1
EXHIBIT 2.2
AGREEMENT TO TERMINATE MANAGEMENT AGREEMENT
This Agreement to Terminate Management Agreement ("Termination
Agreement"), effective as of 12:01 a.m. on September 1, 2000 (the "Effective
Date"), is made by and among IOI MANAGEMENT SERVICES OF LOUISIANA, INC., a
Louisiana business corporation ("IOI Management Corporation"), and WESTSIDE
ORTHOPAEDIC CLINIC (a professional corporation) ("Medical Practice"), and for
purposes of Section 5 hereof only, the shareholders of Medical Practice who are
signatories hereto ("Shareholders") (the parties, at times, are collectively
referred to herein as the "Parties").
RECITALS
WHEREAS, currently IOI Management Corporation and Medical Practice are
parties to that certain Management Services Agreement dated November 12, 1997,
as amended, pursuant to which IOI Management Corporation provides management
services to Medical Practice (the "Management Agreement"); and
WHEREAS, Medical Practice desires to, and IOI Management Corporation
agrees to, terminate the Management Agreement, and in consideration thereof,
Medical Practice agrees to deliver to IOI Management Corporation the Notes (as
defined below);
WHEREAS, concurrently herewith, IOI Management Corporation is selling
to Xxxx and XxXxxxx, Inc. (a professional medical corporation) ("K&D"), an
affiliate of Medical Practice, and K&D is purchasing from IOI Management
Corporation, certain assets of IOI Management Corporation pursuant to an asset
purchase agreement dated of even date herewith ("Asset Purchase Agreement").
NOW, THEREFORE, for and in consideration of the mutual covenants and
consideration set forth herein, the receipt and sufficiency of which is
acknowledged by all the Parties hereto, the parties hereto agree as follows:
TERMS AND CONDITIONS
1. Recitals. The above recitals are true and correct as stated and are
incorporated herein by this reference.
2. Termination of Management Agreement. Each of IOI Management Corporation and
Medical Practice agree that effective as of the Effective Date, the Management
Agreement shall be terminated, null and void and of no further force and effect.
In consideration for IOI Management Corporation's agreement to terminate the
Management Agreement, simultaneously with the execution of this Agreement,
Medical Practice shall cause Xxxxx XxXxxxx, M.D. and Sea Kat, L.L.C. to deliver
to Medical Practice, and Medical Practice shall simultaneously deliver to IOI
Management Corporation, cancelled original Non-Negotiable Subordinated
Convertible Promissory Notes dated November 12, 1997, made by Integrated
Orthopaedics, Inc. ("IOI") in favor of Xx. XxXxxxx in the original principal
amount of $240,618, and in favor of Xxxxx X. Xxxx, M.D., which note was
transferred and assigned by Xx. Xxxx to Sea Kat, L.L.C., also in the
2
original principal amount of $240,618. Medical Practice understands and agrees
that as of the Effective Date, neither IOI Management Corporation nor IOI has
any duty or obligation to provide any services of any nature whatsoever to
Medical Practice, except as otherwise expressly stated in this Termination
Agreement. Furthermore, Medical Practice understands and agrees that as of the
Effective Date, IOI Management Corporation and IOI shall have no liability
whatsoever with respect to "Medical Practice Expenses" (as defined in the
Management Agreement) and that as of the Effective Date, neither IOI Management
Corporation nor IOI shall have any liability with respect to any obligations,
costs or expenses relating to the operation of Medical Practice.
3. Management Fee. Medical Practice shall have no obligation to pay any
Management Fee with respect to any period commencing on or after August 1, 2000.
All funds received by IOI or IOI Management Services after July 31, 2000,
attributable to collections of Medical Practice accounts receivable will be used
solely for payment of Medical Practice Expenses pursuant to the Management
Agreement in accordance with past business practices, and any such collections
not so expended shall be delivered to Medical Practice fourteen (14) days after
IOI or IOI Management Services receives bank statements pertaining to the
Medical Practice. At that time, IOI Management Services shall also deliver (i) a
list of any checks which are outstanding as of the date of the preparation of
the schedule of receipts and disbursements described hereinafter, (ii) a
schedule of receipts and disbursements summarizing the Medical Practice accounts
receivable collected through September 15, 2000.
4. Financial Packages/Tax Filings; Delivery of Information. On or prior to
September 14, 2000, IOI Management Corporation shall deliver to Medical Practice
complete state and federal income tax returns of the Medical Practice for the
fiscal year ended December 31, 1999.
5. Delivery of Financial Information. Medical Practice and the Shareholders
shall provide to IOI Management Corporation access to and, at the option of IOI
Management Corporation, an opportunity to copy, during regular business hours
and upon reasonable prior notice to Medical Practice and the Shareholders, all
information in the actual possession or control of Medical Practice or
Shareholders, necessary for IOI Management Corporation to close its books and
records with respect to the services furnished by IOI Management Corporation to
Medical Practice under the Management Agreement; provided, however, neither
Medical Practice nor Shareholders shall be obligated to prepare any financial or
other reports for IOI Management Services in connection with this obligation.
This section shall survive the execution of this Agreement.
6. Termination of Joint Policy Board. The parties agree that the "Joint Policy
Board" (as defined in the Management Agreement) is terminated as of the
Effective Date and that IOI Management Corporation's and Medical Practice's
representatives on the Joint Policy Board have resigned effective as of the
Effective Date.
7. Accounts Payable Reconciliation. The Parties acknowledge that as of the
Effective Date, Medical Practice is responsible for payment of all payables of
Medical Practice.
2
3
8. Miscellaneous.
8.1 Attorneys' Fees. If any Party institutes litigation or arbitration
to interpret or enforce this Termination Agreement, or to recover damages for
breach of this Termination Agreement, the non-prevailing party shall bear the
attorneys' fees and litigation costs (including any attorneys' fees and costs
for appeals) incurred by the prevailing party.
8.2 Further Acts. Each Party will do such further acts, including
executing and delivering additional agreements or instruments as the other may
reasonably require, to consummate, perform, evidence or confirm the covenants
and conditions contained in this Termination Agreement or any other agreement
executed in connection herewith.
8.3 Applicable Law and Venue. This Termination Agreement shall be
construed, interpreted and enforced according to the laws of the State of
Louisiana, and venue for any action arising hereunder shall be in Xxxxxxxxx
Xxxxxx, Louisiana.
8.4 Integration. The making, execution and delivery of this Termination
Agreement by the Parties has not been induced by any representations,
statements, warranties, or agreements other than those expressed in this
Termination Agreement, the Asset Purchase Agreement or any documents referenced
in the Asset Purchase Agreement or herein. This Termination Agreement and the
documents and agreements executed by the Parties hereto in connection with this
Termination Agreement, including, without limitation the Asset Purchase
Agreement, embody the entire understanding of the Parties with respect to the
subject matter of the transactions documented herein and therein.
8.5 Preparation of Agreement. Each Party represents and warrants that
it was represented by, or had the opportunity to be represented by, counsel in
connection with the negotiation of this Termination Agreement, and each Party
hereto and its counsel participated in the negotiation and drafting of this
Termination Agreement. Accordingly, this Termination Agreement shall not be
construed more favorably for any party hereto regardless of who is responsible
for its preparation.
8.6 Parties in Interest. This Termination Agreement and all of the
terms, covenants and conditions herein shall bind and inure to the benefit of
the Parties hereto and their respective permitted successors and assigns. This
Termination Agreement may not be assigned by any Party hereto without the other
Party's written consent.
8.7 Severability. If any provision of this Termination Agreement is
found to violate any statute, regulation, rule, order or decree of any
governmental authority, court, agency or exchange, such invalidity shall not be
deemed to affect any other provision hereof or the validity of the remainder of
this Termination Agreement, and such invalid provision shall be deemed deleted
from this Termination Agreement to the minimum extent necessary to cure such
violation.
8.8 Headings. The section and other headings contained in this
Termination Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Termination Agreement.
3
4
8.9 Waiver. A waiver of any breach or violation of any term, provision,
or covenant contained herein shall not be deemed a continuing waiver, or a
waiver of any future or past breach or violation, or a waiver of any other term,
provision or covenant of this Termination Agreement.
8.10 Confidentiality. Each of the Parties agrees to keep all terms of
this Termination Agreement, the Asset Purchase Agreement and all terms of any
other documents executed in connection with this Termination Agreement or the
Asset Purchase Agreement confidential; except to the extent disclosure is
required by applicable law or by applicable regulatory filings; except as
otherwise mutually agreed to in writing by the Parties; and except with respect
to communications any of the undersigned may have with: (i) its advisors, such
as accountants or attorneys, to assist in drafting, interpreting or enforcing
the terms of this Termination Agreement or the Asset Purchase Agreement and any
documents executed in connection with this Termination Agreement or the Asset
Purchase Agreement; and (ii) third parties as necessary to carry out the terms
of this Termination Agreement or the Asset Purchase Agreement as long as the
undersigned divulges only the minimal information necessary to carry out the
terms of this Termination Agreement or the Asset Purchase Agreement.
8.11 No Disparagement. Medical Practice agrees that it shall not make
any disparaging statements about IOI, IOI Management Corporation, any of IOI's
or IOI Management Corporation's affiliated corporations, or any directors,
officers or employees of IOI or IOI Management Corporation. Medical Practice
agrees that each of IOI and IOI Management Corporation has a legitimate business
interest justifying a "no disparagement" condition and agreement with respect to
the same. This undertaking shall not be construed to limit in any manner Medical
Practice's right to make statements in the course of the lawsuit styled Xxxx X.
Xxxxxxx v. Xxxxx X. XxXxxxx, M.D., et al., Civil Action No. 00-7103 in Division
"I", Section 0, Xxxxx Xxxxxxxx Xxxxx, Xxxxxx of Orleans, State of Louisiana
("Lawsuit") (i) relating to the operations of Medical Practice, (ii) with
respect to IOI or IOI Management Corporation's actions with respect to Medical
Practice or (iii) in connection with any claim for contribution or indemnity
arising out of the Lawsuit related to Medical Practice. IOI Management
Corporation agrees that it shall not make any disparaging statements about
Medical Practice or its shareholders. IOI Management Corporation agrees that
Medical Practice has a legitimate business interest justifying a "no
disparagement" condition and agreement with respect to the same. This
undertaking shall not be construed to limit in any manner IOI or IOI Management
Corporation's right to make statements in the course of the Lawsuit (i) relating
to Medical Practice, (ii) relating to the operation of the Medical Practice by
the Shareholders; or (iii) in connection with any claim for contribution or
indemnity arising out of the Lawsuit related to Medical Practice.
8.12 Third Party Beneficiary. IOI is an intended third party
beneficiary to this Agreement
8.13 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to constitute one and the same instrument.
4
5
8.14 Facsimile Signatures. Delivery of executed signature pages hereof
by facsimile transmission shall constitute effective and binding execution and
delivery thereof.
5
6
In witness whereof, the Parties hereto have executed this
Termination Agreement to be effective as of the day and year above written.
MEDICAL PRACTICE:
WESTSIDE ORTHOPAEDIC CLINIC (a professional
corporation)
By:
-------------------------------------------
Print Name:
-----------------------------------
Print Title:
----------------------------------
IOI MANAGEMENT CORPORATION:
IOI MANAGEMENT SERVICES OF LOUISIANA, INC., a
Louisiana business corporation
By:
-------------------------------------------
Print Name:
-----------------------------------
Print Title:
----------------------------------
------------------------------------
XXXXX X. XxXXXXX, M.D.
------------------------------------
XXXXX X. XXXX, M.D.
6
