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EXHIBIT 2.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is entered
into as of this 20th day of April, 2001, by and among Xxxxx Healthsystem
Surgical, LLC, a Louisiana limited liability company ("Buyer"), IOI Management
Services of Louisiana, Inc., a Louisiana corporation ("IOI"), and Westbank
Ambulatory Care Center, LLC, a Delaware limited liability company ("Westbank",
and collectively with IOI, the "Sellers" or individually, a "Seller"). The Buyer
and the Sellers are sometimes referred to herein individually as a "Party" and
collectively as the "Parties".
RECITALS
WHEREAS, Westbank operates an ambulatory surgery center and
holds a Medicare supplier number and one or more licenses from the Louisiana
Department of Health and Hospitals (the "L.D.H.H.") for purposes of operating
such center through a facility located at 0000 Xxxxxxxx Xxxxxxxxxx, Xxxxxxx,
Xxxxxxxxx 00000 (the "Surgery Center");
WHEREAS, IOI owns certain equipment and other assets used to
operate the Surgery Center and has provided such equipment and assets to
Westbank pursuant to a management services agreement between IOI and Westbank;
and
WHEREAS, Buyer desires to purchase from each Seller
substantially all of the assets owned by such Seller and used in the operation
of the Surgery Center, and Sellers are willing to sell such assets to Buyer, all
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, for and in consideration of the premises and
promises herein contained, and for other good and valuable consideration, the
adequacy and receipt of which are hereby acknowledged, the Parties, intending to
be legally bound hereby, agree as follows:
ARTICLE I
SALE AND PURCHASE
1.1. Purchase and Sale of Assets. Subject to the terms and conditions
contained herein, each Seller hereby sells, transfers, assigns and delivers to
Buyer, and Buyer hereby purchases from each Seller, all right, title and
interest in and to the tangible and intangible assets owned by such Seller,
employed in the operations of the Surgery Center, and listed in Schedule 1.1(a)
hereto and made a part hereof (collectively, the "Assets"), free and clear of
all liens except as otherwise provided for herein. The items listed on Schedule
1.1(b) are certain assets of the Sellers that are not intended by the Parties to
be a part of the transaction contemplated hereunder and are specifically
excluded as Assets (e.g., all cash, cash equivalents and accounts receivable of
Sellers).
1.2. Assignment of Contracts and Leases; Consents.
(a) At the Closing (as hereinafter defined), Buyer shall assume
the obligations, liabilities, duties and responsibilities, including any
liability for payments arising on
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and after the Closing Date (as hereinafter defined), of each of the Sellers
under and pursuant to the contracts, leases and agreements listed on Exhibit
1.2(a) (the "Assumed Contracts"). To the extent that any required third party
consents with respect to the assignment of the Assumed Contracts cannot be
obtained prior to the Closing Date, the Parties agree to use their best efforts
to obtain such consents as soon as possible after the Closing Date; provided,
however, that failure to obtain such consents will not affect the validity of
this transaction. The Parties agree and acknowledge that Buyer will not assume
the existing lease obligations of IOI as set forth in that certain Lease
Agreement (the "Lease"), between Marrero Shopping Center, Inc. (the "Landlord")
and IOI, by which IOI leases the premises located at 0000 Xxxxxxxx Xxxxxxxxxx,
Xxxxxxx, Xxxxxxxxx (the "Premises"). The Parties agree that, as a condition
precedent to the consummation of this Agreement, Buyer must enter into a new
lease for the Premises and cause the Landlord to release IOI from any and all
obligations under the Lease.
(b) At the Closing, Buyer shall assume only those obligations of
the Sellers as are set forth on Exhibit 1.2(b) (the "Assumed Liabilities"), but
only to the extent such obligations arise or are to be performed on or after the
Closing Date. The Parties agree and acknowledge that Buyer is assuming only
those liabilities set forth on Exhibit 1.2(b), and then only to the extent such
obligations arise or are to be performed on or after the Closing Date, and
Sellers will maintain all other liabilities in connection with their operation
of the Surgery Center. Under no circumstances shall Buyer be obligated to pay or
assume liabilities or obligations of the Sellers in respect of periods prior to
Closing arising under the terms of the Medicare, Medicaid, Blue Cross or other
third-party payor programs, including, without limitation, any claim, penalty or
sanction relating to any claim for overpayment. Additionally, under no
circumstance shall Buyer be obligated to pay or assume: federal, state or local
tax liabilities or obligations of either of the Sellers in respect of periods
prior to the Closing Date; liability for any claims by or on behalf of either of
the Sellers' employees relating to periods prior to the Closing Date, including
without limitation, liability for any pension, profit sharing, deferred
compensation, or any other employee benefit plan and liability for any such
employees' wages and benefits relating to periods prior to the Closing Date; and
liability arising out of or in connection with claims for acts, omissions and
medical malpractice relating to the ownership or operations of the Surgery
Center which occurred prior to the Closing Date.
(c) Buyer shall assume the Assumed Liabilities and the Assumed
Contracts and hereby releases and agrees to hold harmless each of the Sellers
from any and all continuing and further obligations and/or liabilities related
to or arising from the Assumed Liabilities and the Assumed Contracts which
accrue or become due on or after the Closing Date. Except for the Assumed
Liabilities and the Assumed Contracts, Buyer shall not be liable for any other
liabilities or obligations of either of the Sellers, and the Sellers hereby
indemnify and hold harmless Buyer against any and all such liabilities.
(d) After the Closing Date, Westbank and Buyer shall prorate as of
the Closing Date, any amounts which become due and payable on or after the
Closing Date with respect to: the Assumed Contracts; the Assumed Liabilities;
taxes, if any, on the Assets; utilities servicing the Surgery Center, including
without limitation, water, sewer, telephone, electricity and gas service; and
any charges assessed to Buyer by a lessor on any assigned lease for any period
of time prior to the effective date of the Closing.
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1.3. Purchase Price. As consideration in full for the Assets, Buyer
shall, upon the Closing of this Agreement, deliver to Sellers, by wire transfer
or certified check the collective sum of One Million Eight Hundred Thousand and
No/100 Dollars ($1,800,000.00) (the "Purchase Price"). At Closing, Buyer shall
allocate and deliver to each Seller its portion of the Purchase Price, as
determined pursuant to Section 1.4 hereof. The Parties agree and acknowledge
that a non-refundable deposit of Fifty Thousand and No/100 Dollars ($50,000.00)
(the "Deposit") has been delivered to Sellers by Buyer and is a credit against
the Purchase Price. The Purchase Price shall be reduced dollar for dollar if the
inventory balance is less than Seventy-Five Thousand Eight Hundred Dollars
($75,800) as of the Closing Date. Likewise, the Purchase Price shall be
increased if the inventory balance is greater than Seventy-Five Thousand Eight
Hundred Dollars ($75,800), but in no event shall the Purchase Price be increased
by more than Five Thousand Dollars ($5,000). For purposes of this Section,
inventory shall mean those assets that comprise the inventory balance listed on
Westbank's balance sheet, dated as of December 31, 2000, including but not
limited to all usable supplies, inventories, drugs and other disposables and
consumables. Westbank shall determine the value of the inventory as of the 19th
day of April, 2001, and with respect to same, shall attach, as Schedule 1.3,
final inventory statements describing such inventory. The Parties agree that the
value of the inventory is Seventy-Eight Thousand Seven Hundred Forty-Two Dollars
($78,742) and that there will be a Two Thousand Nine Hundred Forty-Two Dollar
($2,942) increase in the Purchase Price as described directly above. Buyer shall
deliver such increase to Westbank, by wire transfer or certified check, within
seven (7) business days after the Closing.
1.4. Allocation of Purchase Price. Prior to the Closing Date, the
Sellers shall allocate the Purchase Price between each Seller and its respective
Assets and notify Buyer of such allocation, and, thereafter, the Parties shall
file Form 8594 with the Internal Revenue Service in a manner consistent with
such allocation.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS
The Sellers, jointly and severally, hereby warrant and represent to
Buyer, as of the date of this Agreement and the Closing Date, as follows:
2.1. Legal Authority. IOI is a business corporation duly organized,
validly existing and in good standing under the laws of the State of Louisiana.
IOI has all necessary corporate power and authority to enter into the
transactions contemplated hereby. Westbank is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Westbank has all necessary power and authority to enter into the
transactions contemplated hereby.
2.2. Execution, Delivery and Performance of Agreement; Authority. IOI
is not in violation of its articles of incorporation or bylaws. Westbank is not
in violation of its certificate of formation or operating agreement. The
execution, delivery and performance of this Agreement by Sellers will not, with
or without the giving of notice or the passage of time, or both, violate or
conflict with any provision of IOI's articles of incorporation or bylaws or
Westbank's certificate of formation or operating agreement, respectively, or
conflict with or result in any violation, in any material respect, of any
statute, law, rule, regulation, judgment,
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order, decree or ordinance (collectively, "Law" or "Laws") applicable to
Sellers, their properties or assets. Sellers have the full power and authority
to enter into this Agreement and to carry out the transactions contemplated
hereby. All proceedings required to be taken by Sellers to authorize the
execution, delivery and performance of this Agreement and the agreements
relating hereto have been properly taken. This Agreement constitutes a valid and
binding obligation of Sellers, enforceable against Sellers in accordance with
its terms.
2.3. Ownership; Condition of Assets. Except for the liens listed on
Schedule 2.3 hereto, Sellers have, and are transferring to Buyer pursuant to
this Agreement, good and valid title to their respective Assets, free and clear
of all security interests, liens, claims, pledges, agreements, options, or other
encumbrances of any nature whatsoever. The tangible Assets are in good condition
and repair, and have been maintained and serviced as necessary in the normal
course of business. The Assets comprise all of the tangible and intangible
assets owned by the Sellers and necessary for the operation of the Surgery
Center.
2.4. Consents. Except as set forth on Schedule 2.4, each Seller has
obtained in writing all consents by third parties that are required for the
consummation of the transactions contemplated hereby and has provided to Buyer
copies of such executed consents.
2.5. No Claims. Except as set forth on Schedule 2.7, there is no claim,
action, suit, proceeding, arbitration, investigation or inquiry, of which
Sellers have notice or are otherwise aware, before any federal, state,
municipal, foreign or other court or governmental or administrative body or
agency, any securities or commodities exchange, other regulatory body or any
private arbitration tribunal now pending or, to the knowledge of each Seller,
threatened against or relating to Sellers that would adversely affect the
ability of Sellers to consummate the transactions contemplated by this
Agreement.
2.6. Legal Compliance. The Sellers have complied with all applicable
material Laws, and no action, suit, proceeding, hearing, complaint, claim,
demand, notice or investigation has been filed or commenced, or to the knowledge
of the Sellers, threatened against the Sellers alleging any failure to so
comply. Westbank has all authorizations, licenses and permits necessary to
operate a surgery center. Except as set forth on Schedule 2.6, there are no
outstanding notices of deficiencies relating to the Sellers issued by any
governmental authority or third-party payor requiring conformity or compliance
with any applicable Law or condition for participation with such governmental
authority or third-party payor.
2.7. Litigation. Schedule 2.7 sets forth each instance in which a
Seller: (a) is subject to any outstanding injunction, judgment, order, decree,
ruling, or charge; or (b) is a party or is, to its knowledge, threatened to be
made a party to any action, suit, proceeding, hearing, or investigation of, in,
or before any court or quasi-judicial or administrative agency of any federal,
state, local, or foreign jurisdiction or before any arbitrator and contains a
summary thereof.
2.8. Medicare Participation. Westbank is qualified for participation in
the Medicare and Medicaid programs, has a current and valid supplier contract
with the Medicare and Medicaid programs, is in compliance with the conditions of
participation in such programs and has received all approvals or qualifications
necessary for reimbursement.
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2.9. No Hazardous Conditions. To the knowledge of the Sellers, there
are no conditions at, in, on, under or related to the Assets and the Premises
which pose a hazard to human health or the environment, other than such
conditions which are in accordance with applicable laws and regulations.
2.10. Employees. Schedule 2.10 sets forth a list of each employee of
Westbank, together with the person's position, rate of compensation, date of
hire and regular scheduled hours. As of the Closing Date, Westbank will have
paid and made provisions for the payment of all salaries, wages, vacation and
holiday pay, and other employee benefits or reimbursements owed with respect to
any periods prior to the Closing Date in connection with any employee of
Westbank. To the Sellers' knowledge, Westbank is in compliance with all material
federal and state laws respecting employment and employment practices, and any
employee benefit plans of Westbank have been administered in accordance with
applicable law.
2.11. Taxes. All tax returns for periods prior to the Closing Date
which are required to be filed by either Seller have been filed or will be filed
within the time and in the manner provided by law (including any valid
extensions thereof). All such tax returns, to the knowledge of the Sellers, are
or will be true and correct and accurately reflect the tax liabilities of the
applicable Seller. To the knowledge of Sellers, all taxes, penalties, interest,
and any other statutory additions which have become due by any Seller pursuant
to tax returns, have been paid or adequately provided for by reserves maintained
by such Seller in accordance with generally accepted accounting principles.
There are no tax liens on any of the Assets.
2.12. Certain Payments. Neither of the Sellers has made or received any
"sensitive" payments pertaining to the Surgery Center, and neither of the
Sellers has maintained any unrecorded cash or non-cash assets out of which any
"sensitive" payments might be made. "Sensitive" payments mean, whether or not
unlawful, payments to or from governmental officials or employees, commercial
bribes or kickbacks (including, without limitation, any payment or consideration
to any physician or other referral source), amounts paid with an understanding
that rebates or refunds will be made in contravention of the laws of any
applicable jurisdiction either directly or through a third party, political
contributions on behalf of any Seller, and payments or commitments made with the
understanding or under circumstances which would indicate that all or part
thereof is to be paid by the recipient to government officials or employees or
as a commercial bribe, influence payment or kickback.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby warrants and represents to each of the Sellers, as of the
date of this Agreement and as of the Closing Date, as follows:
3.1. Legal Authority. Buyer is a limited liability company, duly
organized, validly existing and in good standing under the laws of the State of
Louisiana. Buyer has all necessary corporate power and authority to enter into
the transactions contemplated hereby.
3.2. Execution Delivery and Performance of Agreement; Authority. Buyer
is not in violation of its articles of organization or its operating agreement,
or of any contract or
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other agreement to which Buyer is a party. The execution, delivery, and
performance of this Agreement by Buyer will not, with or without the giving of
notice or the passage of time, or both, (i) violate, conflict with, result in a
default, right to accelerate or loss of rights under or result in the creation
of any lien pursuant to, any provision of Buyer's articles of organization or
its operating agreement or any agreement, contract, note, mortgage, indenture,
lease, instrument, permit, concession, franchise or license to which Buyer is a
party or by which it or its properties or assets may be bound or affected, or
(ii) conflict with or result in any violation, in any material respect, of any
Law applicable to Buyer, its properties or assets. Buyer has the full power and
authority to enter into this Agreement and to carry out the transactions
contemplated hereby. All proceedings required to be taken by Buyer to authorize
the execution, delivery and performance of this Agreement and the agreements
relating hereto have been properly taken. This Agreement constitutes a valid and
binding obligation of Buyer, enforceable against Buyer in accordance with its
terms.
3.3. No Claim. There is no claim, action, suit, proceeding,
arbitration, investigation or inquiry of which Buyer has notice or is otherwise
aware, before any federal, state, municipal, foreign or other court or
governmental or administrative body or agency, any securities or commodities
exchange, other regulatory body, or any private arbitration tribunal now
pending, or threatened against or relating to Buyer that would adversely affect
the ability of Buyer to consummate the transactions contemplated by this
Agreement.
ARTICLE IV
PRE-CLOSING COVENANTS
The Parties agree as follows with respect to the period between the
execution of this Agreement and the Closing:
4.1. General. The Parties will use their reasonable best efforts to
take all action and to do all things necessary, proper or advisable to
consummate and make effective the transactions contemplated by this Agreement.
4.2. Notices and Consents. The Sellers will use their reasonable best
efforts to obtain any consents necessary to effect transfers of the Assumed
Contracts.
4.3. Preservation of Business. The Sellers will use their reasonable
best efforts to keep the Assets substantially intact, including the Sellers'
present operations, working conditions and relationships with lessors,
licensors, suppliers, patients and employees.
4.4. Full Access. Until termination of this Agreement or Closing
pursuant to the terms hereof, the Sellers will permit representatives of the
Buyer to have full access during normal business hours and upon reasonable
notice to all premises, properties, personnel, books, records, contracts and
documents of or pertaining to the Surgery Center; provided, however, that any
such access shall be allowed only to the extent consistent with law and in such
manner as not to interfere unreasonably with the operations of Sellers'
businesses.
4.5. New Lease; Exclusivity. The Buyer will negotiate with the Landlord
to obtain a new lease between Buyer and Landlord for the Premises and to obtain
a release of IOI from all obligations under the Lease. Upon and subject to the
Landlord releasing IOI from any
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and all obligations under the Lease, the Sellers will not: (a) solicit,
initiate, accept or encourage the submission of any proposal or offer from any
third party relating to the acquisition of any ownership interest in, or any
substantial portion of the assets of, the Surgery Center; or (b) participate in
any discussions or negotiations regarding, furnish any information with respect
to, assist or participate in, or facilitate in any other manner any effort or
attempt by any third party to do or seek to do any of the foregoing. If the
Sellers breach the foregoing exclusivity provision, as reasonably determined by
the Buyer, the Sellers shall return the Deposit to Buyer within three (3)
business days of Sellers' receipt of written notice of such breach from Buyer.
ARTICLE V
CONDITIONS TO OBLIGATION TO CLOSE
5.1. Conditions to Obligation of the Buyer. The obligation of the Buyer
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(a) The representations and warranties set forth in Article II
above shall be true and correct in all material respects, in each case at and as
of the Closing Date as if made on the Closing Date.
(b) The Sellers shall have performed and complied in all material
respects with all of their covenants hereunder to be performed on or prior to
the Closing.
(c) The Buyer shall have entered into a new lease with the
Landlord for the Premises.
(d) IOI shall have purchased all outstanding membership interests
in Westbank not owned by IOI, so that IOI shall own one hundred percent (100%)
of the issued and outstanding membership interests of Westbank immediately prior
to the Closing.
5.2. Conditions to Obligation of the Sellers. The obligation of the
Sellers to consummate the transactions to be performed by them in connection
with the Closing is subject to satisfaction of the following conditions:
(a) The representations and warranties set forth in Article III
above shall be true and correct in all material respects, in each case at and as
of the Closing Date as if made on the Closing Date.
(b) The Landlord shall have released IOI from any and all
obligations under the Lease, as reasonably determined by IOI.
(c) The Buyer shall have performed and complied in all material
respects with all of its covenants hereunder to be performed on or prior to the
Closing.
(d) Those physicians owning membership interests in Westbank shall
have sold all of such interests to IOI prior to the Closing.
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ARTICLE VI
TERMINATION
6.1. Termination of Agreement. The Parties may terminate this Agreement
as expressly provided below:
(a) The Buyer and the Sellers may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(b) Either the Sellers or Buyer may terminate this Agreement by
giving written notice to the other at any time prior to the Closing: (i) in the
event the other Party has breached any representation, warranty or covenant
contained in this Agreement in any material respect; or (ii) if the Closing
shall not have occurred on or before the Closing Date, by reason of the failure
of the other Party to fulfill any condition to close under Article V hereof
(unless the failure results primarily from the first Party itself breaching any
representation, warranty or covenant contained in this Agreement); or
(c) Either the Buyer or the Sellers may terminate this Agreement
if the Closing has not occurred by April 20, 2001.
6.2. Effect of Termination. Each Party's right of termination under
Section 6.1 is in addition to any other rights it may have under this Agreement
or otherwise, and the exercise of a right of termination will not constitute an
election of remedies. If this Agreement is terminated pursuant to Section 6.1,
all further obligations of the Parties under this Agreement will terminate
except that the obligations in Section 11.12 (Expenses) will survive; provided,
however, that if this Agreement is terminated by a Party because one or more
conditions to the terminating Party's obligations under this Agreement is not
satisfied as a result of another Party's failure to comply with its obligations
under this Agreement, the terminating Party's right to pursue all legal remedies
will survive such termination unimpaired.
ARTICLE VII
CLOSING; CLOSING DATE
7.1. Closing. The closing of the transactions contemplated herein
("Closing") shall take place on or before April 20, 2001 (the "Closing Date").
7.2. Closing Deliveries. At the Closing,
(a) Each Seller shall deliver to the Buyer:
(i) A Xxxx of Sale conveying such Seller's Assets to the
Buyer;
(ii) Resolutions authorizing and approving this Agreement, the
transactions contemplated hereby and the execution and delivery of this
Agreement and the documents described herein;
(iii) A certificate of incumbency for the officer who will be
executing this Agreement;
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(iv) A certificate of existence and good standing from such
Seller's state of incorporation or organization, dated the most recent practical
date prior to Closing; and
(v) Such other instruments and documents as are reasonably
necessary to satisfy the conditions precedent to Buyer's obligations hereunder.
Additionally, IOI shall deliver to the Buyer evidence that IOI has purchased all
outstanding membership interests in Westbank not owned by IOI, so that IOI shall
own one hundred percent (100%) of the issued and outstanding membership
interests of Westbank immediately prior to the Closing.
(b) Buyer shall deliver or cause the delivery to the Sellers of:
(i) The Purchase Price in immediately available funds,
allocated to each of the Sellers as described herein;
(ii) Evidence the Landlord has released IOI from any
obligation under the Lease;
(iii) An Assignment and Assumption Agreement, fully executed
by Buyer, pursuant to which Buyer shall assume the future payment and
performance of the Assumed Contracts as herein provided;
(iv) Resolutions of Buyer authorizing and approving this
Agreement, the transactions contemplated hereby and the execution and delivery
of this Agreement and the documents described herein;
(v) A certificate of incumbency for the officer of Buyer who
will be executing this Agreement;
(vi) A certificate of existence and good standing of Buyer
from its state of organization, dated the most recent practical date prior to
Closing; and
(vii) Such other instruments and documents as are reasonably
necessary to satisfy the conditions precedent to Sellers' obligations hereunder.
ARTICLE VIII
COVENANTS WHICH SURVIVE THE CLOSING
8.1. Preservation And Access To Records After The Closing. After the
Closing, Buyer shall, in the ordinary course of business and as required by
applicable Law, keep and preserve all medical records and other records of the
Surgery Center existing as of the Closing and which constitute a part of the
Assets delivered to Buyer at Closing. Buyer acknowledges that as a result of
entering into this Agreement and operating the Surgery Center it will gain
access to patient and other information which is subject to rules and
regulations concerning confidentiality. Buyer agrees to abide by any such rules
and regulations relating to the confidential information it acquires. Buyer
agrees to maintain the patient records delivered to
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Buyer at Closing at the Surgery Center after Closing in accordance with
applicable Law (including, if applicable, Section 1861(v)(i)(1) of the Social
Security Act (42 U.S.C. Section 1395(v)(1)(1)), and requirements of relevant
insurance carriers, all in a manner consistent with the maintenance of patient
records generated at the Surgery Center after Closing. Upon reasonable notice,
during normal business hours, at the sole cost and expense of Sellers and upon
Buyer's receipt of appropriate consents and authorizations and to the extent
permitted by Law, Buyer will afford to the representatives of Sellers, including
their counsel and accountants, full and complete access to, and copies of, the
records transferred to Buyer at the Closing (including, without limitation,
access to patient records in respect of patients treated by Westbank at the
Surgery Center). Upon reasonable notice, during normal business hours and at the
sole cost and expense of Sellers, Buyer shall also make its officers and
employees available to Sellers at reasonable times and places after the Closing.
Any access to the Surgery Center, its records or Buyer's personnel granted to
Sellers in this Agreement shall be upon the condition that any such access not
materially interfere with the business operations of Buyer.
8.2. Books and Records. Until the later to occur of (i) the final
adjudication of any dispute or investigation involving liabilities, federal,
state or local taxes or under the Medicare or Medicaid programs arising out of
the business, operations or affairs of Sellers before the Closing Date, or (ii)
the running of applicable statutes of limitations, Buyer will maintain in the
ordinary course of business all books and records of Sellers constituting a part
of the Assets which are delivered to Buyer at Closing and which relate to the
pre-Closing business, operations and affairs of Sellers to the extent reasonably
necessary in connection with any tax, Medicare or Medicaid liability or other
matter reasonably relating to Sellers for any period ending at or before the
Closing Date.
8.3. Further Assurances. Each of the Parties hereto, upon the request
from time to time of any other Party hereto and without further consideration,
will do each and every act and thing as may be necessary or reasonably requested
to consummate the transactions contemplated hereby (including, without
limitation, the orderly transfer to the Buyer of the Assets and assumption by
the Buyer of the Assumed Liabilities), including without limitation: (i)
executing, acknowledging and delivering assurances, assignments and other
documents and instruments, furnishing information and copies of documents, books
and records (including without limitation, tax records); (ii) filing reports,
returns, applications, filings and other documents and instruments with
governmental authorities; and (iii) cooperating with each other Party hereto in
exercising any right or pursuing any claim, whether by litigation or otherwise,
other than rights and claims running against the Party from whom or which such
cooperation is requested.
8.4. Accounts Receivable. Buyer acknowledges and agrees that all
accounts receivable of Westbank relating to the services and operations of the
Surgery Center on and prior to the Closing Date, are the property of and shall
belong to Westbank. Buyer agrees to cooperate with Westbank and to perform such
tasks as are reasonably requested by Westbank with respect to the collection of
any such accounts receivable. Buyer agrees that, following the Closing Date,
Buyer shall promptly deliver to Westbank any such accounts receivable delivered
to or received by Buyer.
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8.5. Insurance Coverage. Westbank shall obtain continuing professional
liability insurance coverage under either a "tail policy" or a "prior acts
policy," with the same limits as the insurance coverage carried by Westbank
prior to the Closing Date.
ARTICLE IX
NON-COMPETITION
9.1. Non-Compete. Sellers agree that they will not during the period
commencing on the Closing Date and terminating two (2) years thereafter: (i)
disclose any proprietary information relating to the Surgery Center, Buyer, or
any principal or related entity of Buyer to any person, including, but not
limited to, any health care provider which is in competition with or may
reasonably be expected to be in competition with the Surgery Center; (ii)
directly or indirectly (either as principal, agent or consultant, or through any
corporation, firm or organization in which any Seller is a member, partner, or
with which such person is otherwise affiliated) ("Directly or Indirectly")
induce or attempt to influence any employee of the Surgery Center to terminate
his employment with Buyer or any of its affiliates, or hire any employee who now
or at such later date shall be an employee of Buyer or of the Surgery Center;
(iii) Directly or Indirectly, in any capacity, own, manage, operate, control,
participate in the management or control of, be employed by, consult with, or
maintain or continue any interest whatsoever in any ambulatory surgery centers
that are located within the Jefferson and Orleans Parish of the State of
Louisiana and that offer any services in competition with the business of the
Surgery Center.
9.2. Injunction; Duration And Scope Limitation. In the event of an
actual or threatened breach by Sellers, Buyer shall be entitled to an injunction
restraining the applicable Seller from the prohibited conduct, without the
necessity of posting a bond, cash or otherwise. Notwithstanding any other
provision of this Agreement, if a court of competent jurisdiction should hold
that the duration or scope (geographic or otherwise) of the covenants contained
in Section 9.1 are unreasonable, then, to the extent permitted by Law, the court
may prescribe a duration and/or scope (geographic or otherwise) that is
reasonable and judicially enforceable. The Parties agree to accept such
determination, subject to their rights of appeal, which the parties hereto agree
shall be substituted in place of any and every offensive part of Section 9.1,
and as so modified Section 9.1 shall be as fully enforceable as if set forth
herein by the Parties in the modified form. Nothing herein stated shall be
construed as prohibiting Buyer or any third party from pursuing any other
remedies available to it for such breach or threatened breach, including the
recovery of damages from any breaching party.
ARTICLE X
SURVIVAL AND INDEMNIFICATION
10.1. Survival. All representations, warranties, covenants, and
agreements contained in this Agreement or in any document delivered pursuant
hereto shall be deemed to be material and to have been relied upon by the
applicable Party hereto. All representations, warranties, covenants, and
agreements contained herein shall survive the Closing and be fully effective and
enforceable for a period of one (1) year following the date hereof, except that
the non-competition provisions in Article IX shall be effective and enforceable
for a period of two
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(2) years following the Closing Date. Any claim for indemnification asserted in
writing during such survival period shall survive until resolved or judicially
determined.
10.2. Seller's Indemnification. Sellers, jointly and severally, shall
indemnify, hold harmless and defend Buyer, its officers, directors,
representatives, subsidiaries, affiliates, successors and assigns from and
against all damages, losses (including court costs and reasonable attorneys'
fees at all levels of trial and through all levels of appeal and expenses and
costs of investigation), suits, actions, claims, deficiencies, liabilities or
obligations (collectively, "Losses") related to, caused by or arising from (i)
any misrepresentation, breach of warranty or failure to fulfill any covenant or
agreement of Sellers contained herein or in any agreement or other document
delivered pursuant hereto; (ii) any and all claims of third parties made based
upon facts alleged that, if true, would constitute such a misrepresentation,
breach or failure; (iii) the operation of the Surgery Center prior to the
Closing Date (including, without limiting the generality of the foregoing, any
claims, penalties and sanctions for overpayments under any Medicare and Medicaid
supplier contracts relating to periods prior to the Closing Date); (iv) any and
all obligations or liabilities of either Seller that are retained by same
hereunder and that are not specifically assumed by Buyer pursuant to the terms
of this Agreement; (v) those liens referenced on Schedule 2.3 hereof; and (vi)
the litigation disclosed on Schedule 2.7 hereof.
10.3. Buyer's Indemnification. Buyer shall indemnify, hold harmless and
defend Sellers, their officers, directors, representatives, subsidiaries,
affiliates, successors and assigns from and against all Losses related to,
caused by or arising from (i) any misrepresentation, breach of warranty or
failure to fulfill any covenant or agreement of Buyer contained herein or in any
agreement or other document delivered pursuant hereto; (ii) any and all claims
of third parties made based upon facts alleged that, if true, would constitute
such a misrepresentation, breach or failure; (iii) the operation by Buyer of the
Surgery Center on and after the Closing Date; and (iv) any and all obligations
or liabilities of either Seller that are assumed by Buyer pursuant to the terms
of this Agreement.
10.4. Indemnification Procedure; Defense Against Asserted Claims. Any
party seeking indemnification (the "Indemnified Party") shall give written
notice to the indemnifying party or parties (the "Indemnifying Party") of the
facts and the circumstances giving rise to any such claim (the "Notice"). The
Indemnified Party shall not settle or compromise any claim by a third party for
which the Indemnified Party is entitled to indemnification hereunder without the
prior written consent of the Indemnifying Party (which consent shall not be
unreasonably withheld), unless legal action shall have been instituted against
the Indemnified Party and the Indemnifying Party shall not have taken reasonable
control of such suit within fifteen (15) days after notification thereof as
provided herein. In connection with any claim giving rise to indemnification
hereunder resulting from or arising out of any claim or legal proceeding by a
person other than the Indemnified Party, the Indemnifying Party may, upon notice
to the Indemnified Party, assume the defense of any such claim or legal
proceeding without prejudice to the right of the Indemnifying Party thereafter
to contest its obligation to indemnify the Indemnified Party in respect to the
claims asserted therein and, in such a case, the Indemnifying Party shall select
counsel (subject to the approval of the Indemnified Party, which approval shall
not be unreasonably withheld) to conduct the defense in such claims and legal
proceedings and at its sole cost and expense shall take all steps necessary in
the defense or settlement thereof. The Indemnifying Party shall not consent to a
settlement of, or the entry of any judgment arising
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from, any claim or legal proceeding, without the prior written consent of the
Indemnified Party, unless the Indemnifying Party admits in writing its liability
to hold the Indemnified Party harmless from and against any loss, damages,
expenses and liabilities arising out of such settlement. The Indemnified Party
shall be entitled to participate in the defense of any such action with its own
counsel and at its own expense. If the Indemnifying Party does not assume the
defense of any such claim or litigation resulting therefrom in accordance with
the terms hereof, the Indemnified Party may defend such claim or litigation in
such a manner as it may deem appropriate, including settling such claim or
litigation, after giving notice of the same to the Indemnifying Party, on such
terms as the Indemnified Party may deem appropriate and after action by the
Indemnified Party seeking indemnification from the Indemnifying Party in
accordance with the provisions of this Section; in such case, the Indemnifying
Party shall not be entitled to question the manner in which the Indemnified
Party defended such claim or litigation or the amount or nature of any such
settlement. In the event of a claim by a third party, the Indemnified Party
shall cooperate with the Indemnifying Party in the defense of such action
(including making a personal contact with the third party if deemed beneficial)
and the relevant records of each party shall be made available on a timely
basis.
ARTICLE XI
GENERAL PROVISIONS
11.1. Attorneys' Fees. In the event any adversarial legal action arises
between or among any of the Parties as a result of this Agreement, the
prevailing Party shall be entitled to recover from the other Party or Parties
its reasonable attorneys' fees and costs incurred at all pre-trial, trial and
appellate proceedings.
11.2. Parties in Interest; Third-Party Beneficiaries. This Agreement
and all of the terms, covenants and conditions herein shall bind and inure to
the benefit of the Parties named herein and their respective permitted
successors and assigns. No Party may assign its rights and/or duties hereunder
without the prior written consent of the other Parties.
11.3. Entire Agreement and Modification. This Agreement and the
Exhibits and Schedules attached hereto, together with the other documents
referenced in this Agreement contain the entire understanding among the parties
with respect to the transactions contemplated hereby, and no representations,
warranties or agreements have been made or, if made, have been relied upon by
any Party except those specifically referred to herein. This Agreement may be
amended, modified or supplemented only by written instrument signed by all of
the Parties hereto.
11.4. Applicable Law. This Agreement shall be governed by and construed
in accordance with the internal substantive laws of the state of Texas. Venue
with respect to any legal action arising under or pursuant to this Agreement
shall be exclusively in the District Courts (State or Federal) of Xxxxxx County,
Texas.
11.5. Severability. If any provision of this Agreement is found to
violate any statute, regulation, rule, order or decree of any governmental
authority, court, agency or exchange, such invalidity shall not be deemed to
affect any other provision hereof or the validity
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of the remainder of this Agreement, and such invalid provision shall be deemed
deleted from this Agreement to the minimum extent necessary to cure such
violation.
11.6. Rights Cumulative. All rights contained in this Agreement are
cumulative and are in addition to all other rights and remedies that are
otherwise available, pursuant to the terms of this Agreement or applicable law.
11.7. Notices. All notices and other communications under this
Agreement shall be given in writing or by overnight delivery service, charges
prepaid, or by registered or certified mail, return receipt requested, postage
prepaid, or hand delivered, personally addressed to the Parties set forth below
at the stated addresses or at such other address as any Party shall designate in
a notice to the other.
To Sellers: IOI Management Services of Louisiana, Inc.
c/o PowerBrief, Inc.
0000 Xxxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxxxx
With a copy to: XxXxxxxxx, Will & Xxxxx
Miami Center, 22nd Floor
000 Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000-0000
Attention: Xxx X. Xxxxxxx, Esq.
To Buyer: Xxxxx Healthsystem Surgical, LLC
000 Xxxxxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxxxxx 00000
Attention: Senior Vice President
With a copy to: Xxxxx
00000 Xxxx Xxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Regional Counsel
With a copy to: Meadowcrest Hospital
0000 Xxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxxxxxx 00000
Attention: CEO
All notices shall be deemed effective when received, as indicated in
the return receipt or other evidence of delivery, or if delivery is refused, on
the date of such refusal.
11.8. Waiver. A waiver of any breach or violation of any term,
provision or covenant contained herein shall not be deemed a continuing waiver,
or a waiver of any future or
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past breach or violation, or a waiver of any other term, provision or covenant
of this Agreement. All waivers must be in writing.
11.9. Recitals. Each of the above recitals is true and correct and by
reference is made a part of and incorporated into this Agreement.
11.10. Counterparts/Facsimiles. This Agreement may be executed in two
or more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument. Facsimile signatures shall
be treated as original signatures for the purposes of executing this Agreement
and the documents contemplated hereby.
11.11. Headings. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.12. Expenses. Whether or not this Agreement is consummated, each of
the Buyer and the Sellers will bear their own costs and expenses (including
legal fees and expenses) incurred in connection with this Agreement and the
transactions contemplated hereby.
11.13. No Brokerage. Except for an agreement between IOI and/or
Westbank and MD Resources, Inc. ("Broker"), the Sellers and Buyer represent to
each other that no broker has in any way been contracted in connection with the
transactions contemplated hereby. The Sellers and Buyer agree to indemnify the
other from and against all loss, cost, damage or expense arising out of claims
for fees or commissions of brokers employed or alleged to have been employed by
such indemnifying party. IOI and/or Westbank shall be solely responsible for
paying any commission due to Broker and agree to indemnify and hold Buyer
harmless for any commission due Broker.
11.14. Confidentiality. It is understood by the Parties hereto that the
information, documents and instruments delivered to Buyer by each of the Sellers
or their agents and the information, documents and instruments delivered to
Sellers by Buyer or Buyer's agents are of a confidential and proprietary nature.
Each of the Parties hereto agrees that both prior and subsequent to Closing it
will maintain the confidentiality of all such confidential information,
documents or instruments delivered to it by each of the other Parties hereto or
their agents in connection with the negotiation of this Agreement or in
compliance with the terms, conditions and covenants hereof and only disclose
such information, documents and instruments to its duly authorized officers,
directors, representatives and agents. Each of the Parties hereto further agrees
that if the transactions contemplated hereby are not consummated, it will return
all such documents and instruments and all copies thereof in its possession to
the other Party or Parties to this Agreement. Each of the Parties hereto
recognizes that any breach of this Section would result in irreparable harm to
the other Parties to this Agreement and their affiliates and that therefore
either Seller(s) or Buyer shall be entitled to an injunction to prohibit any
such breach or anticipated breach, without the necessity of posting a bond, cash
or otherwise, in addition to all of their other legal and equitable remedies.
Nothing in this Section, however, shall prohibit the use of such confidential
information, documents or information for such governmental filings as in the
mutual opinion of Buyer's counsel and Sellers' counsel are (i) required by law
or governmental regulations or (ii) otherwise appropriate.
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IN WITNESS WHEREOF, the Parties hereto have caused this
Agreement to be executed as of the date first written above.
BUYER:
XXXXX HEALTHSYSTEM SURGICAL, LLC
By: _____________________________________
Print Name: _____________________________
Print Title: ____________________________
SELLERS:
IOI MANAGEMENT SERVICES OF
LOUISIANA, INC.
By: _____________________________________
Print Name: _____________________________
Print Title: ____________________________
WESTBANK AMBULATORY CARE
CENTER, LLC
By: _____________________________________
Print Name: _____________________________
Print Title: ____________________________
Solely for purposes of Schedule 2.7:
POWERBRIEF, INC.
By: _______________________________
Print Name: _______________________
Title: ____________________________
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EXHIBIT/SCHEDULE LIST
Exhibit 1.2(a) Assumed Contracts
Exhibit 1.2(b) - Assumed Liabilities
Schedule 1.1(a) List of Assets
Schedule 1.1(b) List of Excluded Assets
Schedule 1.3 Inventory
Schedule 2.3 Liens
Schedule 2.4 Unobtained Consents
Schedule 2.6 Notices of Deficiencies
Schedule 2.7 Litigation
Schedule 2.10 Employees
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EXHIBIT 1.2(a)
ASSUMED CONTRACTS
1. Lucent telephone equipment lease and maintenance contract.
2. GE copier lease for copier located on the Premises.
3. The following managed care contracts:
(a) The contract by and between Westbank Ambulatory Care Center and Aetna
U. S. HealthCare, Inc., dated 10/15/2000.
(b) The contract by and between Westbank Ambulatory Care Center and
American Lifecare PPO, dated 09/01/2000.
(c) The contract by and between Westbank Ambulatory Care Center and Blue
Cross/Blue Shield of Louisiana, dated 07/07/2000.
(d) The contract by and between IOI Management Services of Louisiana, Inc.,
d/b/a Westbank Ambulatory Care Center and X. X. Xxxxxxx PPO/WC, dated
11/01/1999.
(e) The contract by and between Westbank Ambulatory Care Center and The
Oath - HMO, dated 08/01/2000.
(f) The contract by and between Westbank Ambulatory Care Center, LLC, and
The Oath - PPO, dated 01/01/2001.
(g) The contract by and between Westbank Ambulatory Care Center, LLC, and
The Oath - Smart Plan 65, dated 01/01/2001.
(h) The contract by and between Westbank Ambulatory Care Center, LLC, and
PPOPlus, dated 08/01/2000.
(i) The contract by and between Westbank Ambulatory Care Center and
Physician Association of Louisiana (PAL), dated 06/01/2000.
(j) The contract by and between Westbank Ambulatory Care Center and PHCS,
dated 10/01/2000.
(k) The contract by and between Westbank Ambulatory Care Center and State
Employees Group Benefits, dated 08/01/2000.
(l) The contract by and between Westbank Ambulatory Care Center and United
Healthcare of Louisiana, Inc., dated 10/15/2000.
4. The following service contracts:
o Information System - Health Information Systems
o Postage Machine - Pitney Xxxxx
o Medical Gases - AirGas
o Medical Staff Credentialing - Compass resources
o Linen- Associated Linen Services
o Transcription - MedTech
o Security Monitoring and Service - Certified Security System
o Janitorial - Xxxx-Xxxx
o Floor Mates - Cintas
o Pharmacist - Xxxx Xxxxxxxxx
o Medical and Non-Medical Waste - BFI
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o Exterminator - Orkin
o Generator Maintenance - Xxxxxxxx
o HVAC - Master Mechanical
o Manifolds, Vacuum Pump, Alarm Panel, Electrical Checks,
Defibrillator Checks- BioMedical Concepts
o Anesthesia - St. Tammany Anesthesia Group
o Cable Service - Xxx Communications
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EXHIBIT 1.2(b)
ASSUMED LIABILITIES
1. All Assumed Contracts.
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SCHEDULE 1.1(a)
LIST OF ASSETS
Westbank's Assets Being Transferred
1. Any and all major, minor or other equipment, furniture and furnishings
owned by Westbank and listed on Attachment A hereto.
2. Any and all supplies, inventory, drugs and other disposables and
consumables.
3. All current financial, patient, medical staff and personnel records,
medical records, documents, catalogs, books, files, and operating
manuals.
4. All authorizations, licenses and permits (to the extent legally
assignable) that are held by Westbank relating to the ownership,
development and operations of the Surgery Center, excluding Westbank's
Medicare/Medicaid supplier number.
5. All names, trade names, trademarks and service marks (if any), or
variations thereof, used by Westbank in connection with operating the
Surgery Center, including without limitation the name "Westbank
Ambulatory Care Center."
IOI's Assets Being Transferred
1. All major, minor or other equipment, furniture and furnishings owned by
IOI and listed on Attachment A hereto, and any and all tenant
improvements (if any) that are owned by IOI and used in the operation
of the Surgery Center.
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SCHEDULE 1.1(b)
LIST OF EXCLUDED ASSETS
1. All cash, cash equivalents and accounts receivable of each of the
Sellers.
2. Any and all prepaid expenses, deposits, and claims for refunds of each
of the Sellers.
3. All tangible and intangible assets of IOI that are not employed in the
operations of the Surgery Center, including without limitation IOI's
names, trade names, trademarks, service marks or variations thereof.
4. Westbank's Medicare/Medicaid supplier number.
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SCHEDULE 1.3
INVENTORY
[SEE ATTACHED.]
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SCHEDULE 2.3
LIENS
1. Pursuant to the management agreement between IOI and Westbank, IOI has
a lien on, and a security interest in, Westbank's property related to
the ASC. IOI hereby agrees to release such lien and to take all steps
necessary to effectuate same.
2. Copelco Capital, Inc. has a lien on IOI in connection with certain
equipment located in Lancaster, Pennsylvania; Copelco Capital, Inc. has
agreed to release such lien, and it is in the process of being
terminated.
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SCHEDULE 2.4
UNOBTAINED CONSENTS
1. Westbank has not obtained any consents necessary for assigning the
Assumed Contracts.
2. Neither IOI nor Westbank has obtained any consents to the assignment of
the authorizations, licenses, permits and Medicare/Medicaid supplier
number used by Westbank in the operation of the Surgery Center; to the
extent that any such authorizations, licenses, permits, and supplier
number are legally assignable, Buyer shall be solely responsible for
obtaining any required consents from third parties, including without
limitation any consents of applicable regulatory or governmental
entities; provided, however, the Parties agree that Westbank's
Medicare/Medicaid supplier number shall not be assigned to or assumed
by Buyer.
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SCHEDULE 2.6
NOTICES OF DEFICIENCIES
NONE.
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SCHEDULE 2.7
LITIGATION
1. Construction South, the general contractor that built out the Surgery
Center, has filed an action against IOI alleging that $130,000 is owed
in connection with build-out work relating to the Surgery Center. IOI
has filed a counterclaim against Construction South alleging that
Construction South did not appropriately provide and perform its
services under its arrangements with IOI. IOI and Construction South
are in settlement negotiations. If a settlement is not reached, IOI and
Construction South will proceed to binding arbitration. This dispute
relates to work performed for IOI during time periods prior to April of
2000. PowerBrief, Inc., the sole shareholder of IOI, represents and
warrants that if this dispute is not settled, it will be subject to
binding arbitration. PowerBrief, Inc. hereby agrees to indemnify and
hold harmless Buyer from any and all Losses related to, caused by or
arising from the litigation disclosed on this Schedule 2.7.
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SCHEDULE 2.10
EMPLOYEES
------------------------------------------------------------------------------------------------
NAME POSITION PAY DOH SCHEDULED
HOURS
------------------------------------------------------------------------------------------------
Xxxx Xxxxxx DON $52,000/yr 01/2000 M-F 7am-4pm
------------------------------------------------------------------------------------------------
Xxxxx Xxxxx PACU RN $20/hr 03/2000 M-F 7am-4pm
------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx OR RN $21.50/hr 01/2000 M-F 7am-4pm
------------------------------------------------------------------------------------------------
Xxxxx Xxxxx CST $15/hr 03/2000 M-F 7am-4pm
------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx Receptionist $11/hr 03/2000 M-F 7am-4pm
------------------------------------------------------------------------------------------------
The Parties agree that the Buyer shall have the option, in its sole discretion,
to retain or employ any and all of such individuals after the Closing Date.
