Exhibit
10.3
BY
AND BETWEEN
XXXX
X. XXXXXXXX, M.D.,P.C.
(SELLER)
AND
VEIN
ASSOCIATES OF AMERICA, INC.
(PURCHASER)
DATED
AS OF MAY 1, 2006
LIST
OF EXHIBITS:
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| Exhibit
# |
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Reference
to
Section in the Agreement |
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Summary
description |
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| A |
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Article
1 |
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Definitions |
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| 1 |
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Schedule
2.1(a) |
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Assets
Purchased |
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| 2 |
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Schedule
2.1(c) |
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Excluded
Assets |
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| 3 |
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Schedule
2.2(a)(2) |
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Assumed
Contracts |
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| 4 |
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Schedule
2.2(b) |
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Assumed
Obligations |
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| 5 |
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Schedule
2.3(a) |
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Terms
and Conditions of Vein Associates of America, Inc.
Stock |
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| 6 |
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Schedule
2.3(b) |
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License
Agreement |
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| 7 |
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Schedule
2.5(c) |
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Xxxx
of Sale |
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| 8 |
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Schedule
2.5(d) |
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Purchase
Price Allocation |
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| 9 |
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Schedule
3.1(f) |
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Pending
Claims and Litigation |
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| 10 |
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Schedule
3.1(g) |
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Seller's
Insurance Policies |
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| 11 |
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Schedule
3.1(i)(1) |
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Leases |
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| 12 |
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Schedule
3.1(i)(2) |
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Personal
Property |
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| 13 |
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Schedule
3.1(m) |
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Physician
Disclosures |
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| 14 |
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Schedule
3.1(r) |
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Employees |
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| 15 |
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Schedule
3.1(s)3.1.2 |
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Employee
Benefit Plans |
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| 16 |
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Schedule
5.6.1 |
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Rehired
Employees |
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| 17 |
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Schedule
5.8 |
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Vein
Associates of America, Inc. Option Plan |
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| 18 |
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Schedule
5.8.1 |
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Issuance
of Shares in Vein Associates of America, Inc. |
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THIS
ASSET
PURCHASE AGREEMENT (the “Purchase Agreement”), dated May 1, 2006 is by and
between Xxxx X. Xxxxxxxx, M.D., P.C., an Alabama Professional Corporation
(“Seller” or “Xxxxxxxx”), and Vein Associates of America, Inc., a Florida
Corporation (“Purchaser”). This Agreement shall become effective as of the date
this Agreement is signed by both Parties. Purchaser and Seller are individually
referred to herein as a “Party” and collectively referred to herein as
“Parties”.
Recitals
WHEREAS,
the Seller operates a medical practices at 000 Xxxxxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxxxxx Xxxxx, XX 00000 (the “Subject Premises”).
WHEREAS,
the Purchaser wishes to purchase and acquire from Seller substantially all
of
the assets used by Seller in the operation of its vein practice at the Subject
Premises. Seller wishes to sell and to transfer to Purchaser such assets
pursuant to the terms and subject to the conditions set forth in this Agreement.
NOW,
THEREFORE, in consideration of the premises and the representations, warranties,
covenants and agreements herein contained, the Parties agree as follows.
ARTICLE
I
DEFINITIONS
Any
capitalized term not defined herein shall have the meaning ascribed to such
term
in Exhibit A to this Purchase Agreement, if defined therein. If
not, the term shall bear the meaning generally accepted in the context of
appearance herein.
ARTICLE
II
PURCHASE TRANSACTIONS
| Section
2.1 |
Asset
Purchase. |
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(a)
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Subject
to the terms and conditions set forth herein, and in
reliance upon the representations, warranties and covenants set forth
herein, on the Closing Date (i) Seller shall sell, assign, transfer,
convey and deliver to Purchaser, free and clear of all Encumbrances
(except for the Assumed Obligations, as defined in Section 2.2 below),
and
(ii) Purchaser shall purchase from Seller, substantially all the Assets
used by the Seller relating to the providing of medical services
concerning vein treatment, as more specifically delineated in
Exhibit 1, Schedule 2.1(a), for the
Purchase Price, as defined in Section 2.3 below. Said assets, to the
extent permitted |
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by
law, include all of the Business Records; provided, however,
unless otherwise expressly specified herein, Purchaser assumes no
liabilities or obligations whatsoever relating to the purchased assets
or
the medical practice of the Seller, including liabilities arising from
any
patients treated by Seller. |
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(b)
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Exhibit
1, Schedule 2.1(a), sets forth a detailed
description of the Assets purchased pursuant to this Agreement and
shall
include but not be limited to accounts receivable of Seller existing
at
Closing, tangible assets, and supplies. Certain Internet Domain and
Trade
names are acquired subject to that certain Trade and Domain Name License
Agreement to be executed between the parties at the same time of this
Agreement. Medical records of Seller will be transferred to the custody
of
Vein Associates, P.C. |
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(c)
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Notwithstanding
the foregoing, the Assets being conveyed pursuant
to this Agreement shall not include those specific assets listed on
Exhibit 2, Schedule 2.1(c) (the “Excluded Assets”). This
list of excluded assets shall include, but may not be limited to, assets
leased by Seller. |
| Section
2.2 |
Assumption
of Contracts and Liabilities.
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(1)
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Purchaser
shall assume the contracts of Seller relating to
telephone numbers and Yellow Page advertisements to the extent such
contracts relate to the telephone services at the subject premises.
Purchaser shall assume financial responsibilities and payments under
such
contracts for telephone numbers and Yellow Page advertisements on the
date
such Assumed Contracts are assigned to the Purchaser. Unless agreed
to by
the Purchaser in writing, after the execution of this Agreement, Seller
shall not enter into any new Yellow Page contracts to be assigned to
Purchaser under this Agreement. |
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(2)
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No
other contracts of Seller will be assigned by the Seller to
Purchaser under this Agreement unless such contracts to be assumed
are
agreed to be assumed by the Purchaser and included in Exhibit 3,
Schedule 2.2(a)(2) or other written document executed subsequent
to the execution of the Agreement by the Purchaser.
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(b)
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In
addition to any other obligations assumed, Purchaser shall
assume all accounts payable of Seller accrued through the date of closing
acquired during the normal course of business included
in |
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Exhibit
4, Schedule 2.2(b).
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| Section
2.3 |
Payment
of Consideration.
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In
full consideration for the performance of this Agreement by
Seller and the transfer and delivery to the Purchaser of those Assets
governed by this Agreement, on the Closing Date, the Purchaser agrees,
subject to the terms, conditions and limitations set forth in this
Agreement, to pay to Seller the following:
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(a)
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Five
Million shares of common stock in Purchaser, subject to the
terms and conditions outlined in Exhibit 5, Schedule 2.3(a)
of this Purchase Agreement. Purchaser shall deliver a stock
certificate for Five Million shares of Vein Associates of America,
Inc. at
the Closing. |
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(b)
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Purchaser’s
execution and delivery to Seller of a license agreement
in the form of Exhibit 6, Schedule 2.3(b) attached to
this Purchase Agreement licensing the use of the name “Alabama Vascular
& Veins” and the use of the domain name “Xxxxxxxxxxxxxxx.xxx.”
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(c)
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The
Purchaser shall not assume any liabilities or obligations of
the Seller pursuant to this Agreement, except those delineated in Exhibits
3 and 4, Schedules 2.2 (a)(2) and 2.2 (b).
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Subject
to
the satisfaction or waiver of all conditions to the obligations of the Parties
to consummate the transactions contemplated hereby (other than conditions with
respect to actions the respective Parties will take at the Closing), the closing
of the transactions Contemplated by this Agreement (the “Closing”) shall take
place on the date and/or location as the Parties may mutually determine (the
“Closing Date”).
| Section
2.5 |
Closing
Deliveries by the Seller.
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The
Seller
shall, accurately complete and have signed by all necessary parties and deliver
or cause to be delivered to the Purchaser, either as set forth herein, (i)
three
(3) days prior to the Closing Date, or (ii) on the Closing Date, provide to
the
Purchaser:
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(a)
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The
closing date shall be on or before [TBD] or other date as the
parties may mutually agree in writing, at a location to be mutually
determined. |
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(b)
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On
the Closing Date, all consents of any Person, whether or not a
party to this Agreement, which are necessary to effectuate the transfer
of
the Assets and the consummation of the transactions contemplated by
this
Agreement; |
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(c)
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On
the Closing Date, a Xxxx of Sale in the form attached as
Exhibit 7, Schedule 2.5(c), and such other instruments of
transfer and conveyance as may reasonably be requested by the Purchaser,
in each case executed by a duly authorized by the Seller;
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(d)
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On
or before the Closing Date, Seller agrees to indicate their
written agreement to the purchase price allocation prepared by Purchaser
based upon the formula set forth in Exhibit 8, Schedule
2.5(d); |
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(e)
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On
or before the Closing Date, Seller agrees to comply with any
S.E.C. requirements regarding the sale of assets to a public entity
unless
it is determined by both parties that no action is needed to consummate
the sale of assets. Such determination must be made in writing and
agreed
upon by both parties; |
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(f)
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On
the Closing Date, such other agreements, instruments and
documents as the Purchaser may reasonably request to effect the
transactions Contemplated hereby. |
| Section
2.6 |
Closing
Deliveries by the Purchaser.
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At
the Closing, the Purchaser will execute and deliver, or cause to
be delivered to the Seller: |
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(b)
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Such
other agreements, instruments and documents as Seller may
reasonably request to effect the transactions Contemplated hereby.
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| Section
2.7 |
Closing
Conditions. |
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2.7.1
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The
obligations of both the Seller and the Purchaser to consummate
the Purchase Agreement is subject to the satisfaction of each of the
following conditions: |
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(a)
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The
execution of an Employment Agreement, mutually acceptable to
both Parties, between Xxxx X. Xxxxxxxx, M.D. and Vein Associates, P.C.,
an
Alabama professional corporation (“Vein, P.C.”).
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(b)
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The
execution of a mutually acceptable assignment of the lease
agreement for the Subject Premises. |
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(c)
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As
of the Closing Date, no action, claim, suit or proceeding
seeking to enjoin, restrain, or prohibit the consummation of the
transactions contemplated by the Purchase Agreement shall be pending
before any court or government authority.
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2.7.2
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In
addition to satisfaction of the mutual conditions contained in
Section 2.7.1, the obligations of the Purchaser to consummate the Purchase
Agreement is subject to the satisfaction of each of the following
conditions, any of which may be waived by the Purchaser in its sole
discretion: |
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(a)
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The
representations and warranties of the Seller to the Purchaser
made herein shall be true, complete and correct in all material respects
as of the Closing Date with the same force and effect as if then made.
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(b)
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All
of the terms, conditions and covenants to be complied with or
performed by Seller on or before the Closing Date shall have been timely
complied with and performed. |
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(c)
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The
Seller shall deliver to the Purchaser all the documents
specified in Section 2.5, all of which documents shall be dated as
of the
Closing Date, duly executed and in a form customary in transactions
of
this type and in form and substance reasonably satisfactory to the
Purchaser. |
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(d)
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All
required consents and approvals from third parties shall have
been obtained. |
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2.7.3
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In
addition to satisfaction of the mutual conditions contained in
Section 2.7.1, the obligation of the Seller to consummate the Purchase
Agreement is subject to the satisfaction of each of the following
conditions, any of which may be waived by the Seller in its sole
discretion: |
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(a)
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To
the knowledge of the Seller, the representations and warranties
of the Purchaser to the Seller made herein shall be true, complete
and
correct in all material respects as of the Closing Date with the same
force and effect as if then made. |
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(b)
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All
of the terms, conditions and covenants to be complied with or
performed by Purchaser on or before the Closing Date shall have been
timely complied with and performed. |
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(c)
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The
Purchaser shall pay the Seller the Purchase Price as provided
in Section 2.3. |
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(d)
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The
Purchaser shall deliver to the Seller all the documents
specified in Section 2.5, all of which documents shall be dated as
of the
Closing Date, duly executed and in a form customary in transactions
of
this type and in form and substance reasonably satisfactory to the
Seller.
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| Section
2.8 |
Purchase
Price Allocation.
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(a)
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The
Purchase Price shall be allocated by Purchaser and Seller to
the Assets as set forth in Exhibit 8, Schedule 2.5(d).
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(b)
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Purchaser
and Seller agree to complete at, or before, the Closing
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Internal
Revenue Form 8594 based upon Exhibit 8, Schedule
2.5(d). |
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(c)
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As
soon as practicable after the determination of the Closing
Balance Sheet, but it no event more than fifteen (15) business days
thereafter, or other periods as the parties may mutually agree in writing,
Purchaser and Seller agree to adjust and re-execute Form 8594, if
necessary, to reflect the Closing Balance Sheet and to file said form
as
required by the United States Treasury or the Internal Revenue Code
and
the regulations thereunder. |
ARTICLE
III
REPRESENTATIONS OF THE SELLER
As a
material inducement
to the Purchaser to enter into the Transaction Documents and to consummate
the
transactions contemplated hereunder, the Seller, represents and warrants to
Purchaser that the statements contained in this Article III (and in the
Schedules referenced in applicable sections) are true and correct in all
material respects as of the date of this Agreement.
| Section
3.1 |
Seller’s
Representations.
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The
following representations are made to Purchaser by Seller:
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(a)
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Organization,
Valid Authorization and Good Standing. Seller
has the power and authority to own all of its properties and assets
and to
conduct its business prior to the Closing Date. In addition, Seller
has
the power and authority to enter into the Transaction Documents to
which
they are parties and to carry out their respective obligations hereunder.
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The
execution and delivery of the Transaction Documents to which
Seller is a party and the consummation of the transactions Contemplated
thereby have been duly and validly authorized by Seller, and no other
corporate or other proceedings on the part of Seller are necessary
to
authorize the Transaction Documents and the transactions contemplated
thereby. Each Transaction Document executed and delivered by Seller
will,
upon such execution and delivery, constitute the valid and binding
agreement of Seller, enforceable against it in accordance with its
terms.
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Each
Transaction Document executed and delivered by the Seller
will, upon such execution and delivery, constitute the valid and binding
agreement of the Seller, enforceable against them, individually and
jointly, in accordance with its terms.
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(b)
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Compliance.
The execution and delivery of the
Transaction Documents and the consummation of the transactions
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contemplated
thereby by Seller will not (i) violate any provision
of Seller’s organizational documents, (ii) violate any provision of or
result in the breach of or entitle any party to accelerate (whether
after
the giving of notice or lapse of time or both) any material obligation
under, any mortgage, lien, lease, contract, license, instrument or
any
other agreement to which Seller is a party, (iii) result in the creation
or imposition of any Encumbrance upon any property of Seller, or (iv)
to
the best of Seller’s knowledge, violate or conflict with any order, award,
judgment or decree or other material restriction or any law, ordinance
or
regulation to which Seller or its property is subject.
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(c)
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Approvals.
No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Authority
or
Person is required in connection with the execution and delivery of
the
Transaction Documents by Seller or the consummation by Seller of the
transactions Contemplated hereby. |
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(d)
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Undisclosed
Liabilities. Except as otherwise provided in
this Purchase Agreement, Seller does not have any Liabilities relating
to
the assets being conveyed to Purchaser, and to Seller’s knowledge, there
are no basis for any present or future action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand against Seller,
individually or jointly, giving rise to such Liability.
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(e)
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Absence
of Changes or Events. Except as Contemplated by the
Transaction Documents, Seller has not conducted their businesses utilizing
the subject Assets only in the ordinary course of business, and Seller,
individually or jointly, have not: |
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(i)
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Incurred
any obligation or Liability, absolute, accrued, contingent
or otherwise, whether due or to become due, whether individually or
in the
aggregate, that has had or might have a Material Adverse Effect on
Seller;
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(ii)
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Pledged
or subjected to any Encumbrance or restriction on any of
its assets; |
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(iii)
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Sold,
transferred, leased to others or otherwise disposed of any of
its assets material to the operation of its medical practice, except
in
the ordinary course of the business of Seller;
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(iv)
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Canceled
or compromised any material debt or claim, or waived or
released any right of substantial value;
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(v)
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Received
any notice of termination of any contract, lease or other
agreement, or suffered any damage, destruction or loss that, individually
or in the aggregate, has had or might have a Material Adverse Effect
on
Seller; |
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(vi)
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Instituted,
settled or agreed to settle any litigation, action,
proceeding or arbitration; |
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(vii)
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Failed
to replenish its inventory or supplies in a normal and
customary manner or made any purchase commitment other than in the
ordinary course of business of Seller;
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(viii)
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Entered
into any material transaction, contract or commitment,
including, but not limited to, purchases or acquisitions of equipment
or
supplies; |
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(ix)
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Suffered
any event or events, whether individually or in the
aggregate, that has had or could be reasonably expected to have a Material
Adverse Effect on the financial condition, results of operations,
properties, assets, liabilities, business, operations or prospects
of the
medical practice of the Seller or of the Seller, collectively or
individually; |
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(x)
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Engaged
in any activities or practices other than the operation of
a medical practice; |
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(xi)
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Entered
into any agreement or made any commitment to take any of
the actions described in Subsections (i) through (xi) inclusive of
this
Section 3.1(e). |
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(f)
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Claims
or Litigation. Except as disclosed on Exhibit
9, Schedule 3.1(f), there are no claims, actions, suits,
proceedings (arbitration or otherwise) or investigations pending or,
to
Seller’s knowledge, threatened against the Seller, at law or in equity in
any court or before or by any Governmental Authority, and, to the best
of
Seller’s knowledge, there are no, and have not been any, facts, conditions
or incidents that may result in any such actions, suits, proceedings
(arbitration or otherwise) or investigations. Furthermore, the Seller
specifically represents that it has not been notified of any action,
claim, or review contemplated by any third
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party,
including any patients, former patients, managed care
entity, government agency (including but not limited to those with
enforcement authority for Medicaid or Medicare), or other payor
organization or carrier. In addition, the Seller specifically represents
that they have no knowledge or belief as to why any action, claim,
or
review may be brought or contemplated by any third party, including
any
patients, former patients, managed care entity, government agency
(including but not limited to those with enforcement authority for
Medicaid or Medicare), or other payor organization or carrier.
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The
Seller, is not in default in respect of any judgment, order,
writ, injunction or decree of any court or other Governmental Authority.
Furthermore, the Seller, is not aware of any sexual harassment,
whistleblower, employment or wage claims that have been or may be brought
against the Seller. |
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Exhibit
10, Schedule 3.1(g) lists all of the
insurance policies of Seller in full force and effect. Seller represents
that it has, complied in all material respects with the provisions
of all
such policies. Seller is not currently the subject of, and have not
received notice that it will be subject to, any insurance audits for
premium adjustments. Seller has made available to Purchaser complete
and
correct copies of all such policies, together with all riders and
amendments thereto. Seller and Purchaser agree to examine the professional
liability policy presently in force for Seller. In the event it is
agreed
to cancel the current policy, Seller shall be entitled to any refund
for
returned premium. |
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(h)
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Environmental
Protection. |
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Seller
has obtained all permits, licenses and other authorizations
that are required for the conduct of its business under any federal,
state
and local laws and the regulations promulgated thereunder relating
to
pollution or protection of the environment, including laws (i) relating
to
emissions, discharges, releases or threatened releases of hazardous
substances, materials or wastes (collectively, “Hazardous Wastes”), into
the environment (including, without limitation, ambient air, surface
water, ground water or land), (ii) relating to the presence of Hazardous
Wastes in or on any real or personal property or (iii) otherwise relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Wastes (collectively,
“Environmental Laws”). |
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To
Seller’s knowledge, Seller, is in material compliance with all
terms and conditions of such required permits, licenses and
authorizations, and is also in compliance with all applicable
Environmental Laws. |
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No
consent or approval is required for, and no other impediment or
restriction exists that will prohibit or limit, the transfer of such
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permits,
licenses and authorizations in accordance with the terms
of the Transaction Documents. There are no pending or, to the best
of
Seller’s knowledge, threatened, investigations, actions or proceedings of
whatsoever nature involving Seller arising under any Environmental
Laws.
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(i)
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Title
to Real Estate Assets. Seller does not own any real
estate that is being transferred pursuant to this Agreement.
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(1)
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The
Seller has delivered to the Purchaser true, correct and
complete copies of the leases and listed in Exhibit 11, Schedule
3.1(i)(1). |
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All
leases of the Leased Property are in good standing and are
valid, binding and enforceable in accordance with their respective
terms,
and Seller are not aware of any existing, pending or threatened matter
which may impact the use of the premises by the Purchaser or any of
its
affiliates. |
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Seller
represents that it is not in default of any such lease and
to the knowledge of Seller, there does not exist under any such lease
any
default or any event which with notice or lapse of time or both would
constitute a default. There are no disputes, oral agreements or
forbearance programs in effect as to any such lease or sublease. The
Seller has not received notice of any proceedings to impose any new
Taxes
or operating restrictions upon any of such properties or the Seller’s
conduct of the Business therein. |
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(2)
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The
Assets constitute all of the non-real estate properties and
assets used in connection with the operation of the Seller’s business and
medical practice in the manner in which and to the extent to which
the
business and medical practice are currently being conducted.
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Except
as set forth in Exhibit 12, Schedule
3.1(i)(2), none of the non-real estate tangible personal property
included in the Assets being conveyed pursuant to this Agreement is
subject to any personal property or equipment leases. To the knowledge
of
the Seller, each such tangible asset is free
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from
defects (patent and latent) and, is in good operating
condition and repair (subject to normal wear and tear) and is suitable
for
the purposes for which it presently is used.
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Upon
the consummation of the transactions Contemplated hereby,
unless specifically listed on Exhibit 2, Schedule
2.1(c) (the “Excluded Assets”), good and valid title to, and
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valid
leasehold interests in, all non-real estate Assets used by
the Seller in their business and medical practice at the Subject Premises,
shall vest in the Purchaser, free and clear of all Encumbrances or
restrictions on transfer. |
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(j)
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Inventory.
To the best of Seller’s knowledge:
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(1)
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Seller’s
inventory (which consists of medical supplies and similar
assets) is in good condition, in its originally manufactured condition,
fit for the use for which it is intended, free from any known defect
and
in a quality and quantity usable in the ordinary course of business;
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(2)
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is
saleable or usable in the ordinary course of business,
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(3)
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the
qualities and quantities of inventory are consistent
with the amounts set forth on Seller’s Balance Sheet and are reasonable
and warranted in the present and anticipated circumstances; and
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(4)
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there
has been no material decrease in the quantities or
value of inventory since [March 15, 2006]. The parties shall confirm
the
quantities and value of the assets including the inventory are consist
with the values reflected in the [February 28, 2006] financial statements
which were relied upon by the Purchaser in agreeing to the purchase
price
(a) prior to the parties entering into a binding letter of intent and
the
parties shall list those assets in Exhibit 1, Schedule
2.1(a) hereto; and (b) at least 48 hours prior to closing of this
Agreement; and (c) at least 48 hours prior to accepting possession
of the
assets governed by this Agreement. |
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(k)
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Brokers.
All negotiations relating to the Transaction
Documents and the transactions Contemplated hereby have been carried
on
without the intervention of any person acting on behalf of Seller in
such
manner as to give rise to any valid claim for any broker’s or finder’s fee
or similar compensation. However, should any claim for any broker’s or
finder’s fee or similar compensation be asserted by any party acting on
behalf of the Seller, Seller agrees and acknowledges that they,
individually and/or jointly, and not Purchaser, shall be responsible
for
and shall pay any fees or commission payable to such broker.
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(l)
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Fraud
and Abuse. To the knowledge of the Seller,
neither the Seller nor the physicians employed or engaged by the Seller,
or any other persons and entities providing professional services for
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11
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the
Seller, have engaged in any activities which are prohibited
under U.S.C. Sec. 1320a-7b or the regulations promulgated thereunder
pursuant to such statutes, the Alabama Patient Self-Referral laws,
or any
other applicable state or local statutes and regulations, or which
are
prohibited by Rules of Professional Conduct, including but not limited
to:
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(1)
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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; |
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(2)
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knowingly
and willfully making or causing to be made any false
statement or representation of a material fact for use in determining
rights to any benefit or payment; |
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(3)
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failure
to disclose knowledge by a claimant of the occurrence of
any event affecting the initial or continued right to any benefit or
payment on its own behalf or on behalf of another, within intent to
fraudulently secure such benefit or payment; or
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(4)
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knowingly
and willfully soliciting or receiving any remuneration,
kickback, bribe, or rebate, directly or indirectly, overtly or covertly,
in cash or in kind, or offering to pay or receive such remuneration
(a) in
return for referring an individual to a person for the furnishing or
arranging for the furnishing or any item or service for which payment
may
be made in whole or in part by Medicare or Medicaid, or (b) in return
for
purchasing, leasing, or ordering or arranging for 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.
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(m)
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Physician’s
Issues. Except as disclosed in Exhibit
13, Schedule 3.1(m) attached hereto, to the knowledge of Seller,
no physician employed or engaged by Seller, has (i) had his or her
license
to practice medicine in any jurisdiction denied, surrendered, limited,
suspended, revoked or subject to probationary conditions or is subject
to,
any pending proceedings or threatened regarding any of the foregoing,
(ii)
had his or her Federal or State Drug Enforcement Agency controlled
substance authorization denied, revoked, suspended, reduced or not
renewed
or has been subject to institution of, or is subject to, any pending
proceedings regarding any of the foregoing, (iii) had his or her
membership in any local, state or national medical professional society
or
organization revoked, suspended or not renewed or is subject to any
pending |
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proceedings
regarding any of the foregoing, (iv) been the subject
of administrative sanctions or been suspended from or lost eligibility
for
participating in Medicare, Medicaid or other governmental or
non-governmental medical insurance programs or is subject to any pending
proceedings regarding any of the foregoing or (v) none of the physicians
employed or engaged by Seller hospital privileges will expire within
six
(6) months of the date both parties sign this Agreement.
|
| (n)
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Disclosure.
No representation, warranty or statement made by
Seller in this Purchase Agreement or any of the Exhibits or Schedules
hereto, or any agreements, certificates, documents or instruments
delivered or to be delivered to Purchaser in accordance with this
Purchase
Agreement or the other Transaction Documents, contains or will contain
any
untrue statement of a material fact or omits or will omit to state
a
material fact necessary to make the statements contained herein or
therein, in light of the circumstances under which they were made,
not
misleading.
|
| (o)
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Patients
Records. Seller represents all patient records,
charts and account histories relating to his practice since January
2003
have been turned over to Purchaser, subject to all applicable statues,
rules and regulations of the United States government or the State
of
Alabama, as of the date of closing. Seller represents, to the knowledge,
that the patient records and other business reports, from the Seller
computer system are complete and accurate.
|
| (p)
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Computer
Records. Seller represents the patient records and
other business reports from Seller’s computer system are complete and
accurate.
|
| (q)
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Except
as disclosed in the Lease Agreement and assignment, Seller
represents there are no structural or other material problems with
the
medical office at 000 Xxxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxxx Xxxxx,
XX
00000.
|
| (r)
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Employees.
Exhibit
14, Schedule 3.1(r) sets
forth the name, title and total compensation of each person employed
by
the Seller (the “Employees”). The Seller is not a party to any
employment contract with any of the Employees nor are any of the
Employees
covered by or subject to any collective bargaining agreement.
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(s)
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Employee
Benefit Plans.
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3.1.2
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Except
as set forth on Exhibit 15, Schedule
3.1(s)3.1.2, on or prior to the date hereof, Seller (including
any entity required to be aggregated with Seller under Section 414
of the
Code) have not |
13
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sponsored,
or participated in, a defined benefit pension plan (as
defined in Section 3(35) of ERISA), nor has Seller (including any entity
required to be aggregated with Sellers under Section 414 of the Code)
ever
contributed to, or participated in, a multiemployer plan (as defined
in
Section 4001(a)(3) of ERISA). |
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3.1.3
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Except
as set forth on Exhibit 15, Schedule
3.1(s)3.1.2, with respect to the Seller’s Employees, the Seller
(including any entity required to be aggregated with Seller under Section
414 of the Code) does not maintain, contribute to, or participate in,
any
benefit agreement, plan, arrangement or practice including any employee
benefit plan as defined in Section 3(3) of ERISA (the “Plan(s)”).
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3.1.4
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Except
as set forth on Exhibit 15, Schedule
3.1(s)3.1.2, all of the Plans are in material compliance with all
applicable laws, including the Code and ERISA.
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3.1.5
|
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No
Plan contains any provision or is subject to any law that would
prohibit the transactions contemplated by the Transaction Agreements
or
that would give rise to any vesting of benefits, severance, termination,
or other payments or liabilities as a result of the transactions
contemplated by the Transaction Agreements, and no payments or benefits
under any Plan or other agreement of Seller will be considered “excess
parachute payments” under Section 280G of the Code. The Seller has not
declared or paid any bonus compensation in contemplation of the
transactions contemplated by this Agreement.
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3.1.6
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No
Plan provides health or other benefits after a present or former
director’s, officer’s, employee’s, agent’s, or independent contractor’s,
retirement or other termination of employment except as required by
Section 4980B of the Code. |
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3.1.7
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There
are no actions, suits, claims pending, threatened or
reasonably anticipated (other than routine claims for benefits) against
any Plan or against the assets of any Plan which could reasonably be
expected to result in a liability to Seller or any Plan. No Plan is
presently under audit or examination (nor has notice been received
of a
potential audit or examination) by the IRS, the Department of Labor,
or
any other governmental entity, and no matters are pending with respect
to
any Plan under any IRS program. |
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3.1.8
|
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With
respect to each Plan, the Seller has delivered to Buyer
true and correct copies of each Plan, the most recent annual report
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14
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(Form
5500) for each Plan and the summary plan description for each
Plan. The annual report for each Plan has been timely filed.
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(t)
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Taxes.
The Seller has duly filed all tax returns and forms
required to be filed in respect of the Seller’s business and paid in full
or discharged all material taxes, assessments, excises, interest,
penalties, deficiencies and other levies relating to the Assets, excepting
such taxes, assessments and other levies as will not be due until after
the Closing Date. To the Seller’s knowledge, no event has occurred that
could impose on the Purchaser any liability for any taxes, penalties
or
interest due or to become due from the Seller from any taxing authority.
|
ARTICLE
IV
REPRESENTATIONS OF PURCHASER
| Section
4.1 |
Representations
of Purchaser. Purchaser represents and
warrants to Seller that: |
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(a)
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Organization,
Valid Authorization and Good Standing.
Purchaser is duly organized, validly existing and in good standing
under
the laws of the State of Florida and registered to do business in the
State of Alabama. |
|
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Purchaser
has the power and authority to own all of its properties
and assets and to conduct its business. Purchaser has the power and
authority to enter into the Transaction Documents to which it is a
party
and to carry out its obligations hereunder. The execution and delivery
of
the Transaction Documents to which Purchaser is a party and the
consummation of the transactions Contemplated thereby have been duly
and
validly authorized by Purchaser, and no other corporate or other
proceedings on the part of Purchaser is necessary to authorize the
Transaction Documents and the transactions Contemplated thereby.
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This
Purchase Agreement has been duly and validly executed and
delivered by Purchaser and constitutes the valid and binding agreement
of
Purchaser enforceable against Purchaser, in accordance with its terms.
Each Transaction Document executed and delivered at the Closing by
Purchaser will upon such execution and delivery constitute the valid
and
binding agreement of Purchaser, enforceable against Purchaser in
accordance with its terms. |
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(b)
|
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Compliance.
The execution and delivery of the
Transaction Documents and the consummation of the transactions
Contemplated thereby by Purchaser will not (i) violate any provision
of
its articles of incorporation or bylaws, (ii) violate any material
provision of or result in the breach of or entitle any party
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15
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to
accelerate (whether after the giving of notice or lapse of time
or both) any material obligation under, any mortgage, lien, lease,
contract, license, instrument or any other agreement to which Purchaser
is
a party, or (iii) to the best of Purchaser’s knowledge, violate or
conflict with any order, award, judgment or decree or other restriction
or
any law, ordinance or regulation to which Purchaser or the property
of
Purchaser is subject. |
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(c)
|
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Approvals.
No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Authority
or
other person is required in connection with the execution and delivery
of
the Transaction Documents by Parent or the consummation by Purchaser
of
the transactions Contemplated thereby.
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(d)
|
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Brokers.
All negotiations relating to the Transaction
Documents and the transactions Contemplated hereby have been carried
on
without the intervention of any person acting on behalf of Purchaser
in
such manner as to give rise to any valid claim for any broker’s or
finder’s fee or similar compensation. However, should any claim for any
broker’s or finder’s fee or similar compensation be asserted by any party
acting on behalf of the Purchaser, Purchaser agrees and acknowledges
that
it, and not Seller, is responsible for and shall pay any fees or
commission payable to such broker. |
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(e)
|
|
Disclosure.
No representation, warranty or statement made by
Purchaser in this Purchase Agreement or any of the Exhibits or Schedules
hereto, or any agreements, certificates, documents or instruments
delivered or to be delivered to Seller in accordance with this Purchase
Agreement or the other Transaction Documents contains or will contain
any
untrue statement of a material fact or omits or will omit to state
a
material fact necessary to make the statements contained herein or
therein, in light of the circumstances under which they were made,
not
misleading. |
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(f)
|
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Best
Efforts. Purchaser represents and warrants it will use
its best efforts to fully develop and expand the business acquired
pursuant to this Purchase Agreement. |
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(g)
|
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Undisclosed
Liabilities. Except as otherwise provided in
this Purchase Agreement, Purchaser does not have any Liabilities relating
to Purchaser other than those disclosed on the Balance Sheet of Purchaser
as of the date of the Closing hereof. Further, to Purchaser’s knowledge,
there are no basis for any present or future action, suit, proceeding,
hearing, investigation, charge, complaint, claim or demand against
Purchaser giving rise to any Liability.
|
16
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(h)
|
|
Fraud
and Abuse. Purchaser represents that it has sought
advice of counsel concerning this Purchase Agreement and the business
arrangements created thereby and the other agreements to be entered
in
connection with this Agreement, and that the same is believed by counsel
to be in compliance with all federal and state laws.
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(i)
|
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Employee
Benefit Plans. Purchaser represents that any
Employee Benefit Plan it sponsors in connection with itself, or any
of its
affiliates, is in compliance with all federal and state laws applicable
thereto. |
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(j)
|
|
Taxes.
The Purchaser has duly filed all tax returns and
forms required to be filed with respect to Purchaser’s business and paid
in full or discharged all material taxes, assessments, excises, interests,
penalties, deficiencies and other levies relating to the Purchaser,
and
all of its affiliates, excepting such taxes, assessments and other
levies
as will not be due until after the Closing Date. To Purchaser’s knowledge,
no event has occurred that could impose on the Seller any Liability
for
any taxes, penalties or interests due or to become due from the Purchaser
from any taxing authority. |
ARTICLE
V
ADDITIONAL AGREEMENTS
The
parties hereto
further agree that:
| Section
5.1 |
Tax
Matters. Seller shall pay all sales and/or transfer
taxes payable in connection with the consummation of the transactions
Contemplated by the Transaction Documents.
|
| Section
5.2
|
Consents.
Before and after the Closing Date, the Seller
shall use its best efforts to obtain all permits, authorizations, consents
and approvals of all Persons and governmental authorities necessary
(the
“Consents”), proper or advisable in connection with the consummation of
the transactions Contemplated by this Purchase Agreement. Before and
after
the Closing Date, the Seller agrees that it shall do any acts, deeds
or
things that may be necessary, desirable or proper to obtain the Consents
and consummate the assumption of the Assumed Contracts.
|
| Section
5.3
|
Further
Assurances; Transition. If at any time before or
after the Closing Date, the Purchaser shall consider or be advised
that
any further deeds, assignments or assurances in law or in any other
things
are necessary, desirable or proper to vest, perfect or confirm, of
record
or otherwise, in the Purchaser, the title to any property or rights
of the
Seller acquired or to be acquired by reason of, or as a result of,
the
acquisition described in this |
17
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|
Purchase
Agreement, the Seller agrees that it shall execute and
deliver, in a timely manner, all such proper deeds, assignments and
assurances in law and do all things necessary, desirable or proper
to
vest, perfect or confirm title to such property or rights in Purchaser
and
otherwise to carry out the purpose of this Purchaser Agreement.
|
|
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The
Seller shall use its best efforts to effect the smooth
transition of the Business from Seller to Purchaser and the conveyance
of
the Assets and the assignment of the Assumed Contracts to Purchaser,
including obtaining the consent of any third party in connection with
the
assignment of the Leases, Managed Care Contracts and other Assumed
Contracts, and shall not take any action that is designed, intended
or
likely to have the effect of discouraging any lessor, licensor, customer,
patient, supplier, vendor or other business associate of Seller from
maintaining the same business relationships with the Purchaser after
the
Closing as he, she or it maintained with the Seller prior to the Closing.
|
| Section
5.4 |
|
Deliveries
After Closing. If, at any time after the Closing,
the Purchaser shall consider or be advised that any further acts are
necessary or desirable: (a) to vest, perfect or confirm, of record
or
otherwise, in the Purchaser, title to and possession of the Assets
acquired or to be acquired by reason of, or as a result of, the
transaction Contemplated in this Purchase Agreement; or (b) otherwise
to
carry out the purposes of this Purchase Agreement, then the Seller
shall
be deemed to have granted to Purchaser an irrevocable power of attorney
to
execute and deliver all such deeds, assignments and assurances in law
and
to do all other acts necessary or proper to vest, perfect or confirm
title
to and possession of such property or rights in the Purchaser and
otherwise to carry out the purposes of this Agreement; and the officers
and directors of the Purchaser are fully authorized in the name of
the
Seller to take any and all such actions.
|
| Section
5.5
|
Non-Competition
Covenant.
|
|
|
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5.5.1
|
|
Non-Competition.
As a material and valuable
inducement for the Purchaser to enter into this Purchase Agreement,
pay
and deliver the Purchase Price and consummate the transactions provided
for herein, for a period commencing on the effective date of this
Agreement and ending two (2) years after the termination of Xx. Xxxx
Xxxxxxxx’x employment with Vein, P.C. pursuant to that Employment
Agreement between Xx. Xxxx Xxxxxxxx and Vein, P.C. upon which this
Agreement is contingent (the “Restricted Period”), Seller and Xx. Xxxx
Xxxxxxxx, agree that they shall not, directly or indirectly, alone,
or as
a partner, officer, director, employee, consultant, agent, independent
contractor, joint venture, financial backer, creditor, member,
stockholder, or in any other capacity whatsoever, of any Person, have
any
business relationship |
18
|
|
involving
the practice of medicine specifically dealing with the
treatment of veins or hemorrhoids within ten (10) miles of the location
at
Vestavia Hills, Alabama or for 12 months at any primary office of any
entity affiliated with Vein, P.C. in which Xx. Xxxx Xxxxxxxx was assigned
pursuant to the Employment Agreement between Xx. Xxxx Xxxxxxxx and
Vein,
P.C., including those offices in which Xx. Xxxx Xxxxxxxx produces more
than $50,000 in net collected revenues during any last twelve (12)
month
period of his employment with Vein, P.C.. Nothing stated in this Agreement
shall constitute any restrictions upon Xx. Xxxx Xxxxxxxx to practice
medicine generally anywhere or any restriction upon Xx. Xxxx Xxxxxxxx
to
specifically treat veins and hemorrhoids within said (10) mile
geographical area(s) after the termination of his full time employment
with the Vein, P.C.. |
|
|
|
5.5.2
|
|
Irreparable
Harm. The Seller and Xx. Xxxx Xxxxxxxx,
individually and jointly, covenant and agrees that the restrictions
set
forth in this Section 5.5 are fair, reasonable and necessary to
protect the interests of Purchaser, such restrictions were negotiated
and
bargained for and the consideration delivered in connection with this
Purchase Agreement reflects and assumes the Seller’s strict compliance
with, and the enforceability by the Purchaser of, these restrictions.
|
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5.5.3
|
|
The
Seller and Xx. Xxxx Xxxxxxxx acknowledge that a breach of these
restrictions would irreparably harm Purchaser and that monetary damage
due
Purchaser may be inadequate. |
|
|
|
5.5.4
|
|
Judicial
Modification. The Seller and Xx. Xxxx Xxxxxxxx
acknowledge and agrees that the provisions of Section 5.5 are material
and
of the essence to this Agreement. |
|
|
|
|
5.5.4.1
|
|
In
addition, it is the parties expressed intention that if the
scope of any restriction or covenant contained in any of such Sections
of
this Agreement should be or become too broad or extensive to permit
enforcement thereof to its fullest extent, then such restriction or
covenant shall be enforced to the maximum extent permitted by law.
|
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5.5.4.2
|
|
Seller
and Xx. Xxxx Xxxxxxxx hereby consent and agree that it
is the parties’intention and agreement that the covenants and restrictions
contained herein be enforced as written. Provided however, in the event
a
court of competent jurisdiction should determine that any restrictions
or
covenants contained herein are too broad or extensive to permit
enforcement thereof to its fullest extent, the Seller hereby consent
and
agree that it is the parties’ intention and
|
19
|
|
agreement
that the scope of any such restriction or covenant should
be modified by the Court in any judicial proceeding brought to enforce
such restriction or covenant to permit enforcement of the restrictions
and
covenants contained herein to the maximum extent the court, in its
judgment, will permit. |
|
|
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5.5.5
|
|
Assignability;
Third Party Beneficiary. The parties agree
that the rights granted in Section 5.5 to Purchaser may be assigned
by
Purchaser at its sole and absolute discretion. All of the provisions
of
Section 5.5 shall inure to any successors of the Purchaser all of
which are specifically third party beneficiaries of this Section
5.5 with full rights hereunder. In addition, the parties hereto agree
that any employee of Seller granted shares in Purchaser hereunder,
and any
Assignee of the rights hereunder is an intended, direct third party
beneficiary of this Agreement and may enforce such rights in its own
name
in addition to or in lieu of the Purchaser. Likewise, any assignee
of
Purchaser shall be bound by this Agreement to the same extent as is
Purchaser. |
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|
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5.5.6
|
|
Tolling
of Time Periods. In the event that Purchaser or any
other permitted party should bring any legal action or other proceeding
for the enforcement of this Section 5, the time for calculating the
term of the restrictions provided herein shall not include any period
of
time commencing with the filing of legal action or other proceeding
to
enforce the terms of this Section 5 through the date of final
judgment or final resolution, including all appeals, if any, of such
legal
action or other proceeding, unless Purchaser fails to prevail in such
action or proceeding. |
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|
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5.5.7
|
|
Specific
Enforcement. Without limiting other possible
remedies to the Purchaser for breach of this covenant, the Seller agree
that injunctive or other equitable relief will be available to enforce
the
covenants of this provision, such relief to be without the necessity
of
posting a bond, cash or otherwise. |
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|
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5.6.1
|
|
Purchaser
shall extend offers of employment to those non-health
care Employees set forth on Exhibit 16, Schedule 5.6.1
(such employees are hereinafter referred to as the “Rehired Employees”).
|
|
|
|
5.6.2
|
|
Purchaser
shall terminate the employment of all Rehired Employees
who accept Purchaser’s offer of employment immediately prior to the
Closing and shall cooperate with and use its reasonable best efforts
to
assist Purchaser in its efforts to secure satisfactory employment
arrangements with those employees of Seller to whom Purchaser makes
offers
of employment as set forth on Exhibit 16, Schedule 5.6.1.
|
20
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5.6.3
|
|
Seller
shall be solely responsible for all of the Plans and all
obligations and liabilities thereunder. Purchaser shall not assume
any of
the Plans or any obligation or liability thereunder.
|
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5.6.4
|
|
Nothing
contained in this Agreement shall confer upon any Rehired
Employee any right with respect to continuance of employment by Purchaser,
nor shall anything herein interfere with the right of Purchaser to
terminate the employment of any of the Rehired Employees at any time,
with
or without cause, except that such termination shall be in compliance
with
any applicable employment agreements and the current employment policies
or practices of Purchaser, or restrict Purchaser in the exercise of
its
independent business judgment in modifying any of the terms and conditions
of the employment of the Rehired Employees.
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5.6.5
|
|
No
provision of this Agreement shall create any third-party
beneficiary rights in any Rehired Employee, any beneficiary or dependents
thereof, or any collective bargaining representative thereof, with
respect
to the compensation, terms and conditions of employment and benefits
that
may be provided to any Rehired Employee by Purchaser or under any benefit
plan which Purchaser may maintain. |
| Section
5.7 |
Xxxxxxxx
Buy-Back. |
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|
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5.7.1
|
|
For
a period of eighteen (18) months following the Closing,
Xxxxxxxx shall, to the extent permitted by law, have the option, in
accordance with the terms of this Section 5.7, to buy-back (the
“Buy-Back Right”) from the Purchaser, the Assets set forth Exhibit
1, Schedule 2.1(a) (to the extent such Assets are owned
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by
the Purchaser (or any of its affiliates) as of the date that
Xxxxxxxx exercises the Buy-Back Right) (the “Buy-Back Assets”).
Notwithstanding the foregoing, Xxxxxxxx shall be able to exercise the
Buy-Back Right if, and only if, the Purchaser has (i) adopted resolutions
to dissolve, liquidate or terminate operations, (ii) any proceeding
shall
be instituted by or against the Purchaser seeking to adjudicate it
bankrupt or insolvent, or (iii) the Purchaser has not entered any new
Management Services Agreement since the one entered between Purchaser
and
Seller. |
|
|
|
5.7.2
|
|
The
Buy-Back Right shall be exercised by Xxxxxxxx by delivering
written notice to the Purchaser specifying (i) that the conditions
for
exercising the Buy-Back Right have occurred and (ii) a date for closing
of
the sale from the Purchaser to Xxxxxxxx of the Buy-Back Assets (the
“Buy-Back Closing”), which date shall be not less than 15 days following
the date of the written notice to the Purchaser.
|
|
|
|
5.7.3
|
|
The
purchase price for the Buy-Back Assets shall be five million
shares of Purchaser which must be surrendered and delivered to the
Purchaser by Xxxxxxxx at the Buy-Back Closing.
|
|
|
|
5.7.4
|
|
The
Buy-Back Closing shall be subject to such other terms,
conditions, agreements, instruments and documents as the Parties shall
mutually agree. |
21
|
|
|
5.7.5
|
|
Notwithstanding
anything in Section 5.5 to the contrary, Xxxxxxxx
shall no longer be subject to the restrictive covenants set forth in
Section 5.5 after the Buy-Back Closing.
|
| Section
5.8 |
Stock
Options. The Purchaser shall cause Xxxx X. Xxxxxxxx,
M.D. to be a participant in the Purchaser's Employee stock option plan
(the "Option Plan"), attached hereto as Exhibit 17, Schedule 5.8.
|
|
|
|
5.8.1
|
|
The
Purchaser agrees to issue the employees of Seller shown
on Exhibit 18, Schedule 5.8.1 with Common Shares of Vein
Associates of America, Inc. to vest over a Five (5) year period as
listed.
For vesting purposes, the employee’s date of hire with Vein Associates of
America, Inc. or other controlled entity will begin the vesting schedule.
|
| Section
5.9
|
Survivability.
The terms and conditions of this Article V
shall survive the execution of this Agreement and the Closing
notwithstanding any investigation heretofore or hereafter made by or
on
behalf of any party hereto. |
| Section
5.10 |
Transaction
Expenses. The Purchaser and Seller shall bear
their own expenses in connection with this transaction.
|
ARTICLE
VI
INDEMNIFICATION
| Section
6.1
|
Survival.
The representations, warranties, covenants and
agreements of the parties made in this Purchase Agreement shall survive
(and not be affected in any respect by) the Closing and any examination
or
investigation conducted by or on behalf of the parties hereto and any
information which any party may receive pursuant to any applicable
Schedules or otherwise. |
|
|
|
6.1.1
|
|
Notwithstanding
the foregoing, the right of indemnification, with
respect to each representation and warranty contained in this Purchase
Agreement, shall terminate on the date (the “Survival Date”) occurring on
the later of (i) the third (3rd) anniversary of the Closing Date, or
(ii)
the expiration date of the applicable statute of limitations relating
to
the applicable representations and warranties.
|
|
|
|
6.1.2
|
|
The
right to indemnification with respect to the representations
and warranties, and the Liability of either Party with respect thereto,
shall not terminate with respect to any claim, whether or not fixed
as to
Liability or liquidated as to amount, with respect to which such party
has
been given written notice prior to the Survival Date or such thirtieth
day
after the expiration of the applicable statute of limitations (or
extensions or waivers thereof), whichever shall be applicable thereto
in
accordance with this Section 6.1.
|
22
|
|
|
6.1.3
|
|
The
right to indemnification, payment of damages or other remedy
based on such representations, warranties, covenants, and obligations
will
not be affected by any investigation conducted with respect to, whether
before or after the execution and delivery of this Purchase Agreement
or
the Closing Date, with respect to the accuracy or inaccuracy of or
compliance with, any such representation, warranty, covenant, or
obligation. |
|
|
|
6.1.4
|
|
The
waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance
with
any covenant or obligation, will not affect the right to indemnification,
payment of damages, or other remedy based on such representations,
warranties, covenants, and obligations.
|
| Section
6.2
|
Indemnification
by Seller. Seller, covenants and agrees to
indemnify, defend, protect and hold harmless Purchaser and each of
its
successors and assigns and each of their respective directors, officers,
shareholders, employees, agents and affiliates (each a “Purchaser
Indemnified Person”) at all times from and after the date of this
Agreement (subject to any limitation on the survival of representations
and warranties set forth in Section 6.1) against all losses,
claims, damages, actions, suits, proceedings, demands, assessments,
adjustments, costs and expenses (“Losses”) including specifically, but
without limitation, reasonable attorneys’ fees and expenses of
investigation (“Legal Expenses”) based upon, resulting from or arising out
of (a) any inaccuracy, omission or breach (or in the event any third
party
alleges facts that, if true, would mean a breach) of any representation
or
warranty of Seller contained in this Purchase Agreement, (b) the breach
(or in the event any third party alleges facts that, if true, would
mean a
breach) by Purchaser of, or the failure by Seller to observe, any of
the
covenants or other agreements contained in or made pursuant to this
Purchase Agreement. |
| Section
6.3
|
Indemnification
by Purchaser. Purchaser covenants and agrees
that it will indemnify, defend, protect and hold harmless Seller and
each
of its successors, assigns and heirs and each of their respective
directors, officers, employees, agents and affiliates (each a “Seller
Indemnified Person”) at all times from and after the date of this Purchase
Agreement (subject to any limitation on the survival of representations
and warranties set forth in Section 6.1) against all Losses
(including specifically, but without limitation, Legal Expenses) based
upon, resulting from or arising out of (a) any inaccuracy or breach
of any
representation or warranty of Purchaser contained in this Purchase
Agreement, or (b) the breach by Purchaser of, or the failure by Purchaser
to observe, any of the covenants or other agreements contained in or
made
pursuant to this Purchase Agreement. |
| Section
6.4 |
Indemnification
Procedures.
|
23
|
|
|
6.4.1
|
|
Promptly
after receipt by any party entitled to indemnification
under Section 6.2or 6.3 (an “indemnified party”) of notice
of the commencement of any action, claim, suit or proceeding by a person
not a party to this Purchase Agreement in respect of which the indemnified
party will seek indemnification hereunder (a “Third Party Action”), the
indemnified party shall notify the party that is obligated to provide
such
indemnification (the “indemnifying party”) thereof in writing. Provided
however, any failure to so notify the indemnifying party shall not
relieve
it from any Liability that it may have to the indemnified party under
Section 6.2 or 6.3, except to the extent that the
indemnifying party is materially prejudiced by the failure to give
such
notice. |
|
|
|
6.4.2
|
|
The
indemnifying party shall be entitled to assume control or
otherwise participate in the defense of such Third Party Action (including
settlement of such Third Party Action) with counsel reasonably
satisfactory to such indemnified party; provided, however, that:
|
|
|
|
|
(i)
|
|
the
indemnified party shall be entitled to participate in
the defense of such Third Party Action and to employ counsel at its
own
expense (which shall not constitute Legal Expenses for purposes of
this
Purchase Agreement) to assist in the handling of such Third Party Action;
|
|
|
|
|
(ii)
|
|
the
indemnifying party shall obtain the prior written
approval of the indemnified party before entering into any settlement
of
such Third Party Action or ceasing to defend against such Third Party
Action, if pursuant to or as a result of such settlement or cessation,
injunctive or other equitable relief would be imposed against the
indemnified party or the indemnified party would be adversely affected
thereby; |
|
|
|
|
(iii)
|
|
no
indemnifying party shall consent to the entry of any
judgment or enter into any settlement that does not include as an
unconditional term thereof the giving by each claimant or plaintiff
to
each indemnified party of a release from all Liability in respect of
such
Third Party Action; and |
|
|
|
|
(iv)
|
|
the
indemnifying party shall not be entitled to control the
defense of any Third Party Action unless the indemnifying party confirms
in writing its assumption of such defense and continues to pursue the
defense reasonably and in good faith.
|
24
|
|
|
6.4.3
|
|
After
written notice by the indemnifying party to the indemnified
party of its election to assume control of the defense of any such
Third
Party Action in accordance with the foregoing, (a) the indemnifying
party
shall not be liable to such indemnified party hereunder for any Legal
Expenses subsequently incurred by such indemnified party attributable
to
defending against such Third Party Action, and (b) as long as the
indemnifying party is reasonably contesting such Third Party Action
in
good faith, the indemnified party shall not admit any Liability with
respect to, or settle, compromise or discharge the claim underlying,
such
Third Party Action without the indemnifying party’s prior written consent.
|
|
|
|
|
(i)
|
|
If
the indemnifying party does not assume control of the
defense of such Third Party Action in accordance with this Section
6.4, the indemnified party shall have the right to defend
and/or settle such Third Party Action in such manner as it may deem
appropriate at the cost and expense of the indemnifying party, and
the
indemnifying party will promptly reimburse the indemnified party therefore
in accordance with this Section 6.4.
|
|
|
|
|
(ii)
|
|
The
reimbursement of fees, costs and expenses required by this
Section 6.4 shall be made by periodic payments during the course of
the investigation or defense, as and when bills are received or expenses
incurred. |
|
|
|
|
(iii)
|
|
If
an indemnified party becomes entitled to any indemnification
from an indemnifying party pursuant to this Purchase Agreement, such
indemnification payment shall be made in cash upon demand.
|
|
|
|
6.4.4
|
|
If
an indemnified party has actual knowledge of any facts or
circumstances other than the commencement of a Third Party Action which
causes it in good faith to believe that it is entitled to indemnification
under this Section 6.4, then such indemnified party shall
promptly give the indemnifying party notice thereof in writing, but
any
failure to so notify the indemnifying party shall not relieve it from
any
Liability that it may have to the indemnified party under Section
6.2 or 6.3, as the case may be, except to the extent that the
indemnifying party is prejudiced by the failure to give such notice.
|
25
ARTICLE
VII
MISCELLANEOUS
| Section
7.1
|
Remedies
Not Exclusive. No remedy conferred by any of the
specific provisions of this Purchase Agreement or any other Transaction
Document is intended to be exclusive of any other remedy, and each
and
every remedy shall be cumulative and shall be in addition to every
other
remedy given hereunder or now or hereafter existing at law or in equity
or
by statute or otherwise. The election of any one or more remedies by
any
Party hereto shall not constitute a waiver of the right to pursue other
available remedies. |
| Section
7.2 |
Termination.
This Agreement may be terminated at any time
prior to the Closing Date: |
|
|
|
(a)
|
|
with
the mutual consent of the Parties;
|
|
|
|
(b)
|
|
by
the Seller or the Purchaser, on or after [TBD]; provided that
the terminating party is not in material breach of this Purchase
Agreement; or |
|
|
|
(c)
|
|
by
the Seller or the Purchaser if any court of competent
jurisdiction shall have issued an order, decree or ruling or taken
any
other action restraining, enjoining or otherwise prohibiting the
transactions Contemplated hereby. |
If this
Purchase
Agreement is terminated pursuant to this Section 7.2, other than as a result
of
a breach by the Seller or the Purchaser, neither Party shall have any further
liability hereunder or any further obligations hereunder.
| Section
7.3
|
Risk
of Loss. The risk of any loss, damage or impairment,
confiscation or condemnation of any of the Assets from any cause
whatsoever shall be borne by the Seller at all times prior to the Closing.
|
| Section
7.4
|
Parties
Bound. Except to the extent otherwise expressly
provided herein, this Purchase Agreement shall be binding upon and
inure
to the benefit of the Parties hereto and their respective heirs,
representatives, administrators, guardians, successors and permitted
assigns; and no other person shall have any right, benefit or obligation
hereunder. |
|
|
|
7.5.1
|
|
All
notices, reports, records or other communications that are
required or permitted to be given to the Parties under this Purchase
Agreement shall be sufficient in all respects if given in writing and
delivered in person, by telecopy, by overnight courier or by registered
or
certified mail, postage prepaid, return receipt requested, to the
receiving Party at the following address:
|
|
|
|
|
7.5.1.1
|
|
If
to Seller, addressed to: |
26
|
|
Xxxx
X. Xxxxxxxx, M.D., P.C.
c/o Xxxx X. Xxxxxxxx, M.D.
000
Xxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx Xxxxx, XX 00000
|
27
|
|
|
|
7.5.1.2
|
|
If
to Purchaser, addressed to:
|
|
|
Vein
Associates of America, Inc.
c/o Chief Financial
Officer
000 Xxxxxxxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
|
|
|
Xxxxxxx,
Xxxxxxxxx LLP
0 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx
00000
Attention: Daniel Etna |
|
|
|
7.5.2
|
|
A
Party may change its address by notice to the other Parties
pursuant to this Section 7.5.2. Notice shall be deemed given on the
date of delivery, in the case of personal delivery or telecopy, or
on the
delivery or refusal date, as specified on the return receipt, in the
case
of overnight courier or registered or certified mail.
|
| Section
7.6 |
Laws
of the State of
Florida |
|
|
|
7.6.1
|
|
This
Purchase Agreement shall be construed, interpreted, and
the rights of the Parties determined in accordance with, the laws of
the
State of Florida. Provided however, the law of the state of incorporation
or organization of the respective parties to this Agreement shall govern
matters of law concerning the internal affairs of any corporate or
partnership entity which is a party to or the subject of this Purchase
Agreement. |
| Section
7.7 |
Entire
Agreement; Amendments and Waivers.
|
|
|
|
7.7.1
|
|
This
Purchase Agreement, together with the other Transaction
Documents and all Exhibits and Schedules hereto and thereto, constitutes
the entire agreement between the Parties pertaining to the subject
matter
hereof and supersedes all prior and Contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written,
of
the Parties, and there are no warranties, representations or other
agreements between the Parties in connection with the subject matter
hereof. |
|
|
|
7.7.2
|
|
No
supplement, modification or waiver of this Purchase
Agreement shall be binding unless it shall be specifically designated
to
be a supplement, modification or waiver of this Purchase Agreement
and
shall be executed in writing by the party to be bound thereby. No waiver
of any of the provisions of this |
28
|
|
Purchase
Agreement shall be binding unless executed in writing by
the party to be bound thereby. No waiver of any of the provisions of
this
Purchase Agreement shall be deemed or shall constitute a waiver of
any
other provision hereof (whether or not similar), nor shall such waiver
constitute a continuing waiver unless otherwise expressly provided.
|
| Section
7.8 |
Attorneys’
Fees.
|
|
|
Except
as otherwise specifically provided herein, if any action or
proceeding is brought by any party with respect to this Purchase Agreement
or the other Transaction Documents, or with respect to the interpretation,
enforcement or breach hereof, the prevailing party in such action shall
be
entitled to an award of all reasonable costs of litigation or arbitration,
including, without limitation, reasonable attorneys’ fees to be paid by
the losing party, in such amounts as may be determined by (i) the
arbitrators deciding such action or proceeding or (ii) court having
jurisdiction of such action or proceeding.
|
| Section
7.9 |
Further
Assurances. |
|
|
From
time to time hereafter and without further consideration, each
of the Parties hereto shall execute and deliver such additional or
further
instruments of conveyance, assignment and transfer and take such actions
as any of the other Parties hereto may reasonably request in order
to more
effectively consummate the transactions Contemplated by the Transaction
Documents or as shall be reasonably necessary or appropriate in connection
with the carrying out of the Parties’ respective obligations hereunder or
the purposes of this Purchase Agreement.
|
| Section
7.10 |
Announcements
and Press Releases.
|
|
|
Any
press releases or any other public announcements concerning
this Purchase Agreement or the other Transaction Documents shall be
approved by Purchaser and Seller; provided, however, that if any Party
reasonably believes that it has a legal obligation to make a press
release
and the consent of the other Party cannot be obtained, then the release
may be made without such approval. |
| Section
7.11
|
Assignment.
Except as otherwise provided in Section 5.5.,
neither Party may assign this Purchase Agreement without the prior
written
consent of the other Party; provided, however, that the Purchaser may
assign this Purchase Agreement to a corporation, partnership or other
business entity under common control with the Purchaser.
|
| Section
7.12 |
No
Tax Representations.
|
29
|
|
Each
Party acknowledges that it is relying solely on its advisors
to determine the tax consequences of the transactions and arrangements
Contemplated by the Transaction Documents and that no representation
or
warranty has been made by any Party as to the tax consequences of such
transactions and arrangements. |
| Section
7.13 |
Multiple
Counterparts. |
|
|
This
Purchase Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of
which
together shall constitute one and the same instrument.
|
|
|
The
headings of the several Articles and Sections herein are
inserted for convenience of reference only and are not intended to
be a
part of or to affect the meaning or interpretation of this Purchase
Agreement. |
| Section
7.15 |
Severability.
|
|
|
Each
article, section, subsection and lesser section of this
Purchase Agreement constitutes a separate and distinct undertaking,
covenant or provision hereof. In the event that any provision of this
Purchase Agreement shall finally be determined to be unlawful, such
provision shall be deemed severed from this Purchase Agreement, but
every
other provision of this Purchase Agreement shall remain in full force
and
effect. |
| Section
7.16 |
“Knowledge,”
etc. |
|
|
“To
the knowledge,” “to the best knowledge,” or any similar phrase
shall be deemed to refer , in the case of the Seller, the knowledge
of all
of their directors and officers, and, in the case of the Purchaser,
knowledge of all of their employees, directors and officers. An individual
will be deemed to have “knowledge” of a particular fact or matter if: (a)
such individual is actually aware of such fact or matter or (b) a prudent
individual could be expected to discover or otherwise become aware
of such
fact or matter in the course of conducting a reasonably comprehensive
investigation concerning the existence of such fact or matter.
|
IN WITNESS
WHEREOF, the
undersigned have caused this Purchase Agreement to be duly executed as of the
date first above written.
|
|
Xxxx
X. Xxxxxxxx, M.D.,
P.C.
|
|
|
By: /s/ Xxxx
X. Xxxxxxxx, M.D.
Xxxx X.
Xxxxxxxx, M.D.
President |
|
|
Vein
Associates of America, Inc.
|
|
|
By: /s/ Xxxx
Xxxxxxxxxxx
Name: Xxxx
Xxxxxxxxxxx
Title: President |
31
EXHIBIT
A
DEFINITIONS
| 1.
|
|
Assets.
All of the assets owned by Seller’s vein practice,
of every kind, character and description, whether tangible or intangible,
whether real, personal, or mixed, and wherever located, whether carried
on
the books of Seller or not carried on the books of Seller due to having
been expensed, fully depreciated, or otherwise, including without
limitation the following: |
| (a)
|
|
Inventory
and medical supplies;
|
| (b)
|
|
Contracts,
including without limitation the contracts relating to
telephone numbers and Yellow Page advertising and other Contracts
described in Exhibit 3, Schedule 2.2(a)(2);
|
| (c)
|
|
Tangible
Personal Property, except that property that is
specifically excluded from this Agreement in Exhibit 2, Schedule
2.1(c).
|
| (d)
|
|
Business
Records, whether such Business Records are in hard copy
form or are electronically or magnetically stored, including but
not
limited to the names, addresses and phone numbers of patients;
|
| (f)
|
|
Intellectual
Property, including internet domain names;
|
| (g)
|
|
All
of Seller’s right, title and interest in, to and under all
telephone numbers used in connection with Seller’s practice, including all
extensions thereto;
|
| (h)
|
|
All
rights in, to and under 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 Assets;
|
| (j)
|
|
Any
of Seller’s right, title and interest in, to or under, or
possession of, all drugs, pharmaceuticals and other medical products;
|
| (k)
|
|
Any
of Seller’s right, title and interest in and to records of
identity, diagnosis, evaluation or treatment of patients;
|
| (l)
|
|
Any
of Seller’s right, title and interest in, to and under
insurance policies covering or relating to medical malpractice;
|
| (m)
|
|
Any
franchises, licenses, permits, certificates, approvals and
other governmental authorizations necessary or desirable to own and
operate any of the Assets;
|
32
| (o)
|
|
telephone
numbers used at locations; and
|
| (p)
|
|
Any
other assets which are not Excluded Assets and are used in the
operation of the Business.
|
| 2.
|
|
Business
Records. All books and records of Seller, including
without limitation, all credit 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.
|
| 3.
|
|
Code.
The Internal Revenue Code of 1986, as amended.
|
| 4.
|
|
Contracts.
All of Seller’s rights in, to and under all
contracts, agreements, real property and equipment leases, insurance
policies, purchase orders and commitments.
|
| 5.
|
|
Encumbrance.
Any lien, pledge, mortgage, security interest,
claim, charge or any other encumbrance, right or claim of any kind
whatsoever. |
| 6.
|
|
ERISA.
The Employee Retirement Income Security Act of 1974,
as amended. |
| 7.
|
|
Governmental
Authority. Any foreign, United States, state,
local or other governmental authority, regulatory body, arbitration
panel,
court or tribunal. |
| 8.
|
|
Intellectual
Property. All (i) United States and foreign
patents, patent applications, trademarks, trademark applications and
registrations, service marks, service xxxx applications and registrations,
copyrights, copyright applications and registrations and trade names
of
Seller; (ii) proprietary data and technical, manufacturing know-how
and
information (and all materials embodying such information) of Seller;
(iii) developments, discoveries, inventions, ideas and trade secrets
of
Seller; and (iv) rights to xxx for past infringement.
|
| 9.
|
|
Inventory.
All stock, supplies (medical and office) and
inventories of retail product in a condition suitable for resale.
|
| 10.
|
|
Liability.
Any liability (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued
or
unaccrued, whether liquidated or unliquidated, and whether due or to
become due), including any liability for Taxes.
|
| 11.
|
|
Licenses.
All franchises, licenses, permits, certificates,
approvals and other governmental authorizations necessary to own and
operate any of the Assets. |
| |
|
|
|
12. |
|
Material
Adverse Change
or
Material
Adverse Effect.
Any event, change or effect that is materially adverse to the financial
condition, assets, business or results of
operations
of such entity or entities (taken as a whole) or series of changes
aggregated as a whole in excess of Twenty Five Thousand Dollars ($25,000).
|
32
|
13.
|
|
Medical
Contracts.
Any of Seller’s right, title or interest in, to or under any contract or
agreement that requires performance by a licensed health care provider
under federal or applicable state law.
|
|
14.
|
|
Person.
Any corporation, partnership, joint venture, Purchaser, syndicate,
organization, association, trust, entity, natural person, or any
other
type of entity.
|
|
15.
|
|
Personal
Property Leases.
All of Seller’s rights in, to and under all leases of supplies,
instruments, equipment, furniture, machinery and other items of tangible
personal property.
|
|
16.
|
|
Prepaid
Items.
All of Seller’s prepaid expenses, prepaid insurance, deposits and other
similar items.
|
|
17.
|
|
Purchase
Agreement.
This Purchase Agreement, as amended from time to time.
|
|
18.
|
|
Tangible
Personal Property.
All tangible personal property (including supplies, instruments,
equipment, furniture and machinery) owned by Seller
|
|
19.
|
|
Transaction
Documents.
This Purchase Agreement and each other document and instrument executed
and delivered at the Closing.
|
END
OF
EXHIBIT A
33
