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EXHIBIT 2.19
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") effective as of January 1,
1998, is by and between VISION TWENTY-ONE, INC., a Florida corporation ("Vision
Twenty-One"), THE COMPLETE OPTICAL LABORATORY, LTD., CORP., a New Jersey
corporation (the "Company"), and XXXXXX X. SHACK and XXXXXXX X. XXXXXXX
(individually, a "Stockholder" and collectively, the "Stockholders").
RECITALS
A. The Stockholders own all of the issued and outstanding shares
of capital stock of the Company.
B. Vision Twenty-One desires to purchase from the Stockholders,
and the Stockholders desire to sell to Vision Twenty-One, all of the issued and
outstanding capital stock of the Company pursuant to and in accordance with this
Agreement.
NOW, THEREFORE, for and in consideration of the mutual agreements,
terms, covenants and conditions contained herein and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
parties agree as follows:
1. DEFINITIONS. In addition to the definitions set forth herein,
as used in this Agreement, the following terms shall have the meanings set forth
below:
1.1. Affiliate. The term "Affiliate" with respect to any
person or entity shall mean a person or entity that directly or indirectly
through one or more intermediaries, controls, or is controlled by or is under
common control with, such person or entity.
1.2. Closing. The term "Closing" shall mean the
consummation of the transactions contemplated by this Agreement.
1.3. Closing Date. The term "Closing Date" shall mean
March 31, 1998, or such other date as mutually agreed upon by the parties.
1.4. Code. The term "Code" shall mean the Internal Revenue
Code of 1986, as amended.
1.5. Common Stock. The term "Common Stock" or "Vision
Twenty-One Common Stock" shall mean the common stock of Vision Twenty-One.
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1.6. Company Common Stock. The term "Company Common Stock"
shall mean the common stock of the Company.
1.7. Competitor. The term "Competitor" shall mean any
person or entity which, individually or jointly with others, whether for its own
account or for that of any other person or entity, owns or holds any ownership
or voting interest in any person or entity engaged in the practice of optometry
or the operation of optical laboratories or retail optical stores; provided,
however, that such term shall not include any Affiliate of Vision Twenty-One.
1.8. Corporation Law. The term "Corporation Law" shall
mean the statutes, regulations and laws governing business corporations and
professional corporations in the State of New Jersey.
1.9. Environmental Requirements. The term "Environmental
Requirements" shall mean all applicable statutes, regulations, rules,
ordinances, codes, licenses, permits, orders, approvals, plans, authorizations,
concessions, franchises and similar items of all governmental agencies,
departments, commissions, boards, bureaus or instrumentalities of the United
States, states and political subdivisions thereof and all applicable judicial,
administrative and regulatory decrees, judgments and orders relating to the
protection of human health or the environment.
1.10. ERISA. The term "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended.
1.11. Exchange Act. The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
1.12. FBCA. The term "FBCA" shall mean the Florida Business
Corporation Act.
1.13. GAAP. The term "GAAP" shall mean generally accepted
accounting principles, applied on a consistent basis with prior periods, as set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity or other practices and procedures as may be
approved by a significant segment of the accounting profession, which are
applicable to the circumstances as of the date of the determination.
1.14. Governmental Authority. The term "Governmental
Authority" shall mean any national, state, provincial, local or tribunal
governmental, judicial or administrative authority or agency.
1.15. Hazardous Material. The term "Hazardous Material"
shall mean any substance:
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(i) the presence of which requires
investigation or remediation under any Environmental Requirement; or
(ii) which is defined as a "solid
waste," "hazardous waste," "hazardous substance," "pollutant" or "contaminant"
under any federal, state or local statute, regulation, rule or ordinance or
amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. ss.9601 et
seq.) and/or the Resource Conservation and Recovery Act (42 U.S.C. ss. 6901 et
seq.); or
(iii) the presence of which, under any
Environmental Requirement poses a hazard to the health or safety of persons on
or about the Property.
1.16. IRS. The term "IRS" shall mean the Internal Revenue
Service.
1.17. Material Adverse Effect. The term "Material Adverse
Effect" shall mean a material adverse effect on the business, operations,
condition (financial or otherwise) or results of operations of any party,
considering all relevant facts and circumstances.
1.18. Property. The term "Property" shall mean all real
property owned, leased or used by the Company.
1.19. SEC. The term "SEC" shall mean the Securities and
Exchange Commission.
1.20. Securities Act. The term "Securities Act" shall mean
the Securities Act of 1933, as amended.
2. PURCHASE AND SALE OF STOCK; CLOSING.
2.1. Purchase of Stock. Subject to the terms and
conditions of this Agreement, Vision Twenty-One agrees to purchase and accept
delivery from each Stockholder of, and each Stockholder agrees to sell, assign,
transfer and deliver to Vision Twenty-One, at the Closing, all of the issued and
outstanding shares of Company Common Stock, free and clear of all liens,
pledges, security interests, claims, charges, restrictions, equities or
encumbrances of any kind whatsoever.
2.2. The Closing. The Closing shall take place on the
Closing Date at the offices of Xxxxxxxxx, Xxxxxx & Xxxxxxx, Suite 600, One
Gateway Center, Newark, New Jersey 07102-5311, or at such other location in the
State as the parties shall mutually agree.
2.3. Stock Purchase Consideration. As consideration for
the Company Common Stock, Vision Twenty-One shall pay to the Stockholders at the
Closing the maximum aggregate value of Three Million Dollars ($3,000,000) less
the aggregate amount of outstanding indebtedness over and above normal trade
payables and the ongoing costs of business operations incurred in the ordinary
course of business consistent with past practice (the net result of which is the
"Stock Purchase Consideration"). The Stock Purchase Consideration shall consist
of shares of Vision
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Twenty-One Common Stock to be delivered to the Stockholders in proportion to
their respective ownership of the Company Common Stock as set forth in the
Disclosure Schedule (as defined herein). The aggregate number of shares of
Vision Twenty-One Common Stock to be delivered shall be that whole number equal
to (but not greater than) the Stock Purchase Consideration divided by $10.31.
2.4. Fractional Shares. Notwithstanding any other
provision herein, no fractional shares of Vision Twenty-One Common Stock will be
issued. Fractional shares shall be rounded down to the nearest whole number of
shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
STOCKHOLDERS. The Company and the Stockholders, jointly and severally, represent
and warrant to Vision Twenty-One that the following are true and correct on the
date hereof, and shall be true and correct through the Closing Date as if made
on that date, except as set forth in the Disclosure Schedules delivered to
Vision Twenty-One by the Company and the Stockholders (the "Disclosure
Schedule"); when used in this Section 3, the term "best knowledge" (or words of
similar import) of the Company shall mean the actual knowledge of Xxxxxx X.
Shack and/or Xxxxxxx X. Xxxxxxx, without additional investigation.
3.1. Organization and Good Standing; Qualification. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of New Jersey, with all requisite corporate power
and authority to carry on the business in which it is engaged, to own the
properties it owns, to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Company is duly qualified and licensed to
do business in each jurisdiction in which the character or location of the
properties owned or leased by it or the practice of the business conducted by it
makes such qualification necessary. Except as disclosed in the Disclosure
Schedule, the Company does not own, directly or indirectly, any of the capital
stock of any other corporation or any equity, profit sharing, participation or
other interest in any corporation, partnership, joint venture or other entity.
3.2. Capitalization. The authorized capital stock of the
Company consists of 100 shares of Company Common Stock, of which 100 shares are
issued and outstanding. The Stockholders own all of the issued and outstanding
Company Common Stock, free and clear of all security interests, liens, adverse
claims, encumbrances, equities, proxies and shareholder agreements, except to
the extent disclosed in the Disclosure Schedule. Each outstanding share of
Company Common Stock has been legally and validly issued and is fully paid and
nonassessable. No shares of Company Common Stock are owned by the Company in
treasury. No shares of Company Common Stock have been issued or disposed of in
violation of the preemptive rights, rights of first refusal or similar rights of
any of the Company's stockholders. The Company has no bonds, debentures, notes
or other obligations the holders of which have the right to vote (or are
convertible into or exercisable for securities having the right to vote) with
the stockholders of the Company on any matter.
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3.3. Transactions in Capital Stock. The Company has not
acquired any capital stock of the Company within the two (2) year period
preceding the execution of this Agreement. Except as disclosed in the Disclosure
Schedule, there exist no options, warrants, subscriptions or other rights to
purchase, or securities convertible into or exchangeable for, any of the
authorized or outstanding securities of the Company, and no option, warrant,
call, conversion right or commitment of any kind exists which obligates the
Company to issue any of its authorized but unissued capital stock. Except as
disclosed in the Disclosure Schedule, the Company has no obligation (contingent
or otherwise) to purchase, redeem or otherwise acquire any of its equity
securities or any interests therein or to pay any dividend or make any
distribution in respect thereof. Neither the equity structure of the Company nor
the relative ownership of shares among any of its stockholders has been altered
or changed within the two (2) year period preceding the date of this Agreement.
3.4. [Reserved].
3.5. Corporate Records. The copies of the Articles or
Certificate of Incorporation and Bylaws, and all amendments thereto, of the
Company that have been delivered or made available to Vision Twenty-One are
true, correct and complete copies thereof, as in effect on the date hereof. The
minute books of the Company, copies of which have been delivered or made
available to Vision Twenty-One, contain accurate minutes of all meetings of, and
accurate consents to all actions taken without meetings by, the Board of
Directors (and any committees thereof) and the stockholders of the Company in
the three (3) years prior to the Closing Date, and contain all other material
minutes and consents of the directors and stockholders of the Company since its
formation.
3.6. Governmental Consents. To the best knowledge of the
Company and the Stockholders, no filing or registration with, or authorization,
consent, license, permit or approval of, any Governmental Authority, is required
in connection with the execution and delivery of the documents contemplated
herein by the Company or for the consummation by the Company of the transactions
contemplated by this Agreement.
3.7. Authorization and Validity. The execution, delivery
and performance by the Company of this Agreement and the other agreements
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby to be performed by the Company, have been duly authorized by
all necessary corporate action of the Company (including the approval of its
board of directors and stockholders). This Agreement has been duly executed and
delivered by the Company and, to the best knowledge of the Company, constitutes
the legal, valid and binding obligation of the Company, enforceable against it
in accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies. The Company has obtained, in accordance with
applicable law and its Articles or Certificate of Incorporation and Bylaws, the
approval of its stockholders necessary for the consummation of the transactions
contemplated hereby.
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3.8. No Conflict. Except as disclosed in the Disclosure
Schedule, the execution and delivery of this Agreement and the documents
contemplated hereunder and the consummation of the transactions contemplated
hereby and thereby, by the Company will not, to the best knowledge of the
Company and the Stockholders, (i) violate any provision of the Company's
Articles or Certificate of Incorporation or Bylaws, (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 obligation under, any
mortgage, lien, lease, material contract, license, permit, instrument or any
other material agreement to which the Company is a party, (iii) result in the
creation or imposition of any lien, charge, pledge, security interest or other
encumbrance upon any property of the Company, or (iv) violate or conflict with
any order, award, judgment or decree or other restriction or conflict with any
law, ordinance, rule or regulation to which the Company or its property is
subject or by which the Company or its property may be bound or affected.
3.9. Financial Statements. The Company has delivered to
Vision Twenty-One its unaudited/compiled balance sheet at October 31, 1996 and
1997 and related unaudited/compiled statements of income, retained earnings and
cash flows for the fiscal years ended October 31, 1995, 1996 and 1997 and the
related notes thereto (the "Financial Statements"). The Financial Statements
fairly present the financial condition and results of operations of the Company
at the dates and for the periods indicated, and reflect all property and assets
used in the business of the Company in a manner consistent with past practices.
No statement of income on the Financial Statements contains any extraordinary or
nonrecurring item or expense and none of the Financial Statements reflects any
revaluation of assets (except as specified therein). Since October 31, 1997 (the
"Balance Sheet Date") there has been no Material Adverse Effect upon the assets
or liabilities or in the business or condition, financial or otherwise, or the
results of operations or prospects of the Company, and, to the best knowledge of
the Company and the Stockholders, no fact or condition exists or is contemplated
or threatened which might cause such a change in the future. The Stockholders
covenant and agree to cooperate with Vision Twenty-One and its auditors in the
preparation of audited Financial Statements for such interim fiscal periods.
3.10. No Undisclosed Liabilities. Except as disclosed in
the Disclosure Schedule, the Financial Statements reflect all liabilities of the
Company, accrued, contingent or otherwise, that would be required to be
reflected thereon, or in the notes thereto, in accordance with GAAP, except for
liabilities and obligations incurred in the ordinary course of business since
the Balance Sheet Date. Except as set forth in the Financial Statements or in
the Disclosure Schedule, the Company is not liable for or obligated in any way
to provide funds in respect of or to guarantee or assume in any manner, any
debt, obligation or dividend of any person, corporation, association,
partnership, joint venture, trust or other entity, and the Company does not know
of any valid basis for the assertion of any other claims or liabilities of any
nature or in any amount.
3.11. Employee Matters.
a. Cash Compensation. The Disclosure Schedule
contains a complete and accurate list of the names, titles and annual cash
compensation (the "Cash Compensation"), of all employees of the Company. In
addition, the Disclosure Schedule contains a complete and
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accurate description of (i) all increases in Cash Compensation of employees of
the Company during the current fiscal year and the immediately preceding fiscal
year and (ii) any promised increases in Cash Compensation of employees of the
Company that have not yet been effected.
b. Compensation Plans. The Disclosure Schedule
contains a complete and accurate list of all compensation plans, arrangements or
practices (the "Compensation Plans") sponsored by the Company or to which the
Company contributes on behalf of its employees, other than Employment Agreements
listed in the Disclosure Schedule and Employee Benefit Plans listed in the
Disclosure Schedule. The Compensation Plans include without limitation plans,
arrangements or practices that provide for performance awards and stock
ownership or stock options. The Company has provided or made available to Vision
Twenty-One a copy of each written Compensation Plan, including all amendments to
date, and a written description of each unwritten Compensation Plan. Except as
disclosed in the Disclosure Schedule, each of the Compensation Plans can be
terminated or amended at will by the Company.
c. Employment Agreements. Except as disclosed
in the Disclosure Schedule, the Company is not a party to any employment
agreement ("Employment Agreements") with respect to any of its employees.
Employment Agreements include without limitation employee leasing, employee
services, consulting and non-competition agreements.
d. Employee Policies and Procedures. The
Disclosure Schedule contains a complete and accurate list of all employee
manuals and all material policies, procedures and work-related rules (the
"Employee Policies and Procedures") that currently apply to employees of the
Company. The Company has provided or made available to Vision Twenty-One a copy
of all written Employee Policies and Procedures, including all amendments to
date.
e. Labor Compliance. To the best knowledge of
the Company and the Stockholders, the Company has been and is in compliance with
all applicable laws, rules, regulations and ordinances respecting employment and
employment practices, terms and conditions of employment and wages and hours,
except for any such failures to be in compliance that, individually or in the
aggregate, would not result in a Material Adverse Effect, and the Company is not
liable for any arrearages of wages or penalties for failure to comply with any
of the foregoing. To the best knowledge of the Company and the Stockholders, the
Company has not engaged in any unfair labor practices or discriminated on the
basis of race, color, religion, sex, national origin, age, disability or
handicap in its employment conditions or practices and no such charges or
complaints are pending or, to the best knowledge of the Company and the
Stockholders, threatened against the Company before any federal, state or local
court, board, department, commission or agency (nor, to the best knowledge of
the Company and the Stockholders, does any valid basis therefor exist). No labor
strikes, disputes, grievances, controversies or other labor troubles affecting
the Company are pending, or to the best knowledge of the Company and the
Stockholders, threatened (nor, to the best knowledge of the Company and the
Stockholders, does any valid basis therefor exist).
f. Unions. Except as disclosed in the
Disclosure Schedule, the Company has never been a party to any agreement with
any union, labor organization or collective
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bargaining unit. Except as disclosed in the Disclosure Schedule, no employees of
the Company are represented by any union, labor organization or collective
bargaining unit. Except as disclosed in the Disclosure Schedule, to the best
knowledge of the Company and the Stockholders, none of the employees of the
Company has threatened to organize or join a union, labor organization or
collective bargaining unit.
g. Aliens. All employees of the Company are, to
the best knowledge of the Company and the Stockholders, citizens of, or are
authorized in accordance with federal immigration laws to be employed in, the
United States.
3.12. Employee Benefit Plans.
a. Identification. The Company currently does
not and never has maintained, sponsored or contributed to any employee benefit
plans (within the meaning of Section 3(3) of ERISA) on behalf of its employees.
b. Multiemployer Plans. Neither the Company nor
any member of a controlled group (within the meaning of Section 412(n)(6)(B) of
the Code) is or ever has been obligated to contribute to a multiemployer plan
within the meaning of Section 3(37) of ERISA.
c. Retirees. The Company does not have any
obligation or commitment to provide medical, dental or life insurance benefits
to or on behalf of any of its employees who may retire or any of its former
employees who have retired except as may be required pursuant to the
continuation of coverage provisions of Section 4980B of the Code and Sections
501 through 508 of ERISA.
3.13. Absence of Certain Changes. Except as disclosed in
the Disclosure Schedule, or as contemplated in this Agreement, since the Balance
Sheet Date, the Company has not:
a. suffered a Material Adverse Effect;
b. contracted for the purpose of acquiring any
capital asset having a cost in excess of $200,000 or made any single expenditure
for a capital asset in excess of $200,000;
c. incurred any indebtedness for borrowed money
in excess of $200,000 (other than short-term borrowings in the ordinary course
of business), or issued or sold any debt securities;
d. incurred or discharged any material
liabilities or obligations except in the ordinary course of business;
e. paid any amount on any indebtedness prior to
the due date, forgiven or canceled any claims or any debt in excess of $200,000,
or released or waived any rights or claims except in the ordinary course of
business;
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f. mortgaged, pledged or subjected to any
security interest, lien, lease or other charge or encumbrance any of its
properties or assets (other than statutory liens arising in the ordinary course
of business or other liens that do not materially detract from the value or
interfere with the use of such properties or assets);
g. suffered any damage or destruction to or
loss of any assets (whether or not covered by insurance) that has, individually
or in the aggregate, resulted in a Material Adverse Effect;
h. acquired or disposed of any assets having an
aggregate value in excess of $200,000, except in the ordinary course of
business;
i. written up or written down the carrying
value of any of its assets, other than accounts receivable in the ordinary
course of business;
j. changed the costing system or depreciation
methods of accounting for its assets in any material respect;
k. lost or terminated any employee, patient,
customer or supplier that has, individually or in the aggregate, resulted in a
Material Adverse Effect;
l. increased the compensation of any director,
officer, key employee or consultant, except for increases in the ordinary course
of business consistent with past practice;
m. increased the compensation of any employee
(except for increases in the ordinary course of business consistent with past
practice) or hired any new employee who is expected to receive annualized
compensation of at least $200,000;
n. formed or acquired or disposed of any
interest in any corporation, partnership, joint venture or other entity;
o. redeemed, purchased or otherwise acquired,
or sold, granted or otherwise disposed of, directly or indirectly, any of its
capital stock, paid any dividend or made any distribution or payment on any of
its capital stock, or agreed to change the terms and conditions of any such
capital stock;
p. entered into any agreement providing for
total payments in excess of $200,000 in any twelve (12) month period with any
person or group, or modified or amended in any material respect the terms of any
such existing agreement, except in the ordinary course of business whereupon the
sum of total payments shall not exceed $200,000 in any twelve (12) month period;
or
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q. entered into any other commitment or
transaction or experienced any other event that would materially interfere with
its performance under this Agreement or any other agreement or document executed
or to be executed pursuant to this Agreement, or otherwise has, individually or
in the aggregate, resulted in a Material Adverse Effect.
3.14. Title to Assets and Properties.
a. Real Property. The Company does not own any
interest (other than leasehold interests referred to in the Disclosure Schedule
in real property.
b. Personal Property. Except as disclosed in
the Disclosure Schedule, the Company has good, valid and marketable title to all
of its assets and properties, free and clear of all security interests, liens,
claims and encumbrances. The assets and properties of the Company are adequate
for the conduct of the Company's business in the manner in which it is currently
conducted and contemplated to be conducted by the Company.
c. Leases. The Disclosure Schedule contains a
true, correct and complete list and brief description of (i) all leases of real
property (the "Real Property Leases"), and (ii) leases of personal property
involving rental payments within any twelve (12) month period in excess of
$12,000, in either case to which the Company is a party, either as lessor or
lessee. All such leases are valid and enforceable in accordance with their
respective terms and no event has occurred which, with the giving of notice, the
lapse of time or both, would constitute an event of default thereunder,
including the execution of this Agreement or the consummation of the
transactions contemplated hereby. The Company shall, after Closing, upon the
request of Vision Twenty-One, assign its rights under any Real Property Lease
specified by Vision Twenty-One and will, along with Vision Twenty-One, us its
best efforts to secure all required consents from the respective landlords to
such assignments. To this end, the Company shall deliver validly executed lease
assignments, for all Real Property Leases (the "Lease Assignments") to Vision
Twenty-One at Closing, although, the parties agree that the actual assignment of
such Real property Leases shall be contingent on the receipt of all required
landlord consents. To the Company's knowledge, no circumstances or state of
facts currently exist, which would indicate that any landlord to such Real
Property Leases will be unwilling to render such consent. After Closing, the
Company shall comply with the terms of all Real Property Leases and shall renew
all leases as they become subject to renewal, unless Vision Twenty-One requests
otherwise.
3.15. Condition of Fixed Assets. All of the fixtures,
structures and equipment reflected in the Financial Statements and used by the
Company in its business are in good operating condition and repair, subject to
normal wear and tear, and conform in all material respects with all applicable
ordinances, regulations and other laws, and the Company has no actual knowledge
of any latent defects therein.
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3.16. Contracts.
a. Contracts; Defaults. Except as disclosed in
the Disclosure Schedule, the Company is not a party to or bound by, nor are any
of the shares of Company Common Stock or any of the Company's assets or
properties subject to, or bound by, whether or not in writing, any of the
following:
(i) partnership or joint venture
agreement;
(ii) guaranty or suretyship,
indemnification or contribution agreement or performance bond;
(iii) debt instrument, loan agreement or
other obligation relating to indebtedness for borrowed money or money lent or to
be lent to another;
(iv) contract to purchase real property;
(v) agreement with dealers or sales or
commission agents, public relations or advertising agencies, accountants or
attorneys (other than in connection with this Agreement and the transactions
contemplated hereby) involving total payments within any twelve (12) month
period in excess of $200,000 and which is not terminable on thirty (30) days'
notice or without penalty;
(vi) agreement relating to any material
matter or transaction in which an interest is held by a person or entity that is
an officer, director, employee, stockholder or Affiliate of the Company or any
Stockholder;
(vii) agreement for the acquisition of
services, supplies, equipment, inventory, fixtures or other property involving
more than $200,000 in the aggregate, except in the ordinary course of business;
(viii) powers of attorney;
(ix) contracts containing
non-competition covenants;
(x) agreement providing for the
purchase from a supplier of all or substantially all of the requirements of the
Company of a particular product or services;
(xi) agreements regarding clinical
research; or
(xii) any other agreement or commitment
in excess of $200,000 not made in the ordinary course of business or that is
material to the business, operations, condition (financial or otherwise) or
results of operations of the Company.
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b. True, correct and complete copies of all
material written contracts have heretofore been delivered or made available to
Vision Twenty-One. To the best knowledge of the Company and the Stockholders,
there are no existing events of default or events, occurrences, acts or
omissions that, with the giving of notice or lapse of time or both, would
constitute a default by the Company or, to the best knowledge of the Company and
the Stockholders, any other party to a material contract, and no penalties have
been incurred nor are amendments pending, with respect to the material
contracts. The contracts are in full force and effect and are valid and
enforceable obligations of the Company (except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally or
the availability of equitable remedies), and, to the best knowledge of the
Company, are valid and enforceable obligations of the other parties thereto, in
accordance with their respective terms, and no defenses, off-sets or
counterclaims have been asserted, nor has the Company waived any material rights
thereunder. The Company has not received notice of any plan or intention of any
other party to any contracts to exercise any right to cancel or terminate such
contracts, and the Company does not know of any fact that would justify the
exercise of such a right. To the best knowledge of the Company and the
Stockholders, no consents or approvals are required under the terms of any such
contracts in connection with the transactions contemplated herein.
3.17. Insurance. The Company and the Stockholders carry
property, liability, malpractice, workers' compensation and such other types of
insurance pursuant to the insurance policies listed and briefly set forth in the
Disclosure Binder(the "Insurance Policies"). All of the Insurance Policies are
issued by insurers of recognized responsibility and, to the best knowledge of
the Company, are valid and enforceable policies. All Insurance Policies shall be
maintained in force without interruption up to and including the Closing Date.
True, complete and correct copies of all Insurance Policies have been provided
or made available to Vision Twenty-One. Except as disclosed in the Disclosure
Schedule, neither the Company nor any Stockholder has received any notice or
other communication from any issuer of any Insurance Policy canceling such
policy, materially increasing any deductibles or retained amounts thereunder,
and to the best knowledge of the Company, no such cancellation or increase of
deductibles, retainages or premiums is threatened. The Company has established
and maintains all required insurance company reserves in all of those states
that it is required to do so and has established and maintains all required
deposits and bonds as are necessary in such state.
3.18. Proprietary Rights and Information. Contained n the
Disclosure Schedule is a true and correct description of the following
("Proprietary Rights"):
a. all trademarks, trade-names, service marks
and other trade designations, including common law rights, registrations and
applications therefor, and all patents and applications therefor currently
owned, in whole or in part, by the Company, and all licenses, royalties,
assignments and other similar agreements relating to the foregoing to which the
Company is a party (including the expiration date thereof if applicable); and
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b. all agreements relating to technology,
know-how or processes that the Company is licensed or authorized to use by
others (other than technology, know-how or processes generally available to
other healthcare providers), or which it licenses or authorizes others to use.
c. The Company owns or has the legal right to
use the Proprietary Rights, and to the best knowledge of the Company, such
ownership or use does not conflict, infringe or violate the rights of any other
person. To the best knowledge of the Company and the Stockholders, no consent of
any person will be required for the use thereof by Vision Twenty-One upon
consummation of the transactions contemplated hereby and the Proprietary Rights
are freely transferable. To the best knowledge of the Company and the
Stockholders, the Company has the right to use, free and clear of any adverse
claims or rights of others, all trade secrets, customer lists and proprietary
information required for the marketing of all merchandise and services formerly
or presently sold or marketed by it.
3.19. Taxes.
a. Filing of Tax Returns. The Company has duly
and timely filed and prior to the Closing Date will duly and timely file (in
accordance with any extensions duly granted by the appropriate governmental
agency, if applicable) with the appropriate governmental agencies all federal,
state, local or foreign income, excise, corporate, franchise, property, sales,
use, payroll, withholding, provider, value added and other tax returns and
reports (collectively the "Tax Returns") required to be filed by the United
States or any state or any political subdivision thereof or any foreign
jurisdiction. All such Tax Returns or reports are complete and accurate in all
material respects and properly reflect the taxes of the Company for the periods
covered thereby.
b. Payment of Taxes. Except for such items as
the Company may be disputing in good faith by proceedings in compliance with
applicable law, which are described in the Disclosure Schedule, (i) the Company
has paid all taxes, penalties, assessments and interest that have become due
with respect to any Tax Returns that it has filed and has properly accrued on
its books and records for all of the same that have not yet become due, and (ii)
the Company is not delinquent in the payment of any tax, assessment or
governmental charge.
c. No Pending Deficiencies, Delinquencies,
Assessments or Audits. Except as disclosed in the Disclosure Schedule, the
Company has not received any notice that any tax deficiency or delinquency has
been asserted against the Company. There is no taxing authority audit of the
Company pending, or to the best knowledge of the Company, threatened, and the
results of any completed audits are properly reflected in the Financial
Statements.
d. No Extension of Limitation Period. The
Company has not granted an extension to any taxing authority of the limitation
period during which any tax liability may be assessed or collected.
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e. All Withholding Requirements Satisfied. All
monies required to be withheld by the Company and paid to governmental agencies
for all income, social security, unemployment insurance, sales, excise, use and
other taxes have been collected or withheld and paid to the respective
governmental agencies.
f. Tax Sharing Agreements. The Company is not a
party to any tax sharing agreement with any other person or entity.
g. Foreign Person. Neither the Company nor the
Optometrist is a foreign person, as such term is referred to in Section
1445(f)(3) of the Code.
h. Safe Harbor Lease. None of the assets or
properties of the Company constitutes property that the Company, Vision
Twenty-One, or any Affiliate of Vision Twenty-One, will be required to treat as
being owned by another person pursuant to the "Safe Harbor Lease" provisions of
Section 168(f)(8) of the Code prior to repeal by the Tax Equity and Fiscal
Responsibility Act of 1982.
i. Tax Exempt Entity. None of the assets of the
Company are subject to a lease to a "tax exempt entity" as such term is defined
in Section 168(h)(2) of the Code.
j. Collapsible Corporation. The Company has not
at any time consented, and the Stockholders will not permit the Company to
elect, to have the provisions of Section 341(f)(2) of the Code apply to it.
k. Boycotts. The Company has not at any time
participated in or cooperated with any international boycott as defined in
Section 999 of the Code.
l. Parachute Payments. No payment required or
contemplated to be made by the Company will be characterized as an "excess
parachute payment" within the meaning of Section 280G(b)(1) of the Code.
m. S Corporation. The Company has not made an election to be taxed as an "S"
corporation under Section 1362(a) of the Code.
n. Personal Holding Company. The Company is not
or has not been a personal holding company within the meaning of Section 542 of
the Code.
3.20. Governmental Authorizations. To the best knowledge of
the Company and the Stockholders, the Company and the Stockholders possess all
necessary licenses, franchises, permits and other governmental authorizations,
including, but not limited to all licenses, franchises, permits and
authorizations for the conduct of the Company's business as now conducted, all
of which are (with expiration dates, if applicable) contained in the Disclosure
Schedule, except where the failure to possess such licenses, franchises, permits
or authorizations would not have a Material Adverse Effect. Except as disclosed
in the Disclosure Schedule, to the best knowledge of the
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Company and the Stockholders, the transactions contemplated by this Agreement
will not result in a default under or a breach or violation of, or adversely
affect the rights and benefits afforded by any such licenses, franchises,
permits or authorizations, except where such default, breach or violation would
not have a Material Adverse Effect. All such licenses, franchises, permits and
other authorizations are valid and in full force and effect, the Company is
currently in material compliance therewith and the Company has not received any
notice that any governmental authority is considering challenging, revoking,
canceling, restricting, conditioning or not renewing any such license,
franchise, permit or other authorization.
3.21. Compliance with Applicable Laws. Except as disclosed
in the Disclosure Schedule, to the best knowledge of the Company and the
Stockholders, the Company and the Stockholders are in material compliance with
all applicable laws, ordinances and regulations of any Governmental Authority,
including, without limitation, applicable state corporation, insurance and
health regulatory authorities and other Governmental Authorities regulating
exclusive provider organizations, preferred provider organizations, medical
utilization review organizations, medical service organizations, lay
intermediaries, secondary contractors or third-party administrators and all
Medicare and Medicaid provider agreements to which they are a party, except
where the failure to comply would not have a Material Adverse Effect. Except as
disclosed in the Disclosure Schedule, to the best knowledge of the Company and
the Stockholders, no investigation or review by any Governmental Authority,
including, without limitation, applicable state corporation, insurance and
health regulatory authorities, with respect to the Company or any of the
Stockholders or Optometrist Employees is pending or threatened, nor has any
Governmental Authority, including, without limitation, applicable state
corporation, insurance and health regulatory authorities, indicated an intention
to conduct the same, other than those the outcome of which would not have a
Material Adverse Effect.
3.22. Litigation. Except as disclosed in the Disclosure
Schedule, the Company is not a party to nor has it been notified of, any legal
actions or administrative proceedings or investigations which, if adversely
determined, could have a Material Adverse Effect on the Company Common Stock,
the assets, operations, business, condition (financial or otherwise), or results
of operation of the Company or adversely affect the ability of the Company or
any Stockholder to effect the transactions contemplated hereby. Neither the
Company nor any Stockholder is subject to or in default of any court or
administrative order, judgment, writ, injunction or decree applicable to the
Company or to its business, assets, operations or employees.
3.23. Ownership Interests of Interested Persons. Except as
disclosed in the Disclosure Schedule, no officer, director, stockholder or
employee of the Company, or their respective spouses, children or Affiliates
owns, directly or indirectly, on an individual or joint basis, any interest in,
has a compensation or other financial arrangement with, or serves as an officer
or director of, any customer or supplier of the Company or any organization that
has a material contract or arrangement with the Company. Except as may be
disclosed pursuant to this Agreement, neither the Company, nor any of its
directors, officers, employees or consultants, nor any Affiliate of such person
is, or within the last three (3) years was, a party to any contract,
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lease, agreement or arrangement, including, but not limited to, any joint
venture or consulting agreement with any optometrist, hospital, pharmacy, home
health agency or other person which is in a position to make or influence
referrals to, or otherwise generate business for, the Company.
3.24. Investments in Competitors. Except as disclosed in
the Disclosure Schedule, neither the Company nor any Stockholder owns, directly
or indirectly, any interest or has any investment in any person or entity that
is a Competitor of the Company.
3.25. Environmental Matters. Except as disclosed in the
Disclosure Schedule, to the best knowledge of the Company and the Stockholders,
the use, maintenance and operation of the Property, and all activities and
conduct of business related thereto, have at all times complied with all
Environmental Requirements. To the best knowledge of the Company and the
Stockholders, no Hazardous Material has been generated at the Property or
transported to an off-site location. The Company has not received written notice
or other communication concerning any alleged violation of Environmental
Requirements, whether or not corrected to the satisfaction of the appropriate
authority, nor notice or other communication concerning alleged liability for
Environmental Damages both in connection with the Property and in connection
with an off-site location and there exists no writ, injunction, decree, order or
judgment outstanding, nor any lawsuit, claim, proceeding, citation, directive,
summons or investigation, pending or, to the best knowledge of the Company,
threatened, relating to the ownership, use, maintenance or operation of the
Property or off-site location by any person, or from alleged violation of
Environmental Requirements, or from the suspected presence of Hazardous Material
on the Property.
3.26. Certain Payments. Neither the Company, nor to the
best knowledge of the Company and the Stockholders, any director, officer,
employee or stockholder of the Company acting for or on behalf of the Company,
has paid or caused to be paid, directly or indirectly, in connection with the
business of the Company to any government or agency thereof or any agent of any
supplier or customer any bribe, kick-back or other similar payment or any
contribution to any political party or candidate (other than from personal funds
of directors, officers or employees not reimbursed by the Company or as
otherwise permitted by applicable law).
3.27. Insolvency Proceedings. The Company is not, nor has
it ever been, under the jurisdiction of a Federal or state court in a Title 11
or similar case within the meaning of Section 368(a)(3)(A) of the Code.
3.28. Positive Net Worth. On the date hereof the book value
of the assets of the Company equals or exceeds, and on the Closing Date will
equal or exceed, the sum of the liabilities of the Company .
3.29. Accounts Receivable/Payable.
a. The accounts receivable of the Company, to
the extent uncollected on the date hereof, are, and the accounts receivable of
the Company relating to the operation of the
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Company to be reflected on the books of the Company on the Closing Date will be,
valid and existing and represent amounts due for goods sold and delivered or
services performed. Except as set forth in the Financial Statements, there are
not, and on the date of Closing there will not be, any refunds, discounts,
set-offs, defenses, counterclaims or other adjustments payable or assessable
with respect to any of the Company's accounts receivable. The Company has
collected its accounts receivable only in the ordinary course and has not
changed collection procedures or methods nor accelerated the pace of such
collection efforts in anticipation of the transactions contemplated in this
Agreement. The Company has paid accounts payable in the ordinary course and has
not changed payment procedures or methods nor delayed the timing of such
payments in anticipation of the transactions contemplated in this Agreement.
b. Since the Balance Sheet Date, the Company
has not changed any material principle or practice with respect to the
recordation of accounts receivable or the calculation of reserves therefor, or
any material collection, discount or write-off policy or procedure. The Company
is in compliance with the material terms and conditions of all third-party payor
arrangements relating to its accounts receivable.
3.30. Finder's Fee. The Company has not incurred any
obligation for any finder's, brokers or agent's fee in connection with the
transactions contemplated hereby.
3.31. Disclosure. No representation, warranty or statement
made by the Company or the Stockholders in this Agreement or any of the exhibits
or schedules hereto, or any agreements, certificates, documents or instruments
delivered or to be delivered to Vision Twenty-One in accordance herewith or the
documents contemplated herein, 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. Neither the Company nor the Stockholders
has failed to disclose to Vision Twenty-One any fact or condition which the
Company or the Stockholders know or have reasonable grounds to know, which may
materially adversely affect the condition (financial or otherwise), properties,
assets, liabilities, business, operations or prospects of the Company, which has
not been set forth herein or in the Schedules provided herewith.
3.32. Banking Relations. Set forth in the Disclosure
Schedule is a complete and accurate list of all borrowing and investing
arrangements that the Company has with any bank or other financial institution,
indicating with respect to each relationship the type of arrangement maintained
(such as checking account, borrowing arrangements, safe deposit box, etc.) and
the person or persons authorized in respect thereof.
4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS. Each
Stockholder represents and warrants to Vision Twenty-One that the following are
true and correct as of the date hereof, and shall be true and correct through
the Closing Date as if made on that date:
4.1. Validity; Capacity. This Agreement and each other
agreement to be executed in connection herewith has been duly executed and
delivered by the Stockholder, and to
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the best knowledge of each Stockholder, all such agreements constitute legal,
valid and binding obligations of such Stockholder, enforceable against the
Stockholder in accordance with their respective terms, except as may be limited
by applicable bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies. Each Stockholder has the
legal capacity to enter into and perform this Agreement and such other
agreements to which it is a party.
4.2. No Violation. Except as disclosed in the Disclosure
Schedule, neither the execution, delivery or performance of this Agreement or
the other agreements to be executed by the Stockholders, nor the consummation of
the transactions contemplated hereby or thereby, will (a) conflict with, or
result in a violation or breach of the terms, conditions or provisions of, or
constitute a default under, any agreement, indenture or other instrument under
which such Stockholder is bound or to which any of his shares of Company Common
Stock are subject, or result in the creation or imposition of any security
interest, lien, charge or encumbrance upon any of his shares of Company Common
Stock or (b) to the best knowledge of such Stockholder, violate or conflict with
any judgment, decree, order, statute, rule or regulation of any court or any
public, governmental or regulatory agency or body.
4.3. Personal Holding Company. Such Stockholder does not
own his shares of Company Common Stock, directly or indirectly, beneficially or
of record, through a personal holding company.
4.4. Transfers of the Company Common Stock. Set forth in
the Disclosure Schedule is an accurate and complete list of all transfers or
other transactions involving capital stock of the Company made by such
Stockholder since January 1, 1997. All transfers of Company Common Stock by such
Stockholder have been made for valid business reasons and not in anticipation or
contemplation of the consummation of the transactions contemplated by this
Agreement.
4.5. Consents. Except as may be required under the
Exchange Act, the Securities Act, the Corporation Law and state securities laws,
or otherwise disclosed pursuant to this Agreement, no consent, authorization,
approval, permit or license of, or filing with, any governmental or public body
or authority, or any other person is required to authorize, or is required in
connection with, the execution, delivery and performance of this Agreement or
the agreements contemplated hereby on the part of the Stockholder.
4.6. Certain Payments. Such Stockholder has not paid or
caused to be paid, directly or indirectly, in connection with the business of
the Company, to any government or agency thereof or any agent of any supplier or
customer any bribe, kick-back or other similar payment; or any contribution to
any political party or candidate (other than from personal funds not reimbursed
by the Company or as otherwise permitted by applicable law).
4.7. Finder's Fee. Such Stockholder has not incurred any
obligation for any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
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4.8. Ownership of Interested Persons; Affiliations. Except
as disclosed in the Disclosure Schedule, neither such Stockholder nor his
spouse, children or Affiliates, owns directly or indirectly, on an individual or
joint basis, any interest in, has a compensation or other financial arrangement
with, or serves as an officer or director of, any customer or supplier of the
Company or any organization that has a material contact or arrangement with the
Company. Neither such Stockholder nor any of his Affiliates is, or with the last
three (3) years was, a party to any contract, lease, agreement or arrangement,
including, but not limited to, any joint venture or consulting agreement with
any optometrist, hospital, pharmacy, home health agency or other person which is
in a position to make or influence referrals to, or otherwise generate business
for, the Company.
4.9. Investments in Competitors. Such Stockholder does not
own directly or indirectly any interests or have any investment in any person
that is a Competitor of the Company.
4.10. Litigation. Except as disclosed in the Disclosure
Schedule, there are no claims, actions, suits, proceedings (arbitration or
otherwise) or investigations pending or, to the best of such Stockholder's
knowledge, threatened against such Stockholder at law or at equity in any court
or before or by any Governmental Authority, and, to such Stockholder'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. There have been no disciplinary, revocation or
suspension proceedings or similar types of claims, actions or proceedings,
hearings or investigations against the Stockholder.
4.11. Permits. To the best of such Stockholder's knowledge,
the Stockholder has all permits, licenses, orders and approvals of all
Governmental Authorities necessary to perform the services performed by such
Stockholder in connection with the conduct of the Company's business. All such
permits, licenses, orders and approvals are in full force and effect and no
suspension or cancellation of any of them is pending or threatened. To the best
of such Stockholder's knowledge, none of such permits, licenses, orders or
approvals will be adversely affected by the consummation of the transactions
contemplated herein. The Stockholders listed in the Disclosure Schedule are
participating optometrists, as such term is defined by the Medicare program, and
none of the Stockholder's listed in the Disclosure Schedule has not been
disciplined, sanctioned or excluded from the Medicare program and has not been
subject to any plan of correction imposed by any professional review body.
5. REPRESENTATIONS AND WARRANTIES OF VISION TWENTY-ONE. Vision
Twenty-One represents and warrants to the Company and the Stockholders that the
following are true and correct on the date hereof and shall be true and correct
as of the Closing Date, except as set forth in the Disclosure Schedule delivered
by Vision Twenty-One to the Company (the "Vision Disclosure Schedule"); when
used in this Section 5, the term "best knowledge" (or words of similar import)
shall mean the actual knowledge of Xxxxxxxx X. Xxxxxxxx and/or Xxxxxxx X. Xxxxx,
without additional investigation.
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5.1. Organization and Good Standing; Qualification. Vision
Twenty-One is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida, with requisite corporate power
and authority to carry on the business in which it is engaged, to own the
properties it owns, to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. Vision Twenty-One is duly qualified and
licensed to do business in each jurisdiction in which the character or location
of the properties owned or leased by Vision Twenty-One or the practice of the
businesses conducted by Vision Twenty-One makes such qualification necessary,
except for the State of New Jersey and except where the failure to do so would
not have a Material Adverse Effect.
5.2. Subsidiaries. Except as disclosed in the Vision
Twenty-One Disclosure Schedule, Vision Twenty-One does not own, directly or
indirectly, any of the capital stock of any other corporation or any equity,
profit sharing, participation or other interest in any corporation, partnership,
joint venture or other entity. With respect to each corporation that is owned,
directly or indirectly, beneficially or of record by Vision Twenty-One (each, a
"Vision Twenty-One Subsidiary"), the Vision Disclosure Schedule sets forth a
true, correct and complete list of (i) the name and jurisdiction of
incorporation of each Vision Twenty-One Subsidiary, (ii) the jurisdiction in
which each Vision Twenty-One Subsidiary is qualified or licensed to do business
as a foreign corporation, (iii) the authorized capital stock of each Vision
Twenty-One Subsidiary, (iv) the number of shares of each class thereof issued
and outstanding, and (v) the number of shares and percentage of outstanding
capital stock owned by Vision Twenty-One. All outstanding shares of capital
stock of each Vision Twenty-One Subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable, and are owned by Vision Twenty-One
free and clear of all liens, pledges, security interests, restrictions, voting
trusts or other encumbrances of any nature whatsoever.
5.3. Capitalization. The authorized capital stock of
Vision Twenty-One consists of 50,000,000 shares of Common Stock and 10,000,000
shares of preferred stock, of which, as of March 26, 1998, 12,282,913 shares of
Common Stock were issued and outstanding (excluding certain shares issued on a
contingent basis). Options and warrants to acquire an additional 2,062,214
shares of Vision Twenty-One Common Stock are outstanding. The issuance and
delivery of the shares of Common Stock to be issued by Vision Twenty-One in
connection with this Agreement have been duly and validly authorized by all
necessary corporate action on the part of Vision Twenty-One. The Common Stock
being transferred by Vision Twenty-One hereunder shall be free and clear of all
liens, pledges, restrictions, voting trusts, security interests or other
encumbrances of any nature whatsoever, except as set forth herein. Each
outstanding share of Common Stock and the shares to be issued hereunder have
been legally and validly issued and are fully paid and nonassessable. No shares
of Common Stock have been, and the shares of Common Stock to be issued pursuant
to this Agreement will not be, issued or disposed of in violation of the
preemptive rights, rights of first refusal or similar rights of any of Vision
Twenty-One's stockholders.
5.4. Consents. To the best knowledge of Vision Twenty-One,
no filing or registration with, or authorization, consent or approval of, any
Governmental Authority or other
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person is required in connection with the execution and delivery of this
Agreement or the other agreements to be executed and delivered in connection
herewith by Vision Twenty-one or the consummation of the transactions
contemplated hereby or thereby.
5.5. Authorization and Validity. The execution, delivery
and performance by Vision Twenty-One of this Agreement and the other agreements
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby to be performed by Vision Twenty-One, have been duly
authorized by Vision Twenty-One. This Agreement and the other agreements
contemplated hereby to be executed by Vision Twenty-One have been duly executed
and delivered by Vision Twenty-One and, to the best knowledge of Vision
Twenty-One, constitute the legal, valid and binding obligation of Vision
Twenty-One, enforceable against Vision Twenty-One in accordance with its terms,
except as may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally or the availability of equitable remedies.
5.6. No Conflict. The execution and delivery of this
Agreement and the documents contemplated hereunder and the consummation of the
transactions contemplated hereby and thereby by Vision Twenty-One, will not, to
the best knowledge of Vision Twenty-One, (i) violate any provision of Vision
Twenty-One's Articles of Incorporation or By-Laws, (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 obligation under, any mortgage,
lien, lease, material contract, license, permit, instrument or any other
material agreement to which Vision Twenty-One is a party, (iii) result in the
creation or imposition of any lien, charge, pledge, security interest or other
encumbrance upon any property of Vision Twenty-One, or (iv) violate or conflict
with any order, award, judgment or decree or other restriction or any law,
ordinance, rule or regulation to which Vision Twenty-One or its property is
subject or by which Vision Twenty-One or its property may be bound or affected.
5.7. Governmental Authorizations. To the best knowledge of
Vision Twenty-One, Vision Twenty-One and the Vision Twenty-One Subsidiaries
possess all necessary licenses, franchises, permits and other governmental
authorizations, including, but not limited to all licenses, franchises, permits
and authorizations for the conduct of Vision Twenty-One's and the Vision
Twenty-One Subsidiaries' businesses as now conducted, all of which are listed
(with expiration dates, if applicable) in the Vision Disclosure Schedule, except
where the failure to possess such licenses, franchises, permits or
authorizations would not have a Material Adverse Effect. Except as disclosed in
the Vision Disclosure Schedule, to the best knowledge of Vision Twenty-One, the
transactions contemplated by this Agreement will not result in a default under
or a breach or violation of, or adversely affect the rights and benefits
afforded by any such licenses, franchises, permits or authorizations, except
where such default, breach or violation would not have a Material Adverse
Effect. All such licenses, franchises, permits and other authorizations are
valid and in full force and effect, Vision Twenty-One and the Vision Twenty-One
Subsidiaries are currently in material compliance therewith and neither Vision
Twenty-One nor any Vision Twenty-One Subsidiary has received any notice that any
governmental authority is considering challenging, revoking, canceling,
restricting, conditioning or not renewing any such license, franchise, permit or
other authorization, except as disclosed in the Vision Disclosure Schedule.
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5.8. Compliance with Applicable Laws. Except as disclosed
in the Disclosure Schedule, Vision Twenty-One and each of the Vision Twenty-One
Subsidiaries are in material compliance with all applicable laws, ordinances and
regulations of any Governmental Authority, including, without limitation,
applicable state corporation, insurance and health regulatory authorities and
other Governmental Authorities regulating exclusive provider organizations,
preferred provider organizations, medical utilization review organizations,
medical service organizations, lay intermediaries, secondary contractors or
third-party administrators and all Medicare and Medicaid provider agreements to
which it is a party, except where the failure to comply would not have a
Material Adverse Effect. Except as disclosed in the Vision Disclosure Schedule,
to the best knowledge of Vision Twenty-One, no investigation or review by any
Governmental Authority, including, without limitation, applicable state
corporation, insurance and health regulatory authorities, with respect to Vision
Twenty-One or any of the Vision Twenty-One Subsidiaries is pending or
threatened, nor has any Governmental Authority, including, without limitation,
applicable state corporation, insurance and health regulatory authorities,
indicated an intention to conduct the same, other than those the outcome of
which would not have a Material Adverse Effect.
5.9. Finder's Fee. Vision Twenty-One has not incurred any
obligation for any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
5.10. Documents. Vision Twenty-One has furnished the
Company with a true and complete copy of each report and registration statement
filed by it with the SEC (the "Purchaser Documents") since its initial public
offering, which are all the documents that it was required to file with the SEC
since such date. As of their respective dates, the Purchaser Documents did not
contain any untrue statements of material facts or omit to state material facts
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading. As of
their respective dates, the Purchaser Documents complied in all material
respects with the applicable requirements of the Securities Act and the Exchange
Act and the rules and regulations promulgated under such statutes. The Financial
Statements contained in the Purchaser Documents, together with the notes
thereto, have been prepared in accordance with GAAP, reflect all liabilities of
Vision Twenty-One required to be stated therein and present fairly the financial
condition of Vision Twenty-One at such date and the results of operations and
cash flows of Vision Twenty-One for the period then ended. The Purchaser
Documents do not contain any untrue statements of material facts or omit to
state any material facts required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading as of the date hereof except for such facts as are disclosed
herein and except for the transactions contemplated hereby. Vision Twenty-One
has not suffered any Material Adverse Effect since the date of the most recent
Purchaser Document.
6. SECURITIES LAW MATTERS.
6.1. Investment Representations and Covenants. Each
Stockholder represents, warrants and covenants as follows:
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a. Such Stockholder understands that the Vision
Twenty-One Common Stock will not be registered under the Securities Act or any
state securities laws on the grounds that the issuance of the Vision Twenty-One
Common Stock is exempt from registration pursuant to Section 4(2) of the
Securities Act and applicable state securities laws, and that the reliance of
Vision Twenty-One on such exemptions is predicated in part on the Stockholder's
representations, warranties, covenants and acknowledgments set forth in this
Section.
b. Such Stockholder represents and warrants
that he is an "accredited investor" or "sophisticated investor" as defined under
the Securities Act and state "Blue Sky" laws, or that such Stockholder has
utilized, to the extent necessary to be deemed a sophisticated investor under
the Securities Act and State "Blue Sky" laws, the assistance of a professional
advisor.
c. Such Stockholder represents and warrants
that the Vision Twenty-One Common Stock to be acquired by the Stockholder upon
consummation of the transactions described in this Agreement will be acquired by
the Stockholder for his own account, not as a nominee or agent, and without a
view to resale or other distribution within the meaning of the Securities Act
and the rules and regulations thereunder, and that the Stockholder will not
distribute any of the Vision Twenty-One Common Stock in violation of the
Securities Act. All Vision Twenty-One Common Stock shall bear a restrictive
legend in substantially the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY ONLY BE SOLD OR OTHERWISE
TRANSFERRED IF THE HOLDER HEREOF COMPLIES WITH THE ACT AND APPLICABLE
SECURITIES LAWS."
In addition, the Vision Twenty-One Common Stock shall bear any legend
required by the securities or "Blue Sky" laws of any state where the Stockholder
resides as well as any other legend deemed appropriate by Vision Twenty-One or
its counsel.
d. Such Stockholder (i) acknowledges that the
Vision Twenty-One Common Stock issued to it at the Closing must be held
indefinitely by it unless subsequently registered under the Securities Act or an
exemption from registration is available, (ii) is aware that any routine sales
of Vision Twenty-One Common Stock made pursuant to Rule 144 under the Securities
Act may be made only in limited amounts and in accordance with the terms and
conditions of that Rule and that in such cases where the Rule is not applicable,
compliance with some other registration exemption will be required, and (iii) is
aware that Rule 144 is not immediately available for use for resale of any of
the Vision Twenty-One Common Stock to be acquired by the Stockholder upon
consummation of the transactions described in this Agreement.
e. Such Stockholder represents and warrants to
Vision Twenty-One that Stockholder, either alone or together with the assistance
of Stockholder's own professional advisor, has such knowledge and experience in
financial and business matters such that Stockholder is
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capable of evaluating the merits and risks of an investment in the Vision
Twenty-One Common Stock and is able to sustain a complete loss of such
investment.
f. Such Stockholder confirms that he has had
the opportunity to ask questions of and receive answers from Vision Twenty-One
concerning the terms and conditions of his investment in the Vision Twenty-One
Common Stock, and that he has received, to his satisfaction, such information
about Vision Twenty-One's operations as he has requested.
g. Such Stockholder agrees that it will not
sell or otherwise transfer or dispose of the Vision Twenty-One Common Stock or
any interest therein (unless such shares have been registered under the
Securities Act) without first complying with either of the following conditions:
(i) Vision Twenty-One shall have
received a written legal opinion from legal counsel, which opinion and counsel
shall be satisfactory to Vision Twenty-One in the exercise of its reasonable
judgment, or a copy of a "no-action" or interpretive letter of the SEC
specifying the nature and circumstance of the proposed transfer, in either
instance indicating or opining, as the case may be, that the proposed transfer
will not be in violation of any of the registration provisions of the Securities
Act and the rules and regulations promulgated thereunder; or
(ii) Vision Twenty-One shall have
received an opinion from its own counsel to the effect that the proposed
transfer will not be in violation of any of the registration provisions of the
Securities Act and the rules and regulations promulgated thereunder.
Such Stockholder acknowledges and agrees that the certificates or instruments
representing the Vision Twenty-One Common Stock to be issued to Stockholder
pursuant to this Agreement shall contain a restrictive legend noting the
restrictions on transfer described in this Section and required by federal and
applicable state securities laws, and that appropriate "stop-transfer"
instructions will be given to Vision Twenty-One's transfer agent in the event
such provisions and applicable federal and state securities laws are not
complied with by the Company.
6.2. Investment Representations and Covenants. Each
Stockholder represents, warrants and covenants as follows:
7. COVENANTS OF VISION TWENTY-ONE AND THE COMPANY. Vision
Twenty-One and the Company agree as follows:
7.1. Fees and Expenses. Vision Twenty-One and the Company
shall pay the costs and expenses of its own advisors with respect to legal,
accounting and other professional services rendered in connection with the
preparation, negotiation and consummation of this Agreement.
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7.2. Tax Matters.
a. Returns. The Company shall duly and timely
file all Tax Returns required to be filed on or before the Closing Date and duly
and timely pay all taxes shown on such Tax Returns to be due.
b. Tax Sharing Agreements. Any tax sharing
agreement between the Company and any other party shall be terminated as of the
Closing Date and shall have no further effect for any taxable year (whether the
current year, a future year or a past year).
c. Audits. The Company will allow Vision
Twenty-One and its counsel to participate, at their expense, in any audits of
the federal income tax returns of the Company. The Company will not settle any
such audit without the prior written consent of Vision Twenty-One.
7.3. Rule 144. Vision Twenty-One covenants that it will
file the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations promulgated by the SEC thereunder to
the extent required from time to time to enable the Company to sell the Vision
Twenty-One Common Stock without registration under the Securities Act within the
limitations of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule 144 may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC.
8. CLOSING DELIVERIES.
8.1. Deliveries of The Company. Except as otherwise noted
in this Section 8.1, at Closing, the Company shall deliver or cause to be
delivered to Vision Twenty-One the following, all of which shall be in a form
reasonably satisfactory to Vision Twenty-One:
a. a copy of resolutions of the Board of
Directors of the Company authorizing the execution, delivery and performance of
this Agreement and all other documents and agreements to be executed in
connection herewith, certified by the Secretary of the Company as being a true
and correct copy of the original thereof subject to no modifications or
amendments;
b. a certificate of an officer of the Company
and of the Stockholders, dated the Closing Date, certifying the truth and
accuracy of their respective representations and warranties contained herein, on
and as of the Closing Date;
c. a certificate of an officer of the Company
and of the Stockholders, dated the Closing Date, certifying (i) the performance
of and compliance by them with all covenants contained herein on and as of the
Closing Date and (ii) that all conditions precedent of the Company and
Stockholders to the Closing have been satisfied;
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d. a certificate of the Secretary of the
Company certifying as to the incumbency of the directors and officers of each
such corporation as to the signatures of such directors and officers who have
executed documents pursuant to the Agreement on behalf of the Company;
e. a certificate, dated within fifteen (15)
days of the Closing Date, of the Secretary of State of New Jersey certifying
that the Company is in existence, has paid all franchise or similar taxes and is
in good standing to transact business shall be delivered as promptly as
practicable after the Closing;
f. certificates representing the Company Common
Stock together with stock powers duly endorsed in blank by the Stockholders; and
g. such other instrument or instruments of
transfer prepared by Vision Twenty-One as shall be necessary or appropriate, as
Vision Twenty-One or its counsel shall reasonably request, to carry out and
effect the purpose and intent of this Agreement.
8.2. Deliveries of Vision Twenty-One. Except as otherwise
noted in this Section 8.2., at Closing, Vision Twenty-One shall deliver to the
Company the following, all of which shall be in a form reasonably satisfactory
to the Company:
a. a copy of the resolutions of the Board of
Directors of Vision Twenty-One authorizing the execution, delivery and
performance of this Agreement and all other documents and agreements to be
executed in connection herewith, certified by the Secretary of Vision Twenty-One
as being true and correct copies of the originals thereof subject to no
modifications or amendments;
b. a certificate of an officer of Vision
Twenty-One, dated the Closing Date, certifying the truth and accuracy of the
representations and warranties of Vision Twenty-One contained herein, on and as
of the Closing Date;
c. a certificate of an officer of Vision
Twenty-One, dated the Closing Date, certifying (i) the performance and
compliance by Vision Twenty-One with all covenants contained herein on and as of
the Closing Date and (ii) that all conditions precedent of Vision Twenty-One to
the Closing have been satisfied;
d. a certificate of the Secretary of the
Company certifying as to the incumbency of the directors and officers of each
such corporation as to the signatures of such directors and officers who have
executed documents pursuant to the Agreement on behalf of the Company;
e. a certificate, dated within fifteen (15)
days of the Closing Date, of the Secretary of State of the State of Florida
establishing that Vision Twenty-One is in existence, and is
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in good standing to transact business in such state shall be delivered as
promptly as practicable after the Closing;
f. certificates, dated within fifteen (15) days of
the Closing Date, of the Secretaries of State of the states in which Vision
Twenty-One is qualified to do business, if any, to the effect that Vision
Twenty-One is qualified to do business and in good standing as a foreign
corporation in each of such states shall be delivered as promptly as practicable
after the Closing; and
g. stock certificates representing the Vision
Twenty-One Common Stock.
9. POST CLOSING MATTERS.
9.1. 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 other actions as any of the other parties hereto may
reasonably request in order to more effectively consummate the transactions
contemplated hereunder or as shall be reasonably necessary or appropriate in
connection with the carrying out of the parties' respective obligations
hereunder for the purposes of this Agreement.
9.2. Disclosure. From and after the Closing, at the
request of Vision Twenty-One, the Company agrees to provide all information
which Vision Twenty-One may from time to time request concerning itself and the
transactions contemplated hereby for inclusion in any registration statement or
other filing made by Vision Twenty-One under the Securities Act or the Exchange
Act at no additional cost to Vision Twenty-One. The Company covenants and agrees
that all such information shall be true and correct when made and shall not
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein contained not misleading.
9.3. Audited Financial Statements. From and after the
Closing, at the request of Vision Twenty-One, the Company agrees to cooperate
fully in the preparation of any audited Financial Statements of the Company and
to request its auditor to consent to the inclusion thereof in any registration
statement or other filing made by Vision Twenty-One under the Securities Act or
the Exchange Act.
9.4. Survival of Representations and Warranties. All
representations, warranties, agreements and obligations made by the parties in
this Agreement or in any certificate, schedule, document or instrument furnished
hereunder or in connection with the negotiation, execution and performance of
this Agreement shall survive the Closing and continue for a period of one year
from the Closing Date, except for those representations, warranties, agreements
and obligations made by the Company and the Stockholders in Sections 3.2, 3.19
and 3.22 or which were fraudulently made by the Company or the Stockholders,
which such representations, warranties, and agreements and obligations shall
continue for the period of the applicable statute of limitations.
Notwithstanding any investigation or audit conducted before or after the Closing
Date or the decision of any party to
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complete the Closing, each party shall be entitled to rely upon the
representations and warranties set forth herein and therein and each such
representation and warranty shall be deemed to be material.
10. REMEDIES.
10.1. Indemnification by the Stockholders. Subject to
the terms and conditions of this Agreement, the Stockholders, jointly and
severally, agree to indemnify, defend and hold Vision Twenty-One and its
directors, officers, members, managers, employees, agents, attorneys and
affiliates harmless from and against all losses, claims, obligations, demands,
assessments, penalties, liabilities, costs, damages, attorneys' fees and
expenses (collectively, "Damages") asserted against or incurred by Vision
Twenty-One or any of such individuals or entities (including, but not limited
to, any reduction in payments to or revenues of Vision Twenty-One), arising out
of or resulting from:
a. a breach of any representation, warranty or
covenant of the Company or the Stockholders contained herein or in any schedule
or certificate delivered hereunder;
b. any liability of the Company relating to or
arising from events or occurences prior to the Closing Date;
c. any liability under the Securities Act, the
Exchange Act or any other federal or state "Blue Sky" or securities law or
regulation, at common law or otherwise, (i) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact relating to the
Company or the Stockholders and provided to Vision Twenty-One or its counsel by
them specifically for inclusion in a registration statement or any prospectus
forming a part thereof, or any amendment thereof or supplement thereto, or any
other filing made pursuant to the Exchange Act, or (ii) arising out of or based
upon any omission or alleged omission to state therein a material fact relating
to the Company or the Stockholders required to be stated therein or necessary to
make the statements therein not misleading, and not provided to Vision
Twenty-One or its counsel by the Company, or (iii) as a result of the transfer
to Vision Twenty-One of the Company Common Stock; and
d. any and all actions, suits, claims,
proceedings, investigations, demands, assessments, audits, fines, judgments,
costs and other expenses (including, without limitation, reasonable legal fees
and expenses and court costs) incident to any of the foregoing or to the
enforcement of this Section 10.1.
10.2. Indemnification by Vision Twenty-One. Subject
to the terms and conditions of this Agreement, Vision Twenty-One hereby agrees
to indemnify, defend and hold the Stockholders harmless from and against all
Damages asserted against or incurred by the Stockholders arising out of or
resulting from:
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a. a breach by Vision Twenty-One of any
representation, warranty or covenant of Vision Twenty-One contained therein or
in any schedule or certificate delivered hereunder;
b. Vision Twenty-One's failure to satisfy any
liability of the Company arising from events or occurrences after the Closing
Date;
c. any liability under the Securities Act, the
Exchange Act or any other federal or state "Blue Sky" or securities law or
regulation, at common law or otherwise, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact relating to Vision
Twenty-One, contained in any preliminary prospectus, registration statement or
any prospectus forming a part thereof, or any amendment thereof or supplement
thereto, arising out of or based upon any omission or alleged omission to state
therein a material fact relating to Vision Twenty-One, required to be stated
therein or necessary to make the statements therein not misleading or as a
result of the sale to the Stockholders of any of any Vision Twenty-One Common
Stock, unless such liability arises from or relates to any breach of the
Stockholders' representations and warranties contained in Section 6 hereof;
d. any and all damages, losses, deficiencies,
liabilities, costs and expenses incurred or suffered by the Stockholders that
result from, relate to or arise out of the Stockholder's efforts to defend the
termination of this Stock Purchase Agreement by Vision Twenty-One as
contemplated under Section 10.6(ii) or by a third party under Section 10.6(iii);
and
e. any and all actions, suits, claims,
proceedings, investigations, demands, assessments, audits, fines, judgments,
costs and other expenses (including, without limitation, legal fees and expenses
and court costs) incident to any of the foregoing or to the enforcement of this
Section 10.2.
10.3. Conditions of Indemnification. All claims for
indemnification under this Agreement shall be asserted and resolved as follows:
a. A party claiming indemnification under this
Agreement (an "Indemnified Party") shall promptly (and, in any event, at least
ten (10) days prior to the due date for any responsive pleadings, filings or
other documents) (i) notify the party from whom indemnification is sought (the
"Indemnifying Party") of any third-party claim or claims asserted against the
Indemnified Party ("Third Party Claim") that could give rise to a right of
indemnification under this Agreement and (ii) transmit to the Indemnifying Party
a written notice ("Claim Notice") describing in reasonable detail the nature of
the Third Party Claim, a copy of all papers served with respect to such claim
(if any), an estimate of the amount of damages attributable to the Third Party
Claim and the basis of the Indemnified Party's request for indemnification under
this Agreement. Except as set forth in Section 10.6, the failure to promptly
deliver a Claim Notice shall not relieve the Indemnifying Party of its
obligations to the Indemnified Party with respect to the related Third Party
Claim except to the extent that the resulting delay is materially prejudicial to
the defense of such claim. Within thirty (30) days after receipt of any Claim
Notice (the "Election
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Period"), the Indemnifying Party shall notify the Indemnified Party (i) whether
the Indemnifying Party disputes its potential liability to the Indemnified Party
under this Article 10 with respect to such Third Party Claim and (ii) whether
the Indemnifying Party desires, at the sole cost and expense of the Indemnifying
Party, to defend the Indemnified Party against such Third Party Claim.
If the Indemnifying Party notifies the Indemnified Party
within the Election Period that the Indemnifying Party elects to assume the
defense of the Third Party Claim, then the Indemnifying Party shall have the
right to defend, at its sole cost and expense, such Third Party Claim by all
appropriate proceedings, which proceedings shall be prosecuted diligently by the
Indemnifying Party to a final conclusion or settled at the discretion of the
Indemnifying Party in accordance with this Section 10.3. The Indemnifying Party
shall have full control of such defense and proceedings, including any
compromise or settlement thereof. The Indemnified Party is hereby authorized, at
the sole cost and expense of the Indemnifying Party (but only if the Indemnified
Party is entitled to indemnification hereunder), to file, during the Election
Period, any motion, answer or other pleadings that the Indemnified Party shall
deem necessary or appropriate to protect its interests or those of the
Indemnifying Party and not prejudicial to the Indemnifying Party (it being
understood and agreed that if an Indemnified Party takes any such action that is
prejudicial and causes a final adjudication that is adverse to the Indemnifying
Party, the Indemnifying Party shall be relieved of its obligations hereunder
with respect to such Third Party Claim). If requested by the Indemnifying Party,
the Indemnified Party agrees, at the sole cost and expense of the Indemnifying
Party, to cooperate with the Indemnifying Party and its counsel in contesting
any Third Party Claim that the Indemnifying Party elects to contest, including,
without limitation, the making of any related counterclaim against the person
asserting the Third Party Claim or any cross-complaint against any person. The
Indemnified Party may participate in, but not control, any defense or settlement
of any Third Party Claim controlled by the Indemnifying Party pursuant to
Section 10.3(b) and shall bear its own costs and expenses with respect to such
participation; provided, however, that if the named parties to any such action
(including any impleaded parties) include both the Indemnifying Party and the
Indemnified Party, and the Indemnified Party has been advised by counsel that
there may be one or more legal defenses available to it that are different from
or additional to those available to the Indemnifying Party, then the Indemnified
Party may employ separate counsel at the expense of the Indemnifying Party, and
upon written notification thereof, the Indemnifying Party shall not have the
right to assume the defense of such action on behalf of the Indemnified Party;
provided further that the Indemnifying Party shall not, in connection with any
one such action or separate but substantially similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the reasonable fees and expenses of more than one separate firm of
attorneys at any time for the Indemnified Party, which firm shall be designated
in writing by the Indemnified Party.
b. If the Indemnifying Party fails to notify the
Indemnified Party within the Election Period that the Indemnifying Party elects
to defend the Indemnified Party pursuant to Section 10.3(b), or if the
Indemnifying Party elects to defend the Indemnified Party pursuant to Section
10.3(b) but fails diligently and promptly to prosecute or settle the Third Party
Claim, then the Indemnified Party shall have the right to defend, at the sole
cost and expense of the Indemnifying Party (if the Indemnified Party is entitled
to indemnification hereunder), the Third
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Party Claim by all appropriate proceedings, which proceedings shall be promptly
and vigorously prosecuted by the Indemnified Party to a final conclusion or
settled. The Indemnified Party shall have full control of such defense and
proceedings, provided; however, that the Indemnified Party may not enter into,
without the Indemnifying Party's consent, which shall not be unreasonably
withheld, any compromise or settlement of such Third Party Claim.
Notwithstanding the foregoing, if the Indemnifying Party has delivered a written
notice to the Indemnified Party to the effect that the Indemnifying Party
disputes its potential liability to the Indemnified Party under this Article 10
and if such dispute is resolved in favor of the Indemnifying Party, the
Indemnifying Party shall not be required to bear the costs and expenses of the
Indemnifying Party's defense pursuant to this Section or of the Indemnifying
Party's participation therein at the Indemnified Party's request, and the
Indemnified Party shall reimburse the Indemnifying Party in full for all costs
and expenses of such litigation. The Indemnifying Party may participate in, but
not control any defense or settlement controlled by the Indemnified Party
pursuant to this Section 10.3(b), and the Indemnifying Party shall bear its own
costs and expenses with respect to such participation; provided, however, that
if the named parties to any such action (including any impleaded parties)
include both the Indemnifying Party and the Indemnified Party, and the
Indemnifying Party has been advised by counsel that there may be one or more
legal defenses available to the Indemnified Party, then the Indemnifying Party
may employ separate counsel and upon written notification thereof, the
Indemnified Party shall not have the right to assume the defense of such action
on behalf of the Indemnifying Party.
c. In the event any Indemnified Party should have a
claim against any Indemnifying Party hereunder that does not involve a Third
Party Claim, the Indemnified Party shall transmit to the Indemnifying Party a
written notice (the "Indemnity Notice") describing in reasonable detail the
nature of the claim, an estimate of the amount of damages attributable to such
claim and the basis of the Indemnified Party's request for indemnification under
this Agreement. If the Indemnifying Party does not notify the Indemnified Party
within sixty (60) days from its receipt of the Indemnity Notice that the
Indemnifying Party disputes such claim, the claim specified by the Indemnified
Party in the Indemnity Notice shall be deemed a liability of the Indemnifying
Party hereunder. If the Indemnifying Party has timely disputed such claim, as
provided above, such dispute shall be resolved by mediation or arbitration as
provided in Section 12.1 if the parties do not reach a settlement of such
dispute within thirty (30) days after notice of a dispute is given.
d. Payments of all amounts owing by an Indemnifying
Party pursuant to this Article 10 relating to a Third Party Claim shall be made
within thirty (30) days after the latest of (i) the settlement of such Third
Party Claim, (ii) the expiration of the period for appeal of a final
adjudication of such Third Party Claim or (iii) the expiration of the period for
appeal of a final adjudication of the Indemnifying Party's liability to the
Indemnified Party under this Agreement. Payments of all amounts owing by an
Indemnifying Party pursuant to Section 10.3(d) shall be made within thirty (30)
days after the later of (i) the expiration of the sixty (60) day Indemnity
Notice period or (ii) the expiration of the period for appeal, if any, of a
final adjudication or arbitration of the Indemnifying Party's liability to the
Indemnified Party under this Agreement.
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10.4. Tax Benefits; Insurance Proceeds. The total
amount of any indemnity payments owed by one party to another party to this
Agreement shall be reduced by any correlative tax benefit received by the party
to be indemnified or the net proceeds received by the party to be indemnified
with respect to recovery from third parties or insurance proceeds and such
correlative insurance benefit shall be net of the insurance premium, if any,
that becomes due as a result of such claim.
10.5. Indemnification Limitation. The Stockholders
shall not be required to indemnify Vision 21 pursuant to Section 10.1 unless the
aggregate amount of damages or losses incurred by Vision 21 hereunder shall
exceed $100,000, after which the Seller shall be obligated to indemnify Vision
21 from the first dollar, except that the Seller's total monetary obligations to
indemnify Vision 21 pursuant to Section 10.1 shall be capped at the Purchase
Price, unless the liability relates to fraud, in which case Seller's liability
shall be unlimited.
10.6. Health Care Regulatory - Termination
Limitations. If this Stock Purchase Agreement is held to be unlawful or
unenforceable due to health care regulatory matters (and/or if efforts are made
to achieve such a result) then (i) if the Stockholders sought to have this Stock
Purchase Agreement held unlawful or unenforceable, the Stockholders shall
disgorge to Vision Twenty-One the Stock Purchase Consideration; (ii) if Vision
Twenty-One sought to have this Stock Purchase Agreement held unlawful or
unenforceable, the stockholders may keep the Stock Purchase Consideration
despite the termination of this Stock Purchase Agreement, and (iii) if a third
party sought to have this Stock Purchase Agreement held unlawful or
unenforceable, the Stockholders may keep the Stock Purchase Consideration
despite the termination of this Stock Purchase Agreement. In such instance of
(ii) or (iii) above, Stockholders shall take all such steps to cause the
immediate sale and transfer of all assets of the Company (which may be sold by
State law) to Vision Twenty-One for the total purchase price of $10,000 cash to
be paid at the time of transfer, which shall occur immediately upon delivery of
a check for $10,000 by Vision Twenty-One. Such sale and transfer will be
pursuant to such documentation as reasonably requested by Vision Twenty-One.
11. NON-COMPETITION AND CONFIDENTIALITY COVENANTS.
11.1. Non-Compete. The Stockholders recognize that
their employment agreements and covenants not to compete as contained in various
documents to be executed by them in connection with the closing of this
acquisition and a related acquisition are essential to this Agreement. Vision
Twenty-One would not have entered into this Agreement without assurances that
such agreements and covenants would be executed at Closing.
11.2. The Stockholders' Confidentiality Covenant.
From the date hereof, none of the Stockholders shall, directly or indirectly,
use for any purpose, or disclose to any third party, any information of Vision
Twenty-One, any of its Affiliates or the Company (whether written or oral),
including any business management or economic studies, customer lists,
proprietary forms, proprietary business or management methods, marketing data,
operational methods or procedures, fee schedules or trade secrets of Vision
Twenty-One, any of its Affiliates or the Company, and including the terms and
provisions of this Agreement and any transaction or document executed by
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the parties pursuant to this Agreement. Notwithstanding the foregoing, the
Stockholders may disclose information that they can establish (a) is or becomes
generally available to and known by the public or health community (other than
as a result of an unpermitted disclosure directly or indirectly by the
Stockholders); or (b) is or becomes available to the Stockholders on a
nonconfidential basis from a source other than Vision Twenty-One provided that
such source is not and was not bound by a confidentiality agreement with or
other obligation of secrecy to Vision Twenty-One or the Company.
11.3. Remedies for Breach of Restrictive Covenants.
Each of the Stockholders acknowledges that violation of the restrictive
covenants described in Sections 11.1 and 11.2 would cause irreparable harm to
Vision Twenty-One which cannot be fully redressed by payment of damages by the
Stockholders. Accordingly, Vision Twenty-One shall be entitled in addition to
any other right or remedy it may have, at law or in equity, to an injunction,
enjoining or restraining a Stockholder from any violation or threatened
violation of Sections 11.1 and 11.2. The Stockholders and Vision Twenty-One
further expressly acknowledge that the damages that would result from a
violation of the non-competition covenants contained in Section 11.1 would be
impossible to predict with any degree of certainty, and agree that liquidated
damages in the amount of the Stock Purchase Consideration are reasonable in
light of the severe harm to Vision Twenty-One which would result in the event
that a violation of such non-competition covenants were to occur. If any of the
rights, remedies or restrictions contained in this Article 11 shall be deemed by
a court of competent jurisdiction to be unenforceable by reason of the extent,
duration or geographical scope thereof or any other provision of this Agreement,
the parties hereto contemplate that the court shall reduce such extent,
duration, geographical scope or other provision and enforce this Article 11 in
its reduced form for all purposes in the manner contemplated hereby. The
restrictive covenants contained in this Article 11 shall be construed as an
agreement ancillary to the other provisions of this Agreement, and the existence
of any claim or cause of action of the Stockholders against Vision Twenty-One,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Vision Twenty-One of the restrictive covenants
contained in this Article 11.
11.4. Survival. The parties acknowledge and agree
that this Article 11 shall survive the Closing of the transactions contemplated
herein.
12. DISPUTES.
12.1. Mediation and Arbitration. Any dispute,
controversy or claim (excluding claims arising out of an alleged breach of
Article 11 of this Agreement) arising out of this Agreement, or the breach
thereof, that cannot be settled through negotiation may be submitted to
arbitration or the parties may avail themselves of any and all other remedies
available at law or in equity.
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13. MISCELLANEOUS
13.1. Taxes. The Stockholders shall pay all transfer
taxes, sales and other taxes and charges imposed by the State of New Jersey, if
any, which may become payable in connection with the transactions and documents
contemplated hereunder. Vision Twenty-One shall pay all transfer taxes, sales
and other taxes and charges imposed by the State of Florida, if any, which may
become payable in connection with the transactions and documents contemplated
hereunder.
13.2. Parties Bound. Except to the extent otherwise
expressly provided herein, this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, representatives,
administrators, guardians, successors and assigns; and no other person shall
have any right, benefit or obligation hereunder (except pursuant to Section 10
hereof).
13.3. Notices. All notices, reports, records or
other communications that are required or permitted to be given to the parties
under this 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:
IF TO VISION TWENTY-ONE ADDRESSED TO:
Vision Twenty-One, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Chief Financial Officer
WITH COPIES TO:
Xxxxxxxx, Loop & Xxxxxxxx
Post Office Box 172609
000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Facsimile No. (000) 000-0000
Attn: Xxxxxxx X. Xxxxx, Esquire
IF TO THE COMPANY ADDRESSED TO:
The Complete Optical Laboratory, Ltd., Corp.
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxx Xxxxxx
Attn: Xxxxxxx X. Xxxxxxx, President
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WITH COPIES TO:
Xxxxxxxxx, Xxxxxx & Xxxxxxx
Suite 000
Xxx Xxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attn: H. Xxxxx Xxxxxx
or to such other address as such party may have given to the other parties by
notice pursuant to this Section 13.3. 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.
13.4. Choice of Law. This Agreement shall be governed
and construed in accordance with the laws of the State of New Jersey without
giving effect to its conflicts of laws.
13.5. Entire Agreement; Amendments and Waivers. This
Agreement, together with the documents contemplated by this Agreement 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. No supplement, modification or waiver
of any of the provisions of this Agreement shall be binding unless it shall be
executed in writing by the party to be bound thereby. No waiver of any of the
provisions of this 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.
13.6. Assignment. This Agreement may not be assigned
by operation of law or otherwise except that Vision Twenty-One shall have the
right to assign this Agreement, at any time, to any Affiliate or direct or
indirect wholly-owned subsidiary, provided that it shall notify the Company and
the Stockholders of any such assignment.
13.7. Announcements and Press Releases. Any press
releases or any other public announcements by any party hereto concerning this
Agreement or the transactions contemplated hereunder shall be approved in
advance by the other parties hereto; provided, however, that Vision Twenty-One
may make such disclosures as are required under federal and state securities
laws in the opinion of counsel to Vision Twenty-One upon prior notice to the
Company.
13.8. Multiple Counterparts. This 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.
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13.9. Headings. The headings of the several articles
and sections herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.
13.10. Severability. Each article, section and
subsection of this Agreement constitutes a separate and distinct undertaking,
covenant or provision of this Agreement. If any such provision shall finally be
determined to be unlawful, such provision shall be deemed severed from this
Agreement, but every other provision of this Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of March 31, 1998.
THE COMPLETE OPTICAL LABORATORY, LTD., CORP.
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------------
Xxxxxxx X. Xxxxxxx, President
STOCKHOLDERS
/s/ Xxxxxx X. Shack
----------------------------------------------
Xxxxxx X. Shack
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------------
Xxxxxxx X. Xxxxxxx
VISION TWENTY-ONE, INC.
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------------------
Xxxxxxx X. Xxxxx, Chief Financial Officer
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