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EXHIBIT 2.12
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is dated as of the 1st
day of December 1997, by and among DESERT EYE ASSOCIATES, LTD., an Arizona
professional corporation ("Seller"), VISION TWENTY-ONE, INC., a Florida
corporation ("Vision 21"), and XXXX X. XXXXX, M.D. and XXXXXXX X. XXXXXXXX, M.D.
(together, the "Physician").
WITNESSETH:
WHEREAS, Physician is an ophthalmologist who is licensed to practice
ophthalmology in the State of Arizona, and who currently conducts an
ophthalmology practice through the Seller located at 000 Xxxxx Xxxxxxxx Xxx,
Xxxxxx, Xxxxxxx 00000-0000 and 0000 Xxxxx xx xxx Xxxxxxx, Xxxxx 000, Xxxxx
Xxxxxx, Xxxxxxx 00000 (the "Practice");
WHEREAS, Vision 21 provides business management services and facilities
for eye care professionals and related businesses; and
WHEREAS, Seller desires to sell, assign and transfer all of its
Non-Medical Assets (as defined herein) to the extent permitted by law to Vision
21, and Vision 21 desires to purchase, assume and acquire such assets and assume
certain liabilities of the Seller in exchange for the consideration provided
herein.
NOW, THEREFORE, in consideration of the respective covenants,
representations, warranties and agreements herein contained, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I - PURCHASE AND SALE
1.1. Purchase and Sale of Non-Medical Assets. Subject to the terms
and conditions herein set forth, and in reliance upon the representations and
warranties set forth herein, Seller agrees to sell, convey, assign, transfer and
deliver to Vision 21, and Vision 21 agrees to purchase, assume, accept and
acquire, all of Seller's right, title and interest in and to the assets of
Seller relating to the Practice consisting of all the assets (other than the
Medical Assets specified in Section 1.2 hereof and the Excluded Assets specified
in Section 1.3 hereof) as set forth on SCHEDULE 1.1, of every kind, character
and description, whether tangible, real, personal, or mixed, and wheresoever
located, whether carried on the books of Seller or not carried on the books of
Seller due to having been expended, fully depreciated, or otherwise (the
"Non-Medical Assets"), and including without limitation the following (except to
the extent that any of the following are specifically enumerated as Excluded
Assets in Section 1.3 hereof) to the extent permitted by applicable law:
(a) all machinery, equipment, tools, furniture, furnishings,
goods, and other tangible personal property;
(b) [RESERVED];
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(c) all supplies (but not the medical or optical supplies
described as "Medical Assets" in Section 1.2 hereof);
(d) all leases of instruments, equipment, furniture, machinery
and other items of tangible personal property (including rights to any security
deposits with respect to such leases);
(e) all prepaid items, notes and unbilled costs and fees;
(f) to the extent permitted by applicable law, all rights
under any written or oral contract, agreement, plan, instrument, registration,
license, certificate of occupancy, other permit or approval of any nature, or
other document, commitment, arrangement, undertaking, practice or authorization
(but not the third party payor contracts described as "Medical Assets" in
Section 1.2 hereof);
(g) all rights under any patents, trademarks, service marks,
trade names or copyrights, whether registered or unregistered, and any
applications therefor;
(h) all data bases used in the Practice or under development;
(i) all rights arising out of occurrences before or after the
Closing, including without limitation, all representations, warranties,
covenants and guaranties made or provided by third parties to or for the benefit
of Seller with respect to any of the Non-Medical Assets;
(j) all books and records of Seller, including, without
limitation, all credit records, payroll records, computer records, computer
programs, contracts, agreements, operating manuals, schedules of assets,
correspondence, books of account, files, papers, books and all other public and
confidential business records, whether such records are in hard copy form or are
electronically or magnetically stored;
(k) all information, files, records, data, plans, contracts
and recorded knowledge, including supplier lists and employee records related to
the foregoing and the operation of the Practice
(l) all cash in registers or xxxxx cash drawers (which shall
on the Closing Date be at least ninety percent (90%) of the average daily cash
balance held in such locations in the twelve (12) month period preceding the
Closing Date).
1.2. No Sale of Medical AssetsPurchase and Sale of Medical Assets.
Seller shall not sell, convey, assign, transfer and deliver to Vision 21, and
Vision 21 shall not be obligated to purchase, assume, accept and acquire (or
make any payments or otherwise discharge any liability or obligation of Seller
or Physician with respect to) any of Seller's assets described in this Section
(the "Medical Assets") or the Excluded Assets specified in Section 1.3 hereof,
which Medical Assets shall include without limitation the following (except to
the extent that any of the following are specifically enumerated as Excluded
Assets in Section 1.3 hereof) to the extent permitted by applicable law:
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(a) all inventory;
(b) patient lists, including names, addresses and telephone
numbers;
(c) medical records;
(d) all rights in employment contracts with physicians and
optometrists, if any, employed by Seller;
(e) medical supplies, including optical supplies, drugs,
pharmaceuticals, products, substances and items;
(f) third party payor contracts (except for rights to any
purchased accounts receivable);
(g) licenses, certificates of need, Medicare/Medicaid
certifications and other governmental authorizations necessary to provide
medical or optometric services and to be paid therefor by applicable third party
payors;
(h) eyeglasses, lenses and other eye wear; and
(i) any other asset that legally cannot be owned by a party
that is not physician or optometrist-owned.
The Medical Assets and the Non-Medical Assets and collectively referred
to herein as the "Assets."
1.3. Excluded Assets. Notwithstanding the foregoing, neither the
Medical Assets nor the Non-Medical Assets shall include any of the following
(collectively, the "Excluded Assets") which shall be retained by Seller and not
transferred to Vision 21:
(a) life insurance policies covering the life of Physician or
any employee of Seller;
(b) personal effects listed on SCHEDULE 1.3;
(c) Seller's accounts receivable generated or accruing on or
before December 15, 1997;
(d) cash and cash equivalents in banks, certificates of
deposit, commercial paper and securities owned by Seller (but excluding cash
held in registers or xxxxx cash drawers on the Closing Date which shall be
transferred to Vision 21);
(e) any real estate owned by Seller; and
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(f) any assets and liabilities with respect to Seller's
Security Benefit Standardized Profit Sharing Plan and Retirement Plan, all
rights and responsibilities of which shall remain with Seller.
1.4. The Purchase Price. Vision 21 agrees that, subject to the
terms and conditions of this Agreement, and in full consideration for the
aforesaid sale, transfer, conveyance, assignment and delivery of the Non-Medical
Assets of Seller to Vision 21, and the acceptance by Vision 21 of such
Non-Medical Assets and the assumption by Vision 21 of those liabilities listed
on SCHEDULE 1.6 hereto, Vision 21 shall deliver to Seller at the Closing the
consideration (the "Purchase Price") set forth in SCHEDULE 1.4 hereto.
1.5. Allocation of Purchase Price. The Purchase Price shall be
allocated among the Non-Medical Assets as set forth on SCHEDULE 1.5 annexed
hereto and made a part hereof. Each of Seller, Physician and Vision 21 hereby
covenants and agrees that he or it will not take a position that is in any way
inconsistent with the terms of this Section 1.5 on any income tax return, before
any governmental agency charged with the collection of any income tax or in any
judicial proceeding.
1.6. Assumption of Certain Liabilities and Obligations. From and
after the Closing Date, Vision 21 agrees to assume responsibility for the
liabilities and obligations which are listed on SCHEDULE 1.6 attached hereto and
made a part hereof; provided, however, that Vision 21 shall have no
responsibility to fulfill any liability or obligation of Seller or perform under
any contract to the extent not disclosed or in excess of the amount disclosed
hereunder. Vision 21 is not assuming any other responsibility or liability of
any kind for any of the debts, obligations, liabilities, expenses, taxes,
contracts or commitments of Seller, whether accrued or unaccrued, absolute or
contingent, mature or unmatured or otherwise.
1.7. Purchase Price Adjustments.
(a) Working Capital Adjustment. The Purchase Price shall be
subject to adjustment to the extent that Current Assets (as defined herein) or
Current Liabilities Assumed (as defined herein) materially differ from the
amounts customarily arising in the ordinary course of business of the Company as
of December 1, 1997. The term "Current Assets" shall mean xxxxx cash, accounts
receivable, prepaid expenses, inventory, supplies and other current assets
(excluding cash in banks, certificates of deposit, other cash equivalents, the
current portion of capital leases and prepaid income taxes). The term "Current
Liabilities Assumed" shall mean the balances (on an accrual basis) as of
December 1, 1997 of trade accounts payable, accrued payroll, accrued payroll
taxes, accrued benefits, and other current liabilities (excluding notes payable,
the current portion of capital leases and long-term debt and income and
franchise taxes and accrued shareholder expenses). The Purchase Price shall be
increased or reduced to reflect the difference (on a dollar for dollar basis)
between the Current Assets and Current Liabilities and the customary amounts
referred to hereinabove; in the case of an increase in the Purchase Price, such
adjustment shall be settled in cash or Vision 21 common stock (at the option of
Vision 21), or in the case of a reduction in the Purchase Price, such adjustment
shall be settled by a set-off from monies due the Seller pursuant to the
Business Management Agreement described in Section 2.2 of this Agreement. The
parties also agree that to the extent the adjustments materially impact the
goodwill created by the
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transaction, there shall be an adjustment for the related impact upon net income
created by the change in amortization of such goodwill and the Purchase Price
shall be increased or reduced to reflect the impact on net income; in the case
of an increase in the Purchase Price, such adjustment shall be settled in cash
or Vision 21 common stock (at the option of Vision 21), or in the case of a
reduction in the Purchase Price, such adjustment shall be settled by a set-off
from monies due the Seller pursuant to the Business Management Agreement. The
parties acknowledge and agree that Seller has recently put into place a new
computer billing system which has delayed the collection of Seller's accounts
receivable and such increased amount of accounts receivable (and the current
portion of the indebtedness with respect to the line of credit with Bank One of
Arizona entered into in connection with the delayed collection of accounts
receivable) shall not be taken into account in calculating any working capital
adjustment contemplated in this Section 1.7(a).
(b) Predistribution Earnings Adjustment. In addition to any
adjustments made in accordance with Section 1.7(a) of this Agreement, the
Purchase Price shall be subject to adjustment in the event that the Seller's
actual net income plus shareholder expenses (which shareholder expenses shall be
of the same classes as were utilized in computing the Preliminary Practice
Valuations attached as Exhibits A-1 and A-2 to the letter of intent between the
parties hereto dated December 10, 1997 (the "Letter of Intent")) for the
calendar year 1997 (the "Actual Predistribution Earnings") are less than the
Seller's estimated annualized net income plus shareholder expenses for the
calendar year 1997, as reflected in the Preliminary Practice Valuations set
forth in Exhibits A-1 and A-2 attached to the Letter of Intent (the "Estimated
Predistribution Earnings"). The Purchase Price shall be reduced if the Actual
Predistribution Earnings are less than the Estimated Predistribution Earnings,
and in such event, the reduction in the Purchase Price shall be by an amount
equal to thirty-five percent (35%) of such difference times five (5). The
computation of Actual Predistribution Earnings shall not reflect non-recurring
expenses, costs and income occurring throughout the 1997 calendar year or the
salary and draw of Xxxx X. Xxxxxxx, M.D. for such year. The adjustment shall be
settled by a set-off from monies due the Seller pursuant to the Business
Management Agreement. The parties also agree that to the extent the adjustments
materially impact the goodwill created by the transaction, there shall be an
adjustment for the related impact upon net income of Vision 21 created by the
change in amortization of such goodwill and the adjustment to the Purchase Price
shall reflect the impact on net income, settled by a set-off from monies due the
Seller pursuant to the Business Management Agreement.
(c) Within forty-five (45) days following the Closing Date,
Vision 21 shall present to Seller its proposed Purchase Price adjustment (the
"Proposed Purchase Price Adjustment") calculated in accordance with Sections
1.7(a) and 1.7(b) hereof. The Seller shall, within fifteen (15) days after the
delivery by Vision 21 of the Proposed Purchase Price Adjustment, complete its
review thereof. In the event that the Seller believes that the Proposed Purchase
Price Adjustment has not been prepared on the basis set forth in Sections 1.7(a)
and 1.7(b) or otherwise contests any item set forth therein, the Seller shall,
on or before the last day of such 15-day period, so object to Vision 21 in
writing, setting forth a specific description of the nature of the objection and
the corresponding adjustments the Seller believes should be made. If no
objection is received by Vision 21 on or before the last day of such 15-day
period, then the Proposed Purchase Price Adjustment delivered by Vision 21 shall
be final. Any amount then due back to Vision 21 shall be set-off from amounts
otherwise due to the Seller pursuant to the Business Management Agreement. If an
objection has been made and Vision 21 and the Seller are unable to resolve all
of their
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disagreements with respect to the proposed adjustments within fifteen (15) days
following the delivery of the Seller's objection, the dispute shall be submitted
to arbitration administered by the American Arbitration Association (the "AAA")
under the AAA's Commercial Arbitration Rules (such arbitration to be held in
Tampa, Florida) and the arbitrator shall be instructed to deliver his
determination of the dispute to the parties no later than fifteen (15) days
after the arbitration hearing. Vision 21 shall provide to the Seller and its
accountants full access to all relevant books, records and work papers utilized
in preparing the Proposed Purchase Price Adjustment.
ARTICLE II - CLOSING, ITEMS TO BE DELIVERED,
THIRD PARTY CONSENTS AND FURTHER ASSURANCES
2.1. Closing. The closing of the transactions contemplated in this
Agreement (the "Closing") shall take place at or prior to January 31, 1998 (the
date that the Closing takes place is referred to herein as the "Closing Date")
at the office of Xxxxxxxx, Loop & Xxxxxxxx, LLP located at 000 Xxxx Xxxxxxx
Xxxxxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000, or at such other location or date
as the parties hereto shall mutually agree.
2.2. Deliveries of the Seller, Physician and Vision 21 at the
Closing.
(a) Seller and Physician shall deliver to Vision 21 the
following at or prior to the Closing:
(i) such bills of sale with warranties as to
title, assignments, endorsements and other good and sufficient instruments and
documents of conveyance and transfer as shall be necessary and effective to
transfer and assign to and vest in Vision 21 all of Seller's right, title and
interest in and to the Non-Medical Assets, including without limitation (A) good
and valid title in and to all of the Non-Medical Assets owned by Seller, (B)
good and valid leasehold interests in and to all of the Non-Medical Assets
leased by Seller as lessee, and (C) all of Seller's rights under all agreements,
contracts, commitments, instruments and other documents included in the
Non-Medical Assets to which Seller is a party or by which it has rights on the
Closing Date; including the Xxxx of Sale (the "Xxxx of Sale") in the form
annexed hereto and made a part hereof as EXHIBIT 2.2(A)(I);
(i) original instruments of consent or waiver
duly executed by third parties with respect to any contracts, agreements, leases
or other rights or obligations being transferred to Vision 21 hereunder and
requiring a consent or waiver therefor;
(ii) duly executed UCC-3 termination statements
evidencing the release of any and all liens upon any of the Non-Medical Assets
held by any person or entity;
(iii) a duly executed Business Management
Agreement in the form of EXHIBIT 2.2(A)(IV) by and between Seller and Vision 21
(the "Business Management Agreement");
(iv) a copy of resolutions of the Board of
Directors of Seller authorizing the execution, delivery and performance of this
Agreement and all related documents and agreements and the consummation of the
transactions contemplated in this Agreement;
(v) a duly executed Employment Agreement in the
form annexed hereto and made part hereof as EXHIBIT 2.2(A)(VI) between Seller
and Physician (the "Employment Agreement");
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(vi) a duly executed Employment Agreement in the
form annexed hereto and made a part hereof as EXHIBIT 2.2(A)(VII) by and between
Xxxxxxx Xxxxxx, M.D. and Seller (the "Xxxxxx Employment Agreement");
(vii) duly executed Triple Net Leases in the forms
of EXHIBIT 2.2(A)(VIII-A) by and among Xxxxxxx X. Xxxxxxxx, M.D. and Vision 21,
and EXHIBIT 2.2(A)(VIII-B) by and between Eye Site Properties, L.L.C. and Vision
21 for the two (2) medical offices currently used by the Practice (the "Lease
Agreements"); and
(viii) such other certificates and documents as
Vision 21 or its counsel may reasonably request.
Simultaneously with delivery of the items set forth in subsection (a) of this
Section 2.2, Seller shall take all such steps as may be required to put Vision
21 in actual possession and operating control of the Non-Medical Assets.
(b) Vision 21 shall deliver to Seller the following at or
prior to the Closing:
(i) the Purchase Price;
(ii) the Xxxx of Sale;
(iii) the Business Management Agreement;
(iv) a copy of the resolutions of the Board of
Directors of Vision 21 authorizing the execution, delivery and performance of
this Agreement and all related documents and agreements and the consummation of
the transactions contemplated in this Agreement;
(v) the duly executed Lease Agreements; and
(vi) such other certificates and documents as
Seller or its counsel may reasonably request.
2.3. Further Assurances. Seller, from time to time after the
Closing and at the request of Vision 21, will execute, acknowledge and deliver
to Vision 21 such other instruments of conveyance and transfer and will take
such other actions as Vision 21 may reasonably require in order to vest more
effectively in Vision 21, or to put Vision 21 more fully in possession of, any
of the Non-Medical Assets. Each of the parties hereto will cooperate with the
other and execute and deliver to the other parties hereto such other instruments
and documents and take such other actions as may be reasonably requested from
time to time by any other party hereto as necessary to carry out, evidence and
confirm the intended purposes of this Agreement.
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ARTICLE III - REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Seller and Physician. Seller
and Physician hereby jointly and severally represent and warrant to Vision 21
that the following are true and correct through the date hereof, and shall be
true and correct as of the Closing Date as if made on that date, except as set
forth on the Schedules attached hereto and made a part hereof, each of which
exceptions shall specifically identify and be limited to the relevant subsection
hereof to which it relates and shall be deemed to be a representation and
warranty as if made hereunder:
(a) Organization. Seller is a professional corporation duly
organized, validly existing and in good standing under the laws of the State of
Arizona, with all requisite corporate power and authority to carry on the
business in which it is engaged, to own the properties it owns, to execute and
deliver this Agreement and to consummate the transactions contemplated hereby.
Seller is not duly qualified and licensed to do business in any other
jurisdiction. Seller does not have any assets, employees or offices in any state
other than the State of Arizona.
(b) Legal Power and Enforceable Obligations. Seller has the
power, authority and legal right to own, lease and operate the Assets, to
conduct the Practice as currently conducted, and to execute, deliver and perform
this Agreement. This Agreement and all the other documents and instruments
required to be delivered by Seller and/or Physician in accordance with the
provisions hereof have been, or upon their execution and delivery will have
been, duly executed and delivered on behalf of Seller and Physician and
constitute, or will constitute, the legal, valid and binding obligation of
Seller and Physician, enforceable against Seller and Physician in accordance
with their respective terms.
(c) No Violation. The execution, delivery and performance of
this Agreement by Seller and Physician do not and will not violate, conflict
with or result in the breach of any term, condition or provision of, or require
the consent of any other person under (i) any existing law, ordinance, or
governmental rule or regulation to which Seller or Physician is subject, (ii)
any judgment, order, writ, injunction, decree or award of any court, arbitrator
or governmental or regulatory official, body or authority which is applicable to
either Seller or Physician, (iii) Seller's Articles or Certificate of
Incorporation or Bylaws, or (iv) any mortgage, indenture, agreement, contract,
commitment, lease, plan or other instrument, document or understanding, oral or
written, to which either Seller or Physician is a party, by which either Seller
or Physician may have rights, or by which any of the Assets may be bound or
affected, or give any party with rights thereunder the right to terminate,
modify, accelerate or otherwise change the existing rights or obligations of
Seller or Physician thereunder. No authorization, approval or consent of, and no
filing with, any governmental or regulatory official, body or authority is
required in connection with the execution, delivery or performance of this
Agreement by Seller or Physician or the sale to Vision 21 of the Non-Medical
Assets.
(d) No Third Party Options. There are no existing agreements
with, options or commitments to or rights of any person to acquire any of the
Assets or any interest therein.
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(e) Condition of Tangible Assets. All buildings,
structures, facilities, equipment and other material items of tangible property
and assets included in the Assets are in good operating condition and repair,
subject to normal wear and maintenance, are usable in the regular and ordinary
course of business and conform to all applicable laws, ordinances, codes, rules
and regulations relating to their construction, use and operation.
(f) Title to Assets; Required Approvals. Seller has and
shall transfer to Vision 21 at the Closing good, valid and marketable title to
all of the Non-Medical Assets being sold and transferred hereunder, free and
clear of all mortgages, liens, pledges, security interests, charges, claims,
restrictions and other encumbrances and defects of title of any nature
whatsoever, except as set forth in SCHEDULE 3.1(F). Except as set forth in
SCHEDULE 3.1(F), no consent, approval, waiver or authorization is required to be
obtained by Seller from any third party with respect to the assignment to Vision
21 of any contract, agreement, lease, or other right or obligation of Seller
other than pursuant to those leases the failure of which to obtain would not,
individually or in the aggregate, have a material adverse effect upon the
conduct of the Practice. Seller shall use its best efforts to obtain all such
consents, approvals, waivers and authorizations with respect to those items
disclosed on SCHEDULE 3.1(F) before and after the Closing.
(g) Taxes. Seller has filed all tax returns and forms
required to be filed with respect to the Practice, and has paid in full all
taxes, estimated taxes, interest, penalties, assessments and deficiencies which
have become due with respect to the Practice, or will do so prior to the Closing
Date. Such returns and forms are true and correct in all material respects, and
Seller is not required to pay any other tax except as shown on such returns.
Seller is not a party to any pending action or proceeding and, to Seller's
knowledge, there is no action or proceeding threatened by any government or
authority against Seller for the assessment or collection of any tax and no
resolved claim for assessment or collection of any tax has been asserted against
Seller. The Physician is not a "foreign person" as described in Section 1445 of
the Internal Revenue Code of 1986, as amended. There is no pending proceeding to
reduce the assessed valuation of any portion of the Assets. Seller has delivered
to Vision 21 a true and complete copy of its federal and state tax returns for
the years ended December 31, 1994, 1995 and 1996, which tax returns are or shall
be accompanied by all notes and schedules filed therewith. Such tax returns
fairly present the financial position of Seller for the periods covered thereby.
(h) Absence of Changes. Since September 30, 1997, Seller
has not:
(i) incurred any liabilities, other than
liabilities incurred in the ordinary course of business consistent with past
practice, or discharged or satisfied any lien or encumbrance, or paid any
liabilities, other than in the ordinary course of business consistent with past
practice, or failed to pay or discharge when due any liabilities of which the
failure to pay or discharge has caused or will cause any material damage or risk
of material loss to Seller or any of its Assets or properties; provided,
however, that the parties hereto acknowledge that Seller has incurred
indebtedness with respect to (1) a line of credit with Bank One of Arizona
within the subject period, which indebtedness shall be retained by Seller and
not assumed by Vision 21 (except for any draw downs of such line of credit
occurring between December 19, 1997 and December 31, 1997, which will be assumed
by and paid off by Vision 21), and Seller hereby covenants and agrees to make
all payments with respect to such indebtedness on or before the dates when such
payments are due, (2)
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the institution of Seller's new computerized billing system, and (3) the
construction costs with respect to the Green Valley, Arizona medical office;
(ii) sold, encumbered, assigned or transferred
any of its Assets or properties;
(iii) except as provided in Section 3.1(h)(i),
created, incurred, assumed or guaranteed any indebtedness for money borrowed, or
mortgaged, pledged or subjected any of the Assets to any mortgage, lien, pledge,
security interest, conditional sales contract or other encumbrance of any nature
whatsoever;
(iv) made or suffered any amendment or
termination of any material agreement, contract, commitment, lease or plan to
which it is a party or by which it is bound, or canceled, modified or waived any
substantial debts or claims held by it or waived any rights of substantial
value, whether or not in the ordinary course of business;
(v) suffered any damage, destruction or loss,
whether or not covered by insurance, materially and adversely affecting the
Practice and its related operations, assets, properties, prospects or condition
(financial or otherwise) or suffered any repeated, recurring or prolonged
shortage, cessation or interruption of supplies or utility or other services
required to conduct the Practice, except for losses caused by the delay in
Seller's collection of accounts receivable relating to the institution of the
Practice's new computerized billing system;
(vi) except as described in Section 3.1(h)(v),
suffered any material adverse change in the Practice and its related operations,
assets, properties, prospects or condition (financial or otherwise);
(vii) received notice or had knowledge of any
actual or threatened labor trouble, strike or other occurrence, event or
condition of any similar character which has had or might have an adverse effect
on the Practice or its related operations, Assets, properties, prospects or
condition (financial or otherwise);
(viii) increased or decreased the salaries or other
compensation of, or made any advance (excluding advances for ordinary and
necessary business expenses) or loan to, any of its employees or made any
increase in, or any addition to, other benefits to which any of its employees
may be entitled other than in the ordinary course of business consistent with
past practice;
(ix) changed any of the accounting principles
followed by it or the methods of applying such principles; or
(x) entered into any transaction other than in
the ordinary course of business consistent with past practice.
(i) Financial Statements; Consistent Treatment of
Expenses. Seller has delivered to Vision 21 Seller's unaudited balance sheets
and unaudited statements of income and
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cash flows for the fiscal years ended December 31, 1995 and 1996, and Seller's
unaudited balance sheet and unaudited statements of income and cash flows for
the nine (9) month period ended September 30, 1997 (collectively, the "Financial
Statements"). Except as set forth on SCHEDULE 3.1(I), the Financial Statements,
including the notes thereto, have been prepared utilizing generally accepted
accounting principals ("GAAP") consistently applied by Seller in accordance with
past practice throughout the periods indicated. The Financial Statements fairly
present the financial condition and results of operation of Seller as at the
respective dates and for the periods indicated. Except as set forth on SCHEDULE
3.1(I), the Financial Statements reflect all liabilities and obligations of the
Seller, accrued, contingent or otherwise that would be required to be reflected
thereon, or in the notes thereto, prepared in accordance with GAAP, except for
liabilities and obligations incurred in the ordinary course of business since
September 30, 1997. For purposes of this Agreement, the term "liabilities" shall
include, without limitation, any direct or indirect indebtedness, guaranty,
endorsement, claim, loss, damage, deficiency, cost, expense, obligation or
responsibility, fixed or unfixed, known or unknown, asserted or unasserted,
xxxxxx or inchoate, liquidated or unliquidated, secured or unsecured. Seller
has, in presenting information concerning Seller's expenses to Vision 21 for the
purpose of determining the Seller's value, separated out those expenses which
shall be borne by Seller following the acquisition contemplated in this
Agreement in a manner which is consistent with the treatment of expenses which
shall be the responsibility of Seller pursuant to the Business Management
Agreement.
(j) Compliance with Law; Authorizations. Seller has
complied in all material respects with, and is not in any material violation of,
any law, ordinance or governmental or regulatory rules or regulations, whether
federal, state, local or foreign, to which Seller and the Practice and its
related operations, Assets or properties are subject (collectively, the
"Regulations"). Seller owns, holds, possesses or lawfully uses in the operation
of the Practice all franchises, licenses, permits, easements, rights,
applications, filings, registrations and other authorizations (collectively, the
"Authorizations") which are material for Seller to conduct the Practice as
currently conducted or for the ownership and use of the Assets owned or used by
Seller in the conduct of the Practice, free and clear of all liens, charges,
restrictions and encumbrances and in compliance with all Regulations. Seller is
not in default, nor has Seller received any notice of any claim of default, with
respect to any such Authorization. All such Authorizations are renewable by
their terms or in the ordinary course of business without the need to comply
with any special qualification procedures or to pay any amounts other than
routine filing fees. None of such Authorizations will be adversely affected by
the consummation of the transactions contemplated hereby.
(k) Litigation. Except as set forth in SCHEDULE 3.1(K),
no litigation, including any arbitration, investigation or other proceeding of
or before any court, arbitrator or governmental or regulatory official, body or
authority is pending or, to the best knowledge of Seller and Physician,
threatened against Seller or Physician or relates to the Assets or the
transactions contemplated by this Agreement, nor does Seller or Physician know
of any reasonably likely basis for any such litigation, arbitration,
investigation or proceeding, the result of which could adversely affect Seller,
Physician, the Assets or the transactions contemplated hereby or thereby.
Neither Seller nor Physician is a party to or subject to the provisions of any
judgment, order, writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority which may adversely
affect Seller, Physician, the Assets or the transactions contemplated hereby.
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(l) Labor Matters. Seller has not suffered any strike,
slowdown, picketing or work stoppage by any union or other group of employees
affecting the Practice. Seller is not a party to any collective bargaining
agreement, no such agreement determines the terms and conditions of employment
of any employee of Seller, no collective bargaining agent has been certified as
a representative of any of the employees of Seller, and no representation
campaign or election is now in progress with respect to any of the employees of
Seller. Seller has complied and is in compliance in all material respects with
all laws and regulations relating to the employment of labor, including, without
limitation, provisions relating to wages, hours, collective bargaining,
occupational safety and health, equal employment opportunity and the withholding
of income taxes and social security contributions. Seller has paid its employees
all wages, commissions and accruals for earned vacation, personal days and sick
leave owing through the Closing Date. The consummation of the transactions
contemplated hereby will not cause Vision 21 to incur or suffer any liability
relating to, or obligation to pay, any severance, termination or other payment
to any person or entity and any such claim made against Vision 21 for reason of
any termination or separation of any employee on or before Closing, or otherwise
resulting from the sale of the Non-Medical Assets pursuant to this Agreement,
shall be the sole responsibility of Seller. No employee of Seller has any
contractual right to continued employment by Seller following the consummation
of the sale of the Non-Medical Assets pursuant to this Agreement and Vision 21
shall be free to offer employment to such employees of Seller as Vision 21 may
determine and on such terms and conditions as Vision 21 may determine. Set forth
in SCHEDULE 3.1(L) is an accurate and complete list of all employees employed by
Seller in the Practice showing as to each the nature of the employee's job,
years of service, the amount or rate of compensation, all accruals of vacation,
personal days, sick leave, and any other benefits due the employee and other
matters which may be reasonably required by Vision 21.
(m) Employee Benefit Plans. Seller neither sponsors nor
maintains any employee benefit plans except as described in SCHEDULE 3.1(M). The
Seller is not a contributing employer under any multiemployer plan (as such term
is defined in Section 3(37) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA")) nor has it withdrawn from participation in any such
plan after 1979. The Seller has not entered into any agreement to provide, nor
does it otherwise have any obligation to provide, any individual and/or his
designated beneficiary with any medical, life insurance or other fringe
benefits, following his retirement or other termination of employment, other
than pension benefits payable pursuant to its employee pension benefit plans (as
such term is defined in Section 3(2) of ERISA) described in SCHEDULE 3.1(M). Any
employee benefit plans (as such term is defined in Section 3(3) of ERISA)
maintained or sponsored by Seller for the benefit of Seller's employees and
described in SCHEDULE 3.1(M) are in compliance in all material respects with the
applicable provisions of ERISA and the regulations promulgated thereunder as
presently applied, and have so complied during all prior periods during which
such provisions were applicable. Seller has complied in all material respects
with the provisions of ERISA applicable to it as employer, plan sponsor, plan
administrator or fiduciary of any such employee benefit plans with respect to
any such employee benefit plans maintained by Seller or to which Seller was
obligated to contribute funds (or any other plan or individual arrangement which
may not be subject to ERISA). Seller has (i) made all contributions required of
it by law (including, without limitation, ERISA) or contract; and (ii) is and
has been in compliance with the material terms and provisions of all such
employee benefit
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plans. Seller has no accrued but unpaid obligations with respect to any of such
employee benefit plans except as set forth in the Financial Statements or
SCHEDULE 3.1(I). Seller may continue to operate the employee benefit plans
described in SCHEDULE 3.1(M) subsequent to the Closing Date and all rights and
responsibilities of the employer with respect to such plans shall remain with
Seller.
(n) Necessary Assets. The Assets include all rights and
property necessary to the conduct of the Practice in the manner it is presently
conducted by Seller and no property excluded from the Assets hereof constitutes
property or rights material to the Practice; provided, however, that the parties
acknowledge and agree that the Assets do not include real estate previously
owned by Seller and leased by Vision 21 pursuant to the Lease Agreements.
(o) Availability of Documents; Compliance with Due Diligence
Requests. Seller has made available to Vision 21 copies of all documents
including, without limitation, all agreements, contracts, commitments, insurance
policies, leases, plans, instruments, undertakings, authorizations, permits,
licenses, trademarks, trade names, service marks and applications therefor
listed in this Agreement or in the Schedules to this Agreement. Such copies are
true and complete and include all amendments, supplements and modifications
thereto or waivers currently in effect thereunder. Prior to the Closing Date,
the Seller and Physician shall have provided true and correct copies to Vision
21 or answered truthfully in writing all items described in Vision 21's written
due diligence list which has been provided to the Seller by Vision 21 prior to
the date first above written.
(p) Conditions Affecting Seller. There is no fact, development
or threatened development with respect to the markets, products, services,
clients, patients, facilities, personnel, vendors, suppliers, operations, Assets
or prospects of the Practice which are known to Seller which would materially
adversely affect the Practice or the operations, prospects or condition
(financial or otherwise) of Seller considered as a whole, other than such
conditions as may affect as a whole the economy or the practice of medicine
generally. Seller and Physician have used their respective best efforts to keep
available for Vision 21 the services of the employees, agents, patients and
suppliers of Seller active in the conduct of the Practice. Seller does not have
any reason to believe that any loss of any employee, agent, patient or supplier
or other advantageous arrangement will result because of the consummation of the
transactions contemplated hereby.
(q) Real Property. All real property (including, without
limitation, all interests in and rights to real property) and improvements
located thereon which are owned or leased by Seller and used in connection with
the Practice or included in the Non-Medical Assets (the "Real Property") is
listed on SCHEDULE 3.1(Q). The use and operation of the Real Property is in
compliance in all material respects with all applicable building code,
environmental, zoning and land use laws, and other applicable local, state and
federal laws and regulations, including, without limitation, those laws and
regulations relating to the generation, transportation, storage and disposal of
medical waste. No portion of the Real Property is the subject of, or affected
by, any condemnation or eminent domain proceeding or any covenant or other
restriction preventing or limiting Seller's right to convey right, title and
interest in the Real Property or to use the Real Property for the various
purposes for which the Real Property is currently being used. Each lease with
respect to the Real Property is in full force and effect and has not been
assigned, modified,
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supplemented or amended. Neither Seller nor the landlord under any lease is in
material default of the terms of any such lease and, to Seller's knowledge, no
circumstances or state of facts currently exist which, with the giving of notice
or the passage of time or both would permit the landlord under any lease to
terminate such lease.
(r) Medicare and Medicaid Programs. Physician and each
professional employee of the Seller are qualified for participation in the
Medicare and Medicaid programs and the Seller is party to provider agreements
for such programs which are in full force and effect with no events of default
having occurred thereunder. Seller, Physician and each professional employee of
the Seller have timely filed all claims or other reports required to be filed
prior to the Closing Date with respect to the purchase of services by
third-party payors ("Payors"), including but not limited to Medicare and
Medicaid programs. All such claims or reports are complete and accurate in all
material respects. Seller has paid or has properly recorded on the Financial
Statements all actually known and undisputed refunds, discounts or adjustments
which have become due pursuant to such claims, and Seller does not have any
material liability to any Payor with respect thereto, except as has been
reserved for in the Seller's Financial Statements or set forth on SCHEDULE
3.1(I). There are no pending appeals, overpayment determinations, adjustments,
challenges, audits, litigation, or notices of intent to reopen Medicare and/or
Medicaid claims determinations or other reports required to be filed by Seller,
Physician or a professional employee of Seller in order to be paid by a Payor
for services rendered. None of the Seller, Physician or any professional
employee of Seller has been convicted of, or pled guilty or nolo contendere to,
patient abuse or neglect, or any other Medicare or Medicaid program-related
offense. None of the Seller, Physician or any professional employee of the
Seller has committed any offense which may serve as the basis for suspension or
exclusion from the Medicare and Medicaid programs, including but not limited to,
defrauding a government program, loss of a license to provide health services,
and failure to provide quality care.
(s) Fraud and Abuse. To the best knowledge of Seller and
Physician, none of the Seller, Physician or any professional employee of the
Seller has engaged in any activities which are prohibited under 42 U.S.C. xx.xx.
1320-7, 7a or 7b or 42 U.S.C. ss.1395nn (subject to the exceptions set forth in
such legislation), or the regulations promulgated thereunder or pursuant to
similar state or local statutes or regulations, or which are prohibited by rules
of professional conduct, including but not limited to the following:
(i) knowingly and willfully making or causing to
be made a false statement or representation of a material fact in any
application for any benefit or payment;
(ii) knowingly and willfully making or causing to
be made a false statement or representation of a material fact for use in
determining rights to any benefit or payment;
(iii) failure to disclose knowledge by a Medicare
or Medicaid claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on the claimant's behalf or on behalf
of another, with intent to fraudulently secure such benefit or payment;
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(iv) knowingly and willfully offering, paying,
soliciting or receiving any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, in cash or in kind (1) in return for referring
an individual to a person for the furnishing or arranging for the furnishing of
any item or service for which payment may be made in whole or in part by
Medicare or Medicaid, or (2) in return for purchasing, leasing, or ordering, or
arranging for or recommending purchasing, leasing, or ordering any good,
facility, service, or item for which payment may be made in whole or in part by
Medicare or Medicaid; and
(v) referring a patient for designated health
services (as defined in 42 U.S.C. ss.1395nn) or providing designated health
services to a patient upon a referral from an entity or person with which Seller
or an immediate family member has a financial relationship, and to which no
exception under 42 U.S.C. ss.1395nn applies.
(t) Ownership of Competitors. Except as set forth in
SCHEDULE 3.1(T), neither Seller nor the Physician owns, directly or indirectly,
any of the capital stock of any other corporation or any equity, profit sharing,
participation or other interest in any corporation, partnership, joint venture
or other entity that is engaged in a business that is a competitor of Vision 21
or the Seller.
(u) Prohibitions on the Corporate Practice of Medicine.
To the best of the Seller's and Physician's knowledge, the actions, transactions
or relationships arising from, and contemplated by this Agreement, do not
violate any law, rule or regulation relating to the corporate practice of
medicine. Seller and Physician accordingly agree that neither Seller nor
Physician will, in an attempt to void or nullify any document contemplated
herein or any relationship involving Vision 21, Seller or Physician, xxx, claim
or assert that any such document contemplated herein or any such relationship
violates any law, rule or regulation relating to the corporate practice of
medicine and expressly warrant that this Section is valid and enforceable by
Vision 21, and recognizes that Vision 21 has relied upon the statements herein
in closing this acquisition.
(v) Commitments. Except as set forth on SCHEDULE 3.1(V)
or as otherwise disclosed pursuant to this Agreement, neither Seller nor
Physician (with respect to the Practice) is a party to nor bound by, nor are the
Assets bound by, whether or not in writing, any of the following (collectively,
"Commitments"):
(i) partnership or joint venture agreement;
(ii) guaranty or suretyship, indemnification or
contribution agreement or performance bond;
(iii) debt instrument, loan agreement or other
obligation relating to indebtedness for borrowed money or money lent or to be
lent to another;
(iv) contract to purchase real property;
(v) agreement relating to any material matter or
transaction in which an interest is held by a person or entity that is an
affiliate of Seller;
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(vi) agreement for the acquisition of services,
supplies, equipment, inventory, fixtures or other property, or agreements with
public relations or advertising agencies, accountants or attorneys (other than
in connection with this Agreement and the transactions contemplated hereby)
involving more than $2,000 in the aggregate;
(vii) powers of attorney;
(viii) contracts containing non-competition
covenants;
(ix) agreements with Payors and contracts to
provide medical or health care services; or
(x) any other agreement or commitment not made
in the ordinary course of business or that is material to the business,
operations, condition (financial or otherwise) or results of operations of
Seller.
Except as set forth on SCHEDULE 3.1(V) and to Seller's and Physician's best
knowledge, there are no existing or asserted defaults, events of default or
events, occurrences, acts or omissions that, with the giving of notice or lapse
of time or both, would constitute defaults by Seller or Physician or, to the
best knowledge of Seller and Physician, any other party to a material
Commitment, and no penalties have been incurred nor are amendments pending, with
respect to the material Commitments. The Commitments are in full force and
effect and are valid and enforceable obligations of Seller and Physician, and to
the best knowledge of Seller and Physician, are valid and enforceable
obligations of the other parties thereto, in accordance with their respective
terms, and no defenses, off-sets or counterclaims have been asserted or, to the
best knowledge of Seller and Physician, may be made by any party thereto (other
than Seller and Physician), nor has Seller or Physician waived any rights
thereunder. Except as set forth on SCHEDULE 3.1(V), no consents or approvals are
required under the terms of any agreement listed on SCHEDULE 3.1(V) in
connection with the transactions contemplated herein, including, without
limitation, the transfer of any such agreement pursuant to this Agreement.
Except as set forth on SCHEDULE 3.1(v), neither Seller nor Physician has
received notice of any plan or intention of any other party to any Commitment to
exercise any right to cancel or terminate any Commitment, and neither Seller nor
Physician knows of any fact that would justify the exercise of such a right.
(w) Insurance. Seller, Physician and each professional
employee of Seller carries property, liability, malpractice and such other types
of insurance pursuant to the insurance policies listed and briefly described on
SCHEDULE 3.1(W) (the "Insurance Policies"). The Insurance Policies are all of
the insurance policies of the Seller, Physician and each professional employee
of Seller relating to the business of Seller and the Assets. All of the
Insurance Policies are issued by insurers of recognized responsibility, and, to
the best knowledge of the Seller and Physician, are valid and enforceable
policies, except as may be limited by applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally or the availability of
equitable remedies. Except as set forth in SCHEDULE 3.1(W), no consent or
approval is required for, and no other impediment or restriction exists that
will prohibit or limit, the transfer of any such Insurance Policies included
within the Non-Medical Assets in accordance with the terms of this Agreement.
All Insurance
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Policies shall be maintained in force without interruption up to and including
the Closing Date. Neither Seller nor Physician has received any notice or other
communication from any issuer of any Insurance Policy cancelling such policy,
materially increasing any deductibles or retained amounts thereunder, and to the
actual knowledge of Seller and Physician, no such cancellation or increase of
deductibles, retainages or premiums is threatened. Neither Seller nor Physician
has any outstanding claims, settlements or premiums owed against any Insurance
Policy, and Seller and Physician have given all notices or have presented all
potential or actual claims under any Insurance Policy in due and timely fashion.
Since January 1, 1995, neither Seller nor Physician has filed a written
application for any professional liability insurance coverage which has been
denied by an insurance agency or carrier, and the Seller, Physician and each
professional employee employed by Seller have been continuously insured for
professional malpractice claims for at least the past seven (7) years (or the
period of Physician's or such professional employee's employment by Seller, if
shorter). SCHEDULE 3.1(W) also sets forth a list of all claims under any
Insurance Policy in excess of $10,000 per occurrence filed by Seller, Physician
or any professional employee employed by the Seller since January 1, 1995.
(x) Accounts Receivable/Payable. The accounts receivable
of Seller relating to the Practice reflected on the Seller's Financial
Statements (the "Accounts Receivable"), to the extent uncollected on the date
hereof, are, and the accounts receivable of Seller relating to the ownership and
operation of the Practice to be reflected on the books of Seller on the Closing
Date will be, valid, existing and collectible within six (6) months from the
Closing Date (taking into consideration the allowance for doubtful accounts set
forth in the Financial Statements) using reasonably diligent collection methods
taking into account the size and nature of the receivable, and represent amounts
due for goods sold and delivered or services performed. There are not, and on
the date of Closing there will not be, any refunds, discounts, set-offs,
defenses, counterclaims or other adjustments payable or assessable with respect
to the Accounts Receivable. Seller has collected Accounts Receivable only in the
ordinary course and has not changed collection procedures or methods nor
accelerated the pace of such collection efforts in anticipation of the
transactions contemplated in this Agreement; provided, however, that the parties
acknowledge and agree that Seller has recently put into place a new computer
billing system which has delayed the collection of Seller's Accounts Receivable
and such changes and delay shall not be deemed a breach of this Section 3.1(x).
Seller has paid accounts payable in the ordinary course and has not changed
payment procedures or methods nor delayed the timing of such payments in
anticipation of the transactions contemplated in this Agreement.
(y) Intentions. The Physician intends to continue
practicing medicine on a full-time basis for at least the next five (5) years
with the Seller and does not know of any fact or condition that materially
adversely affects, or in the future is reasonably likely to materially adversely
affect, his ability or intention to practice medicine on a full-time basis for
the next five (5) years with the Seller.
(z) Completeness of Disclosure. Neither this Agreement,
nor any Schedule, Exhibit, list, certificate or other instrument or document
furnished by Seller or Physician to Vision 21 pursuant to this Agreement,
contains any untrue statement of a material fact or omits to state any material
fact required to be stated herein or therein or necessary to make the statements
and information contained herein or therein not misleading. Neither Seller nor
Physician has failed
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to disclose to Vision 21 any event, condition or fact which Seller knows, or has
reasonable grounds to know, may materially adversely affect the Assets or the
operations, prospects or condition (financial or otherwise) of the Practice.
3.2. Representations and Warranties of Vision 21. Vision 21 hereby
represents and warrants to Seller and Physician that the following are true and
correct as of the date hereof and shall be true and correct through the Closing
Date as if made on that date:
(a) Corporate Existence. Vision 21 is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida.
(b) Corporate Power and Authorization. Vision 21 has the
power, authority and legal right to execute, deliver and perform this Agreement,
and this Agreement constitutes the legal, valid and binding obligation of Vision
21 enforceable against Vision 21 in accordance with its terms.
(c) Validity of Contemplated Transactions. The execution,
delivery and performance of this Agreement by Vision 21 do not and will not
violate, conflict with or result in the breach of any term, condition or
provision of, or require the consent of any other party under (i) any existing
law, ordinance, or governmental rule or regulation to which Vision 21 is
subject, (ii) any judgment, order, writ, injunction, decree or award of any
court, arbitrator or governmental or regulatory official, body or authority
which is applicable to Vision 21, (iii) the Articles of Incorporation or By-Laws
of Vision 21, or (iv) any mortgage, indenture, agreement, contract, commitment,
lease, plan or other instrument, document or understanding, oral or written, to
which Vision 21 is a party or by which Vision 21 is otherwise bound. No
authorization, approval or consent of, and no registration or filing with, any
governmental or regulatory official, body or authority is required in connection
with the execution, delivery and performance of this Agreement by Vision 21.
(d) Completeness of Disclosure. Neither this Agreement nor any
other instrument or document furnished by Vision 21 to Seller or Physician
pursuant to this Agreement, contains any untrue statement of a material fact or
omits to state any material fact required to be stated herein or therein or
necessary to make the statements and information contained herein or therein not
misleading.
(e) Employment of Seller's Employees. Vision 21 does not
currently intend to change the existing composition or employment terms of any
of the non-professional personnel which have employment arrangements with Seller
on the effective date of this Agreement (except as is necessary for Vision 21 to
employ such individuals pursuant to the Business Management Agreement). Vision
21 reserves the right, however, to change the number, composition or employment
terms of such non-professional personnel in the future.
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ARTICLE IV - CONDITIONS PRECEDENT TO THE CLOSING
4.1. Conditions Precedent to Obligations of Vision 21. All
obligations of Vision 21 under this Agreement are subject to the fulfillment or
satisfaction, prior to or at the Closing, of each of the following conditions
precedent:
(a) Compliance with this Agreement. Seller and Physician shall
have performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by them prior to the Closing.
(b) Due Diligence. Vision 21 shall have completed to its
satisfaction a due diligence review of Seller, Physician, the Practice and the
Assets, which shall include verification that the Practice has been run in the
ordinary course since December 31, 1996, and that the Assets, liabilities,
obligations, revenues, vendor relations and patient relations of Seller are as
represented to and anticipated by Vision 21. Seller agrees to cooperate and make
available to Vision 21 and its employees and accountants, all of Seller's books
and records and to make available Seller's officers, employees and agents in
assisting Vision 21 to complete its due diligence investigations. Vision 21 may
conduct its due diligence investigations from the date first above written to,
and including, the Closing Date.
(c) No Adverse Changes. No change other than as contemplated
or permitted by this Agreement, or other than in the ordinary course, shall have
occurred with respect to the business, operations, prospects or condition
(financial or otherwise) of the Practice or any of the Assets, which shall have
been material and adverse to Seller.
(d) Consents and Approvals. Vision 21 shall have received
those written consents and approvals necessary or desirable for the transfer of
the Non-Medical Assets to Vision 21.
(e) Removal of Liens. Seller shall have obtained valid,
binding and enforceable releases, satisfactions and discharges of all liens,
charges and encumbrances affecting the Non-Medical Assets.
(f) Employment Agreements. Physician and the Seller shall have
entered into the Employment Agreement and Xxxxxx Employment Agreement.
(g) Business Management Agreement. Seller shall have entered
into the Business Management Agreement and Physician shall have executed the
undertakings attached as Exhibits thereto.
(h) Lease Agreements. Xxxxxxx X. Xxxxxxxx, M.D. and Eye Site
Properties, L.L.C. shall have entered into the Lease Agreements.
4.2. Conditions Precedent to Seller's Obligations. All obligations
of Seller under this Agreement are subject to the fulfillment or satisfaction,
prior to or at the Closing, of each of the following conditions precedent:
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(a) Compliance with this Agreement. Vision 21 shall have
performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by Vision 21 prior to or at the
Closing.
(b) Business Management Agreement. Vision 21 shall have
entered into the Business Management Agreement.
(c) Lease Agreements. Vision 21 shall have entered into the
Lease Agreements.
4.3. Risk of Loss Prior to Closing. The risk of any loss,
destruction or other damage to the Non-Medical Assets, other than ordinary wear
and tear, prior to the completion of the Closing, shall be solely that of
Seller.
ARTICLE V - SECURITIES LAW MATTERS
5.1. Investment Representations and Covenants of Seller and
Physician.
(a) Each of Physician and Seller understands that the common
stock of Vision 21 (the "Securities") which may comprise the Purchase Price will
not be registered under the Securities Act of 1933, as amended (the "Securities
Act"), or any state securities laws on the grounds that the issuance of the
Securities is exempt from registration pursuant to Section 4(2) of the
Securities Act and under applicable state securities laws, and that the reliance
of Vision 21 on such exemptions is predicated in part on the Seller's and
Physician's representations, warranties, covenants and acknowledgments set forth
in this Section.
(b) Seller and Physician represent and warrant that Seller and
Physician are "accredited investors" or "sophisticated investors" as defined
under the Securities Act and state "Blue Sky" laws, or that Seller and Physician
have utilized, to the extent necessary to be deemed sophisticated investors
under the Securities Act and State "Blue Sky" laws, the assistance of a
professional advisor.
(c) Seller and Physician represent and warrant that the
Securities to be acquired by Seller upon consummation of the transactions
described in this Agreement will be acquired by Seller for Seller's own account,
not as a nominee or agent, and without a view to resale or other distribution
within the meaning of the Securities Act and the rules and regulations
thereunder, except as contemplated in this Agreement, and that Seller will not
distribute any of the Securities in violation of the Securities Act. All
Securities shall bear a restrictive legend in substantially the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY ONLY BE SOLD OR OTHERWISE
TRANSFERRED IF THE HOLDER HEREOF COMPLIES WITH THE ACT AND APPLICABLE
SECURITIES LAWS."
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In addition, the Securities shall bear any legend required by the
securities or "Blue Sky" laws of any state where Physician resides as well as
any other legend deemed appropriate by Vision 21 or its counsel.
(d) Seller and Physician represent and warrant that the
city and state set forth below Physician's name on SCHEDULE 5.1(D) is where
Physician's principal residence is located
(e) Seller and Physician (i) acknowledge that the
Securities issued to Seller at the Closing must be held indefinitely by Seller
unless subsequently registered under the Securities Act or an exemption from
registration is available, (ii) are aware that any routine sales of Securities
made pursuant to Rule 144 under the Securities Act may be made only in limited
amounts and in accordance with the terms and conditions of that Rule and that in
such cases where the Rule is not applicable, compliance with some other
registration exemption will be required, and (iii) are aware that Rule 144 is
not currently available for use by Seller for resale of any of the Securities to
be acquired by Seller upon consummation of the transactions described in this
Agreement.
(f) Seller and Physician represent and warrant to Vision
21 that Seller and Physician, either alone or together with the assistance of
Seller's and Physician's own professional advisor, have such knowledge and
experience in financial and business matters such that Seller and Physician are
capable of evaluating the merits and risks of Seller's investment in any of the
Securities to be acquired by Seller upon consummation of the transactions
described in this Agreement.
(g) Seller and Physician confirm that Seller and
Physician have had the opportunity to ask questions of and receive answers from
Vision 21 concerning the terms and conditions of Seller's investment in the
Securities, and the Seller and Physician have received to Seller's and
Physician's satisfaction, such additional information, in addition to that set
forth herein, about Vision 21's operations and the terms and conditions of the
offering as Seller and Physician have requested.
(h) In order to ensure compliance with the provisions of
paragraph (c) hereof, Seller and Physician agree that after the Closing Seller
will not sell or otherwise transfer or dispose of Securities or any interest
therein (unless such shares have been registered under the Securities Act)
without first complying with either of the following conditions, the expenses
and costs of satisfaction of which shall be fully borne and paid for by Seller:
(i) Vision 21 shall have received a written
legal opinion from Seller's legal counsel, which opinion and counsel shall be
satisfactory to Vision 21 in the exercise of its reasonable judgment, or a copy
of a "no-action" or interpretive letter of the Securities and Exchange
Commission specifying the nature and circumstances of the proposed transfer and
indicating that the proposed transfer will not be in violation of any of the
registration provisions of the Securities Act and the rules and regulations
promulgated thereunder; or
(ii) Vision 21 shall have received an opinion
from its own counsel to the effect that the proposed transfer will not be in
violation of any of the registration provisions of the Securities Act and the
rules and regulations promulgated thereunder.
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Seller and Physician also agree that the certificates or instruments
representing the Securities to be issued to Seller pursuant to this Agreement
may contain a restrictive legend noting the restrictions on transfer described
in this Section and required by federal and applicable state securities laws,
and that appropriate "stop-transfer" instructions will be given to Vision 21's
transfer agent, if any, provided that this Section 5.1(h) shall no longer be
applicable to any Securities following their transfer pursuant to a registration
statement effective under the Securities Act or in compliance with Rule 144 or
if the opinion of counsel referred to above is to the further effect that
transfer restrictions and the legend referred to herein are no longer required
in order to establish compliance with any provisions of the Securities Act.
(i) Seller and Physician agree that they shall be
considered "affiliates" of Vision 21 for purposes of Rule 144 and agree to the
restrictions and limitations imposed by Rule 144 on affiliates. Seller and
Physician further agree that they shall be considered affiliates of Vision 21
for Rule 144 purposes even if they do not meet the technical definition of
"affiliate" under Rule 144.
5.2. Current Public Information. At all times following the
registration of any of Vision 21's securities under the Securities Act or
Securities Exchange Act pursuant to which Vision 21 becomes subject to the
reporting requirements of the Securities Exchange Act, Vision 21 shall use
commercially reasonable efforts to comply with the requirements of Rule 144
under the Securities Act, as such Rule may be amended from time to time (or any
similar rule or regulation hereafter adopted by the SEC) regarding the
availability of current public information to the extent required to enable any
holder of shares of the common stock of Vision 21 to sell such shares without
registration under the Securities Act pursuant to Rule 144 (or any similar rule
or regulation).
ARTICLE VI - INDEMNIFICATION AND REMEDIES
6.1. Indemnification Obligation of Seller and Physician. From and
after the Closing, Seller and Physician, jointly and severally, will reimburse,
indemnify and hold harmless Vision 21, and its successors and assigns (an
"Indemnified Buyer Party") against and in respect of:
(a) any and all damages, losses, deficiencies,
liabilities, costs and expenses incurred or suffered by any Indemnified Buyer
Party that result from, relate to or arise out of:
(i) any and all liabilities and obligations of
Seller of any nature whatsoever not disclosed in this Agreement and expressly
assumed by Vision 21;
(ii) any and all actions, suits, claims, or
legal, administrative, arbitration, governmental or other proceedings or
investigations against any Indemnified Buyer Party that relate to Seller or the
Practice in which the principal event giving rise thereto occurred prior to the
Closing Date or which result from or arise out of any action or inaction of
Seller or any employee, agent, representative or subcontractor of Seller prior
to the Closing Date; or
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(iii) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of Seller under this
Agreement or from any misrepresentation in or omission from any certificate,
schedule, exhibit, statement, document or instrument furnished to Vision 21
pursuant hereto or in connection with the negotiation, execution or performance
hereof; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and expenses and
court costs) incident to any of the foregoing or to the enforcement of this
Section 6.1.
6.2. Indemnification Obligation Of Vision 21. From and after the
Closing, Vision 21 will reimburse, indemnify and hold harmless Seller, Physician
and their respective successors and assigns (an "Indemnified Seller Party")
against and in respect of:
(a) any and all damages, losses, deficiencies, liabilities,
costs and expenses incurred or suffered by any Indemnified Seller Party that
result from, relate to or arise out of any misrepresentation, breach of warranty
or non-fulfillment of any agreement or covenant on the part of Vision 21 under
this Agreement or from any misrepresentation in or omission from any
certificate, schedule, exhibit, statement, document or instrument furnished to
Seller pursuant hereto or in connection with the negotiation, execution or
performance hereof; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and expenses)
incident to any of the foregoing or to the enforcement of this Section 6.2.
6.3. Procedure for Indemnification Claims. If at any time a claim
shall be made or threatened, or an action or proceeding shall be commenced or
threatened, against a party hereto (the "Aggrieved Party") which could result in
liability of the other party (the "Indemnifying Party") under its
indemnification obligations hereunder, the Aggrieved Party shall give to the
Indemnifying Party prompt notice of such claim, action or proceeding. Such
notice shall state the basis for the claim, action or proceeding and the amount
thereof (to the extent such amount is determinable at the time when such notice
is given) and shall permit the Indemnifying Party to assume the defense of any
such claim, action or proceeding (including any action or proceeding resulting
from any such claim). Failure by the Indemnifying Party to notify the Aggrieved
Party of its election to defend any such claim, action or proceeding within a
reasonable time shall be deemed a waiver by the Indemnifying Party of its right
to defend such claim, action or proceeding; provided, however, that the
Indemnifying Party shall not be deemed to have waived its right to contest and
defend against any claim of the Aggrieved Party for indemnification hereunder
based upon or arising out of such claim, action or proceeding.
If the Indemnifying Party assumes the defense of any such claim, action
or proceeding, the obligation of the Indemnifying Party as to such claim, action
or proceeding shall be limited to taking all steps necessary in the defense or
settlement thereof and, to the extent the Indemnifying Party is liable for
indemnification hereunder, to holding the Aggrieved Party harmless from and
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against any and all losses, damages and liabilities caused by or arising out of
any settlement approved by the Indemnifying Party or any judgment or award
rendered in connection with such claim, action or proceeding. The Aggrieved
Party agrees to cooperate and make available to the Indemnifying Party all books
and records and such officers, employees and agents as are reasonably necessary
and useful in connection with the defense. The Aggrieved Party may participate,
at its expense, in the defense of such claim, action or proceeding provided that
the Indemnifying Party shall direct and control the defense of such claim,
action or proceeding; provided, however, if in the reasonable opinion of the
Aggrieved Party any such claim, action or proceeding involves an issue or matter
which, if adversely determined, would have a materially adverse effect on the
Aggrieved Party, then the Aggrieved Party shall have the right to control the
defense or settlement of any such claim, action or proceeding and its reasonable
costs and expenses shall be included as a part of the indemnification obligation
of the Indemnifying Party. The Indemnifying Party shall not, with respect to any
such claim, action or proceeding, consent to the entry of any judgment or award,
or enter into any settlement, except with the prior written consent of the
Aggrieved Party, which consent shall not be unreasonably withheld; provided,
however, in the case of any such judgment, award or settlement for money, it
shall be a condition thereto that the Indemnifying Party shall acknowledge its
obligation to indemnify the Aggrieved Party pursuant to this Article VI; and
provided, further, that any such judgment, award or settlement include, as an
unconditional term thereof, the release of the Aggrieved Party from all
liability by the third party claimant or plaintiff.
6.4. Payment; Indemnification Limitations.
(a) Payment. In the event that Seller or the Physician has an
indemnification obligation to Vision 21 hereunder, subject to Vision 21's
approval as set forth below, the Seller and/or Physician may satisfy such
obligation by transferring to Vision 21 such number of shares of Vision 21
Securities owned by the Seller and/or Physician having an aggregate fair market
value (based on the last reported sale price of the Vision 21 Securities on a
principal national securities exchange or other exchange on which the Vision 21
Securities are then listed or the last quoted ask price on any over-the-counter
market through which the Vision 21 Securities are then quoted on the last
trading day immediately preceding the day on which Seller or the Physician
transfers shares of the Vision 21 Securities to Vision 21 hereunder) equal to
the indemnification obligation, which Vision 21 Securities shall be transferred
to Vision 21 free and clear of all adverse claims, security interests, liens,
claims, proxies, options, stockholders' agreements and encumbrances.
(b) Indemnification Limitations. Notwithstanding the
provisions of Sections 6.1 and 6.2, (i) no party shall be required to indemnify
another party with respect to a breach of a representation, warranty or covenant
unless the claim for indemnification is brought within two (2) years after the
Closing Date, except that a claim for indemnification for a breach of the
representations and warranties contained in Sections 3.1(a), 3.1(b), 3.1(d),
3.1(f), 3.2(a) and 3.2(b) may be made at any time, and a claim for
indemnification for a breach of the representations and warranties contained in
Sections 3.1(g), 3.1(k), 3.1(m), 3.1(r), 3.1(s) and 8.14 may be made at any time
within the applicable statute of limitations; (ii) neither Seller nor the
Physician shall be required to indemnify Vision 21 pursuant to Section 6.1
unless, and to the extent that, the aggregate amount of damages or claims
incurred by Vision 21 shall exceed an amount equal to two percent (2%) of the
total Purchase Price; and (c) neither Seller nor the Physician shall be required
to
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indemnify Vision 21 with respect to a breach of a representation, warranty or
covenant for damages or claims in excess of the aggregate Purchase Price
received by the Seller (other than pursuant to a requirement to indemnify Vision
21 under Sections 3.1(r) or 3.1(s), or unless the breach involves an intentional
breach or fraud by Seller or the Physician which shall be unlimited).
Furthermore, the total amount of any indemnity payments owed by one party to
another party to this Agreement shall be reduced by any correlative tax benefit
received by the party to be indemnified or the net proceeds received by the
party to be indemnified with respect to recovery from third parties or insurance
proceeds and such correlative insurance benefit shall be net of the insurance
premium, if any, that becomes due as a result of such claim.
6.5. Other Rights and Remedies Not Affected. The indemnification rights
of the parties under this Article VI are independent of and in addition to such
rights and remedies as the parties may have at law or in equity or otherwise for
any misrepresentation, breach of warranty or failure to fulfill any agreement or
covenant hereunder on the part of any party hereto, including, without
limitation the right to seek specific performance, recision or restitution, none
of which rights or remedies shall be affected or diminished hereby. The
indemnification obligations hereunder shall survive the consummation of the
transactions described herein and are subject to set-off against any other
amounts owing between the parties hereunder. Should either party employ an
attorney or attorneys to enforce any of the provisions hereof, or to protect its
interest in any matter arising hereunder, or to recover damages for the breach
hereof, the party prevailing shall be entitled to recover from the other party
all reasonable costs, charges and expenses, including attorney's fees, the value
of time charged by paralegals and/or other staff members operating under the
supervision of an attorney, and other legal costs, expended or incurred in
connection therewith, before, during and subsequent to any litigation, including
arbitration and appellate proceedings, bankruptcy or similar debtor/creditor
proceedings, and proceedings to enforce any indemnity agreement herein
contained.
ARTICLE VII- POST CLOSING MATTERS
7.1. Survival of Representations and Warranties. All representations,
warranties, agreements and obligations made by the parties in this Agreement or
in any certificate, schedule, document or instrument furnished hereunder or in
connection with the negotiation, execution and performance of this Agreement
shall survive the Closing. Notwithstanding any investigation or audit conducted
before or after the Closing Date or the decision of any party to complete the
Closing, each party shall be entitled to rely upon the representations and
warranties set forth herein and therein and each such representation and
warranty shall be deemed to be material.
7.2. Maintenance of Books and Records. Each of Seller, Physician and
Vision 21 shall preserve until the fifth anniversary of the Closing Date all
records possessed or to be possessed by such party relating to any of the
Assets, liabilities or business of the Practice prior to the Closing Date. After
the Closing Date, Seller and Physician shall provide Vision 21 with access, upon
prior reasonable written request specifying the need therefor, during regular
business hours, to (a) Seller and the employees of Seller and (b) the books of
account and records of Seller, and Vision 21 and its representatives shall have
the right to make copies of such books and records.
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7.3. Discharge of Business Obligations. From and after the Closing
Date, Seller shall pay and discharge, in accordance with past practice but not
less than on a timely basis, all obligations and liabilities incurred prior to
the Closing Date in respect of the Practice which are not assumed by Vision 21
pursuant to Section 1.6.
7.4. Payments Received. Seller, Physician and Vision 21 each agree that
after the Closing they will hold and will promptly transfer and deliver to the
other, from time to time as and when received by them, any cash, checks with
appropriate endorsements (using their best efforts not to convert such checks
into cash) or other property that they may receive on or after the Closing Date
which properly belongs to the other party, and will account to the other for all
such receipts. From and after the Closing, Vision 21 shall have the right and
authority to endorse without recourse the name of Seller on any check or any
other evidences of indebtedness received by Vision 21 on account of the Practice
and the Non-Medical Assets transferred to Vision 21 hereunder.
7.5. Audit. Vision 21 may cause an audit of the Financial Statements to
be conducted by Ernst & Young LLP or such other auditor of Vision 21's
selection, the cost of which shall be borne by Vision 21 if the Closing takes
place. Except as otherwise provided in this Section, all items prepared by Ernst
& Young LLP in connection with the audit (the "Prepared Audit Materials") shall
be for use solely by Vision 21. The Prepared Audit Materials shall not be deemed
to include those items that customarily remain the property of the auditors such
as their working papers and internal memos. Seller and Physician represent and
warrant to Vision 21 that the preparation of audited financial statements will
not take an unreasonable amount of time or be of unreasonable cost. Seller and
Physician agree to fully cooperate with any such audit and provide any
documentation reasonably requested by the auditor in order to complete such
audit. Should the Closing not occur because of a breach by Seller or Physician
of any term or condition of this Agreement, Seller shall pay for or reimburse
Vision 21 for one-half (1/2) of all expenses of Ernst & Young LLP in connection
with the audit. For the purposes of this Agreement, audit expenses shall include
all expenses related to the audit as well as expenses incurred to present
financial statements in accordance with GAAP and all schedules related thereto.
Should the Seller reimburse Vision 21 for one-half of the expenses set forth
herein with respect to the audit and pay any remaining balance owed to Ernst &
Young LLP, if any, it shall be entitled to copies of the Prepared Audit
Materials. Seller agrees to submit to and fully cooperate with a Medicare audit
to be conducted by Xxxxxxxx Consulting, the cost of which shall be paid for or
reimbursed by Vision 21. All information obtained in connection with the
Medicare audit shall be made available to Vision 21.
7.6. Non-Compete. As part of the consideration hereof, neither Seller
nor Physician shall for a period of five (5) years from the Closing Date
directly or indirectly (a) engage in any medical or optometric practice
management business within the State of Arizona, (b) solicit the employees of
Vision 21 to become employed by Seller or Physician or otherwise terminate their
employment relationship with Vision 21, or (c) render advice or assistance, or
have any interest in, or provide any services to any competitor of Vision 21;
provided, however, that ownership of no more than five percent (5%) of the stock
of a publicly traded corporation engaged in a competitive business shall not be
deemed to be engaging in a competing business. Seller and Physician acknowledge
that violation of such covenant not to compete would cause irreparable harm to
Vision 21 which cannot be fully redressed by payment of damages by Seller and/or
Physician. Accordingly, Vision 21 shall be entitled in addition to any other
right or remedy it may have, at law
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or in equity, to an injunction, enjoining or restraining Seller and/or Physician
from any violation or threatened violation of this Section. If any of the rights
or restrictions contained herein shall be deemed by a court of competent
jurisdiction to be unenforceable by reason of the extent, duration or
geographical scope thereof or any other provision of this Agreement, the parties
hereto contemplate that the court shall reduce such extent, duration,
geographical scope or other provision and enforce this Section in its reduced
form for all purposes in the manner contemplated hereby.
7.7. Seller and Physician Confidentiality Covenant. 0.2. Physician and
Company Confidentiality Covenant. From the date hereof, the Seller and Physician
shall not, directly or indirectly, use for any purpose, other than in connection
with the performance of the Seller's duties under the Business Management
Agreement with Vision 21 and the performance of Physician's duties under the
Employment Agreement, or disclose to any third party, any information of Vision
21 (whether written or oral), including any business management or economic
studies, patient lists, proprietary forms, proprietary business or management
methods, marketing data, fee schedules, or trade secrets of Vision 21, and
including the terms and provisions of this Agreement and any transaction or
document executed by the parties pursuant to this Agreement. Notwithstanding the
foregoing, the Seller and Physician may disclose information that the Seller or
Physician can establish (a) is or becomes generally available to and known by
the public or medical community (other than as a result of an unpermitted
disclosure directly or indirectly by Seller or Physician or their respective
Affiliates, advisors, or representatives); (b) is or becomes available to the
Seller or Physician on a nonconfidential basis from a source other than Vision
21 or its Affiliates, advisors or representatives, provided that such source is
not and was not bound by a confidentiality agreement with or other obligation of
secrecy to Vision 21 or its Affiliates, advisors or representatives of which the
Seller or Physician has knowledge; or (c) has already been or is hereafter
independently acquired or developed by the Seller or Physician without violating
any confidentiality agreement with or other obligation of secrecy to Vision 21,
or its Affiliates, advisors or representatives. Without limiting the other
possible remedies to Vision 21 for the breach of this covenant, Seller and
Physician agree that injunctive or other equitable relief shall be available to
enforce this covenant, such relief to be without the necessity of posting a
bond, cash or otherwise. The Seller and Physician further agree that if any
restriction contained in this Section 7.7 is held by any court to be
unenforceable or unreasonable, a lesser restriction shall be enforced in its
place and the remaining restrictions contained herein shall be enforced
independently of each other.
7.8. Release of Physician From Practice Liabilities. 0.4. Release of
Physician From Practice Liabilities. Vision 21 shall use its best efforts to
obtain from third party creditors the release of Physician from any personal
liabilities relating to the Practice which are identified on SCHEDULE 1.6 and
assumed by Vision 21 pursuant to the terms of this Agreement.
7.9. Employment Agreements of Non-Shareholder Professionals. Seller and
Physician shall use their best efforts to cause all non-shareholder
ophthalmologists and optometrists, if any, employed by Seller to terminate their
existing employment agreements effective as of the Closing Date and to enter
into employment agreements to be utilized for such professionals in
substantially the form of such employment agreements attached as exhibits to the
Business Management Agreement; provided, however, that the parties acknowledge
and agree that Xxxxxxx Xxxxxx, M.D. shall execute and deliver at the Closing the
Xxxxxx Employment Agreement.
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7.10. No Additional Actions and Documents. From and after the Closing
Date, Seller and Physician will take or cause to be taken such further actions,
and execute, deliver and file such further documents and instruments as Vision
21 may request from time to time to evidence the transfer of the Non-Medical
Assets to Vision 21 and to fully effectuate the purposes and terms of this
Agreement.
7.11. Collection of Seller's Accounts Receivable. Subsequent to the
Closing Date, Vision 21 shall collect Seller's accounts receivable existing on
the Closing Date and excluded from transfer pursuant to Section 1.3 of this
Agreement and shall remit Seller's collected accounts receivable to the Seller.
Seller shall use such collected accounts receivable to pay off Seller's
indebtedness relating to the line of credit with Bank One of Arizona currently
in effect, which payments shall be made by Seller on or before the dates when
such payments are due. Seller's portion of the accounts receivable shall not be
included as "Adjusted Gross Revenue" as such term is defined in the Business
Management Agreement described in Section 2.2 of this Agreement.
ARTICLE VIII - MISCELLANEOUS
8.1. Taxes. Seller shall pay all state and local sales, documentary and
other transfer taxes, if any, due under Arizona law as a result of the purchase,
sale or transfer of the Non-Medical Assets in accordance therewith whether
imposed by law on Seller, Physician or Vision 21, and Seller shall indemnify,
reimburse and hold harmless Vision 21 in respect of the liability for payment of
or failure to pay any such taxes or the filing of or failure to file any reports
required in connection therewith. Vision 21 shall pay all state and local sales,
documentary and other transfer taxes, if any, due under Florida law as a result
of the purchase, sale or transfer of the Non-Medical Assets in accordance
therewith whether imposed by law on Seller, Physician or Vision 21, and Vision
21 shall indemnify, reimburse and hold harmless Seller in respect of the
liability for payment of or failure to pay any such taxes or the filing of or
failure to file any reports required in connection therewith.
8.2. Expenses. Except as otherwise provided in this Agreement, each
party hereto shall pay its own expenses incidental to the preparation of this
Agreement, the carrying out of the provisions hereof and the consummation of the
transactions contemplated hereby.
8.3. Contents of Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof.
It shall not be amended or modified, and no provision hereof shall be waived,
except by written instrument duly executed by each of the parties hereto. Any
and all previous agreements and understandings between or among the parties
regarding the subject matter hereof, whether written or oral, are superseded by
this Agreement.
8.4. Assignment and Binding Effect. This Agreement may not be assigned
by any party hereto without the prior written consent of the other parties.
Subject to the foregoing, all of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
permitted successors and assigns of the parties.
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8.5. Waiver. No delay or failure on the part of either party in
exercising any right hereunder, and no partial or single exercise hereof, will
constitute a waiver of such right or of any other right hereunder.
8.6. Notices. Any notice, request, demand, waiver, consent,
approval or other communication which is required or permitted hereunder shall
be in writing and shall be deemed given only if delivered personally or sent by
overnight, registered or certified mail, postage prepaid, as follows:
If to Vision 21, to:
Vision Twenty-One, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, Chief Financial Officer
With a copy to:
Xxxxxxx X. Xxxxx, Esquire
Xxxxxxxx, Xxxx & Xxxxxxxx
Xxxxx 0000, Xxxxxxx Xxxxx
000 Xxxx Xxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
If to Seller or Physician, to:
Desert Eye Associates, Ltd.
000 X. Xxxxxxxx Xxx
Xxxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx, M.D., President
With a copy to:
Xxxxxx X. Xxxxxxxxx, Esquire
Sacks Tierney P.A. Lawyers
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as of
the date of delivery, in the case of personal delivery, or the delivery or
refusal date, as specified on the return receipt, in the case of overnight,
registered or certified mail.
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8.7. Governing Law. This Agreement shall be governed by and interpreted
and enforced in accordance with the laws of the State of Florida.
8.8. No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and, in the case of Article VI hereof, the other indemnified
parties, and their heirs, executors, administrators, legal representatives,
successors and assigns, and they shall not be construed as conferring any rights
on any other persons.
8.9. Headings, Gender and "Person". All section headings contained in
this Agreement are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement. Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine or neuter, as the context
requires. Any reference to a "person" herein shall include an individual, firm,
corporation, partnership, trust, governmental authority or body, association,
unincorporated organization or any other entity.
8.10. Schedules and Exhibits. All Schedules and Exhibits referred to
herein are intended to be and hereby are specifically made a part of this
Agreement.
8.11. Severability. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
8.12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original and all of which counterparts when taken together shall constitute but
one and the same instrument.
8.13. Rules of Construction. The rules of construction which require
the terms of an agreement to be construed most strictly against the drafter of
such an agreement are hereby waived and relinquished by each party.
8.14. Brokerage. Each of the parties hereto represents and warrants to
the others that no broker is entitled to any commission or similar fee in
connection with the making and carrying out of this Agreement.
8.15. Confidentiality of Agreement. The parties agree not to make any
public announcement with regard to the transactions contemplated by this
Agreement without the prior written consent of the other party until after the
Closing Date.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
"SELLER"
DESERT EYE ASSOCIATES, LTD.
By:
---------------------------------------
Xxxx X. Xxxxx, M.D., its President
"VISION 21"
VISION TWENTY-ONE, INC.
By:
---------------------------------------
Xxxxxxxx X. Xxxxxxxx, President
"PHYSICIAN"
-----------------------------------------
Xxxx X. Xxxxx, M.D.
-----------------------------------------
Xxxxxxx X. Xxxxxxxx, M.D.
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