURE PAGE TO PURCHASE AGREEMENT
/s/ Xxxxxx Xxxxx
------------------------
Signature of Member
Xxxxxx Xxxxx
Print Name of Member
000 Xxxxx xxx Xxxxx Xxxx
Xx. Xxxxx, XX 00000
Address of Member
MEMBERS' COUNTERPART SIGNATURE PAGE TO PURCHASE AGREEMENT
/s/ Xxxxxxxx X. Xxxxxx, M.D.
----------------------------
Signature of Member
Xxxxxxxx X. Xxxxxx, M.D.
Print Name of Member
00 Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Address of Member
MEMBERS' COUNTERPART SIGNATURE PAGE TO PURCHASE AGREEMENT
/s/ Xxxxxx X. Xxxxxxx, M.D.
----------------------------
Signature of Member
Xxxxxx X. Xxxxxxx, M.D.
Print Name of Member
00000 Xxxxxxxx Xxxxx
Xx. Xxxxx, XX 00000
Address of Member
MEMBERS' COUNTERPART SIGNATURE PAGE TO PURCHASE AGREEMENT
/s/ Xxxxxxx X. Xxxxxx, D.O.
----------------------------
Signature of Member
Xxxxxxx X. Xxxxxx, D.O.
Print Name of Member
0000 Xxx Xxxxxx Xxxx
Xx. Xxxxx, XX 00000
Address of Member
MEMBERS' COUNTERPART SIGNATURE PAGE TO PURCHASE AGREEMENT
/s/ Xxxxx Xxxxxxxxx
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Signature of Member
Xxxxx Xxxxxxxxx
Print Name of Member
00 Xxxxxx Xxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Address of Member
Schedules and Exhibits are omitted in accordance with Item 601(b)(2) of
Regulation S-K. Schedules and Exhibits will be provided supplementally by
Symbion, Inc. to the Securities and Exchange Commission upon request.