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EXHIBIT 2.15
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of the 1st
day of April, 1998, by and among XXXXXX X. XXXXXXX, O.D., P.C., an Arizona
professional corporation, XXXXXX X. XXXXXXX, an individual (together "Seller"),
OPTOMETRIC ASSOCIATES OF ARIZONA, P.L.C., an Arizona professional limited
liability company ("P.L.C."), VISION TWENTY-ONE, INC., a Florida corporation
("Vision 21"), and XXXXXX X. XXXXXXX, O.D. (the "Optometrist").
WITNESSETH:
WHEREAS, Optometrist is licensed to practice optometry in the State of
Arizona, and currently conducts an optometry practice through the Seller located
at 0000 X. Xxxxxx Xxxx, Xxxx, Xxxxxxx 00000 and 0000 X. Xxxx Xxxxxx Xxxx, Xxxx,
Xxxxxxx 00000 (collectively, the "Practice");
WHEREAS, P.L.C. is an optometric professional limited liability company
with its principal place of business at 0000 X. Xxxxxx Xxxx, Xxxx, Xxxxxxx
00000; and
WHEREAS, Vision 21 provides business management services and facilities
for eye care professionals and related businesses; and
WHEREAS, Seller desires to sell, assign and transfer all of its
Optometric Assets (as defined herein) to the P.L.C. and all of its
Non-Optometric Assets (as defined herein) to the extent permitted by law to
Vision 21, and Vision 21 and the P.L.C. desire to purchase, assume and acquire
such assets and assume certain liabilities of the Seller in exchange for the
consideration provided herein.
NOW, THEREFORE, in consideration of the respective covenants,
representations, warranties and agreements herein contained, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I - PURCHASE AND SALE
1.1. Purchase and Sale of Non-Optometric Assets. Subject to the
terms and conditions herein set forth, and in reliance upon the representations
and warranties set forth herein, Seller agrees to sell, convey, assign, transfer
and deliver to Vision 21, and Vision 21 agrees to purchase, assume, accept and
acquire, all of Seller's right, title and interest in and to the assets of
Seller relating to the Practice consisting of all the assets (other than the
Optometric Assets specified in Section 1.2 hereof and the Excluded Assets
specified in Section 1.3 hereof) as set forth on SCHEDULE 1.1, of every kind,
character and description, whether tangible, real, personal, or mixed, and
wheresoever located, whether carried on the books of Seller or not carried on
the books of Seller due to having been expended, fully depreciated, or otherwise
(collectively, "Non-Optometric Assets"), and including without limitation the
following (except to the extent that any of the following are specifically
enumerated as Excluded Assets in Section 1.3 hereof) to the extent permitted by
applicable law:
(a) all machinery, equipment, tools, furniture, furnishings,
goods, and other tangible personal property;
(b) all accounts receivable;
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(c) all supplies (but not the optometric or optical supplies
described as "Optometric Assets" in Section 1.2 hereof);
(d) all leases of instruments, equipment, furniture, machinery
and other items of tangible personal property (including rights to any security
deposits with respect to such leases);
(e) all prepaid items, notes and unbilled costs and fees;
(f) to the extent permitted by applicable law, all rights
under any written or oral contract, agreement, plan, instrument, registration,
license, certificate of occupancy, other permit or approval of any nature, or
other document, commitment, arrangement, undertaking, practice or authorization
(but not the third party payor contracts described as "Optometric Assets" in
Section 1.2 hereof);
(g) all rights under any patents, trademarks, service marks,
trade names or copyrights, whether registered or unregistered, and any
applications therefor;
(h) all data bases used in the Practice or under development;
(i) all rights arising out of occurrences before or after the
Closing, including without limitation, all representations, warranties,
covenants and guaranties made or provided by third parties to or for the benefit
of Seller with respect to any of the Non-Optometric Assets;
(j) all books and records of Seller, including, without
limitation, all credit records, payroll records, computer records, computer
programs, contracts, agreements, operating manuals, schedules of assets,
correspondence, books of account, files, papers, books and all other public and
confidential business records, whether such records are in hard copy form or are
electronically or magnetically stored;
(k) all information, files, records, data, plans, contracts
and recorded knowledge, including supplier lists and employee records related to
the foregoing and the operation of the Practice;
(l) all cash in registers or xxxxx cash drawers (which shall
on the Closing Date be at least ninety percent (90%) of the average daily cash
balance held in such locations in the twelve (12) month period preceding the
Closing Date).
1.2 Purchase and Sale of Optometric Assets. Subject to the terms
and conditions herein set forth, and in reliance upon the representations and
warranties set forth herein, Seller agrees to sell, convey, assign, transfer and
deliver to the P.L.C. and the P.L.C. agrees to purchase, assume, accept and
acquire all of Seller's right, title and interest in and to the assets of Seller
consisting of all the assets (other than the Non-Optometric Assets specified in
Section 1.1 hereof and the Excluded Assets specified in Section 1.3 hereof), of
every kind, character and description, whether tangible or intangible, and
wheresoever located, whether carried on the books of Seller due to having been
expended, fully depreciated or otherwise (the "Optometric Assets," and together
with the Non-Optometric Assets, sometimes collectively referred to as the
"Assets,") including without limitation those Optometric Assets described on
SCHEDULE 1.2 and including the following (except to the extent
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that any of the following are specifically enumerated as Excluded Assets in
Section 1.3 hereof) to the extent permitted by applicable law:
(a) all inventory;
(b) patient lists, including names, addresses and telephone
numbers;
(c) optometric records;
(d) all rights in employment contracts with optometrists, if
any, employed by Seller;
(e) optometric supplies, including optical supplies, drugs,
pharmaceuticals, products, substances and items;
(f) third party payor contracts (except for rights to
purchased accounts receivable);
(g) licenses, certificates of need, Medicare/Medicaid
certifications and other governmental authorizations necessary to provide
optometric services and to be paid therefor by applicable third party payors;
(h) eyeglasses, lenses and other eye wear; and
(i) any other asset that legally cannot be owned by a party
that is not optometrist-owned.
1.3. Excluded Assets. Notwithstanding the foregoing, neither the
Optometric Assets nor the Non-Optometric Assets shall include any of the
following (collectively, the "Excluded Assets") which shall be retained by
Seller:
(a) life insurance policies covering the life of Optometrist
or any employee of Seller;
(b) personal effects listed on SCHEDULE 1.3; and
(c) cash and cash equivalents in banks, certificates of
deposit, commercial paper and securities owned by Seller (but excluding cash
held in registers or xxxxx cash drawers on the Closing Date which shall be
transferred to Vision 21).
1.4. The Purchase Price. Vision 21 agrees that, subject to the
terms and conditions of this Agreement, and in full consideration for the
aforesaid sale, transfer, conveyance, assignment and delivery of the
Non-Optometric Assets of Seller to Vision 21, and the acceptance by Vision 21 of
such Non-Optometric Assets and the assumption by Vision 21 of those liabilities
listed on SCHEDULE 1.6 hereto, Vision 21 shall deliver to Seller at the Closing
the consideration (the "Non-Optometric Asset Purchase Price") set forth in
SCHEDULE 1.4(A) hereto. The P.L.C. agrees that, subject to the terms and
conditions of this Agreement, and in full consideration for the aforesaid sale,
transfer, conveyance,
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assignment and delivery of the Optometric Assets of Seller to P.L.C., and the
acceptance by P.L.C. of such Optometric Assets and the execution by Seller of
the Employment Agreement described in Section 2.2(b)(iv) hereof, P.L.C. shall
deliver to Seller at the Closing the consideration (the "Optometric Asset
Purchase Price," and together with the Non-Optometric Asset Purchase Price,
herein sometimes referred to as the "Purchase Price") set forth in SCHEDULE
1.4(B) hereto.
1.5. Allocation of Purchase Price. The Purchase Price shall be
allocated among the Assets as set forth on SCHEDULE 1.5 annexed hereto and made
a part hereof. Each of Seller, Optometrist, Vision 21 and P.L.C. hereby
covenants and agrees that he or it will not take a position that is in any way
inconsistent with the terms of this Section 1.5 on any income tax return, before
any governmental agency charged with the collection of any income tax or in any
judicial proceeding.
1.6. Assumption of Certain Obligations and Liabilities. From and
after the Closing Date, Vision 21 shall assume and agree to pay or perform,
promptly as they become due, only those obligations and liabilities of Seller
expressly set forth on SCHEDULE 1.6 (the "Assumed Obligations"). Except for the
Assumed Obligations, neither Vision 21 nor the P.L.C. shall assume or be deemed
to have assumed and shall not be responsible for any other obligation or
liability of Seller, direct or indirect, known or unknown, absolute or
contingent, including without limitation (i) any and all obligations regarding
any foreign, Federal, state or local income, sales, use, franchise or other tax
liabilities, (ii) any and all obligations or liabilities relating to any fees or
expenses of Seller or Optometrist's counsel, accountants or other experts
incident to the negotiation and preparation of any of the documents contemplated
herein and consummation of the contemplated Transactions thereby, (iii) any and
all liabilities relating to or arising from the provision of professional
optometric services (or failure to provide professional optometric services)
prior to the Closing Date; and (iv) any and all liability for violations of the
Civil Rights Act of 1964, as amended, otherwise known as Title VII ("Title VII")
by Seller and/or Optometrist for employee, discrimination or other claims
thereunder.
1.7. Purchase Price Adjustments.
(a) Working Capital Adjustment. The Non-Optometric Asset
Purchase Price shall be subject to adjustment to the extent that Current Assets
(as defined herein) or Current Liabilities Assumed (as defined herein)
materially differ from the amounts customarily arising in the ordinary course of
business of the Seller as of March 31, 1998. The term "Current Assets" shall
mean xxxxx cash, accounts receivable, prepaid expenses, inventory, supplies and
other current assets (excluding cash in banks, certificates of deposit, other
cash equivalents, the current portion of capital leases and prepaid income
taxes). The term "Current Liabilities Assumed" shall mean the balances (on an
accrual basis) as of March 31, 1998 of trade accounts payable, accrued payroll,
accrued payroll taxes, accrued benefits, and other current liabilities
(excluding notes payable, the current portion of capital leases and long-term
debt and income and franchise taxes and accrued shareholder expenses). The
Non-Optometric Asset Purchase Price shall be increased or reduced to reflect the
difference (on a dollar for dollar basis) between the Current Assets and Current
Liabilities and the customary amounts referred to herein above. The adjustment
shall be settled in cash or Vision 21 common stock (at the option of Vision 21),
which in the case of a reduction in the Purchase Price may be set-off from
monies and/or Vision 21 common stock held back in accordance with SCHEDULE 1.4,
or set-off from monies due the Seller pursuant to the Business Management
Agreement. The parties also agree that to the extent the
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adjustments materially impact the goodwill created by the transaction, there
shall be an adjustment for the related impact upon net income created by the
change in amortization of such goodwill and the Purchase Price shall be
increased or reduced to reflect the impact on net income, settled in cash or
Vision 21 common stock (at the option of Vision 21) as provided in this Section
1.7(a).
(b) Contribution/Net Income Adjustment. In addition to any
adjustments made in accordance with Section 1.7(a) of this Agreement, the
Non-Optometric Asset Purchase Price shall be subject to adjustment in the event
that the Seller's actual audited net income minus the Seller's compensation
structure minus the Seller's actual lease expense minus shareholder expenses
plus Vision 21's new compensation structure for the practice and Vision 21's new
lease expense as such items were utilized in computing the Preliminary Practice
Valuations attached as Exhibit A attached to the letter of intent between the
parties hereto dated January 8, 1998 (the "Letter of Intent") for the calendar
year 1997 (the "Actual Contribution/Net Income Earnings") are less than the
Seller's estimated annualized net income plus shareholder expenses for the
calendar year 1997, as reflected in the Preliminary Practice Valuations set
forth in Exhibit A attached to the Letter of Intent (the "Estimated
Contribution/Net Income Earnings"). The Non-Optometric Asset Purchase Price
shall be reduced if the Actual Contribution/Net Income Earnings are less than
the Estimated Contribution/Net Income Earnings, and in such event, the reduction
in the Purchase Price shall be by such difference times five (5). The
computation of Actual Contribution/Net Income Earnings shall not reflect
non-recurring expenses, costs and income occurring throughout the 1997 calendar
year. The adjustment shall be settled in cash or Vision 21 common stock which
may at the option of Vision 21 be set-off from monies due the Seller pursuant to
the Business Management Agreement. The parties also agree that to the extent the
adjustments materially impact the goodwill created by the transaction, there
shall be an adjustment for the related impact upon net income of Vision 21
created by the change in amortization of such goodwill and the adjustment to the
Non-Optometric Asset Purchase Price shall reflect the impact on net income,
settled in cash or Vision 21 common stock (at the option of Vision 21) as
provided in this Section 1.7(b).
(c) Purchase Price Adjustment Procedure. Within forty-five
(45) days following the Closing Date, Vision 21 shall present to Seller its
proposed Non-Optometric Asset Purchase Price adjustment (the "Proposed Purchase
Price Adjustment") calculated in accordance with Sections 1.7(a) and (b) hereof.
The Seller shall, within fifteen (15) days after the delivery by Vision 21 of
the Proposed Purchase Price Adjustment, complete its review thereof. In the
event that the Seller believes that the Proposed Purchase Price Adjustment has
not been prepared on the basis set forth in Sections 1.7(a) and (b) or otherwise
contests any item set forth therein, the Seller shall, on or before the last day
of such 15-day period, so object to Vision 21 in writing, setting forth a
specific description of the nature of the objection and the corresponding
adjustments the Seller believes should be made. If no objection is received by
Vision 21 on or before the last day of such 15-day period, then the Proposed
Purchase Price Adjustment delivered by Vision 21 shall be final. If an objection
has been made and Vision 21 and the Seller are unable to resolve all of their
disagreements with respect to the proposed adjustments within fifteen (15) days
following the delivery of the Seller's objection, the dispute shall be submitted
to arbitration administered by the American Arbitration Association (the "AAA")
under the AAA's Commercial Arbitration Rules (such arbitration to be held in
Tampa, Florida) and the arbitrator shall be instructed to deliver his
determination of the dispute to the parties no later than fifteen (15) days
after the arbitration hearing. Vision 21 shall provide to the Seller and its
accountants full access to all relevant books, records and work papers utilized
in preparing the Proposed Purchase Price Adjustment.
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ARTICLE II - CLOSING, ITEMS TO BE DELIVERED,
THIRD PARTY CONSENTS AND FURTHER ASSURANCES
2.1. Closing. The closing of the transactions contemplated in this
Agreement (the "Closing") shall take place at or prior to April 15, 1998 (the
date that the Closing takes place is referred to herein as the "Closing Date")
at the office of Xxxxxxxx, Loop & Xxxxxxxx, LLP located at 000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, or at such other location or date
as the parties hereto shall mutually agree. Notwithstanding the foregoing
language to the contrary, the effective date of Closing shall be deemed February
1, 1998.
2.2. Deliveries of the Seller, Optometrist, Vision 21 and the
P.L.C. at the Closing.
(a) Seller and Optometrist shall deliver to Vision 21 the
following at or prior to the Closing:
(i) such bills of sale with warranties as to
title, assignments, endorsements and other good and sufficient instruments and
documents of conveyance and transfer as shall be necessary and effective to
transfer and assign to and vest in Vision 21 all of Seller's right, title and
interest in and to the Non-Optometric Assets, including without limitation (A)
good and valid title in and to all of the Non-Optometric Assets owned by Seller,
(B) good and valid leasehold interests in and to all of the Non-Optometric
Assets leased by Seller as lessee, and (C) all of Seller's rights under all
agreements, contracts, commitments, instruments and other documents included in
the Non-Optometric Assets to which Seller is a party or by which it has rights
on the Closing Date; the aforedescribed instruments shall include, without
limitation, the Xxxx of Sale for Non-Optometric Assets (the "Non-Optometric
Asset Xxxx of Sale") in the form annexed hereto and made a part hereof as
EXHIBIT 2.2(A)(I);
(ii) original instruments of consent or waiver
duly executed by third parties with respect to any contracts, agreements, leases
or other rights or obligations being transferred to Vision 21 hereunder and
requiring a consent or waiver therefor;
(iii) duly executed UCC-3 termination statements
evidencing the release of any and all liens upon any of the Non-Optometric
Assets held by any person or entity;
(iv) a copy of resolutions of the Board of
Directors of Seller authorizing the execution, delivery and performance of this
Agreement and all related documents and agreements and the consummation of the
transactions contemplated in this Agreement;
(v) an assignment to and assumption by Vision 21
of the leases for real property described on SCHEDULE 3.1(G) (the "Lease
Assignments"), or if desired by Vision 21, a new lease or leases between the
landlord under such lease and Vision 21 in form and substance reasonably
satisfactory to Vision 21 (the "Lease Agreements"); and
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(vi) such other certificates and documents as
Vision 21 or its counsel may reasonably request.
(b) Seller shall deliver to the P.L.C. the following:
(i) such bills of sale with warranties as to
title, assignments, endorsements and other good and sufficient instruments and
documents of conveyance and transfer as shall be necessary and effective to
transfer and assign to and vest in the P.L.C. all of Seller's right, title and
interest in and to the Optometric Assets, including without limitation (A) good
and valid title in and to all of the Optometric Assets owned by Seller, (B) good
and valid leasehold interest in and to all of the Optometric Assets leased by
Seller as lessee, and (C) all of Seller's rights under all agreements,
contracts, commitments, instruments and other documents included in the
Optometric Assets to which Seller is a party or by which he has rights on the
Closing Date; the aforedescribed instruments shall include, without limitation,
the Xxxx of Sale for Optometric Assets (the "Optometric Asset Xxxx of Sale") in
the form annexed hereto and made a part hereof as EXHIBIT 2.2(B)(I);
(ii) original instruments of consent or waiver
duly executed by third parties with respect to any contracts, agreements, leases
or other rights or obligations being transferred o the P.L.C. hereunder and
requiring a consent or waiver therefor;
(iii) duly executed UCC-3 termination statements
evidencing the release of any and all liens upon any of the Optometric Assets
held by any person or entity;
(iv) a duly executed Employment Agreement in the
form annexed hereto and made a part hereof as EXHIBIT 2.2(B)(IV) (the
"Employment Agreement");
(v) such other certificates and documents as the
P.L.C. or its counsel may reasonably request.
Simultaneously with delivery of the items set forth in subsection (a) and (b) of
this Section 2.2, Seller shall take all such steps as may be required to put
Vision 21 in actual possession and operating control of the Non-Optometric
Assets and the P.L.C. in actual possession and operating control of the
Optometric Assets.
(c) Vision 21 shall deliver to Seller the following at or
prior to the Closing:
(i) the Non-Optometric Asset Purchase Price;
(ii) the Non-Optometric Asset Xxxx of Sale;
(iii) a copy of the resolutions of the Board of
Directors of Vision 21 authorizing the execution, delivery and performance of
this Agreement and all related documents and agreements and the consummation of
the transactions contemplated in this Agreement;
(iv) duly executed Lease Assignments or duly
executed Lease Agreements; and
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(v) such other certificates and documents as
Seller or its counsel may reasonably request.
(d) P.L.C. shall deliver to Seller the following:
(i) the Optometric Asset Purchase Price;
(ii) the Optometric Asset Xxxx of Sale;
(iii) a duly executed Employment Agreement; and
(iv) such other certificates and documents as
Seller or his counsel may reasonably request.
(e) P.L.C. shall deliver to Vision 21 the following:
(i) a duly executed Business Management
Agreement in the form of EXHIBIT 2.2(E)(I) by and between P.L.C. and Vision 21
(the "Business Management Agreement").
2.3. Further Assurances. Seller, from time to time after the
Closing and at the request of Vision 21 or the P.L.C., will execute, acknowledge
and deliver to Vision 21 and the P.L.C. such other instruments of conveyance and
transfer and will take such other actions as Vision 21 or the P.L.C. may
reasonably require in order to vest more effectively in Vision 21 or the P.L.C.,
or to put Vision 21 or the P.L.C. more fully in possession of, any of the
Assets. Each of the parties hereto will cooperate with the other and execute and
deliver to the other parties hereto such other instruments and documents and
take such other actions as may be reasonably requested from time to time by any
other party hereto as necessary to carry out, evidence and confirm the intended
purposes of this Agreement.
ARTICLE III - REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Seller and Optometrist.
Seller and Optometrist hereby jointly and severally represent and warrant to
Vision 21 and the P.L.C. that the following are true and correct as of the date
hereof, and shall be true and correct as of the Closing Date as if made on that
date, except as set forth on the Schedules attached hereto and made a part
hereof, each of which exceptions shall specifically identify and be limited to
the relevant subsection hereof to which it relates and shall be deemed to be a
representation and warranty as if made hereunder, when used in this Section 3,
the term "best knowledge" (or words of similar import) shall mean such knowledge
of Seller as shall have been obtained through due and diligent investigation. :
(a) Organization. Seller is a professional corporation
duly organized, validly existing and in good standing under the laws of the
State of Arizona, with all requisite corporate power and authority to carry on
the business in which it is engaged, to own the properties it owns, to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby. Seller is not duly qualified and licensed to do business in any other
jurisdiction. Seller does not have any assets, employees or offices in any state
other than the State of Arizona.
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(b) Legal Power and Enforceable Obligations. Seller has
the power, authority and legal right to own, lease and operate the Assets, to
conduct the Practice as currently conducted, and to execute, deliver and perform
this Agreement. This Agreement and all the other documents and instruments
required to be delivered by Seller and/or Optometrist in accordance with the
provisions hereof have been, or upon their execution and delivery will have
been, duly executed and delivered on behalf of Seller and Optometrist and
constitute, or will constitute, the legal, valid and binding obligation of
Seller and Optometrist, enforceable against Seller and Optometrist in accordance
with their respective terms.
(c) No Violation. The execution, delivery and performance
of this Agreement by Seller and Optometrist do not and will not violate,
conflict with or result in the breach of any term, condition or provision of, or
require the consent of any other person under (i) any existing law, ordinance,
or governmental rule or regulation to which Seller or Optometrist is subject,
(ii) any judgment, order, writ, injunction, decree or award of any court,
arbitrator or governmental or regulatory official, body or authority which is
applicable to either Seller or Optometrist, (iii) Seller's Articles or
Certificate of Incorporation or Bylaws, or (iv) any mortgage, indenture,
agreement, contract, commitment, lease, plan or other instrument, document or
understanding, oral or written, to which either Seller or Optometrist is a
party, by which either Seller or Optometrist may have rights, or by which any of
the Assets may be bound or affected, or give any party with rights thereunder
the right to terminate, modify, accelerate or otherwise change the existing
rights or obligations of Seller or Optometrist thereunder. No authorization,
approval or consent of, and no filing with, any governmental or regulatory
official, body or authority is required in connection with the execution,
delivery or performance of this Agreement by Seller or Optometrist or the sale
to Vision 21 and the P.L.C. of the Assets.
(d) No Third Party Options. There are no existing
agreements with, options or commitments to or rights of any person to acquire
any of the Assets or any interest therein.
(e) Condition of Tangible Assets. All buildings,
structures, facilities, equipment and other material items of tangible property
and assets included in the Assets are in good operating condition and repair,
subject to normal wear and maintenance, are usable in the regular and ordinary
course of business and conform to all applicable laws, ordinances, codes, rules
and regulations relating to their construction, use and operation.
(f) Absence of Undisclosed Liabilities. Seller does not
have any liabilities or obligations with respect to the Practice, either direct
or indirect, matured or unmatured or absolute, contingent or otherwise, except
those liabilities incurred, consistently with past business practice, in or as a
result of the normal and ordinary course of business and except for those
liabilities disclosed in SCHEDULE 1.6 hereof. For purposes of this Agreement,
the term "liabilities" shall include, without limitation, any direct or indirect
indebtedness, guaranty, endorsement, claim, loss, damage, deficiency, cost,
expense, obligation or responsibility, fixed or unfixed, known or unknown,
asserted or unasserted, xxxxxx or inchoate, liquidated or unliquidated, secured
or unsecured.
(g) Title to Assets; Required Approvals. Seller has and
shall transfer to Vision 21 and the P.L.C. at the Closing good, valid and
marketable title to all of the Assets being sold and
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transferred hereunder, free and clear of all mortgages, liens, pledges, security
interests, charges, claims, restrictions and other encumbrances and defects of
title of any nature whatsoever, except as set forth in SCHEDULE 3.1(G). Except
as set forth in SCHEDULE 3.1(G), no consent, approval, waiver or authorization
is required to be obtained by Seller from any third party with respect to the
assignment to Vision 21 or the P.L.C. of any contract, agreement, lease, or
other right or obligation of Seller other than pursuant to those leases the
failure of which to obtain would not, individually or in the aggregate, have a
material adverse effect upon the conduct of the Practice. Seller shall use its
best efforts to obtain all such consents, approvals, waivers and authorizations
with respect to those items disclosed on SCHEDULE 3.1(G) before and after the
Closing.
(h) Taxes. Seller has filed all tax returns and forms
required to be filed with respect to the Practice, and has paid in full all
taxes, estimated taxes, interest, penalties, assessments and deficiencies which
have become due with respect to the Practice, or will do so prior to the Closing
Date. Such returns and forms are true and correct in all material respects, and
Seller is not required to pay any other tax except as shown on such returns.
Seller is not a party to any pending action or proceeding and, to Seller's
knowledge, there is no action or proceeding threatened by any government or
authority against Seller for the assessment or collection of any tax and no
resolved claim for assessment or collection of any tax has been asserted against
Seller. The Optometrist is not a "foreign person" as described in Section 1445
of the Internal Revenue Code of 1986, as amended. There is no pending proceeding
to reduce the assessed valuation of any portion of the Assets. Seller has
delivered to Vision 21 and the P.L.C. a true and complete copy of its federal
and state tax return for the year ended December 31, 1996, which tax return is
or shall be accompanied by all notes and schedules filed therewith. Such tax
return fairly presents the financial position of Seller for the period covered
thereby.
(i) Absence of Changes. Since January 30, 1998 Seller has
not:
(i) incurred any liabilities, other than
liabilities incurred in the ordinary course of business consistent with past
practice, or discharged or satisfied any lien or encumbrance, or paid any
liabilities, other than in the ordinary course of business consistent with past
practice, or failed to pay or discharge when due any liabilities of which the
failure to pay or discharge has caused or will cause any material damage or risk
of material loss to Seller or any of its Assets or properties;
(ii) sold, encumbered, assigned or transferred
any of its Assets or properties;
(iii) created, incurred, assumed or guaranteed any
indebtedness for money borrowed, or mortgaged, pledged or subjected any of the
Assets to any mortgage, lien, pledge, security interest, conditional sales
contract or other encumbrance of any nature whatsoever;
(iv) made or suffered any amendment or
termination of any material agreement, contract, commitment, lease or plan to
which it is a party or by which it is bound, or canceled, modified or waived any
substantial debts or claims held by it or waived any rights of substantial
value, whether or not in the ordinary course of business;
(v) suffered any damage, destruction or loss,
whether or not covered by insurance, materially and adversely affecting the
Practice and its related operations, assets, properties, prospects or condition
(financial or otherwise) or suffered any repeated, recurring or prolonged
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shortage, cessation or interruption of supplies or utility or other services
required to conduct the Practice;
(vi) suffered any material adverse change in the
Practice and its related operations, assets, properties, prospects or condition
(financial or otherwise);
(vii) received notice or had knowledge of any
actual or threatened labor trouble, strike or other occurrence, event or
condition of any similar character which has had or might have an adverse effect
on the Practice or its related operations, Assets, properties, prospects or
condition (financial or otherwise);
(viii) increased or decreased the salaries or other
compensation of, or made any advance (excluding advances for ordinary and
necessary business expenses) or loan to, any of its employees or made any
increase in, or any addition to, other benefits to which any of its employees
may be entitled other than in the ordinary course of business consistent with
past practice;
(ix) changed any of the accounting principles
followed by it or the methods of applying such principles; or
(x) entered into any transaction other than in
the ordinary course of business consistent with past practice.
(j) Financial Statements; Consistent Treatment of
Expenses. Seller has delivered to Vision 21 and the P.L.C. Seller's unaudited
balance sheets and unaudited statements of income and cash flows for the fiscal
year ended December 31, 1997, and Seller's unaudited balance sheet and unaudited
statements of income and cash flows for the two (2) month period ended February
28, 1998 (collectively, the "Financial Statements"). Except as set forth on
SCHEDULE 3.1(J), the Financial Statements, including the notes thereto, have
been prepared utilizing generally accepted accounting principals ("GAAP")
consistently applied by Seller in accordance with past practice throughout the
periods indicated. The Financial Statements fairly present the financial
condition and results of operation of Seller as at the respective dates and for
the periods indicated. Except as set forth on SCHEDULE 3.1(J), the Financial
Statements reflect all liabilities and obligations of the Seller, accrued,
contingent or otherwise that would be required to be reflected thereon, or in
the notes thereto, prepared in accordance with GAAP, except for liabilities and
obligations incurred in the ordinary course of business since February 28, 1998.
For purposes of this Agreement, the term "liabilities" shall include, without
limitation, any direct or indirect indebtedness, guaranty, endorsement, claim,
loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or
unfixed, known or unknown, asserted or unasserted, xxxxxx or inchoate,
liquidated or unliquidated, secured or unsecured. Seller has, in presenting
information concerning Seller's expenses to Vision 21 for the purpose of
determining the Seller's value, separated out those expenses which shall be
borne by Seller following the acquisition contemplated in this Agreement in a
manner which is consistent with the treatment of expenses which shall be the
responsibility of Seller pursuant to the Business Management Agreement.
(k) Compliance with Law; Authorizations. Seller has
complied in all material respects with, and is not in any material violation of,
any law, ordinance or governmental or regulatory
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rules or regulations, whether federal, state, local or foreign, to which Seller
and the Practice and its related operations, assets or properties are subject
(collectively, the "Regulations"). Seller owns, holds, possesses or lawfully
uses in the operation of the Practice all franchises, licenses, permits,
easements, rights, applications, filings, registrations and other authorizations
(collectively, the "Authorizations") which are material for Seller to conduct
the Practice as currently conducted or for the ownership and use of the assets
owned or used by Seller in the conduct of the Practice, free and clear of all
liens, charges, restrictions and encumbrances and in compliance with all
Regulations. Seller is not in default, nor has Seller received any notice of any
claim of default, with respect to any such Authorization. All such
Authorizations are renewable by their terms or in the ordinary course of
business without the need to comply with any special qualification procedures or
to pay any amounts other than routine filing fees. None of such Authorizations
will be adversely affected by the consummation of the transactions contemplated
hereby.
(l) Litigation. No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
best knowledge of Seller and Optometrist, threatened against Seller or
Optometrist or relates to the Assets or the transactions contemplated by this
Agreement, nor does Seller or Optometrist know of any reasonably likely basis
for any such litigation, arbitration, investigation or proceeding, the result of
which could adversely affect Seller, Optometrist, the Assets or the transactions
contemplated hereby or thereby. Neither Seller nor Optometrist is a party to or
subject to the provisions of any judgment, order, writ, injunction, decree or
award of any court, arbitrator or governmental or regulatory official, body or
authority which may adversely affect Seller, Optometrist, the Assets or the
transactions contemplated hereby.
(m) Labor Matters. Seller has not suffered any strike,
slowdown, picketing or work stoppage by any union or other group of employees
affecting the Practice. Seller is not a party to any collective bargaining
agreement, no such agreement determines the terms and conditions of employment
of any employee of Seller, no collective bargaining agent has been certified as
a representative of any of the employees of Seller, and no representation
campaign or election is now in progress with respect to any of the employees of
Seller. Seller has complied and is in compliance in all material respects with
all laws and regulations relating to the employment of labor, including, without
limitation, provisions relating to wages, hours, collective bargaining,
occupational safety and health, equal employment opportunity and the withholding
of income taxes and social security contributions. Seller has paid its employees
all wages, commissions and accruals for earned vacation, personal days and sick
leave owing through the Closing Date. The consummation of the transactions
contemplated hereby will not cause Vision 21 or the P.L.C. to incur or suffer
any liability relating to, or obligation to pay, any severance, termination or
other payment to any person or entity and any such claim made against Vision 21
or the P.L.C. for reason of any termination or separation of any employee on or
before Closing, or otherwise resulting from the sale of the Assets pursuant to
this Agreement, shall be the sole responsibility of Seller. No employee of
Seller has any contractual right to continued employment by Seller following the
consummation of the sale of the Assets pursuant to this Agreement and Vision 21
and the P.L.C. shall be free to offer employment to such employees of Seller as
Vision 21 and the P.L.C. may determine and on such terms and conditions as
Vision 21 and the P.L.C. may determine. Set forth in SCHEDULE 3.1(M) is an
accurate and complete list of all employees employed by Seller in the Practice
showing as to each the nature of the employee's job, years of service, the
amount or rate of compensation, all accruals of vacation, personal days, sick
leave, and any other benefits due the employee and other matters which may be
reasonably required by Vision 21 and the P.L.C.
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(n) Employee Benefit Plans. Seller neither sponsors nor
maintains any employee benefit plans except as described in SCHEDULE 3.1(N). The
Seller is not a contributing employer under any multiemployer plan (as such term
is defined in Section 3(37) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) nor has it withdrawn from participation in any such
plan after 1979. The Seller has not entered into any agreement to provide, nor
does it otherwise have any obligation to provide, any individual and/or his
designated beneficiary with any optometric, life insurance or other fringe
benefits, following his retirement or other termination of employment, other
than pension benefits payable pursuant to its employee pension benefit plans (as
such term is defined in Section 3(2) of ERISA) described in SCHEDULE 3.1(N). Any
employee benefit plans (as such term is defined in Section 3(3) of ERISA)
maintained or sponsored by Seller for the benefit of Seller's employees and
described in SCHEDULE 3.1(N) are in compliance in all material respects with the
applicable provisions of ERISA and the regulations promulgated thereunder as
presently applied, and have so complied during all prior periods during which
such provisions were applicable. Seller has complied in all material respects
with the provisions of ERISA applicable to it as employer, plan sponsor, plan
administrator or fiduciary of any such employee benefit plans with respect to
any such employee benefit plans maintained by Seller or to which Seller was
obligated to contribute funds (or any other plan or individual arrangement which
may not be subject to ERISA). Seller has (i) made all contributions required of
it by law (including, without limitation, ERISA) or contract; and (ii) is and
has been in compliance with the material terms and provisions of all such
employee benefit plans. Seller has no accrued but unpaid obligations with
respect to any of such employee benefit plans except as set forth in the
Financial Statements or SCHEDULE 3.1(I).
(o) Necessary Assets. The Assets include all rights and
property necessary to the conduct of the Practice in the manner it is presently
conducted by Seller and no property excluded from the Assets hereof constitutes
property or rights material to the Practice.
(p) Availability of Documents; Compliance with Due
Diligence Requests. Seller has made available to Vision 21 and the P.L.C. copies
of all documents including, without limitation, all agreements, contracts,
commitments, insurance policies, leases, plans, instruments, undertakings,
authorizations, permits, licenses, trademarks, trade names, service marks and
applications therefor listed in this Agreement or in the Schedules to this
Agreement. Such copies are true and complete and include all amendments,
supplements and modifications thereto or waivers currently in effect thereunder.
Prior to the Closing Date, the Seller and Optometrist shall have provided true
and correct copies to Vision 21 and the P.L.C. or answered truthfully in writing
all items described in Vision 21's written due diligence list which has been
provided to the Seller by Vision 21 prior to the date first above written.
(q) Conditions Affecting Seller. There is no fact,
development or threatened development with respect to the markets, products,
services, clients, patients, facilities, personnel, vendors, suppliers,
operations, Assets or prospects of the Practice which are known to Seller which
would materially adversely affect the Practice or the operations, prospects or
condition (financial or otherwise) of Seller considered as a whole, other than
such conditions as may affect as a whole the economy or the practice of
optometry generally. Seller and Optometrist have used their respective best
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efforts to keep available for Vision 21 and the P.L.C. the services of the
employees, agents, patients and suppliers of Seller active in the conduct of the
Practice. Seller does not have any reason to believe that any loss of any
employee, agent, patient or supplier or other advantageous arrangement will
result because of the consummation of the transactions contemplated hereby.
(r) Real Property. All real property (including, without
limitation, all interests in and rights to real property) and improvements
located thereon which are owned or leased by Seller and used in connection with
the Practice or included in the Assets (the "Real Property") are listed on
SCHEDULE 3.1(R). The use and operation of the Real Property is in compliance in
all material respects with all applicable building code, environmental, zoning
and land use laws, and other applicable local, state and federal laws and
regulations, including, without limitation, those laws and regulations relating
to the generation, transportation, storage and disposal of medical waste. No
portion of the Real Property is the subject of, or affected by, any condemnation
or eminent domain proceeding or any covenant or other restriction preventing or
limiting Seller's right to convey right, title and interest in the Real Property
or to use the Real Property for the various purposes for which the Real Property
is currently being used. Each lease with respect to the Real Property is in full
force and effect and has not been assigned, modified, supplemented or amended.
Neither Seller nor the landlord under any lease is in material default of the
terms of any such lease and, to the best of Seller's knowledge, no circumstances
or state of facts currently exist which, with the giving of notice or the
passage of time or both would permit the landlord under any lease to terminate
such lease.
(s) Medicare and Medicaid Programs. To the best of
Seller's knowledge, Optometrist and each professional employee of the Seller are
qualified for participation in the Medicare and Medicaid programs and the Seller
is party to provider agreements for such programs which are in full force and
effect with no events of default having occurred thereunder. To the best of
Seller's knowledge, Seller, Optometrist and each professional employee of the
Seller have timely filed all claims or other reports required to be filed prior
to the Closing Date with respect to the purchase of services by third-party
payors ("Payors"), including but not limited to Medicare and Medicaid programs,
except where the failure to file would not, individually or in the aggregate,
result in a material adverse affect. All such claims or reports are complete and
accurate in all material respects. Seller has paid or has properly recorded on
the Financial Statements all actually known and undisputed refunds, discounts or
adjustments which have become due pursuant to such claims, and to the best of
Seller's knowledge, Seller does not have any material liability to any Payor
with respect thereto, except as has been reserved for in the Seller's Financial
Statements or set forth on SCHEDULE 3.1(J). There are no pending appeals,
overpayment determinations, adjustments, challenges, audits, litigation, or
notices of intent to reopen Medicare and/or Medicaid claims determinations or
other reports required to be filed by Seller, Optometrist or to the best of
Seller's knowledge, a professional employee of Seller in order to be paid by a
Payor for services rendered. None of the Seller, Optometrist or to the best of
Seller's knowledge, any professional employee of Seller has been convicted of,
or pled guilty or nolo contendere to, patient abuse or neglect, or any other
Medicare or Medicaid program-related offense. None of the Seller, Optometrist or
any professional employee of the Seller has committed any offense which may
serve as the basis for suspension or exclusion from the Medicare and Medicaid
programs, including but not limited to, defrauding a government program, loss of
a license to provide health services, and failure to provide quality care.
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(t) Fraud and Abuse. None of the Seller, Optometrist, or,
to the best of Seller's knowledge, any professional employee of the Seller has
engaged in any activities which are prohibited under 42 U.S.C. xx.xx. 1320-7, 7a
or 7b or 42 U.S.C. ss.1395nn (subject to the exceptions set forth in such
legislation), or the regulations promulgated thereunder or pursuant to similar
state or local statutes or regulations, or which are prohibited by rules of
professional conduct, including but not limited to the following:
(i) knowingly and willfully making or causing to
be made a false statement or representation of a material fact in any
application for any benefit or payment;
(ii) knowingly and willfully making or causing to
be made a false statement or representation of a material fact for use in
determining rights to any benefit or payment;
(iii) failure to disclose knowledge by a Medicare
or Medicaid claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on the claimant's behalf or on behalf
of another, with intent to fraudulently secure such benefit or payment;
(iv) knowingly and willfully offering, paying,
soliciting or receiving any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, in cash or in kind (1) in return for referring
an individual to a person for the furnishing or arranging for the furnishing of
any item or service for which payment may be made in whole or in part by
Medicare or Medicaid, or (2) in return for purchasing, leasing, or ordering, or
arranging for or recommending purchasing, leasing, or ordering any good,
facility, service, or item for which payment may be made in whole or in part by
Medicare or Medicaid; and
(v) referring a patient for designated health
services (as defined in 42 U.S.C. ss.1395nn) or providing designated health
services to a patient upon a referral from an entity or person with which Seller
or an immediate family member has a financial relationship, and to which no
exception under 42 U.S.C. ss.1395nn applies.
(u) Ownership of Competitors. Neither Seller nor the
Optometrist owns, directly or indirectly, any of the capital stock of any other
corporation or any equity, profit sharing, participation or other interest in
any corporation, partnership, joint venture or other entity that is engaged in a
business that is a competitor of Vision 21 or the Seller.
(v) Prohibitions on the Corporate Practice of Optometry.
To the best of the Seller's and Optometrist's knowledge, the actions,
transactions or relationships arising from, and contemplated by this Agreement,
do not violate any law, rule or regulation relating to the corporate practice of
optometry. Seller and Optometrist accordingly agree that neither Seller nor
Optometrist will, in an attempt to void or nullify any document contemplated
herein or any relationship involving Vision 21, the P.L.C., Seller or
Optometrist, xxx, claim or assert that any such document contemplated herein or
any such relationship violates any law, rule or regulation relating to the
corporate practice of optometry and expressly warrant that this Section is valid
and enforceable by Vision 21, and recognizes that Vision 21 has relied upon the
statements herein in closing this acquisition.
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(w) Commitments. Except as set forth on SCHEDULE 3.1(W)
or as otherwise disclosed pursuant to this Agreement, neither Seller nor
Optometrist (with respect to the Practice) is a party to nor bound by, nor are
the Assets bound by, whether or not in writing, any of the following
(collectively, "Commitments"):
(i) partnership or joint venture agreement;
(ii) guaranty or suretyship, indemnification or
contribution agreement or performance bond;
(iii) debt instrument, loan agreement or other
obligation relating to indebtedness for borrowed money or money lent or to be
lent to another;
(iv) contract to purchase real property;
(v) agreement relating to any material matter or
transaction in which an interest is held by a person or entity that is an
affiliate of Seller;
(vi) agreement for the acquisition of services,
supplies, equipment, inventory, fixtures or other property, or agreements with
public relations or advertising agencies, accountants or attorneys (other than
in connection with this Agreement and the transactions contemplated hereby)
involving more than $2,000 in the aggregate;
(vii) powers of attorney;
(viii) contracts containing non-competition
covenants;
(ix) agreements with Payors and contracts to
provide optometric or health care services; or
(x) any other agreement or commitment not made
in the ordinary course of business or that is material to the business,
operations, condition (financial or otherwise) or results of operations of
Seller.
Except as set forth on SCHEDULE 3.1(W) and to Seller's and Optometrist's best
knowledge, there are no existing or asserted defaults, events of default or
events, occurrences, acts or omissions that, with the giving of notice or lapse
of time or both, would constitute defaults by Seller or Optometrist or, to the
best knowledge of Seller and Optometrist, any other party to a material
Commitment, and no penalties have been incurred nor are amendments pending, with
respect to the material Commitments. The Commitments are in full force and
effect and are valid and enforceable obligations of Seller and Optometrist, and
to the best knowledge of Seller and Optometrist, are valid and enforceable
obligations of the other parties thereto, in accordance with their respective
terms, and no defenses, off-sets or counterclaims have been asserted or, to the
best knowledge of Seller and Optometrist, may be made by any party thereto
(other than Seller and Optometrist), nor has Seller or Optometrist waived any
rights thereunder. Except as set forth on SCHEDULE 3.1(W), no consents or
approvals are required under the terms of any agreement listed on SCHEDULE
3.1(W) in connection with the transactions contemplated
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herein, including, without limitation, the transfer of any such agreement
pursuant to this Agreement. Except as set forth on SCHEDULE 3.1(w), neither
Seller nor Optometrist has received notice of any plan or intention of any other
party to any Commitment to exercise any right to cancel or terminate any
Commitment, and neither Seller nor Optometrist knows of any fact that would
justify the exercise of such a right.
(x) Insurance. Seller, Optometrist and each
professional employee of Seller carries property, liability, malpractice and
such other types of insurance pursuant to the insurance policies listed and
briefly described on SCHEDULE 3.1(X) (the "Insurance Policies"). The Insurance
Policies are all of the insurance policies of the Seller, Optometrist and, to
the best of Seller's knowledge, each professional employee of Seller relating to
the business of Seller and the Assets. All of the Insurance Policies are issued
by insurers of recognized responsibility, and, to the best knowledge of the
Seller and Optometrist, are valid and enforceable policies, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies. Except as
set forth in SCHEDULE 3.1(X), no consent or approval is required for, and no
other impediment or restriction exists that will prohibit or limit, the transfer
of any such Insurance Policies included within the Non-Optometric Assets in
accordance with the terms of this Agreement. All Insurance Policies shall be
maintained in force without interruption up to and including the Closing Date.
Neither Seller nor Optometrist has received any notice or other communication
from any issuer of any Insurance Policy canceling such policy, materially
increasing any deductibles or retained amounts thereunder, and to the actual
knowledge of Seller and Optometrist, no such cancellation or increase of
deductibles, retainages or premiums is threatened. Neither Seller nor
Optometrist has any outstanding claims, settlements or premiums owed against any
Insurance Policy, and Seller and Optometrist have given all notices or have
presented all potential or actual claims under any Insurance Policy in due and
timely fashion. In the three years before the effective date of this Agreement,
neither Seller nor Optometrist has filed a written application for any
professional liability insurance coverage which has been denied by an insurance
agency or carrier, and the Seller, Optometrist and each professional employee
employed by Seller have been continuously insured for professional malpractice
claims for at least the past seven (7) years (or the period of Optometrist's or
such professional employee's employment by Seller, if shorter). SCHEDULE 3.1(X)
also sets forth a list of all claims under any Insurance Policy in excess of
$10,000 per occurrence filed by Seller, Optometrist or any professional employee
employed by the Seller in the three years before the effective date of this
Agreement.
(y) Accounts Receivable/Payable. The accounts
receivable of Seller relating to the Practice reflected on the Seller's
Financial Statements (the "Accounts Receivable"), to the extent uncollected on
the date hereof, are, and the accounts receivable of Seller relating to the
ownership and operation of the Practice to be reflected on the books of Seller
on the Closing Date will be, valid, existing and collectible within six (6)
months from the Closing Date (taking into consideration the allowance for
doubtful accounts set forth in the Financial Statements) using reasonably
diligent collection methods taking into account the size and nature of the
receivable, and represent amounts due for goods sold and delivered or services
performed. To the best knowledge of Seller, there are not, and on the date of
Closing there will not be, any refunds, discounts, set-offs, defenses,
counterclaims or other adjustments payable or assessable with respect to the
Accounts Receivable. Seller has collected Accounts Receivable only in the
ordinary course and has not changed collection procedures or methods nor
accelerated the pace of such collection efforts in anticipation of the
transactions contemplated in this Agreement. Seller has paid accounts payable in
the ordinary course and has not changed payment
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procedures or methods nor delayed the timing of such payments in anticipation of
the transactions contemplated in this Agreement.
(z) Intentions. The Optometrist intends to continue
practicing medicine on a full-time basis for at least the next five (5) years
with the Seller and does not know of any fact or condition that materially
adversely affects, or in the future is reasonably likely to materially adversely
affect, his ability or intention to practice optometry on a full-time basis for
the next five (5) years with the Seller.
(aa) Completeness of Disclosure. Neither this Agreement,
nor any Schedule, Exhibit, list, certificate or other instrument or document
furnished by Seller or Optometrist to Vision 21 or the P.L.C. pursuant to this
Agreement, contains any untrue statement of a material fact or omits to state
any material fact required to be stated herein or therein or necessary to make
the statements and information contained herein or therein not misleading.
Neither Seller nor Optometrist has failed to disclose to Vision 21 or the P.L.C.
any event, condition or fact which Seller knows, or has reasonable grounds to
know, may materially adversely affect the Assets or the operations, prospects or
condition (financial or otherwise) of the Practice.
3.2. Representations and Warranties of Vision 21. Vision 21 hereby
represents and warrants to Seller and Optometrist that the following are true
and correct as of the date hereof and shall be true and correct as of the
Closing Date as if made on that date:
(a) Corporate Existence. Vision 21 is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida.
(b) Corporate Power and Authorization. Vision 21 has the
power, authority and legal right to execute, deliver and perform this Agreement,
and this Agreement constitutes the legal, valid and binding obligation of Vision
21 enforceable against Vision 21 in accordance with its terms.
(c) Validity of Contemplated Transactions. The execution,
delivery and performance of this Agreement by Vision 21 do not and will not
violate, conflict with or result in the breach of any term, condition or
provision of, or require the consent of any other party under (i) any existing
law, ordinance, or governmental rule or regulation to which Vision 21 is
subject, (ii) any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority
which is applicable to Vision 21, (iii) the Articles of Incorporation or By-Laws
of Vision 21, or (iv) any mortgage, indenture, agreement, contract, commitment,
lease, plan or other instrument, document or understanding, oral or written, to
which Vision 21 is a party or by which Vision 21 is otherwise bound. No
authorization, approval or consent of, and no registration or filing with, any
governmental or regulatory official, body or authority is required in connection
with the execution, delivery and performance of this Agreement by Vision 21.
(d) Completeness of Disclosure. Neither this Agreement
nor any other instrument or document furnished by Vision 21 to Seller or
Optometrist pursuant to this Agreement, contains any untrue statement of a
material fact or omits to state any material fact required to be stated herein
or therein or necessary to make the statements and information contained herein
or therein not misleading.
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(e) Employment of Seller's Employees. Vision 21 does not
currently intend to change the existing composition or employment terms of any
of the non-professional personnel which have employment arrangements with Seller
on the effective date of this Agreement (except as is necessary for Vision 21 to
employ such individuals pursuant to the Business Management Agreement). Vision
21 reserves the right, however, to change the number, composition or employment
terms of such non-professional personnel in the future.
(f) Compliance with Applicable Laws. Vision 21 is in
material compliance with all applicable laws, ordinances and regulations of any
governmental authority, including, without limitation, applicable state
corporation, insurance and health regulatory authorities and other Governmental
Authorities regulating exclusive provider organizations, preferred provider
organizations, medical utilization review organizations, medical service
organizations, lay intermediaries, secondary contractors or third-party
administrators and all Medicare and Medicaid provider agreements to which it is
a party, except where the failure to comply would not have a material adverse
effect. To the best knowledge of Vision 21, no investigation or review by any
governmental authority, including, without limitation, applicable state
corporation, insurance and health regulatory authorities, with respect to Vision
21 is pending or threatened, nor has any governmental authority, including,
without limitation, applicable state corporation, insurance and health
regulatory authorities, indicated an intention to conduct the same, other than
those the outcome of which would not have a material adverse effect.
(g) Documents. Vision 21 has filed reports and
registration statements with the SEC (the "Purchaser Documents") since its
initial public offering. As of their respective dates, the Purchaser Documents
did not contain any untrue statements of material facts or omit to state
material facts required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading. As of their respective dates, the Purchaser Documents complied in
all material respects with the applicable requirements of the Securities Act and
the Exchange Act and the rules and regulations promulgated under such statutes.
The financial statements contained in the Purchaser Documents, together with the
notes thereto, have been prepared in accordance with GAAP, reflect all
liabilities of Vision 21 required to be stated therein and present fairly the
financial condition of Vision 21 at such date and the results of operations and
cash flows of Vision 21 for the period then ended. The Purchaser Documents do
not contain any untrue statements of material facts or omit to state any
material facts required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading as of the date hereof except for such facts as are disclosed herein
and except for the transactions contemplated hereby.
3.3. Representations and Warranties of P.L.C. P.L.C.
hereby represents and warrants to Seller that the following are true and correct
as of the date hereof and shall be true and correct as of the Closing Date as if
made on that date:
(a) Corporate Existence. P.L.C. is a professional
corporation duly organized, validly existing and in good standing under the laws
of the State of Arizona.
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(b) Corporate Power and Authorization. P.L.C. has the
power, authority and legal right to execute, deliver and perform this Agreement,
and this Agreement constitutes the legal, valid and binding obligation of P.L.C.
enforceable against P.L.C. in accordance with its terms.
(c) Validity of Contemplated Transactions. The execution,
delivery and performance of this Agreement by P.L.C. do not and will not
violate, conflict with or result in the breach of any term, condition or
provision of, or require the consent of any other party under (i) any existing
law, ordinance, or governmental rule or regulation to which P.L.C. is subject,
(ii) any judgment, order, writ, injunction, decree or award of any court,
arbitrator or governmental or regulatory official, body or authority which is
applicable to P.L.C., (iii) the Articles of Incorporation or By-Laws of P.L.C.,
or (iv) any mortgage, indenture, agreement, contract, commitment, lease, plan or
other instrument, document or understanding, oral or written, to which P.L.C. is
a party or by which P.L.C. is otherwise bound. No authorization, approval or
consent of, and no registration or filing with, any governmental or regulatory
official, body or authority is required in connection with the execution,
delivery and performance of this Agreement by P.L.C.
(d) Completeness of Disclosure. Neither this Agreement
nor any other instrument or document furnished by P.L.C. to Seller pursuant to
this Agreement, contains any untrue statement of a material fact or omits to
state any material fact required to be stated herein or therein or necessary to
make the statements and information contained herein or therein not misleading.
ARTICLE IV - CONDITIONS PRECEDENT TO THE CLOSING
4.1. Conditions Precedent to Obligations of Vision 21 and the
P.L.C.. All obligations of Vision 21 and the P.L.C. under this Agreement are
subject to the fulfillment or satisfaction, prior to or at the Closing, of each
of the following conditions precedent:
(a) Compliance with this Agreement. Seller and
Optometrist shall have performed and complied with all agreements and conditions
required by this Agreement to be performed or complied with by them prior to the
Closing.
(b) Due Diligence. Vision 21 and the P.L.C. shall have
completed to their satisfaction a due diligence review of Seller, Optometrist,
the Practice and the Assets, which shall include verification that the Practice
has been run in the ordinary course since August, 1997, and that the Assets,
liabilities, obligations, revenues, vendor relations and patient relations of
Seller are as represented to and anticipated by Vision 21 and the P.L.C. Seller
agrees to cooperate and make available to Vision 21, and the P.L.C. and their
employees and accountants, all of Seller's books and records and to make
available Seller's officers, employees and agents in assisting Vision 21 and the
P.L.C. to complete their due diligence investigations. Vision 21 and the P.L.C.
may conduct their due diligence investigations from the date first above written
to, and including, the Closing Date.
(c) No Adverse Changes. No change other than as
contemplated or permitted by this Agreement, or other than in the ordinary
course, shall have occurred with respect to the business, operations, prospects
or condition (financial or otherwise) of the Practice or any of the Assets,
which shall have been material and adverse to Seller.
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(d) Consents and Approvals. Vision 21 and the P.L.C.
shall have received those written consents and approvals necessary or desirable
for the transfer of the Assets to Vision 21 and the P.L.C.
(e) Removal of Liens. Seller shall have obtained valid,
binding and enforceable releases, satisfactions and discharges of all liens,
charges and encumbrances affecting the Assets.
(f) Employment Agreement. Optometrist and the Seller
shall have entered into the Employment Agreement.
(g) Business Management Agreement. Vision 21 and the
P.L.C. shall have entered into the Business Management Agreement and shall have
executed the undertakings attached as Exhibits thereto.
(h) Lease Assignments and Lease Agreements. Seller shall
have entered into the Lease Assignments or the Lease Agreements.
(i) Termination of Retirement Plans. Seller shall have
taken all steps necessary to discontinue benefits accruals under any employee
benefit plan that is intended to be a qualified employee retirement plan under
Section 401(a) of the Code (a "Retirement Plan") effective as of Closing or as
soon thereafter as may be practical. Subsequent to Closing, Seller and Vision 21
shall review the extent to which Seller can resume contributions to the
Retirement Plan without violating the qualification requirements of Section
410(b) and 401(a)(4) of the Code taking into account any employees of Vision 21
who would be "leased employees" of Seller under Section 414(n) of the Code. If
Vision 21 and Seller mutually agree that such qualification requirements can be
satisfied, Seller may elect to continue the Retirement Plan and make
contributions in accordance with its terms, provided that Seller shall agree to
cover at its own expense any Vision 21 employees who are leased employees if
such coverage is required to maintain the tax qualified status of the Retirement
Plan.
4.2. Conditions Precedent to Seller's and Optometrist's
Obligations. All obligations of Seller and Optometrist under this Agreement are
subject to the fulfillment or satisfaction, prior to or at the Closing, of each
of the following conditions precedent:
(a) Compliance with this Agreement. Vision 21 and the
P.L.C. shall have performed and complied with all agreements and conditions
required by this Agreement to be performed or complied with by them prior to or
at the Closing.
(b) Employment Agreement. P.L.C. shall have entered into
the Employment Agreement.
(c) Lease Assignments and Lease Agreements. Vision 21
shall have assumed the leases of real property set forth in the Lease
Assignments or entered into the Lease Agreements.
4.3. Risk of Loss Prior to Closing. The risk of any loss,
destruction or other damage to the Assets, other than ordinary wear and tear,
prior to the completion of the Closing, shall be solely that of Seller.
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ARTICLE V - SECURITIES LAW MATTERS
5.1. Investment Representations and Covenants of Seller and
Optometrist.
(a) Each of Optometrist and Seller understands that the
common stock of Vision 21 (the "Securities") which may comprise the
Non-Optometric Asset Purchase Price will not be registered under the Securities
Act of 1933, as amended (the "Securities Act"), or any state securities laws on
the grounds that the issuance of the Securities is exempt from registration
pursuant to Section 4(2) of the Securities Act and applicable state securities
laws, and that the reliance of Vision 21 on such exemptions is predicated in
part on the Seller's and Optometrist's representations, warranties, covenants
and acknowledgments set forth in this Section.
(b) Seller and Optometrist represent and warrant that
Seller and Optometrist are "accredited investors" or "sophisticated investors"
as defined under the Securities Act and state "Blue Sky" laws, or that Seller
and Optometrist have utilized, to the extent necessary to be deemed
sophisticated investors under the Securities Act and State "Blue Sky" laws, the
assistance of a professional advisor.
(c) Seller and Optometrist represent and warrant that the
Securities to be acquired by Seller upon consummation of the transactions
described in this Agreement will be acquired by Seller for Seller's own account,
not as a nominee or agent, and without a view to resale or other distribution
within the meaning of the Securities Act and the rules and regulations
thereunder, except as contemplated in this Agreement, and that Seller will not
distribute any of the Securities in violation of the Securities Act. All
Securities shall bear a restrictive legend in substantially the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY ONLY BE SOLD OR OTHERWISE
TRANSFERRED IF THE HOLDER HEREOF COMPLIES WITH THE ACT AND APPLICABLE
SECURITIES LAWS."
In addition, the Securities shall bear any legend required by the
securities or "Blue Sky" laws of any state where Optometrist resides as well as
any other legend deemed appropriate by Vision 21 or its counsel.
(d) Seller and Optometrist represent and warrant that the
city and state set forth below Optometrist's name on SCHEDULE 5.1(D) is where
Optometrist's principal residence is located.
(e) Seller and Optometrist (i) acknowledge that the
Securities issued to Seller at the Closing must be held indefinitely by Seller
unless subsequently registered under the Securities Act or an exemption from
registration is available, (ii) are aware that any routine sales of Securities
made pursuant to Rule 144 under the Securities Act may be made only in limited
amounts and in accordance with the terms and conditions of that Rule and that in
such cases where the Rule is not applicable, compliance with some other
registration exemption will be required, and (iii) are aware that Rule 144
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is not currently available for use by Seller for resale of any of the Securities
to be acquired by Seller upon consummation of the transactions described in this
Agreement.
(f) Seller and Optometrist represent and warrant to
Vision 21 that Seller and Optometrist, either alone or together with the
assistance of Seller's and Optometrist's own professional advisor, have such
knowledge and experience in financial and business matters such that Seller and
Optometrist are capable of evaluating the merits and risks of Seller's
investment in any of the Securities to be acquired by Seller upon consummation
of the transactions described in this Agreement.
(g) Seller and Optometrist confirm that Seller and
Optometrist have had the opportunity to ask questions of and receive answers
from Vision 21 concerning the terms and conditions of Seller's investment in the
Securities, and the Seller and Optometrist have received to Seller's and
Optometrist's satisfaction, such additional information, in addition to that set
forth herein, about Vision 21's operations and the terms and conditions of the
offering as Seller and Optometrist have requested.
(h) In order to ensure compliance with the provisions of
paragraph (c) hereof, Seller and Optometrist agree that after the Closing Seller
will not sell or otherwise transfer or dispose of Securities or any interest
therein (unless such shares have been registered under the Securities Act)
without first complying with either of the following conditions, the expenses
and costs of satisfaction of which shall be fully borne and paid for by Seller:
(i) Vision 21 shall have received a written
legal opinion from Seller's legal counsel, which opinion and counsel shall be
satisfactory to Vision 21 in the exercise of its reasonable judgment, or a copy
of a "no-action" or interpretive letter of the Securities and Exchange
Commission specifying the nature and circumstances of the proposed transfer and
indicating that the proposed transfer will not be in violation of any of the
registration provisions of the Securities Act and the rules and regulations
promulgated thereunder; or
(ii) Vision 21 shall have received an opinion
from its own counsel to the effect that the proposed transfer will not be in
violation of any of the registration provisions of the Securities Act and the
rules and regulations promulgated thereunder.
Seller and Optometrist also agree that the certificates or instruments
representing the Securities to be issued to Seller pursuant to this Agreement
may contain a restrictive legend noting the restrictions on transfer described
in this Section and required by federal and applicable state securities laws,
and that appropriate "stop-transfer" instructions will be given to Vision 21's
transfer agent, if any, provided that this Section 5.1(h) shall no longer be
applicable to any Securities following their transfer pursuant to a registration
statement effective under the Securities Act or in compliance with Rule 144 or
if the opinion of counsel referred to above is to the further effect that
transfer restrictions and the legend referred to herein are no longer required
in order to establish compliance with any provisions of the Securities Act.
(i) Seller and Optometrist agree that they shall be
considered "affiliates" of Vision 21 for purposes of Rule 144 and agree to the
restrictions and limitations imposed by Rule 144
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on affiliates. Seller and Optometrist further agree that they shall be
considered affiliates of Vision 21 for Rule 144 purposes even if they do not
meet the technical definition of "affiliate" under Rule 144.
5.2. Current Public Information. At all times following the
registration of any of Vision 21's securities under the Securities Act or
Securities Exchange Act pursuant to which Vision 21 becomes subject to the
reporting requirements of the Securities Exchange Act, Vision 21 shall use
commercially reasonable efforts to comply with the requirements of Rule 144
under the Securities Act, as such Rule may be amended from time to time (or any
similar rule or regulation hereafter adopted by the SEC) regarding the
availability of current public information to the extent required to enable any
holder of shares of the common stock of Vision 21 to sell such shares without
registration under the Securities Act pursuant to Rule 144 (or any similar rule
or regulation).
ARTICLE VI - INDEMNIFICATION AND REMEDIES
6.1. Indemnification Obligation of Seller and Optometrist. From and
after the Closing, Seller and Optometrist, jointly and severally, will
reimburse, indemnify and hold harmless Vision 21 and the P.L.C., and their
successors and assigns (an "Indemnified Buyer Party") against and in respect of:
(a) any and all damages, losses, deficiencies,
liabilities, costs and expenses incurred or suffered by any Indemnified Buyer
Party that result from, relate to or arise out of:
(i) any and all liabilities and obligations of
Seller of any nature whatsoever not disclosed in this Agreement and expressly
assumed by Vision 21 or the P.L.C.;
(ii) any and all actions, suits, claims, or
legal, administrative, arbitration, governmental or other proceedings or
investigations against any Indemnified Buyer Party that relate to Seller or the
Practice in which the principal event giving rise thereto occurred prior to the
Closing Date or which result from or arise out of any action or inaction of
Seller or any employee, agent, representative or subcontractor of Seller prior
to the Closing Date; or
(iii) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of Seller under this
Agreement or from any misrepresentation in or omission from any certificate,
schedule, exhibit, statement, document or instrument furnished to Vision 21 or
the P.L.C. pursuant hereto or in connection with the negotiation, execution or
performance hereof; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and expenses and
court costs) incident to any of the foregoing or to the enforcement of this
Section 6.1.
6.2. Indemnification Obligation Of Vision 21. From and after the
Closing, Vision 21 will reimburse, indemnify and hold harmless Seller,
Optometrist and their respective successors and assigns (an "Indemnified Seller
Party") against and in respect of:
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(a) any and all damages, losses, deficiencies,
liabilities, costs and expenses incurred or suffered by any Indemnified Seller
Party that result from, relate to or arise out of:
(i) any and all actions, suits, claims, or
legal, administrative, arbitration, governmental or other proceedings or
investigations against any Indemnified Seller Party that relate to Vision 21 in
which the principal event giving rise thereto occurred subsequent to the Closing
Date or which result from or arise out of any action or inaction of Vision 21 or
any employee, agent, representative or subcontractor of Vision 21 subsequent to
the Closing Date unless the liability has been expressly assumed by the
Indemnified Seller Party; or
(ii) any misrepresentation, breach of warranty or
non-fulfillment of any agreement or covenant on the part of Vision 21 under this
Agreement or from any misrepresentation in or omission from any certificate,
schedule, exhibit, statement, document or instrument furnished to Seller
pursuant hereto or in connection with the negotiation, execution or performance
hereof; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and expenses)
incident to any of the foregoing or to the enforcement of this Section 6.2.
6.3. Indemnification Obligation Of P.L.C. From and after the
Closing, the P.L.C. will reimburse, indemnify and hold harmless Seller,
Optometrist and their respective successors and assigns (an "Indemnified Seller
Party") against and in respect of:
(a) any and all damages, losses, deficiencies,
liabilities, costs and expenses incurred or suffered by any Indemnified Seller
Party that result from, relate to or arise out of any misrepresentation, breach
of warranty or non-fulfillment of any agreement or covenant on the part of the
P.L.C. under this Agreement or from any misrepresentation in or omission from
any certificate, schedule, exhibit, statement, document or instrument furnished
to Seller pursuant hereto or in connection with the negotiation, execution or
performance hereof; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and expenses)
incident to any of the foregoing or to the enforcement of this Section 6.3.
6.4. Procedure for Indemnification Claims. If at any time a claim
shall be made or threatened, or an action or proceeding shall be commenced or
threatened, against a party hereto (the "Aggrieved Party") which could result in
liability of the other party (the "Indemnifying Party") under its
indemnification obligations hereunder, the Aggrieved Party shall give to the
Indemnifying Party prompt notice of such claim, action or proceeding. Such
notice shall state the basis for the claim, action or proceeding and the amount
thereof (to the extent such amount is determinable at the time when such notice
is given) and shall permit the Indemnifying Party to assume the defense of any
such claim, action or proceeding (including any action or proceeding resulting
from any such claim). Failure by the Indemnifying Party to notify the Aggrieved
Party of its election to defend any such claim, action or proceeding within a
reasonable time shall be deemed a waiver by the Indemnifying
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Party of its right to defend such claim, action or proceeding; provided,
however, that the Indemnifying Party shall not be deemed to have waived its
right to contest and defend against any claim of the Aggrieved Party for
indemnification hereunder based upon or arising out of such claim, action or
proceeding.
If the Indemnifying Party assumes the defense of any such claim, action
or proceeding, the obligation of the Indemnifying Party as to such claim, action
or proceeding shall be limited to taking all steps necessary in the defense or
settlement thereof and, to the extent the Indemnifying Party is liable for
indemnification hereunder, to holding the Aggrieved Party harmless from and
against any and all losses, damages and liabilities caused by or arising out of
any settlement approved by the Indemnifying Party or any judgment or award
rendered in connection with such claim, action or proceeding. The Aggrieved
Party agrees to cooperate and make available to the Indemnifying Party all books
and records and such officers, employees and agents as are reasonably necessary
and useful in connection with the defense. The Aggrieved Party may participate,
at its expense, in the defense of such claim, action or proceeding provided that
the Indemnifying Party shall direct and control the defense of such claim,
action or proceeding; provided, however, if in the reasonable opinion of the
Aggrieved Party any such claim, action or proceeding involves an issue or matter
which, if adversely determined, would have a materially adverse effect on the
Aggrieved Party, then the Aggrieved Party shall have the right to control the
defense or settlement of any such claim, action or proceeding and its reasonable
costs and expenses shall be included as a part of the indemnification obligation
of the Indemnifying Party. The Indemnifying Party shall not, with respect to any
such claim, action or proceeding, consent to the entry of any judgment or award,
or enter into any settlement, except with the prior written consent of the
Aggrieved Party, which consent shall not be unreasonably withheld; provided,
however, in the case of any such judgment, award or settlement for money, it
shall be a condition thereto that the Indemnifying Party shall acknowledge its
obligation to indemnify the Aggrieved Party pursuant to this Article VI; and
provided, further, that any such judgment, award or settlement include, as an
unconditional term thereof, the release of the Aggrieved Party from all
liability by the third party claimant or plaintiff.
6.5. Payment; Indemnification Limitations.
(a) Payment. In the event that Seller or the Optometrist
has an indemnification obligation to Vision 21 hereunder, subject to Vision 21's
approval as set forth below, the Seller and/or Optometrist may satisfy such
obligation by transferring to Vision 21 such number of shares of Vision 21
common stock ("Vision 21 Securities") owned by the Seller and/or Optometrist
having an aggregate fair market value (based on the last reported sale price of
the Vision 21 Securities on a principal national securities exchange or other
exchange on which the Vision 21 Securities are then listed or the last quoted
ask price on any over-the-counter market through which the Vision 21 Securities
are then quoted on the last trading day immediately preceding the day on which
Seller or the Optometrist transfers shares of the Vision 21 Securities to Vision
21 hereunder) equal to the indemnification obligation, which Vision 21
Securities shall be transferred to Vision 21 free and clear of all adverse
claims, security interests, liens, claims, proxies, options, stockholders'
agreements and encumbrances.
(b) Indemnification Limitations. Notwithstanding the
provisions of Sections 6.1, 6.2 and 6.3, (i) no party shall be required to
indemnify another party with respect to a breach of a representation, warranty
or covenant unless the claim for indemnification is brought within two (2) years
after the Closing Date, except that a claim for indemnification for a breach of
the representations
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and warranties contained in Sections 3.1(a), 3.1(b), 3.1(d), 3.1(g), 3.2(a) and
3.2(b) may be made at any time, and a claim for indemnification for a breach of
the representations and warranties contained in Sections 3.1(h), 3.1(l), 3.1(n),
3.1(s), 3.1(t) and 8.14 may be made at any time within the applicable statute of
limitations; (ii) neither Seller nor the Optometrist shall be required to
indemnify Vision 21 pursuant to Section 6.1 unless, and to the extent that, the
aggregate amount of damages or claims incurred by Vision 21 shall exceed an
amount equal to two percent (2%) of the total Non-Optometric Asset Purchase
Price; and (c) neither Seller nor the Optometrist shall be required to indemnify
Vision 21 with respect to a breach of a representation, warranty or covenant for
damages or claims in excess of the aggregate Non-Optometric Asset Purchase Price
received by the Seller (other than pursuant to a requirement to indemnify Vision
21 under Sections 3.1(s) or 3.1(t), or unless the breach involves an intentional
breach or fraud by Seller or the Optometrist which shall be unlimited).
Furthermore, the total amount of any indemnity payments owed by one party to
another party to this Agreement shall be reduced by any correlative tax benefit
received by the party to be indemnified or the net proceeds received by the
party to be indemnified with respect to recovery from third parties or insurance
proceeds and such correlative insurance benefit shall be net of the insurance
premium, if any, that becomes due as a result of such claim.
6.6. Other Rights and Remedies Not Affected. The indemnification
rights of the parties under this Article VI are independent of and in addition
to such rights and remedies as the parties may have at law or in equity or
otherwise for any misrepresentation, breach of warranty or failure to fulfill
any agreement or covenant hereunder on the part of any party hereto, including,
without limitation the right to seek an injunction against a violation of any of
the terms hereof or in aid of the exercise of any power granted hereby or by
law, the right to seek specific performance, recision or restitution, none of
which rights or remedies shall be affected or diminished hereby. All rights,
powers, options or remedies afforded to the parties either hereunder or by law
shall be cumulative and not alternative and the exercise of a party's right,
power, option or remedy shall not bar other rights, powers, options or remedies
allowed herein or by law. The indemnification obligations hereunder shall
survive the consummation of the transactions described herein. Should either
party employ an attorney or attorneys to enforce any of the provisions hereof,
or to protect its interest in any matter arising hereunder, or to recover
damages for the breach hereof, the party prevailing shall be entitled to recover
from the other party all reasonable costs, charges and expenses, including
attorney's fees, the value of time charged by paralegals and/or other staff
members operating under the supervision of an attorney, and other legal costs,
expended or incurred in connection therewith, before, during and subsequent to
any litigation, including arbitration and appellate proceedings, bankruptcy or
similar debtor/creditor proceedings, and proceedings to enforce any indemnity
agreement herein contained.
ARTICLE VII- POST CLOSING MATTERS
7.1. Survival of Representations and Warranties. All
representations, warranties, agreements and obligations made by the parties in
this Agreement or in any certificate, schedule, document or instrument furnished
hereunder or in connection with the negotiation, execution and performance of
this Agreement shall survive the Closing. Notwithstanding any investigation or
audit conducted before or after the Closing Date or the decision of any party to
complete the Closing, each party shall be entitled to rely upon the
representations and warranties set forth herein and therein and each such
representation and warranty shall be deemed to be material.
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7.2. Maintenance of Books and Records. Each of Seller, Optometrist,
Vision 21 and the P.L.C. shall preserve until the fifth anniversary of the
Closing Date all records possessed or to be possessed by such party relating to
any of the Assets, liabilities or business of the Practice prior to the Closing
Date. After the Closing Date, Seller and Optometrist shall provide Vision 21 and
the P.L.C. with access, upon prior reasonable written request specifying the
need therefor, during regular business hours, to (a) Seller and the employees of
Seller and (b) the books of account and records of Seller, and Vision 21 and the
P.L.C. and its representatives shall have the right to make copies of such books
and records at the expense of Vision 21.
7.3. Discharge of Business Obligations. From and after the Closing
Date, Seller shall pay and discharge, in accordance with past practice but not
less than on a timely basis, all obligations and liabilities incurred prior to
the Closing Date in respect of the Practice which are not assumed by Vision 21
or the P.L.C. pursuant to Section 1.6, unless such obligations or liabilities
are being disputed by Seller.
7.4. Payments Received. Seller, Optometrist, Vision 21 and the P.L.C.
each agree that after the Closing they will hold and will promptly transfer and
deliver to the other, from time to time as and when received by them, any cash,
checks with appropriate endorsements (using their best efforts not to convert
such checks into cash) or other property that they may receive on or after the
Closing Date which properly belongs to the other party, and will account to the
other for all such receipts. From and after the Closing, Vision 21 and the
P.L.C. shall have the right and authority to endorse without recourse the name
of Seller on any check or any other evidences of indebtedness received by Vision
21 or the P.L.C. on account of the Practice and the Assets transferred to Vision
21 and the P.L.C. hereunder.
7.5. Audit. Vision 21 or the P.L.C. may cause an audit of the Financial
Statements to be conducted by Ernst & Young LLP or such other auditor of Vision
21's selection, the cost of which shall be borne by Vision 21 if the Closing
takes place. Except as otherwise provided in this Section, all items prepared by
Ernst & Young LLP in connection with the audit (the "Prepared Audit Materials")
shall be for use solely by Vision 21. The Prepared Audit Materials shall not be
deemed to include those items that customarily remain the property of the
auditors such as their working papers and internal memos. Seller and Optometrist
represent and warrant to Vision 21 that the preparation of audited financial
statements will not take an unreasonable amount of time or be of unreasonable
cost and that the audited financial statements will not materially differ from
the unaudited financial statements. Seller and Optometrist agree to fully
cooperate with any such audit and provide any documentation reasonably requested
by the auditor in order to complete such audit. Should the Closing not occur,
Seller shall pay for or reimburse Vision 21 for all expenses of Ernst & Young
LLP in connection with the audit. For the purposes of this Agreement, audit
expenses shall include all expenses related to the audit as well as expenses
incurred to present financial statements in accordance with GAAP and all
schedules related thereto. Should the Seller reimburse Vision 21 for all of the
expenses set forth herein with respect to the audit and pay any remaining
balance owed to Ernst & Young LLP, if any, it shall be entitled to copies of the
Prepared Audit Materials.
7.6. Non-Compete. As part of the consideration hereof, neither Seller
nor Optometrist shall for a period of five (5) years from the Closing Date
directly or indirectly (a) engage in any optometric practice management business
or otherwise compete against Vision 21 within the State of Arizona, (b)
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solicit the employees of Vision 21 to become employed by Seller or Optometrist
or otherwise terminate their employment relationship with Vision 21, or (c)
render advice or assistance, or have any interest in, or provide any services to
any competitor of Vision 21; provided, however, that ownership of no more than
five percent (5%) of the stock of a publicly traded corporation engaged in a
competitive business shall not be deemed to be engaging in a competing business.
Seller and Optometrist acknowledge that violation of such covenant not to
compete would cause irreparable harm to Vision 21 which cannot be fully
redressed by payment of damages by Seller and/or Optometrist. Accordingly,
Vision 21 shall be entitled in addition to any other right or remedy it may
have, at law or in equity, to an injunction, enjoining or restraining Seller
and/or Optometrist from any violation or threatened violation of this Section.
If any of the rights or restrictions contained herein shall be deemed by a court
of competent jurisdiction to be unenforceable by reason of the extent, duration
or geographical scope thereof or any other provision of this Agreement, the
parties hereto contemplate that the court shall reduce such extent, duration,
geographical scope or other provision and enforce this Section in its reduced
form for all purposes in the manner contemplated hereby.
7.7. Seller and Optometrist Confidentiality Covenant.0.2. Physician and
Seller Confidentiality Covenant. From the date hereof, the Seller and
Optometrist shall not, directly or indirectly, use for any purpose, other than
in the performance of Optometrist's duties under the Employment Agreement, or
disclose to any third party, any information of Vision 21 (whether written or
oral), including any business management or economic studies, patient lists,
proprietary forms, proprietary business or management methods, marketing data,
fee schedules, or trade secrets of Vision 21, and including the terms and
provisions of this Agreement and any transaction or document executed by the
parties pursuant to this Agreement. Notwithstanding the foregoing, the Seller
and Optometrist may disclose information that the Seller or Optometrist can
establish (a) is or becomes generally available to and known by the public or
optometric community (other than as a result of an unpermitted disclosure
directly or indirectly by Seller or Optometrist or their respective Affiliates,
advisors, or representatives); (b) is or becomes available to the Seller or
Optometrist on a nonconfidential basis from a source other than Vision 21 or its
Affiliates, advisors or representatives, provided that such source is not and
was not bound by a confidentiality agreement with or other obligation of secrecy
to Vision 21 or its Affiliates, advisors or representatives of which the Seller
or Optometrist has knowledge; or (c) has already been or is hereafter
independently acquired or developed by the Seller or Optometrist without
violating any confidentiality agreement with or other obligation of secrecy to
Vision 21, or its Affiliates, advisors or representatives. Without limiting the
other possible remedies to Vision 21 for the breach of this covenant, Seller and
Optometrist agree that injunctive or other equitable relief shall be available
to enforce this covenant, such relief to be without the necessity of posting a
bond, cash or otherwise. The Seller and Optometrist further agree that if any
restriction contained in this Section 7.7 is held by any court to be
unenforceable or unreasonable, a lesser restriction shall be enforced in its
place and the remaining restrictions contained herein shall be enforced
independently of each other.
7.8. Release of Optometrist From Practice Liabilities. 0.4. Release of
Physician From Practice Liabiliti Vision 21 shall use its best efforts to obtain
from third party creditors the release of Optometrist from any personal
liabilities relating to the Practice which are identified on SCHEDULE 1.6 and
assumed by Vision 21 pursuant to the terms of this Agreement.
7.9. Employment Agreements of Non-Shareholder Professionals. Seller and
Optometrist shall use their best efforts to cause all non-shareholder
optometrists, if any, employed by Seller to
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terminate their existing employment agreements effective as of the Closing Date
and to enter into employment agreements to be utilized for such professionals in
substantially the form of such employment agreements attached as exhibits to the
Business Management Agreement.
7.10. Additional Actions and Documents. From and after the Closing
Date, Seller and Optometrist will take or cause to be taken such further
actions, and execute, deliver and file such further documents and instruments as
Vision 21 or the P.L.C. may request from time to time to evidence the transfer
of the Assets to Vision 21 and the P.L.C. and to fully effectuate the purposes
and terms of this Agreement.
ARTICLE VIII - MISCELLANEOUS
8.1. Taxes. Seller shall pay all state and local sales, documentary and
other transfer taxes, if any, due under Arizona law as a result of the purchase,
sale or transfer of the Assets in accordance therewith whether imposed by law on
Seller, Optometrist or Vision 21 or the P.L.C., and Seller shall indemnify,
reimburse and hold harmless Vision 21 in respect of the liability for payment of
or failure to pay any such taxes or the filing of or failure to file any reports
required in connection therewith. Vision 21 shall pay all state and local sales,
documentary and other transfer taxes, if any, due under Florida law as a result
of the purchase, sale or transfer of the Non-Optometric Assets in accordance
therewith whether imposed by law on Seller, Optometrist or Vision 21, and Vision
21 shall indemnify, reimburse and hold harmless Seller in respect of the
liability for payment of or failure to pay any such taxes or the filing of or
failure to file any reports required in connection therewith.
8.2. Expenses. Except as otherwise provided in this Agreement, each
party hereto shall pay its own expenses incidental to the preparation of this
Agreement, the carrying out of the provisions hereof and the consummation of the
transactions contemplated hereby.
8.3. Contents of Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof.
It shall not be amended or modified, and no provision hereof shall be waived,
except by written instrument duly executed by each of the parties hereto. Any
and all previous agreements and understandings between or among the parties
regarding the subject matter hereof, whether written or oral, are superseded by
this Agreement.
8.4. Assignment and Binding Effect. This Agreement may not be assigned
by any party hereto without the prior written consent of the other parties.
Subject to the foregoing, all of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
permitted successors and assigns of the parties.
8.5. Waiver. No delay or failure on the part of either party in
exercising any right hereunder, and no partial or single exercise hereof, will
constitute a waiver of such right or of any other right hereunder.
8.6. Notices. Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be in writing
and shall be deemed given only if delivered personally or sent by overnight,
registered or certified mail, postage prepaid, as follows:
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If to Vision 21, to:
Vision Twenty-One, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Chief Financial Officer
With a copy to:
Xxxxxxx X. Xxxxx, Esquire
Xxxxxxxx, Xxxx & Xxxxxxxx
Xxxxx 0000, Xxxxxxx Xxxxx
000 Xxxx Xxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
If to Seller or Optometrist, to:
Xxxxxx X. Xxxxxxx, O.D.
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, O.D., President
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as of
the date of delivery, in the case of personal delivery, or the delivery or
refusal date, as specified on the return receipt, in the case of overnight,
registered or certified mail.
8.7. Governing Law. This Agreement shall be governed by and interpreted
and enforced in accordance with the laws of the State of Florida.
8.8. No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and, in the case of Article VI hereof, the other Indemnified
Parties, and their heirs, executors, administrators, legal representatives,
successors and assigns, and they shall not be construed as conferring any rights
on any other persons.
8.9. Headings, Gender and "Person". All section headings contained in
this Agreement are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement. Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine or neuter, as the context
requires. Any reference to a "person" herein shall include an individual, firm,
corporation, partnership, trust, governmental authority or body, association,
unincorporated organization or any other entity.
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8.10. Schedules and Exhibits. All Schedules and Exhibits referred to
herein are intended to be and hereby are specifically made a part of this
Agreement.
8.11. Severability. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
8.12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original and all of which counterparts when taken together shall constitute but
one and the same instrument.
8.13. Brokerage. Each of the parties hereto represents and warrants to
the others that no broker is entitled to any commission or similar fee in
connection with the making and carrying out of this Agreement.
8.14. Confidentiality of Agreement. The parties agree not to make any
public announcement with regard to the transactions contemplated by this
Agreement without the prior written consent of the other party until after the
Closing Date.
8.15. Reformation. It is the intention of the parties hereto to conform
strictly to applicable laws regarding the practice and regulation of optometry,
whether such laws are now or hereafter in effect, including the laws of the
United States of America, the State or any other applicable jurisdiction, and
including any subsequent revisions to, or judicial interpretations of, those
laws, in each case to the extent they are applicable to this Agreement (the
"Applicable Laws"). Accordingly, if the Practice is required to terminate
operations at any of the locations ("Terminated Locations") owned or managed by
the Practice as of the date of this Agreement as a result of any Applicable Law,
then the parties hereto agree that, if Vision 21 is economically disadvantaged
as a result thereof, and if the parties hereto cannot negotiate in good faith
such changes to the structure and terms of the transactions provided for in this
Agreement as may be necessary to make these transactions, as restructured,
lawful under applicable laws and regulations, without materially disadvantaging
Vision 21, the Practice shall repay to Vision 21 that portion of the Purchase
Price attributable to those Terminated Locations (based upon such Terminated
Locations' pro rata share of the Practice's gross revenues from all of its
locations for the calendar year 1997), minus (i) any proceeds received by Vision
21 in connection with the termination of operations at the Terminated Locations,
and (ii) the fair market value of any tangible assets located at the Terminated
Locations on the date of this Agreement which are retained by Vision 21 despite
the termination of operations at the Terminated Locations. The parties to this
Agreement shall execute and deliver all documents or instruments necessary to
effect or evidence the provisions of this Section.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
"SELLER"
XXXXXX X. XXXXXXX, O.D., P.C.
By:
------------------------------------------
Xxxxxx X. Xxxxxxx, O.D., President
"P.L.C."
OPTOMETRIC ASSOCIATES OF ARIZONA,
P.L.C.
By:
------------------------------------------
Xxxxxx X. Xxxxxxx, O.D., Manager
"VISION 21"
VISION TWENTY-ONE, INC.
By:
------------------------------------------
Xxxx Xxxxx, authorized agent
"OPTOMETRIST"
----------------------------------------------
Xxxxxx X. Xxxxxxx, O.D.
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