1
EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
AMONG
RENEX DIALYSIS CLINIC OF SOUTH GEORGIA, INC.,
RENEX CORP.,
SOUTH GEORGIA DIALYSIS SERVICES, LLC.
AND
XXXX X. XXXX, M.D.
MARCH 18, 1998
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TABLE OF CONTENTS
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ARTICLE 1. - DEFINITIONS..........................................................................................1
1.1 ASSETS...............................................................................................1
1.2 BUSINESS.............................................................................................1
1.3 BUYER................................................................................................1
1.4 CLOSING DATE.........................................................................................1
1.5 COLLATERAL AGREEMENTS................................................................................1
1.6 COMPANY..............................................................................................1
1.7 CONTRACTS............................................................................................1
1.8 DAMAGES..............................................................................................2
1.9 DISCLOSURE SCHEDULE..................................................................................2
1.10 ENVIRONMENTAL CLAIM..................................................................................2
1.11 ENVIRONMENTAL LAW....................................................................................2
1.12 ERISA ...............................................................................................2
1.13 FINANCIAL STATEMENTS.................................................................................2
1.14 GOVERNMENTAL AUTHORITY...............................................................................2
1.15 HAZARDOUS MATERIAL...................................................................................2
1.16 HAZARDOUS MATERIAL ACTIVITY..........................................................................3
1.17 INTANGIBLE RIGHTS....................................................................................3
1.18 MATERIAL ADVERSE EFFECT..............................................................................3
1.19 MEMBER...............................................................................................3
1.20 RENEX ...............................................................................................3
1.21 ORDINARY COURSE OF BUSINESS..........................................................................3
1.22 PERMITS..............................................................................................3
1.23 RELEASE..............................................................................................3
1.24 TAX OR TAXES.........................................................................................3
ARTICLE 2. - SALE AND PURCHASE OF ASSETS..........................................................................3
2.1 SALE AND PURCHASE OF ASSETS..........................................................................3
2.2. EXCLUDED ASSETS......................................................................................4
2.3 METHOD OF CONVEYANCE.................................................................................4
2.4 NO LIENS.............................................................................................4
2.5 ASSUMPTION OF LIABILITIES............................................................................4
ARTICLE 3. - PURCHASE PRICE AND METHOD OF PAYMENT.................................................................5
3.1 PURCHASE PRICE.......................................................................................5
3.2 EFFECTIVE DATE.......................................................................................5
ARTICLE 4. - CLOSING..............................................................................................5
4.1 CLOSING..............................................................................................5
4.2 MEMBER AND COMPANY PERFORMANCE AT CLOSING............................................................5
4.3 BUYER'S PERFORMANCE AT CLOSING.......................................................................6
4.4 TERMINATION IN ABSENCE OF CLOSING....................................................................7
ARTICLE 5. - REPRESENTATIONS AND WARRANTIES OFTHE COMPANY AND MEMBER..............................................7
5.1 ORGANIZATION OF COMPANY..............................................................................8
5.2 MEMBERSHIP INTERESTS.................................................................................8
5.3 CORPORATE DOCUMENTS..................................................................................8
5.4 NO SUBSIDIARIES......................................................................................8
5.5 AUTHORITY............................................................................................8
5.6 CONSENTS AND APPROVALS...............................................................................8
5.7 FINANCIAL STATEMENTS.................................................................................8
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5.8 TITLE TO ASSETS......................................................................................8
5.9 LIABILITIES..........................................................................................9
5.10 BUSINESS.............................................................................................9
5.11 OBLIGATIONS TO AFFILIATES............................................................................9
5.12 REAL PROPERTY........................................................................................9
5.13 EMPLOYEE BENEFITS...................................................................................10
5.14 LABOR AND EMPLOYMENT MATTERS........................................................................11
5.15 INSURANCE...........................................................................................12
5.16 CONTRACTS AND COMMITMENTS...........................................................................12
5.17 INVENTORIES.........................................................................................12
5.18 EQUIPMENT AND OTHER TANGIBLE PROPERTY...............................................................13
5.19 PERMITS.............................................................................................13
5.20 INTANGIBLE RIGHTS...................................................................................13
5.21 LITIGATION..........................................................................................13
5.22 COMPLIANCE WITH LAWS................................................................................13
5.23 ABSENCE OF MATERIAL CHANGES.........................................................................13
5.24 TAX RETURNS.........................................................................................14
5.25 ACCOUNTS RECEIVABLE.................................................................................14
5.26 MEDICARE MATTERS....................................................................................15
5.27 COMPLIANCE WITH INSTRUMENTS.........................................................................15
5.28 CONTRACTS WITH PHYSICIANS, HOSPITALS, HMO'S AND THIRD PARTY PAYORS..................................15
5.29 BROKERS' COMMISSIONS................................................................................15
5.30 BOOKS AND RECORDS...................................................................................15
5.31 INSPECTION OF RECORDS...............................................................................15
5.32 ENVIRONMENTAL LAWS..................................................................................16
ARTICLE 6. - REPRESENTATIONS AND WARRANTIES OF BUYER AND RENEX...................................................16
6.1 BUYER ORGANIZATION..................................................................................16
6.2 RENEX ORGANIZATION..................................................................................16
6.3 AUTHORITY...........................................................................................16
6.4 CONSENTS AND APPROVALS..............................................................................16
6.5 BROKERS' COMMISSIONS................................................................................16
ARTICLE 7. - OBLIGATIONS PRIOR TO CLOSING........................................................................16
7.1 OPERATION OF BUSINESS...............................................................................16
7.2 ACCESS TO BOOKS AND RECORDS.........................................................................17
7.3 NEGATIVE COVENANTS..................................................................................17
7.4 AFFIRMATIVE COVENANTS...............................................................................18
7.5 CONSUMMATION OF TRANSACTIONS........................................................................18
7.6 NO NEGOTIATIONS.....................................................................................19
7.7 DAMAGE OR DESTRUCTION OF ASSETS.....................................................................19
7.8 COMPANY EMPLOYEES...................................................................................19
7.9 ACCESS TO RECORDS...................................................................................19
7.10 LEASES FOR FACILITIES...............................................................................19
ARTICLE 8. - CONDITIONS PRECEDENT TO THE CLOSING.................................................................20
8.1 CONDITIONS TO OBLIGATIONS OF BUYER AND RENEX........................................................20
8.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY AND MEMBER ................................................20
ARTICLE 9. - POST-CLOSING OBLIGATIONS............................................................................21
9.1 SURVIVAL OF THE CLOSING.............................................................................21
9.2 FURTHER ASSURANCES..................................................................................21
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9.3 INDEMNIFICATION BY THE COMPANY AND THE MEMBER.......................................................21
9.4 INDEMNIFICATION BY THE BUYER AND RENEX..............................................................22
9.5 NON-COMPETITION AGREEMENT...........................................................................23
9.6 PUBLICITY...........................................................................................23
9.7 CONFIDENTIALITY.....................................................................................24
9.8 ....................................................................................................24
ARTICLE 10. - MISCELLANEOUS......................................................................................24
10.1 COSTS AND EXPENSES..................................................................................24
10.2 REMEDIES............................................................................................24
10.3 DISCLOSURE SCHEDULE.................................................................................24
10.4 ATTORNEYS' FEES.....................................................................................25
10.5 RISK OF LOSS........................................................................................25
10.6 ASSIGNMENT AND AMENDMENT OF AGREEMENT...............................................................25
10.7 NOTICES.............................................................................................25
10.8 ENTIRE AGREEMENT....................................................................................25
10.9 WAIVER..............................................................................................25
10.10 GOVERNING LAW.......................................................................................25
10.11 COUNTERPARTS........................................................................................26
10.12 CAPTIONS............................................................................................26
10.13 SUCCESSORS AND ASSIGNS..............................................................................26
10.14 INTERPRETATION......................................................................................26
10.15 SEVERABILITY........................................................................................26
10.16 RIGHTS OF THIRD PARTIES.............................................................................26
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") entered into as
of the 18th day of March, 1998 by and between RENEX DIALYSIS CLINIC OF SOUTH
GEORGIA, INC., a Georgia corporation, RENEX CORP., a Florida corporation, SOUTH
GEORGIA DIALYSIS SERVICES, LLC., a Georgia limited liability company and XXXX X.
XXXX.
R E C I T A L S
A. The Company owns and operates four (4) dialysis clinics
located in South Georgia through which it provides various forms of kidney
dialysis treatments and related services;
B. Buyer desires to purchase certain of the Company's assets
related to the Business and the Company desires to sell such assets, upon the
terms and subject to the conditions set forth herein.
C. The Member currently owns an aggregate of 18.346% of the
outstanding membership interests of the Company and has the contractual right to
acquire (or cause the Company to redeem) an additional 79.616% of the
outstanding membership interests of the Company prior to the Closing and as
such, will receive an indirect benefit from the consummation of the transactions
contemplated herein;
D. The parties desire to make certain representations, warranties
and agreements in connection with this Agreement and also to prescribe various
conditions to the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual
benefits to be derived therefrom and of the respective mutual covenants and
agreements hereinafter set forth and such other good and valuable consideration,
the adequacy and receipt of which is hereby acknowledged, the parties hereto do
hereby agree as follows:
ARTICLE 1. - DEFINITIONS
------------------------
All capitalized terms used in this Agreement are used as defined
in this Article I or elsewhere in this Agreement.
1.1 ASSETS - shall mean the tangible and intangible property
being sold to the Buyer that are listed in Section 2.1 herein and specifically
excluding those items defined as Excluded Assets in Section 2.2 herein.
1.2 BUSINESS - shall mean the provision of kidney dialysis
treatments and related services and supplies through four (4) dialysis clinics
located in Thomasville, GA, Camilla, GA, Bainbridge, GA and Quitman, GA,
respectively.
1.3 BUYER - shall mean RENEX DIALYSIS CLINICS OF SOUTH GEORGIA,
INC., a Georgia corporation.
1.4 CLOSING DATE - shall mean March 24, 1998 at 11:30 a.m., or
such other date as may be agreed upon in writing by all parties hereto.
1.5 COLLATERAL AGREEMENTS - shall mean and include any and all
agreements, instruments, certificates or documents required or expressly
provided for in this Agreement to be executed and delivered in connection with
the transaction contemplated by this Agreement.
1.6 COMPANY - shall mean SOUTH GEORGIA DIALYSIS SERVICES, LLC, a
Georgia limited liability company.
1.7 CONTRACTS - shall mean and include any and all contracts,
agreements understandings, arrangements, leases, licenses, registrations,
authorizations, easements, servitudes, rights of way, mortgages, bonds, notes,
guaranties, liens, indebtedness, approvals, or other instruments or undertaking
to which such person is a party or to which or by which such person or the
property of such person is subject or bound, excluding any Permits, including
such Contracts listed on Schedule 1.7 to the Disclosure Schedule.
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1.8 DAMAGES - shall mean any and all damages, liabilities,
obligations, penalties, fines, judgments, claims, deficiencies, losses, costs,
expenses and assessments, including all reasonable attorneys' fees and costs
actually incurred, and interest accruing on such Damages.
1.9 DISCLOSURE SCHEDULE - shall mean the Disclosure Schedule
prepared by the Member and the Company in connection with this Agreement.
1.10 ENVIRONMENTAL CLAIM - shall mean any investigation, notice,
violation, demand, allegation, action, suit, injunction, judgment, order,
consent, decree, penalty, fine, lien, proceeding, or claim (whether
administrative, judicial or private in nature) arising (a) pursuant to, or in
connection with, a violation of any Environmental Law, (b) in connection with
any Hazardous Material, Hazardous Material Activity, (c) from any abatement,
removal, remedial, corrective or other response action in connection with a
Hazardous Material, Environmental law or other order of a Governmental
Authority, or (d) from any damage, injury, threat or harm to health, safety,
natural resources or the environment.
1.11 ENVIRONMENTAL LAW - shall mean any current legal requirement
whether federal, state or local pertaining to (a) the protection of health,
safety and the indoor or outdoor environment, (b) the conservation, management
or use of natural resources and wildlife, (c) the protection or use of surface
water and groundwater, (d) the management, manufacture, possession, presence,
use, generation, transportation, treatment, storage, disposal, Release,
threatened Release, abatement, removal, remediation or handling of, or exposure
to, any Hazardous Material (e) the management, treatment, disposal or handling
of medical waste, or (e) pollution (including any Release to air, land, surface
water, and groundwater), and includes, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), as
amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
ss. 9601, et seq., Solid Waste Disposal Act of 1976 and Hazardous and Solid
Waste Amendments of 1984, 42 U.S.C. ss. 6901, et seq., Federal Water Pollution
Control Act, as amended by the Clean Water Act of 1977, 33 U.S.C. ss. 1251, et
seq., Clean Air Act of 1966, as amended, 42 U.S.C. ss. 7401, et seq., Toxic
Substance Control Act of 1976, 15 U.S.C. ss. 2601, et seq., Hazardous material
Transportation Act, 49 U.S.C. App. ss. 1801, et seq., Occupational Safety and
Health Act of 1970, as amended, 29 U.S.C. ss. 651, et seq., Oil Pollution act of
1990, 33 U.S.C. ss. 2701, et seq., Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. ss. 11001, et seq., National Environmental
Policy Act of 1969, 42 U.S.C. ss. 4321, et seq., Safe Drinking Water Act of
1974, as amended, 42 U.S.C. ss. 300(f), et seq., any similar, law, and any
amendment, rule, regulation, order or directive issued thereunder prior to the
Closing.
1.12 ERISA - shall mean the federal Employment Retirement Income
Security Act of 1974, as amended.
1.13 FINANCIAL STATEMENTS - shall mean the Company's unaudited
consolidated Financial Statements consisting of balance sheet as of December 31,
1997 and a statement of income for the year ended December 31, 1997, which do
not include footnotes, and the unaudited interim financial statements,
consisting of a balance sheet as of January 31, 1998 and a statement of income
for the one (1) month ended January 31, 1998 which do not include footnotes, all
as attached to the Disclosure Schedule as Schedule 1.13.
1.14 GOVERNMENTAL AUTHORITY - shall mean and include the United
States of America, and any commonwealth, state, territory or possession thereof
and any political subdivision of any of the foregoing, including, but not
limited to courts, departments, commissions, boards, bureaus, agencies,
ministries or other instrumentalities.
1.15 HAZARDOUS MATERIAL - shall mean any substance, chemical,
compound, product, solid, gas, liquid, waste, byproduct, pollutant, contaminant,
or material which is hazardous or toxic, and includes, without limitation, (a)
any medical waste, (b) asbestos, polychlorinated biphyenls and petroleum
(including crude oil or any fraction thereof) and (c) any such material
classified or regulated as "hazardous" or "toxic" pursuant to CERCLA, the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976 and Hazardous an Solid Waste Amendments of 1984, 42 U.S.C. ss. 6901, et
seq., Federal Water Pollution Control Act, as amended by the Clean Water Act of
1977, 33 U.S.C. ss. 1251, et seq., Clean Air Act of 1966, as amended, 42 U.S.C.
ss. 7401, et seq., Toxic substances Control Act of 1976, 15 U.S.C. ss. 2601, et
seq., or Hazardous Materials Transportation Act, 49 U.S.C. App. ss. 1801, et
seq.
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1.16 HAZARDOUS MATERIAL ACTIVITY - shall mean any activity, event
or occurrence involving a Hazardous Material, including, without limitation, the
manufacture, possession, presence, use, generation, transportation, treatment,
storage, disposal, Release, threatened Release, abatement, removal, remediation,
handling of or corrective or response action to any Hazardous Material.
1.17 INTANGIBLE RIGHTS - shall mean and include any and all
information, trade secrets, patents, copyrights, trademarks, trade names and
other intangible properties owned by the Company that are necessary or
customarily used by the Company in the operation of its Business, including the
Intangible Rights listed on Schedule 1.17 to the Disclosure Schedule .
1.18 MATERIAL ADVERSE EFFECT - shall mean an effect (or
circumstance involving a prospective effect) on the business, operations,
assets, liabilities, results of operations, cash flows, conditions (financial or
otherwise) or prospects of the Company which is materially adverse to the
Business taken as a whole.
1.19 MEMBER - shall mean XXXX X. XXXX, M.D.
1.20 RENEX - shall mean RENEX CORP., a Florida corporation.
1.21 ORDINARY COURSE OF BUSINESS - shall mean the conduct and
operation of the Business of the Company only in the manner in which it
conducted and operated such Business during the year ended December 31, 1997 and
the two months ended February 28, 1998, following its usual and ordinary
accounting practices, making ordinary accruals, incurring ordinary liabilities
and expenditures, and making ordinary commitments for inventory, equipment,
maintenance, insurance, rentals, and other ordinary Business purposes whether
reflected in the Financial Statements, or otherwise.
1.22 PERMITS - shall mean and include any and all permits,
provider numbers, certificates of need, licenses, agencies, orders or contracts
granted by any Governmental Authority necessary or used in the operation of the
Business as presently conducted, including the Permits listed on Schedule 1.22
to the Disclosure Schedule.
1.23 RELEASE - shall mean any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing into the indoor or outdoor environment, including, without
limitation, the abandonment or discarding of barrels, drums, containers, tanks
and other receptacles containing or previously containing any Hazardous Material
or medical waste.
1.24 TAX OR TAXES - shall mean any federal, state, local or
foreign, income, gross receipt, license, payroll, employment, excise,
communications, severance, stamp, occupation, premium, windfall profits,
environmental, customs, duties, capital stock, franchise profits, withholding,
social security, unemployment, disability, real property, personal property,
sales, use, transaction, transfer, registration, value added, alternative,
estimated or other tax of any kind whatsoever, including any interest, penalty
or addition thereto.
ARTICLE 2. - SALE AND PURCHASE OF ASSETS
----------------------------------------
2.1 SALE AND PURCHASE OF ASSETS - On the terms and subject to the
conditions of this Agreement, on the Closing Date, the Company shall sell,
convey, assign, transfer, and deliver to Buyer, and Buyer shall purchase,
acquire, and accept delivery of, the following Assets owned by the Company as of
the Closing Date and used by the Company in its Business:
(a) All inventories and other materials, including all
inventory in transit or on order and not yet delivered;
(b) All supplies, equipment, vehicles, machinery,
furniture, fixtures, leasehold improvements and other tangible personal property
used by the Company in the Business, including the items which are listed on
Schedule 2.1(b) to the Disclosure Schedule;
(c) All proprietary knowledge, trade secrets, doctor
lists, referral lists, Contracts, technical information, quality control data,
processes (whether secret or not), methods and other similar proprietary know
how or rights used in the conduct of the Business;
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(d) The Business as a going concern and all of its
assignable franchises, Permits, insurance policies, licenses, telephone numbers,
customer lists, vendor lists, advertising material and data, restrictive
covenants and similar obligations owing to the Company concerning the Business,
together with all books, computer software, files, papers, records, and other
data relating to the Business; and
(e) All other intangible property used by the Business
2.2. EXCLUDED ASSETS - the following assets are specifically
excluded from the Assets being sold to the Buyer (the "Excluded Assets"):
(a) All real estate and buildings owned or used by the
Company or the Business and any lease agreements and proceeds relating to real
estate not included in the leases referred to in Section 4.3(g);
(b) All cash and investments owned by the Company;
(c) All accounts and other receivables and reimbursements
relating to any period prior to the Closing, including without limitation,
charges due but unpaid for patient services of any nature, rebates or refunds
(including Medicare or Medicaid benefits, insurance, travel or other rebates and
reimbursements), whether or not a claim has been made as of Closing; and
(d) All non-operating assets owned or used by the
Company, if any, as of the Closing.
(e) The name "South Georgia Dialysis Services, LLC."
(f) Accounting and medical management software as
referred to on Schedule 1.17 on the Disclosure Schedule.
2.3 METHOD OF CONVEYANCE - The sale, transfer, conveyance,
assignment, and delivery by the Company of the Assets to the Buyer in accordance
with Section 2.1 hereof shall be through the delivery of a duly executed Xxxx of
Sale in the form set forth on Schedule 4.2(a) of the Disclosure Schedule, as
well as various assignments of leases, contracts and other matters as deemed
reasonably necessary and appropriate by Buyer's counsel.
2.4 NO LIENS - The Company shall transfer good and marketable
title to the Assets to Buyer free and clear of all liens, charges, claims,
security interests, adverse interests, and encumbrances of any kind whatsoever
owed to, owed by, accrued to, or in favor of any person or party whatsoever.
2.5 ASSUMPTION OF LIABILITIES - Except as expressly set forth on
Schedule 2.5 to the Disclosure Schedule and as provided in the Assignment and
Assumption Agreements and in Section 3.1 below, Buyer shall not assume or be
responsible at any time for any liability, obligation, debt or commitment of the
Company, whether absolute or contingent, accrued or unaccrued, asserted or
unasserted, or otherwise, which is not expressly assumed by Buyer, all of which
the Company agrees to retain including, but not limited to: (a) all trade
accounts payable; (b) the Company's payroll expenses; (c) the Company's
indebtedness for borrowed money; (d) any liability of the Company for Taxes; (e)
any liability of the Company in connection with any employee benefit plan or
program including, without limitation, any liability of the Company under ERISA,
paid time off and separation allowance (provided however, Renex shall not
require the Company to pay any severance to any of its employees; (f) any
liability of the Company under any Federal, state or local law, rule,
regulation, ordinance, program or permit relating to health, safety, Hazardous
Waste and other Environmental matters, (g) any medical malpractice or other
liability claims for the provision of services by the Company or its employees
and agents, (h) any product liabilities pertaining to any products sold,
manufactured or otherwise performed or services rendered prior to the Closing
Date, (i) any claims by any Governmental Authority, including the Health Care
Financing Administration, whether as a result of any violations of Medicare or
Medicaid laws, rules, regulations or orders or otherwise; or (j) any liability
for services provided by the Company, under any Contract or otherwise, arising
prior to the Closing Date. The Company agrees to satisfy and discharge, as the
same shall become due, all obligations and liabilities of the Company not
specifically assumed by Buyer hereunder.
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ARTICLE 3. - PURCHASE PRICE AND METHOD OF PAYMENT
-------------------------------------------------
3.1 PURCHASE PRICE - As consideration for the Assets purchased by
the Buyer, and subject to compliance by the Company and Members with their
warranties and undertakings contained in this Agreement, Buyer shall pay to the
Company the purchase price of $4.5 million (the "Purchase Price") payable in
cash by wire transfer of immediately available funds at closing, subject to any
adjustment as provided in Sections 7.7 or 8.1(a) herein. In addition, Renex and
Buyer shall assume all remaining liabilities and obligations relating to: (a)
the four (4) leases initially with Morcroft Capital (including, without
limitation rental or lease payments), (b) any medical and other supplies and
other inventories of materials included in the Assets that were in transit or on
order and not received as of the Closing (including without limitation the
purchase price and shipping charges) and (c) any other operating Contracts that
are included in the Assets acquired by Buyer. Buyer and Renex shall use their
best efforts following the Closing Date to cause the Company and the Member to
be released from liability to the other parties to the leases described in
3.1(a) above.
3.2 EFFECTIVE DATE - The operation of the Assets, the income and
expenses attributable thereto up to 12:01 A.M. on the Closing Date shall, except
as otherwise expressly provided elsewhere in this Agreement, be for the account
of the Company and after 12:01 A.M. on the Closing Date shall be for the account
of Buyer. Expenses such as power and utility charges, personal property taxes,
lease rents, prepaid expenses, and similar prepaid and deferred items, together
with payroll expenses for employees who are hired by the Buyer, shall be
prorated between the Company and Buyer as of the Closing Date. All prorations
and adjustments shall be made and paid insofar as feasible on the Closing Date,
and if not feasible, no later than thirty (30) days following the Closing Date.
ARTICLE 4. - CLOSING
--------------------
4.1 CLOSING - Subject to the terms and conditions of this
Agreement, the Closing shall take place at 11:30 a.m. on the Closing Date, or
such other date as is mutually agreed between the parties. The Closing shall
take place at the offices of Xxxxxxx & Associates, Thomasville, Georgia.
4.2 MEMBER AND COMPANY PERFORMANCE AT CLOSING - At or prior to
the Closing, the Member and the Company shall deliver, or cause to be delivered,
to Buyer:
(a) a duly executed Xxxx of Sale in the form attached to
the Disclosure Schedule as Exhibit 4.2(a);
(b) a certificate duly executed by the Member and the
manager of the Company to the effect that:
(i) all of the representations and warranties made by
Members and the Company in this Agreement are true and correct in all material
respects as of the Closing Date, except for such representations and warranties
that by their terms are as of another date, or if not true and correct as of the
Closing Date the specific details as to which representations and warranties are
not true and correct as of the Closing Date;
(ii) none of the covenants made by Members and the
Company in this Agreement have been breached in any material respect as of the
Closing Date or if any covenants were breached in any material respect, the
specific details of such breaches; and
(iii) there have been no Material Adverse Effect on
the financial condition or financial position of the Company since the date of
the Financial Statements, through the Closing Date or if there has been a
Material Adverse Effect, the specific details of such Material Adverse Effect;
(c) all consents to the transactions of third parties
that are required to be obtained by the Company as listed on Schedule 4.2 (c) to
the Disclosure Schedule;
(d) all approvals and consents of all appropriate state
and federal regulatory agencies that are required to be obtained by the Company
as listed on Schedule 4.2 (d) to the Disclosure Schedule;
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(e) a certified copy of the actions taken by the Company,
and its members authorizing and approving this Agreement and the transactions
contemplated by it;
(f) all Assignment and Assumption Agreements for all
Contracts listed on Schedule 1.7 to the Disclosure Schedule, such Assignment and
Assumption Agreements in the form of Exhibit 4.2(f) to the Disclosure Schedule;
(g) a certificate of incumbency duly executed by the
Company's secretary in the form of Exhibit 4.2(g) to the Disclosure Schedule;
(h) possession of the Assets and all originals and copies
of all agreements, instruments, documents, books, records, files, and other data
and information within the possession of the Company that are included in or
pertain to the Assets;
(i) a Medical Director's Employment Agreement executed by
XXXX X. XXXXX, M.D. substantially in the form attached to the Disclosure
Schedule as Exhibit "4.2(i)" to the Disclosure Schedule, whereby XXXX X. XXXXX,
M.D. shall agree to be employed by the Buyer, following the Closing, as its
Medical Director;
(j) any and all assignments or other instruments of
conveyance necessary to vest good and marketable title in and to the Assets in
Buyer;
(k) an opinion of counsel substantially in the form of
Exhibit 4.2(k) to the Disclosure Schedule
4.3 BUYER'S PERFORMANCE AT CLOSING - At or prior to Closing,
Buyer and Renex, shall deliver or cause to be delivered to the Company the
following:
(a) The cash to close as required in Section 3.1;
(b) a certificate executed by an officer of Buyer and
Renex to the effect that all of the representations and warranties made by Buyer
and Renex in this Agreement are true and correct as of the Closing Date;
(c) Secretary's certificate that Buyer's and Renex's
boards of directors approved consummation of the transaction;
(d) certificates of incumbency duly executed by the
Buyer's and Renex's respective secretaries;
(e) the Medical Director Agreement executed by Buyer;
(f) an opinion of counsel in form and substance
satisfactory to the Company and its counsel that:
(i) the Buyer and Renex have been duly incorporated
and are validly existing and in good standing under the laws of the State of
Georgia and Florida respectively, and are duly qualified to do business and are
in good standing in each jurisdiction in which the character and location of the
properties owned by them or the nature of the business transacted by them makes
such qualification necessary.
(ii) the Buyer and Renex have the full power to
conduct their business as presently conducted and to execute and deliver this
Agreement and to perform their obligations hereunder;
(iii) the Buyer and Renex have authorized the
execution, delivery and performance of the Agreement by all necessary corporate
action.
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(iv) the execution and delivery of the Agreement,
performance by the Buyer and Renex of their obligations under the Agreement and
the exercise by the Buyer and Renex have of the rights created by the Agreement
do not: (A) violate their respective Articles of Incorporation or by-laws; (B)
constitute a breach of or a default under any agreement or instrument to which
they are a party or by which they or their assets are bound, or result in the
creation of a mortgage, security interest or other encumbrance upon the assets
of the Buyer and Renex; (C) violate any judgment, decree or order of any court
or administrative tribunal, which judgment, decree or order is binding on the
Buyer and Renex or their assets; (D) to the best of such counsel's knowledge,
violate any Federal or state law, rule or regulation;
(v) the Agreement and the Collateral Agreements are
valid and binding obligations of Renex and the Buyer, enforceable against them
in accordance with the laws of the State of Florida if such laws were applicable
to the enforcement of such agreements.
(g) Leases of the four (4) buildings owned and used by
the Company, in the form of Exhibit 4.3(g) to the Disclosure Schedule, executed
by Buyer and guaranteed by Renex;
(h) Assignment and Assumption Agreements relating to the
Contracts included in the Assets in the form of Exhibit 4.2(f) to the Disclosure
Schedule, executed by Buyer and guaranteed by Renex;
4.4 TERMINATION IN ABSENCE OF CLOSING -
(a) TERMINATION - If by the close of business on the
Closing Date, the Closing has not occurred, then any party may thereafter
terminate this Agreement by written notice to the other parties hereto, without
liability to, any other party to this Agreement, unless the reason for closing
having not occurred is (i) such party's breach of any of its obligations,
representations, warranties or covenants or other provisions of this Agreement;
or (ii) the failure of such party to perform its obligations hereunder,
including without limitation the obligations to close if all conditions to its
obligations to close are met prior to or at the Closing Date. In such event, the
defaulting party shall be liable to all other parties for all Damages incurred
by the non-defaulting parties, including but not limited to all expenses, costs
and reasonable attorney fees actually incurred in due diligence, negotiation of
this Agreement, the drafting of this Agreement and all Collateral Agreements and
otherwise representing such non-defaulting parties.
(b) TERMINATION BY BUYER AND RENEX - This Agreement and
the transaction contemplated herein may be terminated and abandoned at any time
on or prior to the Closing Date by Buyer or Renex, if:
(i) fraud on the part of the Company or the
Member in any representation or warranty made herein for the benefit of Buyer
and Renex or in any certificate, schedule or document required to be furnished
to Buyer and Renex at Closing pursuant to this Agreement is untrue; or
(ii) a material misrepresentation on the part of
the Company of the Company's inability to deliver title to the assets.
In the event that Buyer and Renex terminates this Agreement in accordance with
the provisions contained in this Section 4.4(b), except where the failure to
deliver title relates to the inability to obtain the necessary consents to
transfer from a third party, (including any Governmental Authority) then the
Company shall be liable to Buyer and Renex for all Damages incurred by Buyer and
Renex .
ARTICLE 5. - REPRESENTATIONS AND WARRANTIES OF
THE COMPANY AND MEMBER
The Member and the Company represent and warrant to Buyer and
Renex that the representations and warranties contained in this Article 5 are
true and correct as of the date hereof and as of the Closing Date, except with
respect to any representation or warranty that by its terms relates to a
specific date:
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5.1 ORGANIZATION OF COMPANY - The Company is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Georgia. The Company has the corporate power to own, manage, lease
and hold its assets and engage in its businesses where such assets are located,
is duly qualified to do business and is in good standing in each jurisdiction in
which the character and location of the properties owned by it or the nature of
the business transacted by it makes such qualification necessary.
5.2 MEMBERSHIP INTERESTS - The Member is a member of the Company
holding an aggregate of 18.346% of the membership interests of the Company. The
member has the contractual right, subject to approval by NationsBank, to acquire
(or cause the Company to redeem) prior to the Closing an additional 79.616% of
the membership interests of the Company. Except as provided on Schedule 5.2 to
the Disclosure Schedule, there are no operating agreements, voting trust
agreement or any other agreements restricting the membership interests which
would prohibit the consummation of the transaction contemplated hereby. Except
as provided on Schedule 5.2 to the Disclosure Schedule, the Company has not
authorized and there is not outstanding as of the date hereof, any options,
warrants or other rights to purchase any membership interests in the Company.
5.3 CORPORATE DOCUMENTS - The Articles of Organization and
Operating Agreement of the Company attached as Exhibit 5.3 to the Disclosure
Schedule are true and correct as of the date hereof. The Membership and minute
books of the Company that have been made available to Buyer for review contain a
complete and accurate record of all Members of the Company and all significant
actions of the Members and directors (and any committees thereof) of the
Company.
5.4 NO SUBSIDIARIES - The Company does not have any subsidiaries
or any interest or investment, direct or indirect, and has no commitment to
purchase any interest or make any investment in, any other corporation,
partnership, joint venture or other business enterprise or entity. The Company's
Business has not been conducted through any direct or indirect subsidiary or
affiliate of the Company or the Members.
5.5 AUTHORITY - The Company and the Member have full power and
authority (or capacity as applicable) to enter into this Agreement and, subject
to obtaining the approval of the other members of the Company, to consummate the
transaction contemplated hereby. This Agreement and any Collateral Agreement
executed in connection with the Closing constitutes, or upon execution and
delivery will constitute, the legal, valid and binding obligations of such
parties enforceable in accordance with their terms. Except as provided on
Schedule 5.5 to the Disclosure Schedule, no consent of any Federal, state,
municipal or other Governmental Authority is required for the execution,
delivery or performance of this Agreement.
5.6 CONSENTS AND APPROVALS -Except as provided on Schedule 5.6 to
the Disclosure Schedule, no filing with and no Permit, authorization, consent or
approval of, any public or Governmental Authority is necessary for the
consummation by the Company of the transactions contemplated by this Agreement.
5.7 FINANCIAL STATEMENTS - Except as provided on Schedule 5.7 to
the Disclosure Schedule, the Financial Statements attached to the Disclosure
Schedule are correct and complete and present fairly in all material respects,
the financial condition of the Company as of the date of such balance sheets and
the results of its operations for the periods of such statements of operations
and have been prepared on a consistent basis with all prior periods in
accordance with generally accepted accounting principles ("GAAP"), except that
none of the Financial Statements contain the footnote disclosures and, with
respect to the interim financial Statements, are subject to normal year end
adjustments. Except as provided on Schedule 5.7 to the Disclosure Schedule,
since the date of the interim Financial Statements, there has been no Material
Adverse Effect in the assets, liabilities, business, operations or condition,
financial or otherwise, of the Company from that shown on the Financial
Statements. The Company and Member represent that the unaudited Financial
Statements and books and records can be audited in accordance with GAAP.
5.8 TITLE TO ASSETS - The Disclosure Schedule contains a list of
all tangible and intangible Assets related to the Business which are to be sold
to Buyer. Except as provided on Schedule 5.8 to the Disclosure Schedule, the
Company has good and marketable title to the Assets, free and clear of any and
all liens, mortgages, pledges, conditional sales assignments, security
interests, judgments, options, adverse claims, encumbrances or other
restrictions or limitations whatsoever. The Assets listed on the Disclosure
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Schedule represent all of the assets necessary to operate the Business in the
same manner as operated prior to the date hereof and at the Closing Date will be
suitable and sufficient for the conduct of the Business in the same manner as
presently conducted.
5.9 LIABILITIES - As of the date hereof, the Company had no
liabilities, fixed or contingent, which are not fully shown or provided for in
the Financial Statements or as otherwise listed in Schedule 5.9 to the
Disclosure Schedule. -Except as provided on Schedule 5.9 to the Disclosure
Schedule, all liabilities of the Company were incurred in the Ordinary Course of
Business.
5.10 BUSINESS - Neither the Company, nor the Member, have any
direct or indirect interest, investment or commitment to purchase any interest
or make an investment in any other corporation, partnership, joint venture or
other business (except of not more than one (1%) percent of the securities of a
publicly traded entity) in which a portion of such operations are similar to the
Business.
5.11 OBLIGATIONS TO AFFILIATES - Except as set forth on Schedule
5.11 to the Disclosure Schedule, the Company is not a party to any agreement
with, and does not owe any amount or have any commitment to the Members or any
of their respective directors, officers, employees, consultants or affiliates,
and none of such persons owe any amounts to the Company.
5.12 REAL PROPERTY -
(a) The descriptions set forth in Schedule 5.12 to the
Disclosure Schedule are true and complete descriptions of all real property
owned by the Company which are to be leased to the Buyer in accordance with
Section 7.10 herein (the "Real Property"). The Company has good record and
marketable title in fee simple to the Real Property, free and clear of all
encumbrances other than (i) easements and restrictions of record, (ii) real and
personal property taxes and assessments becoming due and payable after the
Closing, (iii) building and zoning laws, ordinances and regulations and (iv)
those matters disclosed in Schedule 5.12 to the Disclosure Schedule.
(b) All of the buildings, structures, improvements and
appurtenances situated on the Real Property are in substantially good operating
condition and substantially a good state of repair, reasonable wear and tear
excepted.
(c) To the knowledge of the Company and the Member and the
Real Property (during the time owned or leased by the Company) have been and
presently are, in compliance with all applicable Environmental Laws. The Company
has not, and has no knowledge of any other person who has, caused any Release,
threatened Release, or disposal of any Hazardous Material at the Real Property
that is in violation of any Environmental Law; To the Knowledge of the Company
and the Member, the Real Property is not adversely affected by any Release,
threatened Release or disposal of a Hazardous Material originating or emanating
from any other property. The Company has not used the Real Property for, and to
the knowledge of the Member or the Company, the Real Property does not contain
any: (A) underground storage tank, (B) landfill or dump, or (C) site, on or
nominated for, the national priority list promulgated pursuant to CERCLA or any
state remedial priority list promulgated or published pursuant to any comparable
state law. To the knowledge of the Company or the Member, the Company and the
Business have no liability for response or corrective action, natural resource
damage or other harm pursuant to any Environmental Law. The Company, has no
notice or knowledge of, and to the knowledge of the Company and the Member is
not required to give any notice of, any Environmental Claim involving the
Business or the Real Property; to the knowledge of the Company or the Member,
there are no conditions or occurrences at the Real Property which could form the
basis for an Environmental Claim against the Company, the Business Seller or any
Real Property. To the knowledge of the Company or the Member, there are no
conditions or circumstances at the Real Property which pose a risk to the
environmental or the health or safety of persons. The Company has provided or
otherwise made available to the Buyer all material environmental records
prepared for or required by any Environmental Laws concerning the Real Property.
(d) Except as set forth on Schedule 5.12, none of the Real
Property is subject to any lease or rights of possession by any other person or
entity. Following the Closing, subject to the terms of the Leases, the Buyer
shall have right to exclusively occupy the portions of the Real Property being
leased to Buyer, free and clear of all possessory claims.
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(e) the Real Property comply in all material respects with
applicable building and zoning laws, ordinances, codes and regulations, and all
applicable restrictions or covenants materially affecting them. There are no
claims by any governmental body pending or, to the knowledge of the Company or
the Member, threatened against the Company or the Real Property alleging a
violation of any law or any building, zoning, or other ordinance, code, or
regulation affecting the Real Property. There is not pending or, to the
knowledge of the Company or the Member, threatened, any proceeding or government
action to condemn or take by the power of eminent domain or to classify as a
landmark or to impose a special assessment on any Real Property.
5.13 EMPLOYEE BENEFITS PLANS -
(a) Attached to the Disclosure Schedule as Schedule 5.13, is
a description of all employee benefit plans sponsored, maintained, or
contributed to, by the Company for the benefit of the Company's employees or has
been sponsored, maintained or contributed to anytime during the Company's
existence, including the following plans:
(i) each employee benefit plan as such term is
defined in ss. 3(3) of ERISA, including but not limited to employee benefit
plans which are not subject to the provisions of ERISA (collectively referred to
as "Plans");
(ii) each written personnel policy, stock option
plan, collective bargaining agreement, bonus plan or arrangement, incentive
award plan or arrangement, vacation policy, severance pay policy or agreement,
deferred compensation agreement or arrangement and each other written employee
benefit plan, agreement, arrangement, program, practice or understanding which
is not described in Section 5.13(i) above ("Benefit Programs").
(b) True, correct and complete copies of each of the
Plans, related trusts and Benefit Programs, including all amendments thereto,
have been furnished to Renex and Buyer.
(c) There has been furnished to Renex and Buyer, with
respect to all Plans or Benefit Programs required to comply with ERISA, all
reports and summary plan descriptions. Except as otherwise set forth in the
Disclosure Schedule:
(i) the Company does not contribute to or have
any obligation to contribute to, and has not at any time contributed to or had
an obligation to contribute to, a multi-employer plan within the meaning of ss.
3(37) of ERISA ("Multi-Employer Plan") or a multiple employer plan within the
meaning of ss. 413(b) and (c) of the Internal Revenue Code of 1986, as amended
(the "Code");
(ii) the Company has performed all obligations
due to be performed prior to the date hereof, whether arising by operation of
law or by contract required to be performed by it in connection with the Plans
and Benefit Programs and to the knowledge of the Company and the Member, there
have been no defaults or violations by any other party to the Plans or Benefit
Programs.
(iii) all reports and disclosures relating to
the Plans required to be filed with or furnished to governmental agencies, Plan
participants or Plan beneficiaries have been filed or furnished in accordance
with applicable law in a timely manner and each Plan and each Benefit Program
has been administered in compliance with its governing documents;
(iv) each of the Plans intended to be qualified
under ss. 401 of the Code satisfies the requirements of the Code and has
received a favorable determination letter from the Internal Revenue Service
regarding such status and has not, since receipt of the most recent favorable
determination letters, been amended or operated in a way which could adversely
affect such qualified status;
(v) there are no actions, suits, or claims
pending (other than routine claims for benefits) or to the knowledge of the
Company and the Member, threatened against or with respect to, any of the Plans,
Benefit Programs or their respective assets;
(vi) all contributions required to be made to
the Plans and Benefit Programs pursuant to their respective terms and provisions
and applicable law have been timely made;
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(vii) as to any Plan subject to ERISA, no event
or condition which presents a risk of Plan termination or accumulated funding
deficiency within the meaning of ss. 302 of ERISA or ss. 412 of the Code has
occurred. No reportable event within the meaning of ss. 4043 of ERISA has
occurred, no notice of intent to terminate the Plans has been given, no
proceeding to terminate the Plan has been instituted, there has been no
termination of the Plan and no liability to the Pension Benefit Guaranty
Corporation has been incurred;
(viii) to the knowledge of the Company and the
Member, none of the Plans or their trustees has engaged in any prohibited
transactions or party in interest transactions as such terms are defined in ss.
4975 of the Code and ss. 406 of ERISA;
(ix) there is no matter pending with respect to
any Plan or Benefit Program before the Internal Revenue Service, the U.S.
Department of Labor, or the Pension Benefit Guaranty Corporation;
(d) Except as otherwise set forth on the Disclosure
Schedule, neither the execution or delivery of this Agreement or the
consummation of the transactions contemplated hereby will:
(i) entitle any current or former employee of
the Company to severance pay, unemployment compensation or any similar payment
all of which if payable shall be paid by the Company;
(ii) accelerate the time of payment or vesting
or cause any increase in the amount of any compensation due to any such employee
or former employee; or
(iii) directly or indirectly result in any
payment made to or on behalf of any person to constitute a parachute payment
within the meaning of ss. 280B of the Code.
5.14 LABOR AND EMPLOYMENT MATTERS - Except as set forth in
Schedule 5.14 to the Disclosure Schedule:
(a) The Company is presently, and has at all times been,
in substantial compliance with all applicable laws respecting employment and
employment practices, terms and conditions of employment and wages and hours,
including without limitation the following: The Fair Labor Standards Act
("FLSA"), the Immigration and Control Act ("IRCA"), the Workers Adjustment and
Retraining Notification Act ("WARN"), the Americans with Disabilities Act
("ADA") and such laws respecting employment discrimination, equal opportunity,
affirmative action, workers compensation, occupational safety and health
requirements and unemployment insurance and related matters.
(b) No investigation or review by, or before, any
Governmental Authority is pending, nor to the knowledge of the Company and the
Member, is any investigation threatened, or has any investigation occurred
during the last three (3) years and no Governmental Authority has provided any
notice to the Company or the Member asserting an intention to conduct any such
investigation.
(c) The Company does not have any (i) material
controversies between it and its employees, (ii) unresolved labor lien,
grievances or organization efforts; or (iii) unfair labor practices or labor
arbitration proceedings pending or to the knowledge of the Company and the
Member, threatened.
(d) The Company is not a party to any agreement and has
not established any policy or practice requiring the Company to make a payment
or provide any other form of compensation or benefit to any person performing
services for the Company upon termination of such services.
(e) The Company has paid in full to its employees all
wages, salaries, commissions, bonuses and other direct compensation for all
services performed by them, other than amounts which have not yet become payable
in accordance with the Company's customary practices.
(f) Schedule 5.14 to the Disclosure Schedule sets forth
by number and employment classification the number of employees of the Company
as of the date hereof. Except as set forth on the Disclosure Schedule, none of
such employees are subject to collective bargaining agreements with the
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Company. The Company has not, nor at any time had, or to the knowledge of the
Company and the Member, been threatened with, any work stoppages or other labor
disputes or controversies with respect to its employees.
5.15 INSURANCE - Schedule 5.15 to the Disclosure Schedule
contains a list of all policies of insurance owned by the Company, and the
amounts of such coverage of each policy, all premiums on such policies or
renewals thereof having been paid, for policy periods through the date hereof (
and will be through the Closing Date). The Company has previously delivered
copies of all such insurance policies and proof of payment of such premiums to
the Buyer.
5.16 CONTRACTS AND COMMITMENTS - Except as set forth on Schedules
1.7 or 5.16 to the Disclosure Schedule, the Company is not a party to, or bound
or affected by any contract, lease, agreement, covenant, license, instrument or
commitment (whether written or oral) of any type, including the following:
(a) contracts for the employment or compensation of any
officer or individual employee, not terminable without further liability at any
time:
(b) contracts with any labor union;
(c) continuing contracts for the future purchase of
materials, supplies or equipment, at a cost of $10,000 or more, or to be
delivered more than ninety (90) days after the date hereof;
(d) continuing contracts for the future provision of its
services;
(e) distribution or agency contracts, franchise
contracts, or advertising commitments, which cannot be terminated without
further liability to the Company upon no more than thirty (30) days' notice;
(f) pension, profit sharing, deferred compensation,
retirement or stock option or stock purchase plans in effect with respect to
officers, employees or others;
(g) leases under which it is lessor or lessee;
(h) underwriting agreements or agreements with a broker
or finder;
(i) consulting agreements;
(j) contracts for the acquisition of a business, or
substantially all of the property, assets, or stock of a business under which
there are any continuing or unperformed obligations on the part of any of the
parties thereto; or
(k) Any other contract, agreement, or commitment
involving $10,000 or more or which is not terminable without further liability
to the Company upon no more than thirty (30) days' notice. There have been
delivered to Buyer true and correct copies of each of the Contracts listed in
the Disclosure Schedule. Except as set forth on Schedule 5.16 to the Disclosure
Schedule, all of the Contracts listed on Schedule 5.16 are valid, binding and in
full force and effect and are enforceable in accordance with their terms against
all other parties to such Contracts and are assignable to Buyer; provided,
however, neither the Company nor the Member makes any representation or warranty
with respect to whether any or all Medicare licenses or provider numbers or
approvals can be assumed by Buyer or Renex. Buyer and Renex shall be responsible
for seeking any such assignments or approvals (or issuances of new numbers where
required) and the Company and Member shall cooperate and execute such documents
as are reasonably required. The Company has performed all material obligations
required to be performed by it to date and is not in default in any material
respect under any Contract to which it is a party. To the knowledge of the
Company and the Member no other party to any such Contract is in default with
the terms thereof. Except as set forth on Schedule 5.16 to the Disclosure
Schedule, none of the Contracts listed on Schedule 5.16 were arrived at, or
otherwise reflect, less than arms length negotiations or bargaining.
5.17 INVENTORIES - The inventory of the Company as of the Closing
Date shall, in all material respects, consist of items of a quality, condition
and quantity substantially consistent with normal inventory
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levels of the Company and be useable and saleable in the Ordinary Course of
Business for the purposes for which intended.
5.18 EQUIPMENT AND OTHER TANGIBLE PROPERTY - The Company's
equipment, furniture, machinery, vehicles, structures, fixtures and other
tangible property related to the Business and included in the Financial
Statements or as listed in any schedule to the Disclosure Schedule and which are
included in the Assets shall, as of the Closing Date, be in all material
respects suitable for the purposes for which intended and in general good
operating condition and repair consistent with normal industry standards, except
for ordinary wear and tear.
5.19 PERMITS - The Company has all material Permits necessary to
own, operate, use and/or maintain its Assets and the Business in all locations
where the Company conducts such Business, all of which Material Permits are
listed on Schedule 5.19 to the Disclosure Schedule. Without limiting the
generality of the foregoing, the Company is certified as a provider under all
applicable Medicare and Medicaid programs to the extent required to be so
certified. Such Permits are valid and subsisting and all fees required to be
paid thereon have been paid. No proceeding is pending or to the knowledge of the
Company or the Member, threatened to modify, suspend, revoke, withdraw,
terminate or otherwise limit any material Permit which could substantially and
adversely affect the ability of the Company own, operate, use or conduct the
Business currently operated.
5.20 INTANGIBLE RIGHTS - Listed on Schedule 1.17 to the
Disclosure Schedule are all of the material Intangible Rights owned or used by
the Company in its Business. The Company is the legal and equitable owner or has
the right to use all of the Intangible Rights listed on the Disclosure Schedule.
To the knowledge of the Company and the Member, the conduct of the Business does
not infringe or conflict with, and has not in the past infringed or conflicted
with, and the Company is not in receipt of any notice or complaint of conflict
with or infringement of, the asserted rights of others in any Intangible Rights
of others. Except as set forth on Schedule 5.20 to the Disclosure Schedule, the
Intangible Rights listed on Schedule 1.17 are fully assignable to the Buyer in
accordance with the terms of this Agreement.
5.21 LITIGATION - Except as set forth on Schedule 5.21 to the
Disclosure Schedule, there are no actions, suits, proceedings or investigations,
either administrative or judicial (whether or not on behalf of the Company)
pending or, to the knowledge of the Company or the Member, threatened against or
affecting the Company, its properties or which involve the possibility of any
judgment or liability not fully covered by insurance. The Company is not in
default with respect to any order, writ, injunction or decree of any court or
Governmental Authority.
5.22 COMPLIANCE WITH LAWS -
(a) To the best of the knowledge of the Company and the
Member, the Company is and has been in compliance in all material respects with
any and all laws, regulations, ordinances, rules, orders or decrees applicable
to the Company, including but not limited to, all Environmental Laws and
regulations. Except as set forth on Schedule 5.22 to the Disclosure Schedule,
the Company has not received or entered into any citation, complaints, consent
order, compliance agreements or other similar enforcement order or received
written notice from any Governmental Authority that would indicate that the
Company is not currently in compliance with all such laws, regulations,
ordinances, rules, orders or decrees.
(b) Neither the Company or any member of the Company has
directly or indirectly paid or delivered any fees, commission or any money or
property, however characterized, to any physician or any other party for the
referral of patients to the Company or its Business or any business or operation
of the Company or the members. Neither the Company or any member is in conflict
with, or is in default or violation of any provision of federal or state laws or
regulations relating to restrictions on physician referrals or claims for
payment under the Medicare, Medicaid or other programs for the furnishing of
health services, including, but not limited to, the illegal remuneration
provisions of the Social Security Act and the provisions of the Omnibus Budget
Reconciliation Act of 1989 and the Omnibus Budget Reconciliation Act of 1993
restricting physician referrals.
5.23 ABSENCE OF MATERIAL CHANGES - Except as set forth on
Schedule 5.23 to the Disclosure Schedule, from the date of the interim Financial
Statements to the date hereof, the Company has not:
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(a) incurred any material obligations or liabilities
(absolute or contingent) except current liabilities incurred, and obligations
under Contracts entered into, in the Ordinary Course of Business;
(b) discharged or satisfied any lien or encumbrance or
paid any material obligation or liability (absolute or contingent) other than
obligations or liabilities discharged or satisfied in the Ordinary Course of
Business;
(c) mortgaged, pledged, or subjected to any lien, charge,
or other encumbrance, any of its material assets, tangible or intangible, other
than liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings;
(d) sold or transferred any of its material tangible
assets or canceled any debts or claims, except in each case in the Ordinary
Course of Business;
(e) sold, assigned, or transferred any material
Intangible Rights;
(f) suffered any material operating or extraordinary loss
or waived any right of substantial value;
(g) made any loan to, borrowed money from, or entered
into any material contract or understanding with, any affiliate, employee,
officer, or director of the Company;
(h) made any payment or contracted for payment of any
material bonus, gratuity, or other compensation to employees, other than wages
and salaries in effect as of the date of the interim Financial Statements,
except wage and salary adjustments made in the Ordinary Course of Business for
employees who are not officers or directors of the Company;
(i) had any union or labor difficulties or work stoppage;
(j) entered into any material transaction other than in
the Ordinary Course of Business;
(k) entered into any leases of real or personal property;
or
(l) received any notice of termination of any material
contract, lease or other agreement;
(m) entered into any Contracts for which the Company
expects to incur a loss from the provision of services.
5.24 TAX RETURNS - To the best of their knowledge, the Company
has duly filed, or duly received extensions for the filing, of all Tax Returns,
required to have been filed by it and have paid the Taxes shown to be due on any
such returns filed, except where the failure to so file would not have a
Material Adverse Effect, and no waivers or extension of the statutory period of
limitation within which assessments may be made have been granted with respect
to any such tax return. All Tax returns of the Company have never been examined
by the Internal Revenue Service. The Company is not a party to any action or
proceeding by any governmental authority for assessment or collection of Taxes
nor have any claims for assessment and collection been asserted against the
Company. The reserves made for Taxes, governmental charges and duties on the
Company's interim balance sheet are sufficient in all material respects for the
payment of all unpaid Taxes, governmental charges and duties payable by the
Company, attributable to all periods on or before the date of the Company's
interim balance sheet and there is no basis or claim for any penalties or
interest through the Closing Date. The Company shall (i) make adequate provision
on its books for all taxes accruable and (ii) timely remit all withholding,
1099's, employment, sales, ad valorem, personal property and estimated income
taxes due and payable to date and which becomes due prior to, or on, the Closing
Date. The Company has made available copies of all the Company's federal, state
and local tax returns.
5.25 ACCOUNTS RECEIVABLE - Except as set forth on Schedule 5.25
of the Disclosure Schedule, the accounts receivable and other receivables shown
on the Financial Statements or thereafter acquired prior to the Closing Date
hereof arose from bona fide transactions in the Ordinary Course of Business
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and the goods and services involved have been sold, delivered and performed for
the Company's patients as covered by the account obligor. Since the date of the
interim Financial Statements, there has been no material reduction in the
accounts receivables of the Company.
5.26 MEDICARE MATTERS - The Company is receiving payments under
Titles XVIII and XIX of the Social Security Act and the Medicaid programs in
each state in which it conducts business. There is no pending or to the
knowledge of the Company or the Member, threatened termination of such status.
The Company and the Member have no knowledge of and have not received any notice
of any claims, actions, payment reviews or appeals pending or threatened before
any commission, board or agency, including without limitation, any intermediary
or carrier or the Administrator of the Health Care Financing Administration with
respect to any Medicare and Medicaid claims filed by or on behalf of the
Company, or program compliance matters, which if adversely determined would have
a material adverse effect on the Company or its Business. The Company and the
Member have no knowledge of, and has not received any notice of, any validation
review or program integrity review or investigation or review with respect to
false claims, fraud and abuse or other violations of federal or state laws,
rules and regulations respecting the Medicare and Medicaid programs or the
delivery of payment for health care services, by any commission, board or agency
in connection with the Medicare and Medicaid programs, including the Health Care
Financing Administration, the U.S. Department of Justice or the HHS Office of
Inspector General and to the knowledge of the Company or the Member, no such
reviews are scheduled, pending or threatened against the Company. To the
knowledge of the Company and the Member, all of the Company's Medicare and
Medicare xxxxxxxx and collections thereof are in all respects appropriate and in
compliance with all applicable federal and state laws, rules, regulations and
orders and to the knowledge of the Company and the Member, there are no denials,
past payment denials or recoupments pending or threatened with respect to the
xxxxxxxx and collections, other than ordinary adjustments, modifications and
disallowance of xxxxxxxx consistent with industry practices.
5.27 COMPLIANCE WITH INSTRUMENTS - Except as set forth on
Schedule 5.27 to the Disclosure Schedule, the consummation of the transaction
contemplated by this Agreement will not result in a breach or violation of any
of the terms, provisions or conditions of, or constitute a default under, or
result in the creation of any lien, charge or encumbrance on any property or
assets of the Company pursuant to its Articles of Organization, all amendments
thereto, its Operating Agreement, any provision of law, judgment, decree,
indenture, agreement or instrument to which the Company is a party or by which
it is bound.
5.28 CONTRACTS WITH PHYSICIANS, HOSPITALS, HMO'S AND THIRD PARTY
PAYORS - The Disclosure Schedule contains a list of all outstanding material
contracts, partnerships, joint ventures and other arrangements or understandings
(written or oral) between the Company and any physician, hospital, HMO, other
managed care organization or other third party payor related to the provision of
medical or other services, treatments, patients, referrals or similar
activities. All such agreements in all material respects are in good standing
and are in full force and effect and do not violate any federal, state or local
laws.
5.29 BROKERS' COMMISSIONS - Except as set forth on Schedule 5.29
to the Disclosure Schedule, The Company has not entered into any agreement or
understanding with any person, firm or entity or have become indirectly a party
to any agreement for the payment or any commission, finders or brokerage fee in
connection with this Agreement and the transaction contemplated hereof. The
Company and the Member hereby agree jointly and severally to indemnify and hold
harmless the Buyer and Renex from any claims for a commission, finder's or
broker's fee.
5.30 BOOKS AND RECORDS - The books of account and other records
of the Company are materially complete and correct and in the aggregate present
and reflect all of the transactions entered into by it or to which it is a
party. Except as set forth on Schedule 5.30 to the Disclosure Schedule, the
Company has no knowledge of any condition whether pending or threatened which
would have a Material Adverse Effect or prevent such Business from being carried
on in substantially the same manner in which it is presently carried on.
5.31 INSPECTION OF RECORDS - The Company has made, or will make,
available for inspection by Buyer full and complete information, to the extent
available to the Company or the Member. concerning the Company's patients,
suppliers, vendors and all aspects of the Company's Business, including complete
copies of any customer, vendor, or supplier contracts.
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5.32 ENVIRONMENTAL LAWS - To the best of their knowledge, the
Business and the Company are in substantial compliance with all applicable
federal, state and local Environmental Laws and regulations governing the
environment, public health and safety and employee health and safety (including
all provisions of the Occupational Safety and Health Act) and no Environmental
Claim has been filed or commenced against the Company alleging any failure to
comply with any such Environmental Law or regulation. To the best of the
knowledge of the Company and the Member, the Company nor any of its affiliates,
agents or licensees have engaged on behalf of the Business or on the Real
Property in the storage, Release, holding, emission, discharge, generation,
processing, disposition, handling or transportation of any substance or material
designated as a Hazardous Material or medical waste in violation of any
Environmental Law, ordinance or regulation. To the knowledge of the Company and
the Member, there are no Hazardous Materials or medical waste at, on or in any
of the Company's properties in violation of any Environmental Laws, ordinances
or regulations and there is no proceeding or inquiry pending or threatened by
any federal, state or local Governmental Authority with respect thereto.
ARTICLE 6. - REPRESENTATIONS AND WARRANTIES OF BUYER AND RENEX
--------------------------------------------------------------
Buyer and Renex represent and warrant to the Company and Members
that:
6.1 BUYER ORGANIZATION - Buyer is duly organized and validly
existing as a corporation in good standing under the laws of the State of
Georgia and has full corporate power to carry on its business as now conducted
or as contemplated following the Closing and is entitled to own or lease its
properties and to carry on its business as now conducted or as contemplated
following the Closing in the places where such properties are now leased, owned
or operated or such business is now conducted or as contemplated following the
Closing. Buyer is a wholly owned subsidiary of Renex.
6.2 RENEX ORGANIZATION - Renex is duly organized and validly
existing as a corporation in good standing under the laws of the State of
Florida and has full corporate power to carry on its business as now conducted
and is entitled to own or lease its properties and to carry on its business as
now conducted in the places where such properties are now leased, owned or
operated or such business is now conducted.
6.3 AUTHORITY - Buyer and Renex have full power and authority to
enter into this Agreement. This Agreement and the Collateral Agreements executed
by Buyer or Renex in connection with the Closing constitutes, or upon execution
will constitute, the legal, valid and binding obligations of Renex and Buyer in
accordance with these terms. No consent of any Governmental Authority is
necessary for the execution, delivery or performance of this Agreement. The
consummation of the transaction contemplated by this Agreement will not result
in any breach of any of the terms, provisions, or conditions of, or constitute a
default under, or result in the creation of, any lien, charge, or encumbrance of
any property or assets of Buyer or Renex pursuant to their respective Articles
of Incorporation, By-Laws or any indenture, agreement, instrument, order,
judgment, or decree to which they are a party or by which they are bound.
6.4 CONSENTS AND APPROVALS -Except as provided on Schedule 6.4 to
the Disclosure Schedule, no filing with and no Permit, authorization, consent or
approval of, any public or Governmental Authority is necessary for the
consummation by Renex or Buyer of the transactions contemplated by this
Agreement.
6.5 BROKERS' COMMISSIONS - The Buyer and Renex have not entered
into any agreement or understanding with any person, firm or entity or have
become indirectly a party to any agreement for the payment or any commission,
finders or brokerage fee in connection with this Agreement and the transaction
contemplated hereof. The Buyer and Renex hereby agree jointly and severally to
indemnify and hold harmless the Company and the Member from any claims for a
commission, finder's or broker's fee arising from any agreement with Buyer or
Renex.
ARTICLE 7. - OBLIGATIONS PRIOR TO CLOSING
-----------------------------------------
7.1 OPERATION OF BUSINESS - The Company and the Member agree
that, from the date hereof to the Closing Date, except as set forth on Schedule
7.1 of the Disclosure Schedule or as contemplated
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herein to consummate the transactions set forth herein or as otherwise requested
by Renex or Buyer, the Company shall conduct its Business and affairs only in
the Ordinary Course of Business. In accordance therewith, except as set forth on
Schedule 7.1 of the Disclosure Schedule, the Company shall not permit (i) any
adverse changes in its operating practices; (ii) dispose of assets other than in
the Ordinary Course of Business; (iii) any increase in any levels of
compensation or benefits of or entry into employment agreements with officers,
directors or employees; (iv) grant any bonuses or other benefits to any
employee, officer, director or consultant which would be assumed by Buyer; (v)
declare any dividends or other distributions to the Members if such declaration
or distribution shall adversely affect the operations of the Business; and (vi)
any borrowing of any additional funds under existing lines of credit or
otherwise.
7.2 ACCESS TO BOOKS AND RECORDS - From and after the date hereof,
the Company shall (a) afford to the officers, employees and representatives of
Buyer and Renex full and free access to its assets, personnel, properties,
records and books of account at all reasonable times during business hours, (b)
to furnish to such officers, employees and representatives such other
information as Buyer and Renex may reasonably request, and (c) to authorize its
accountants and auditors to permit Buyer's and Renex's independent public
accountants and representatives to examine all records pertaining to the
Company's Financial Statements and other books and records of the Company. Buyer
and Renex agree to treat all such material as confidential and not make use of
such materials except for the purposes expressed in this Agreement unless such
use comes into the public domain through no fault of Buyer or Renex.
7.3 NEGATIVE COVENANTS - The Company and the Member covenant that
from and after the date hereof and through the Closing Date, except as set forth
on Schedules 7.1 or 7.3 of the Disclosure Schedule or as contemplated herein to
consummate the transactions set forth herein or as otherwise requested by Renex
or Buyer, without the prior written consent of Buyer and Renex, the Company will
not:
(a) enter into any written or oral contract, agreement,
or commitment of any type, relating to:
(i) contracts for the employment or compensation
of any officer, director, or individual employee;
(ii) contracts with any labor union;
(iii) continuing contracts for the future
purchase of inventory, materials, supplies, or equipment at a cost of $10,000 or
more;
(iv) continuing contracts for future services;
(v) distribution or agency contracts, franchise
contracts, or advertising commitments;
(vi) pension, profit sharing, deferred
compensation retirement, stock option, stock purchase plans, group health
insurance, or similar plans with respect to officers, directors, employees, or
others;
(vii) leases under which the Company is a lessor
or lessee;
(viii) underwriting agreements or agreements
with a broker or finder;
(ix) consulting agreements;
(x) contracts for the acquisition of a business
or substantially all of the property, assets or capital stock of a business;
(xi) any other contract, agreement, or
commitment involving $10,000 or more.
(b) discharge or satisfy any lien or encumbrance or pay
any material obligation or liability except in the Ordinary Course of Business;
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(c) make any change in its Articles of Organization;
(d) issue any additional Membership Interests or grant
options, warrants or rights of any kind to purchase any of its Membership
Interests;
(e) mortgage, pledge or subject to any lien, charge or
other encumbrance any of its material tangible or intangible assets;
(f) make any material payment, or enter into any contract
for payment of any material bonus, gratuity or other compensation, or increase
the rate or form of compensation payable to any agent or employee, except salary
adjustments in the Ordinary Course of Business for employees who are not
officers, directors or stockholders of the Company;
(g) dispose of any material items of its properties or
assets except in the Ordinary Course of Business;
(h) incur any material indebtedness, except for operating
expenses in the Ordinary Course of Business, nor allow any material adverse
change to be made in its financial affairs, nor allow any tax or other liability
to be extended by waiver of the statutes of limitation or otherwise;
(i) make any loan to, borrow any money from, or entered
into any contract or understanding with, any officer, director or stockholder of
the Company; or
(j) enter into any other material transaction, other than
in the Ordinary Course of Business.
7.4 AFFIRMATIVE COVENANTS - The Company and the Member covenant
that from and after the date hereof and through the Closing Date, the Company
will, except as set forth on Schedules 7.1, 7.3 or 7.4 of the Disclosure
Schedule:
(a) keep its properties and assets insured consistent
with prior practices in respect thereto;
(b) perform in all material respects in the Ordinary
Course of Business all of its obligations under Contracts, and documents
relating to or affecting its Assets, properties and Business;
(c) materially preserve intact its Business,
organization, and goodwill, to the end that the Buyer shall continue to operate
the Assets as a going business as now constituted, until the consummation of the
transaction contemplated hereunder.
7.5 CONSUMMATION OF TRANSACTIONS - Upon the terms and subject to
the conditions of this Agreement, each of the parties hereto shall use its best
efforts to take, or cause to be taken, all such actions and to do, or cause to
be done, all other things necessary to carry out its obligations hereunder and
to consummate and make effective, as soon as reasonably practicable, the
transactions contemplated by this Agreement, including satisfying the conditions
to the obligations of the other party and obtaining all waivers, permits,
consents and approvals and effecting all registrations, filings and notices with
or to third parties or governmental or public bodies or authorities which are
necessary in connection with the transactions contemplated by this Agreement;
provided that this Section 7.5 shall not require either party to waive any
condition for its benefit or any performance hereunder by the other party or to
make any payment to any third party, whether private or governmental, or to
expend any funds or incur any economic burden in connection with obtaining the
consent of any third party, whether private or governmental; and provided
further that this Section 7.5 shall not require any party to take any action the
result of which, in its reasonable judgment, would be to impose material
limitations on its ability to consummate and retain the full benefits of the
transactions contemplated hereby. The Company and the Member shall assist Buyer
and Renex in securing assignments of any Contracts included in the Assets
assigned hereunder; provided however, neither the Company or the Member shall
have any liability to Renex or Buyer in the event the parties hereto are unable
to obtain any of the consents required in Sections 4.2(c) or 4.2(d) or referred
to in Schedules 5.5 or 5.6 or 5.16 of the Disclosure Schedule.
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7.6 NO NEGOTIATIONS - Except in the furtherance of the
transactions contemplated hereby, prior to the Closing Date, the Company, on its
own behalf and on behalf of its officers, directors, manager, members and the
Member each agree that (a) neither of them nor any of their respective
affiliates shall, and each of them shall direct and use its best efforts to
cause its respective directors, officers, employees, representatives or agents
(including, without limitation, any investment banker, attorney or accountant
retained by it or any of its affiliates) not to, directly or indirectly,
initiate, solicit or encourage any inquiries or the making or implementation of
any proposal or offer (including, without limitation, any proposal or offer to
its stockholders), with respect to any merger, acquisition, consolidation, share
exchange, business combination or other transaction involving, or which would
result in, (i) the acquisition of a majority of the outstanding Membership
Interests in the Company, or (ii) the acquisition of a majority of the assets of
the Company (any such proposal or offer being hereinafter referred to as an
"Acquisition Proposal"), or engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions with, any
person or entity relating to an Acquisition Proposal, or otherwise facilitate
any effort or attempt to make or implement an Acquisition Proposal; (b) it shall
immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing, and it shall take the necessary steps to inform any
such parties of the obligations undertaken in this Section 7.6; and (c) it shall
notify Buyer immediately if any such inquiries or proposals are received by, any
such information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with, it.
7.7 DAMAGE OR DESTRUCTION OF ASSETS - In the event that any loss
or damage to, or destruction of, any of the Assets shall occur prior to the
Closing, Buyer shall have the option of either (a) accepting any insurance
proceeds, awards, or compensation in respect of such loss, damage or destruction
and proceeding with the Closing, or (b) terminating this Agreement, in which
case neither Buyer nor the Company or Members shall have any further obligations
or rights hereunder. Notwithstanding, if the Buyer determines to terminate the
Agreement, the Company shall have the option to reduce the Purchase Price by the
replacement cost of such Assets and Buyer shall not have the right to terminate
the Agreement for such reason.
7.8 COMPANY EMPLOYEES - Prior to the Closing, Buyer shall advise
the Company of those employees of the Company that Buyer intends to hire
following the Closing, The Company shall terminate the employment of all such
employees on the day immediately prior to the Closing Date. All claims of the
employees arising out of their employment by the Company before the Closing Date
or termination thereof whether or not hired by Buyer shall be the sole liability
of the Company and the Company and Members will jointly and severally indemnify
and hold the Buyer harmless from all claims or damages arising therefrom. The
Company will directly pay all terminated employees, including any employees
thereafter hired by the Buyer for earned and unused vacation if applicable, in
accordance with the Company's prior practices; provided however, Renex shall not
require the Company to pay any such terminated employees any severance.
7.9 ACCESS TO RECORDS - Following the Closing, Buyer and Renex
shall permit the Company or the Member to have full access to the records,
business and medical, of the Company that are being transferred to Buyer
pursuant hereto at reasonable times and on reasonable notice, as may be required
by the Company or the Member in connection with taxation matters, defending or
prosecuting claims relating to the operation of the Business prior to Closing,
as required in the course the Member's ongoing medical practice, and for other
reasonable purposes.
7.10 LEASES FOR FACILITIES -At the Closing, the Company as
landlord and the Buyer as tenant will enter into four (4) leases, pursuant to
which the Company will lease to Buyer the real property and improvements therein
of each of the clinics being purchased by Buyer. Renex will guarantee all four
(4) leases. Such leases shall be for a period of ten (10) years each at the rate
of $14 per square foot on a gross basis, adjusted annually for any increase or
decrease in the consumer price index. The obligations of Buyer shall be absolute
under the leases and shall not be subject to setoff, and performance of Buyer's
obligations thereunder may not be withheld to offset against any amounts due or
believed to be due Renex or Buyer by the Company or the Member. Buyer would be
responsible for maintenance, utilities and non-structural repairs for the
interior and the leasehold improvements. The Company shall be responsible for
payment of the real estate taxes and insurance and shall make any structural
repairs to the respective premises, including repairs
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to the roof, plumbing, exterior walls and electrical and mechanical systems. The
Buyer shall be responsible for routine maintenance of the plumbing, electrical,
and HVAC systems. The form of the leases shall be substantially in the form
attached as Exhibit "7.10" to the Disclosure Schedule.
ARTICLE 8. - CONDITIONS PRECEDENT TO THE CLOSING
------------------------------------------------
8.1 CONDITIONS TO OBLIGATIONS OF BUYER AND RENEX- The obligations
of Buyer and Renex to consummate this Agreement shall be subject to, and be
conditioned upon, each of the following conditions:
(a) PROPERTIES INTACT - Subject to the provisions of
Section 7.7 herein, no material properties or Assets of the Company shall have
suffered any destruction or damage by fire, accident or other casualty or act of
God not fully covered by insurance or affecting in a material and adverse way
the conduct of the Business of the Company.
(b) REPRESENTATIONS AND WARRANTIES - The representations
and warranties made by the Company and Member in Article 5 hereof shall not be
fraudulent as of the Closing Date.
(c) TITLE TO ASSETS -The Company and the Member shall
have not materially misrepresented the Company's ability to deliver title to the
Assets.
(d) AUTHORIZATION OF AGREEMENT BY THE COMPANY - All
actions of the Company's Members, necessary to authorize the execution, delivery
and performance of this Agreement by the Company shall have been duly and
validly taken.
(e) NO LITIGATION - No claim, proceeding, investigation,
or litigation, either administrative or judicial, shall be threatened or be
pending against the Buyer, Renex, the Company or Members which, in the opinion
of counsel for Buyer, presents a reasonable probability that the transaction
contemplated by this Agreement would be enjoined or prevented or that the right
of Buyer to continue the operations of the property, assets and Business of the
Company would be materially affected.
(f) NO LIENS - Buyer shall have received a payoff letter
from NationsBank to the effect that upon receipt by NationsBank of an amount to
be specified therein from the Purchase Price, it will release its liens on the
Assets .
(g) MEDICAL DIRECTOR'S EMPLOYMENT AGREEMENT - XXXX X.
XXXX, M.D. shall have entered into a new Medical Director's employment agreement
with the Company as Medical Director as required in Section 4.2(j) hereof.
8.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY AND MEMBER - The
obligations of the Company and the Member to consummate this Agreement are
subject to and shall be conditioned upon each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES - The representations
and warranties made by Buyer and Renex herein shall be correct in all material
respects on and as of the Closing Date with the same force and effect as though
such representations had been made on and as of the Closing Date. The covenants
of Buyer and Renex contained herein shall not have been breached in any material
respects as of the Closing Date, and Buyer and Renex shall have delivered to the
Seller certificates to such effect signed by duly authorized officers of Buyer
and Renex.
(b) PERFORMANCE BY BUYER AND RENEX - All of the terms,
covenants and conditions of this Agreement to be complied with and performed by
Buyer and Renex on or before the Closing Date shall have been complied with and
performed.
(c) NATIONSBANK APPROVAL - The Company shall have
obtained the consent of NationsBank to the transaction contemplated herein and
to the buy out by the Member or the Company of the membership interest of
medical Services investors L.P. in the Company out of the proceeds of this
transaction at Closing and to the release of the NationsBank security interest
in the Assets.
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(d) CONSENT OF MEMBERS - The Company shall have obtained
the consent of all of its members of the transaction contemplated herein and to
the redemption or transfer of the membership interest of Medical Services
Investors L.P. in the Company.
(e) CONSENTS AND APPROVALS - No other consent, approval,
authorization or order of any individual, entity, court or governmental agency
or administrative body not obtained and in effect on the Closing Date shall be
required for the consummation of the transaction contemplated by this Agreement.
ARTICLE 9. - POST-CLOSING OBLIGATIONS
-------------------------------------
9.1 SURVIVAL OF THE CLOSING - All covenants, agreements,
representations, and warranties made hereunder and in any certificates delivered
at the Closing pursuant hereto shall be deemed to have been relied upon by
Buyer, Renex, Members and the Company, and shall survive the Closing for period
of one year from the Closing Date.
9.2 FURTHER ASSURANCES - Following the Closing, each of the
Company , Members, Renex and Buyer shall execute and deliver such documents, and
take such other action as shall be reasonably requested by any other party
hereto to carry out the transaction contemplated by this Agreement.
9.3 INDEMNIFICATION BY THE COMPANY AND THE MEMBER - The Company
and the Member jointly and severally agree to indemnify, reimburse and hold
Buyer and Renex harmless against and from:
(a) All Damages suffered, incurred, or sustained by Buyer
or Renex as a result of (i) the existence on or before the Closing Date of any
liabilities, absolute or contingent, of the Company which were not paid by the
Company other than such liabilities assumed by Buyer; (ii) the material untruth
of any representation or the material breach of any warranty made in this
Agreement; (iii) the material untruth of any certificate required under this
Agreement to be delivered by the Member or the Company to Buyer or Renex on the
Closing Date; (iv) the material breach of this Agreement by the Company or the
Member; and (v) any liabilities arising out of any COBRA violations by the
Company.
(b) Buyer and Renex shall give the Company and the Member
prompt notice of any claim to indemnification it may wish to assert pursuant to
this Article 9 as soon as reasonably practicable. Before being required to make
any payments pursuant to this Section 9.3, the Company and the Member may, in
their discretion and at their expense, take all necessary steps properly to
contest any claim or liability or action in respect thereof involving third
parties, or to prosecute such contest or action to conclusion or settlement
reasonably satisfactory to Buyer and themselves. Buyer and Renex shall cooperate
fully with the Company and the Member in the reasonable conduct of any such
contest or action, legal proceedings, negotiation, or settlement and will not
permit compromise voluntarily or settle any such contest, action, legal
proceeding, claim or demand without prior agreement with the Company and the
Member.
(c) Upon the payment to Buyer or Renex by the Company and
the Member of any amount which Buyer or Renex is entitled to receive by way of
indemnification under this Section 9.3, Buyer and Renex shall forthwith assign
to the Company and the Member all of their right, title, and interest in any
item for which indemnification shall so be made, including claims against third
parties relating therewith.
(d) In the event that the Company and the Member shall
dispute the right of Buyer or Renex to be indemnified under this Section 9.3, or
any item with respect to which Buyer or Renex shall so request indemnification,
or if the Company and the Member shall dispute the amount which Buyer or Renex
shall be entitled to receive with respect to such item by way of
indemnification, such dispute shall be submitted to arbitration in the City of
Atlanta, Georgia, in accordance with the rules then in effect of the American
Arbitration Association.
(e) Buyer and Renex agree that they shall not be entitled
to and shall not seek indemnification under this Section 9.3 on account of any
Damages or other liabilities, loss damage, injury or claim hereunder until the
aggregate amount thereof exceeds twenty-five thousand dollars ($25,000) (the
"Minimum Aggregate Amount") at which time claims may be asserted for the excess
of such claims over the Minimum Aggregate Amount but only up to the aggregate
amount of two million two hundred twenty-five thousand dollars ($2,225,000) (the
"Maximum Amount"). Neither the Buyer or Renex shall be entitled to make
- 21 -
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any claim for indemnification under this Section 9.3 unless such claim is made
in writing with reasonable specificity prior to the expiration of one year
following the Closing Date. Claims not made in such a manner on or before such
date shall be forever barred. To the extent any claim for indemnification is
paid by the Company and or the Member, and Renex or Buyer is reimbursed by
insurance or third party reimbursement, such amounts recovered by Buyer and or
Renex shall be paid to the Company or the Member but only to the amount of the
payment made by the Company or the Member , as the case may be.
9.4 INDEMNIFICATION BY THE BUYER AND RENEX - The Buyer and Renex
jointly and severally agree to indemnify, reimburse and hold the Company and the
Member harmless against and from:
(a) All Damages suffered, incurred, or sustained by the
Company or the Member; (i) the material untruth of any representation or the
material breach of any warranty made in this Agreement by Renex or Buyer; (ii)
the material untruth of any certificate required under this Agreement to be
delivered by the Buyer or Renex to the Company or the Member on the Closing
Date; (iii) the material breach of this Agreement by the buyer or Renex; and
(iv) any claim against the Company or the Member relating to any expenses
incurred by the Buyer or Renex arising from the operation of the Business
following the Closing Date (including claims arising from the leases and
contracts assumed by the Buyer and Renex).
(b) The Company and the Member shall give the Buyer and
Renex prompt notice of any claim to indemnification it may wish to assert
pursuant to this Article 9 as soon as reasonably practicable. Before being
required to make any payments pursuant to this Section 9.4, the Buyer and Renex
may, in their discretion and at their expense, take all necessary steps properly
to contest any claim or liability or action in respect thereof involving third
parties, or to prosecute such contest or action to conclusion or settlement
reasonably satisfactory to the Company and themselves. The Company and the
Member shall cooperate fully with the Buyer and Renex in the reasonable conduct
of any such contest or action, legal proceedings, negotiation, or settlement and
will not permit compromise voluntarily or settle any such contest, action, legal
proceeding, claim or demand without prior agreement with the Buyer and Renex.
(c) Upon the payment to the Company and the Member by the
Buyer and Renex of any amount which the Company or the Member is entitled to
receive by way of indemnification under this Section 9.4, the Company and Renex
shall forthwith assign to the Buyer and Renex all of their right, title, and
interest in any item for which indemnification shall so be made, including
claims against third parties relating therewith.
(d) In the event that the Buyer and Renex shall dispute
the right of the Company to be indemnified under this Section 9.4, or any item
with respect to which the Company or the Member shall so request
indemnification, or if the Buyer or Renex shall dispute the amount which the
Company or the Member shall be entitled to receive with respect to such item by
way of indemnification, such dispute shall be submitted to arbitration in the
City of Atlanta, Georgia, in accordance with the rules then in effect of the
American Arbitration Association.
(e) The Company and the Member agree that they shall not
be entitled to and shall not seek indemnification under this Section 9.4 on
account of any Damages or other liabilities, loss damage, injury or claim
hereunder until the aggregate amount thereof exceeds the Minimum Aggregate
Amount at which time claims may be asserted for the excess of such claims over
the Minimum Aggregate Amount, but only up to the Maximum Amount. Neither the
Company or the Member shall be entitled to make any claim for indemnification
under this Section 9.4 unless such claim is made in writing with reasonable
specificity prior to the dates of the expiration of one year following the
Closing Date or one year following the conduct that gives rise to the claim.
Claims not made in such a manner on or before such date shall be forever barred.
To the extent any claim for indemnification is paid by the Buyer and/or Renex,
and the company or the Member is reimbursed by insurance or third party
reimbursement, such amounts recovered by the company or the Member shall be paid
to the Buyer or Renex but only to the amount of the payment made by the Buyer or
Renex , as the case may be.
9.4 EXCLUSIVE REMEDY - Notwithstanding any other provision of
this Agreement and except for the remedies provided in Section 9.5 or 9.7
herein, a claim pursuant to Section 9.3 (with respect to the Buyer and Renex and
any person or entity claiming through either of them) or Section 9.4 (with
respect to the Company or the Member or any person or entity claiming through
either of them) shall be the sole and
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exclusive remedy of an aggrieved party or any person or entity claiming through
a party for any and all Damages or other liability, loss, damage, injury or
claim arising under or related to this Agreement (other than claims arising due
to actions or failures to act after Closing under the Leases or the Medical
Director's Employment Agreement, for which claims the aggrieved party shall be
entitled to whatever remedies are available to such party under those contracts
or under law).
9.5 NON-COMPETITION AGREEMENT - The Company and the Member hereby
agree as follows:
(a) The Company and Member will not, for a period of ten
(10) years from the Closing Date without the prior written consent of Buyer, be
an employee, independent contractor, agent, director, stockholder or owner
(except of not more than one percent (1%) of the securities of a publicly traded
entity), partner, consultant, financial backer, creditor or be otherwise
directly or indirectly connected with or participate in the management,
operation or control of any business, firm, proprietorship, corporation,
partnership, association, entity or venture engaged in the provision of
hemodialysis treatments or peritoneal dialysis services and supplies whether in
an out-patient facility, in the patient's home or in a hospital in any county in
which the Company presently operates a dialysis clinic or provides dialysis
treatments, services or supplies or any county which is contiguous to such
county.
(b) The Company and Member covenant and agree that for a
period of ten (10) years from the Closing Date without the prior written consent
of Buyer, it will not contact, call upon, solicit business from, sell or render
services to any patient of the Business with respect to the provision of any
dialysis treatments, services or supplies similar to the Business or otherwise
directly or indirectly aid or assist any other person, firm or entity to do any
of the aforesaid acts, except on behalf of the Buyer or its subsidiaries or
affiliates.
(c) The Company and the Member covenant and agree that
for a period of ten (10) years from the Closing Date without the prior written
consent of Buyer, it will not directly or indirectly as principal, agent, owner,
partner, stockholder, officer, director, employee, independent contractor or
consultant or in any individual or representative capacity for itself or on
behalf of any business firm, corporation, partnership, association or
proprietorship solicit, or directly or indirectly cause others to solicit, the
employment of any person that is at that time an officer or other employee of
the Buyer, Renex or any of their subsidiaries and affiliates for the purpose of
causing said officer or employee to terminate employment with the Buyer, Renex
or their subsidiaries and affiliates.
(d) It is recognized and acknowledged by the parties
hereto that a breach, threatened breach, or violation by the Company and Member
of any of the covenants and agreements contained in Section 9.6 may cause
irreparable harm and Damage to the Buyer and the Business in a monetary amount
which may be impossible to ascertain. The Company and Members agree that the
Buyer and Renex shall be entitled to an injunction from any court of competent
jurisdiction enjoining or restraining any breach or violation of any or all of
the covenants and agreements contained in this Section 9.6 and that such right
to injunction shall be cumulative and in addition to whatever other rights or
remedies the Buyer or Renex may possess hereunder at law or in equity.
(e) Nothing herein shall prohibit or limit Member in the
practice of medicine as he currently so practices, including the treatment of
renal patients; provided that as part of the practice of medicine, Member does
not provide dialysis treatments or sale of services and/or supplies used in the
provision of dialysis treatments.
9.6 PUBLICITY - Neither the Company or the Members shall issue or
make, or cause to have made, any public release or announcement concerning this
Agreement or the transaction contemplated hereby, without the advance written
approval of the form and substance by Buyer. Renex and the Buyer shall not make
any public release or announcement of the transaction, unless in form and
substance reasonably acceptable to Member. In any filings with the Securities
and Exchange Commission (the "SEC"), Renex shall endeavor to take advantage of
the right to omit the Disclosure Schedule and all exhibits thereto as permitted
in item 601 of Regulation S-K and, unless required by law, shall not file copies
of the Medical Director Agreements or the leases with the SEC. If Renex is
required to file the Medical Director Agreement and/or leases, prior thereto,
Renex shall submit a confidentiality request regarding such items with the SEC
and use its best efforts to pursue such confidentiality request with the SEC.
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9.7 CONFIDENTIALITY -
(a) As a material inducement for the parties to enter
into this Agreement, the Company and the Member agree that they shall not at any
time following the date of this Agreement, divulge, furnish or make accessible
to anyone, without the Buyer's prior written consent, any knowledge or
information with respect to any aspect of the Business, including but not
limited to: the Company's costs; fees or models; physician or patient names;
provider names; referral sources; addresses and telephone numbers of patients
and referral sources; billing procedures, prices and terms; its business
techniques, computer programs and printouts; identity of prospective patients,
providers or referral sources; information disclosed by the Company's patients
to the Company; or other information concerning the Business or its employees.
All such information shall be considered confidential and proprietary. The
Company and the Member agree and recognize that following the Closing Date all
records; patient lists; provider lists; referral lists; material cost data; fees
or models; files and correspondence with patients, referral services,
physicians, and providers of services; computer printouts relating to such
matters; contracts; reports; notes; business plans; compilations of other
recorded matter; and copies or reproductions thereof, relating to the Business
and activities will be the exclusive property of the Buyer. All of such
information, if disclosed by the Company or the Member, could cause irreparable
and continuing injury to the Business for which there may not be an adequate
remedy at law..
(b) This Section 9.7 shall not apply to information which
is or becomes public knowledge through no fault of the Company or the Member. In
the event of a breach of the provisions of this Section 9.7, the Company and the
Member agree that the Buyer and Renex shall be entitled to the remedies set
forth in Section 9.5(d) above and that such right to injunction shall be
cumulative and in addition to whatever other rights or remedies the Buyer or
Renex may possess hereunder at law or in equity.
9.8 COLLECTION OF RECEIVABLES - Following the Closing, if the
Company or the Member receive any payment or funds (whether collection of
receivables, refunds, rebates, reimbursements or payments for services rendered
or products provided) that relate to the operation of the Business following the
Closing Date, to which Buyer or Renex is entitled, the Company and/or the Member
receiving same shall immediately forward such payments or funds to Buyer.
Following the Closing, if the Buyer or Renex receive any payment or funds
(whether collection of receivables, refunds, rebates, reimbursements or payments
for services rendered or products provided) that relate to the operation of the
Business prior to the Closing Date, to which the Company is entitled, the Buyer
and/or Renex receiving same shall immediately forward such payments or funds to
the Company. In the event such payments relate solely to amounts payable to a
party other than the recipient, such checks and all accompanying documentation
shall be forwarded immediately to the appropriate party without being deposited
by the party initially receiving the instrument and to the extent necessary
properly endorse any such instruments evidencing such payments in favor of the
intended recipient. If any instrument received by a party relates to funds due
both the Company and the Buyer, the party receiving the instrument shall deposit
such instrument and promptly remit the amount due the other party immediately
upon clearance of funds. Such payment shall be held in trust until disbursement.
9.9 ACCESS TO BOOKS AND RECORDS - From and after the Closing Date
hereof, the Company shall use its best efforts to (a) afford to the officers,
employees and representatives of Buyer and Renex full and free access to its
assets, personnel, properties, records and books of account at all reasonable
times during business hours, (b) to furnish to such officers, employees and
representatives such other information as Buyer and Renex may reasonably
request, and (c) to authorize its accountants and auditors to permit Buyer's and
Renex's independent public accountants and representatives to examine all
records pertaining to the Company's Financial Statements and other books and
records of the Company.
ARTICLE 10. - MISCELLANEOUS
---------------------------
10.1 COSTS AND EXPENSES - Except as otherwise provided herein in
this Agreement, each of the parties to this Agreement shall bear their own
expenses incurred in connection with the negotiation, preparation, execution and
closing of this Agreement and the transaction contemplated hereby, including but
not limited to, transfer taxes, legal fees and accounting fees.
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29
10.2 REMEDIES - The right and remedies provided by this Agreement
are cumulative, and the use of any one right or remedy by any party hereto shall
not preclude or constitute a waiver of its right to use any and all other
remedies. Such rights and remedies are given in addition to any other rights and
remedies a party may have by law, statute or otherwise.
10.3 DISCLOSURE SCHEDULE - The Disclosure Schedules shall in each
instance, include the Schedules and the Exhibits referred to herein and therein.
The Disclosure Schedules shall be deemed an integral part hereof and are
incorporated herein by this reference. Matter and items listed or disclosed
herein or in any disclosure Schedule shall be deemed disclosed or listed for all
purposes of this Agreement without necessity or relisting disclosing such item
or matter in all applicable schedules
10.4 ATTORNEYS' FEES - In the event of any litigation or
arbitration arising out of this Agreement, the prevailing party shall be
entitled to an award of its reasonable attorneys' fees and costs actually
incurred (including any fees and costs actually incurred and paid in Appellate
proceedings) against the losing party.
10.5 RISK OF LOSS - Prior to the Closing, except as provided in
Section 7.7, the risk of loss, damage to, or destruction of any assets of the
Company shall remain with the Company.
10.6 ASSIGNMENT AND AMENDMENT OF AGREEMENT - This Agreement shall
not be assignable by any of the parties hereto except with the written consent
of the other party. This Agreement may not be amended except by written
agreement executed by all of the parties hereto.
10.7 NOTICES - Any notice or communication given pursuant hereto
by either party to the other party shall be in writing and delivered or mailed
by certified mail, return receipt requested, postage prepaid, as follows:
If to Buyer or Renex: RENEX CORP.
0000 Xxxxx xx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxx, President
Copy to: Wallace, Bauman, Fodiman & Xxxxxxx, P.A.
0000 Xxxxx xx Xxxx Xxxxxxxxx, 0xx Xxxxx
Xxxxx Xxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
If to the Company SOUTH GEORGIA DIALYSIS SERVICES, LLC.
or the Members: 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxx X. Xxxx, M.D., President
Copy to: Xxxxxxx X. Xxxxxx
X.X. Xxx 00000
Xxxxxxx, Xxxxxxx 00000
or at such other address as hereafter shall be furnished in writing by any party
hereto to the other parties.
10.8 ENTIRE AGREEMENT - This Agreement, together with the
Disclosure Schedule, is the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements,
disclosures, understandings, negotiations and discussions, whether oral or
written of the parties. No other agreement not specifically referred to herein,
oral or otherwise, shall be deemed to exist or to bind any of the parties. No
officer or employee of any party has any authority to make any representation or
promise not contained in this Agreement and each of the parties agrees that it
has not executed this agreement in reliance upon any such representation or
promise.
10.9 WAIVER - Any forbearance, failure or delay by any of the
parties hereto to exercise any right, power or remedy hereunder shall not be
deemed a waiver of such right, power or remedy and any single or
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partial exercise of any such right, power or remedy hereunder shall not preclude
the further exercise thereof and every right, power or remedy of either party
shall continue in full force and effect unless waived specifically by an
instrument in writing executed by such party.
10.10 GOVERNING LAW - This Agreement shall be construed in
accordance with the laws of the State of Georgia.
10.11 COUNTERPARTS - This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original but all
of which together shall constitute one and the same instrument.
10.12 CAPTIONS - The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
10.13 SUCCESSORS AND ASSIGNS - All of the terms of this Agreement
shall be binding upon and inure to the benefit of, and be enforceable by and
against the parties and their respective successors and assigns.
10.14 INTERPRETATION - Handwritten provisions inserted in this
Agreement, initialed in ink, shall control all typewritten provisions in
conflict therewith. This Agreement shall not be construed more strongly against
or in favor of any party, regardless of who is responsible for its preparation.
10.15 SEVERABILITY - In the event any provision of this Agreement
or the application of such provision to any part shall be held by a court of
competent jurisdiction to be contrary to any rule of law or public policy, the
remaining provisions of this Agreement shall remain in full force and effect.
10.16 RIGHTS OF THIRD PARTIES - Except as may otherwise be
specifically provided in this Agreement, nothing expressed or implied in this
Agreement is intended, or shall be construed to confer upon or give any person,
firm or corporation, other than the parties hereto and their respective Members,
any rights or remedies under or by reason of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Asset Purchase
Agreement as of the date set forth above.
RENEX DIALYSIS CLINIC OF SOUTH GEORGIA,
INC., a Georgia corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
XXXXX X. XXXX, President
RENEX CORP., a Florida corporation
By: /s/ Xxxxx X. Xxxx
-------------------------------------
XXXXX X. XXXX, President
SOUTH GEORGIA DIALYSIS SERVICES, LLC.,
a Georgia limited liability company
By: /s/ Xxxx X. Xxxx
-------------------------------------
XXXX X. XXXX, Manager
/s/ Xxxx X. Xxxx
-------------------------------------
XXXX X. XXXX, M.D.
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