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Exhibit 10(q)
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement ("Agreement") is made and entered into as
of this 29th day of August , 1997 by and between XXXXX X. XXXXXXX, M.D., a
citizen and resident of Illinois ("Seller"), and OMEGA HEALTH SYSTEMS OF
ILLINOIS, INC., an Illinois corporation ("Buyer").
RECITALS
WHEREAS, Seller is the sole shareholder in Xxxxxxx Eye Care Associates,
Inc., an Illinois corporation (the "Corporation");
WHEREAS, Seller has agreed to sell all of Seller's stock (the "Shares")
in the Corporation, and Buyer has agreed to purchase the Shares; and
WHEREAS, in connection with that certain Management Agreement, dated as
of August 29, 1997, and entered into by and between Buyer and Ocular Care
Associates, S.C., an Illinois service corporation (the "Management Agreement");
Seller desires Buyer to provide and Buyer has agreed to provide management
services to Ocular Care Associates, S.C.;
NOW, THEREFORE, in consideration of the Recitals (which are
incorporated into and deemed a part of this Agreement), the covenants and
agreements contained in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are acknowledged by the
parties, the parties agree as follows:
SECTION 1. PURCHASE AND SALE OF SHARES
1.1 AGREEMENT TO PURCHASE AND SELL. Effective as of August 29, 1997,
and upon the terms and subject to the conditions set forth in this Agreement,
Seller shall sell, assign, transfer, convey and deliver the Shares to Buyer, and
Buyer shall accept the Shares.
1.2 COLLECTION OF ACCOUNTS RECEIVABLE. For a period of six (6) months
following the Closing Date (as defined herein) (the "Collection Period"), Omega
shall collect the accounts receivable (the "Accounts") of the Corporation
existing as of the Closing Date. Every thirty (30) days through the end of the
Collection Period, Omega shall pay to Seller, any Accounts so collected, less
twenty percent (20%) for such collection services (the "Collection Fee"). After
the Collection Period, Omega shall cease collection efforts on the Accounts, and
will review with the Seller the remaining Accounts. Seller agrees to cooperate
with Omega in the collection of the Accounts. Seller understands and
acknowledges that Omega will exercise only its normal collection efforts to
collect the Accounts. Omega shall not exercise extraordinary efforts, including,
but not limited to, litigation to collect the Accounts.
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1.3 CLOSING DATE. The closing of the purchase and sale and the exchange
contemplated herein (the "Closing") shall take place at such time and place as
the parties hereto may agree in writing (the "Closing Date"). The parties agree
that the Closing Date shall be extended, if required, to allow either party to
fulfill any condition of this Agreement, but in no event shall the Closing be
extended beyond August 31, 1997, unless agreed in writing by Seller and Buyer.
1.4 TRANSFER OF THE SHARES. Effective as of the Closing Date, Seller
shall sell, transfer, assign, grant, deliver and convey to Buyer all of Seller's
right, title and interest in and to the Shares, free and clear of any lien,
pledge, charge, security interest or encumbrance of any nature ("Lien") by
delivery by Seller to the Buyer of the stock certificates representing the
Shares duly endorsed in blank for transfer or accompanied by appropriate stock
powers duly executed in blank, with all transfer taxes, direct or indirect,
attributable to the transfer of the Shares paid or provided for.
1.5 EVIDENCE OF TRANSFER. At the Closing and thereafter, as Buyer may
from time to time request, Seller shall execute and deliver to the Buyer such
documents and instruments of conveyance as may be appropriate and shall take or
cause to be taken such actions as Buyer may reasonably request in order to
accomplish the transfer of the Shares, and the consummation of the matters
contemplated by this Agreement. All such documents shall be in form reasonably
satisfactory to Buyer.
1.6 PAYMENT OF PURCHASE PRICE. At the Closing, in consideration for the
Shares, Buyer shall pay to Seller the Purchase Price set forth in Section 2
hereof.
SECTION 2. CONSIDERATION
2.1 AMOUNT OF CONSIDERATION. The purchase price for the Shares shall be
(i) Seven Hundred Twenty-five Thousand Dollars ($725,000) in the form of either
a wire transfer or certified funds payable at the Closing; and (ii) Three
Hundred Seventy-five Thousand Dollars ($375,000) represented by Buyer's 7%
Subordinated Note, dated as of August 29, 1997, substantially in the form
attached hereto as Exhibit 2 (the "Promissory Note") and (iii) the net value of
the Accounts collected as provided in Section 1.2 hereof (the "Purchase Price").
2.2 REFERRALS. The parties agree that nothing in this Agreement is
intended to violate state or federal health care laws or regulations including,
but not limited to, those listed in Section 3.8 herein, nor shall any portion of
the consideration be construed as a payment for or inducement of the referral of
patients. Seller shall be free to refer patients to whomever it sees fit in the
exercise of professional judgment, according to the convenience or preference of
the patient, or otherwise.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF SELLER
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Seller represents, warrants and agrees with Buyer that:
3.1 NUMBER OF, TITLE TO THE SHARES. The entire authorized capital stock
of the Corporation consists of One Thousand (1,000) shares, no par value, of
which Ten (10) shares are issued and outstanding. All of the issued and
outstanding Shares have been duly authorized, are validly issued, fully paid,
and nonassessable, and are held of record by Seller. Seller owns beneficially
and of record, and has good and marketable title to, the Shares and shall convey
the Shares to Buyer free and clear of all Liens. As of the Closing Date, Buyer
will acquire good and marketable title to the Shares, free and clear of all
Liens. Seller further warrants that the Corporation is no longer organized as a
service corporation under Illinois law, that the Corporation is now a business
corporation organized under Illinois law, and that the Shares may be legally
transferred to Buyer.
3.2 OPTIONS AND OTHER RIGHTS. There are no outstanding options,
warrants, agreements, calls, conversion rights or other rights to subscribe for,
purchase or otherwise acquire any of the Shares.
3.3 AUTHORITY TO EXECUTE AND PERFORM AGREEMENT. Seller has the full
legal right, power and capacity, and all authority and approval required to
enter into, execute and deliver this Agreement and to perform and observe fully
Seller's obligations hereunder and to perform the transactions contemplated
hereby. This Agreement has been fully executed and delivered by Seller and is
the valid and binding obligation of Seller enforceable in accordance with its
terms.
3.4 TAXES. (a) Seller has paid, or will pay on or prior to any
applicable due date, all income, employment and other taxes and duties accrued
or owed by Seller in connection with the Shares.
(b) The Corporation has filed all federal, state, local, municipal or
other tax returns ("Tax Returns") that it was required to file. All such Tax
Returns were correct and complete in all material respects. All federal, state,
local, municipal, or other income, employment, and other taxes ("Taxes") owed by
the Corporation (whether or not shown on any Tax Return) through the Closing
Date have been duly paid or accrued. The Corporation is not the beneficiary of
any extension of time within which to file any Tax Return. No claim has ever
been made by an authority in a jurisdiction where the Corporation does not file
Tax Returns that it is or may be subject to taxation by that jurisdiction. There
are no Liens on any of the assets of the Corporation that arose in connection
with any failure (or alleged failure) to pay any Tax.
(c) The Corporation has withheld and paid all Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party.
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3.5 LITIGATION. Except as set forth on Schedule 3.5 hereto, there are
no judgments unsatisfied against Seller or Corporation or consent decrees or
injunctions to which Seller or Corporation is subject. Neither Seller nor
Corporation is a party to any pending action, suit, proceeding or investigation,
at law or in equity, or otherwise in, for or by any court or governmental board,
commission, agency, department or officer arising from the acts of Seller or of
Corporation or initiation thereof by Seller or Corporation. Neither Seller nor
Corporation is subject to any order, judgment, decree or governmental
restriction which adversely affects the either the Shares or which would prevent
the transactions contemplated by this Agreement. Neither Seller nor Corporation
is in violation of any law, order, writ, injunction or decree of any court,
governmental department or instrumentality (including, without limitation,
applicable environmental protection legislation and regulations). There is no
claim, action or proceeding now pending or, to the knowledge of Seller,
threatened against Seller or Corporation which will, or could, prevent or delay
consummation of the transactions contemplated by this Agreement.
3.6 CONTRACTS OR OTHER AGREEMENTS. Neither the execution or delivery of
this Agreement nor the consummation of this transaction will: (i) conflict with,
constitute a breach, violation or termination of any provision of any contract
or other agreement to which either the Seller or Corporation is a party or by
which either the Seller or Corporation is bound; (ii) result in the creation or
imposition of any Lien against the Shares; or (iii) violate any law, regulation,
judgment, rule, order or any other restriction of any kind or character
applicable to the Seller, Corporation, or the Shares.
3.7 HEALTHCARE COMPLIANCE. Either the Seller or the Corporation is
participating in or otherwise authorized to receive reimbursement from or is a
party to Medicare, Medicaid, and other third-party payor programs. Except as
listed on Schedule 3.7, all necessary certifications and contracts required for
participation in such programs are in full force and effect and have not been
amended or otherwise modified, rescinded, revoked or assigned as of the date
hereof, and to the best knowledge of Seller no condition exists or event has
occurred which in itself or with the giving of notice or the lapse of time or
both would result in the suspension, revocation, impairment, forfeiture, or
non-renewal of any such third-party payor program. To the best of Seller's
knowledge, Seller and the Corporation are in full compliance with the
requirements of all such third-party payor programs applicable thereto.
3.8 FRAUD AND ABUSE. Seller and persons and entities providing
professional services for Seller have not, to the knowledge of Seller, engaged
in any activities which are prohibited under 42 U.S.C. ss. 1320a-7b, or the
regulations promulgated thereunder pursuant to such statutes, or related state
or local statues or regulations, or which are prohibited by rules of
professional conduct, including but not limited to the following:
(a) knowingly and willfully making or causing to be made a
false statement or representation of a material fact in any application
for any benefit or payment;
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(b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in
determining rights to any benefit or payment;
(c) failing to disclose knowledge by a claimant of the
occurrence of any event effecting the initial or continued right to any
benefit or payment on his own behalf or on behalf of another, with
intent to fraudulently secure such benefit or payment; or
(d) knowingly and willfully soliciting or receiving any
remuneration (including any kickback, bribe or rebate) directly or
indirectly, overtly or covertly, in cash or in kind or offering to pay
or receive such remuneration (i) in return for referring an individual
to a person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by
Medicare or Medicaid, or (ii) in return for purchasing, leasing, or
ordering or arranging for or recommending purchasing, leasing, or
ordering any good, facility, service or item for which payment may be
made in whole or in part by Medicaid or Medicare.
3.9 ACCURACY AND MATERIALITY. No representation or warranty of Seller
contained in this Agreement or any other document prepared by Seller and
delivered to Buyer in connection with this Agreement contains any untrue
statement of a material fact, or fails to state any material fact necessary in
order to make the statements made in this Agreement or such document not
misleading. Each of the representations, warranties and covenants contained in
this Section 3 shall be deemed to be material to and have been relied upon by
Buyer, and shall be binding and enforceable, notwithstanding any independent
investigation made by Buyer.
3.10 REVIEW AND CONSULTATION. Seller has had access to and reviewed
such information and has consulted with all legal counsel, tax counsel,
accountants and other experts and advisors deemed necessary by Seller in
connection with the transactions contemplated herein.
3.11 BROKER FEES. Neither Seller nor the Corporation has utilized the
services of a broker in connection with this transaction, and neither Seller nor
the Corporation has any liability or obligation to pay any fee or commission to
any broker, finder, or agent with respect to the transactions contemplated by
this Agreement.
3.12 PRACTICE ASSETS. Attached hereto as Schedule 3.12 is a true and
complete list of all of the non-cash assets, including leases to which
Corporation is a party, of Corporation at Closing Date (the "Practice Assets").
Corporation has and at the Closing will have good title, unencumbered by any
Lien, to all of the Practice Assets. The Practice Assets will be updated at
Closing, and supplies and inventories at Closing will be at levels greater than
or equal to the Closing Date levels.
3.13 ACCOUNTS RECEIVABLE. Attached hereto as Schedule 3.13 is a true
and complete list of all accounts receivable of Corporation at the Closing Date
(the "Accounts Receivable"). Prior
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to the Closing there shall be no change in the Accounts Receivable except for
transactions in the normal course of the Corporation's business. The Accounts
Receivable will be updated at the Closing.
3.14 FINANCIAL STATEMENTS. Attached hereto as collective Exhibit 3.14
are unaudited financial statements of Corporation at December 31, 1996, 1995 and
1994, including balance sheets and income statements for the periods then ended.
Such financial statements accurately reflect the condition and results of
operations of Corporation at such dates and for such periods. Since December 31,
1996 there has not been, and prior to the Closing Date there will not be any
material adverse change in the assets or business condition, financial or
otherwise, of Corporation or the Practice Assets.
3.15 LIABILITIES. Attached hereto as Schedule 3.15 is a true and
complete list at the Closing Date of Corporation's debts, liabilities, or
obligations, whether contingent, nonasserted, or nonaccrued, of any type or
nature, including obligations on contracts, leases, written or oral, employee
benefits, or state or federal tax obligations (the "Corporate Liabilities").
Except for the Corporate Liabilities, Corporation does not have, and at the
Closing Date will not have, any debts or obligations, contingent or otherwise,
related to the conduct of the Corporation's business prior to the Closing Date,
except as may be reserved for on Schedule 3.15.
3.16 MALPRACTICE CLAIMS. Since January 1, 1993, Corporation and its
professional employees have been continuously insured for professional
malpractice claims. Attached hereto as Schedule 3.16 is a list of all insurance
claims filed by Corporation or any of its professional employees since December
31, 1993. Neither Corporation nor any of its professional employees is in
violation or default of any provision contained in any insurance policy for
their benefit, and neither has failed to give any required notice or timely
present any claim under any such policy. Seller and Corporation hereby agree to
promptly cause its professional liability insurance carrier to furnish to Buyer
a list of professional liability claims known to such insurance carrier, or
otherwise currently pending or threatened against Seller or Corporation.
3.17 GOVERNMENTAL APPROVALS. Corporation and all professionals employed
by it have all permits and licenses required by all applicable laws and
regulations and are not in violation of any such applicable laws or regulations.
Corporation is duly licensed, and Corporation and its clinics, offices and
facilities are lawfully operated in accordance with the requirements of all
applicable laws and certificates of need and has all necessary authorizations
and certificates of need for their use and operation, all of which are in full
force and effect. There are no outstanding notices of deficiencies relating to
Corporation or any physician employed thereby issued by any governmental
authority or third party payor requiring conformity or compliance with any
applicable law or condition for participation of such governmental authority or
third party payor, and after reasonable and independent inquiry and due
diligence and investigation, Corporation has knowledge or reason to believe that
such necessary authorizations may be revoked or not renewed in the ordinary
course of business.
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3.18 THIRD-PARTY RELATIONS. Neither Seller nor Corporation is aware of
any problem or disagreements with any third parties with which it does business
and the Corporation will use its best efforts from the date of this Agreement
until the Closing Date to operate its business in such a manner so as not to
adversely affect the goodwill of their patients, suppliers, employees,
associated physicians and other such persons or third parties with which
Corporation does business.
3.19 TRADE RELATIONS. There exists no actual or threatened limitation
of the business relationship of Corporation with any material customer, supplier
or landlord or with any person whose contracts or projected contracts with
Corporation would be material to the operations of Corporation. There exists no
condition or state of facts or circumstances which could result in the
occurrence of a material adverse effect with respect to Corporation or prevent
Buyer from conducting its business after the consummation of the transactions
contemplated by this Agreement as such business is conducted or proposed to be
conducted.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents, warrants and agrees with Seller that:
4.1 CONTRACTS OR OTHER AGREEMENTS. Neither the execution or delivery of
this Agreement nor the consummation of this transaction will: (i) conflict with,
constitute a breach, violation or termination of any provision of any contract
or other agreement to which Buyer is a party or by which it is bound; or (ii)
violate any law, regulation, judgment, rule, order or any other restriction of
any kind or character applicable to Buyer.
4.2 REVIEW AND CONSULTATION. Buyer has had access to and reviewed such
information and has consulted with all legal counsel, tax counsel, accountants
and other experts and advisors deemed necessary by Buyer in connection with the
transactions contemplated herein.
4.3 AUTHORITY TO EXECUTE AND PERFORM AGREEMENT. Buyer has the full
legal right, power and capacity, and all authority and approval required to
enter into, execute and deliver this Agreement and to perform and observe fully
Buyer's obligations hereunder and to perform the transactions contemplated
hereby. This Agreement has been fully executed and delivered by Buyer and is the
valid and binding obligation of Buyer enforceable in accordance with its terms.
4.4 OWNERSHIP. Buyer is a wholly-owned subsidiary of Omega Health
Systems, Inc.
4.5 FRAUD AND ABUSE. Buyer and persons and entities providing
professional services for Buyer, have not, to the knowledge of Buyer, engaged in
any activities which are prohibited under 42 U.S.C. ss. 1320a-7b, or the
regulations promulgated thereunder pursuant to such statutes, or related state
or local statues or regulations, or which are prohibited by rules of
professional conduct, including but not limited to the following:
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(a) knowingly and willfully making or causing to be made a
false statement or representation of a material fact in any application
for any benefit or payment;
(b) knowingly and willfully making or causing to be made any
false statement or representation of a material fact for use in
determining rights to any benefit or payment;
(c) failing to disclose knowledge by a claimant of the
occurrence of any event effecting the initial or continued right to any
benefit or payment on his own behalf or on behalf of another, with
intent to fraudulently secure such benefit or payment; or
(d) knowingly and willfully soliciting or receiving any
remuneration (including any kickback, bribe or rebate) directly or
indirectly, overtly or covertly, in cash or in kind or offering to pay
or receive such remuneration (i) in return for referring an individual
to a person for the furnishing or arranging for the furnishing of any
item or service for which payment may be made in whole or in part by
Medicare or Medicaid, or (ii) in return for purchasing, leasing, or
ordering or arranging for or recommending purchasing, leasing, or
ordering any good, facility, service or item for which payment may be
made in whole or in part by Medicaid or Medicare.
4.6 LITIGATION. Other than that set forth on Schedule 4.6, there is no
suit, action, proceeding at law or in equity, arbitration, administrative
proceeding or other proceeding by any governmental entity pending or to the best
of Buyer's knowledge, threatened against, or affecting Buyer, and to the best of
Buyer's knowledge there is no basis for any of the foregoing.
4.7 AUTHORITY TO ISSUE OMEGA STOCK. Omega has the full legal right,
power and capacity, and all authority and approval required to issue the Omega
Stock, which stock shall be fully paid and non-assessable.
SECTION 5. CONDITIONS AND ADDITIONAL AGREEMENTS.
5.1 CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. The Closing and all
obligations of Buyer pursuant to this Agreement shall be conditioned upon the
following:
(a) All representations and warranties contained in Section 3
shall be true and correct as of the date of this Agreement and as of
the Closing Date;
(b) There shall have been no material change in the Practice
Assets, Corporate Liabilities, financial condition or business of the
Corporation from the date of this Agreement through the Closing Date;
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(c) Seller shall have executed and delivered to the Buyer the
stock certificates pursuant to Section 1.3 of this Agreement;
(d) Seller shall have performed all of his obligations under
this Agreement required to be performed as of the Closing Date,
including, but not limited to delivery of all documents set forth in
Section 5.4;
(e) Seller shall have executed and delivered to the Buyer
originals of the Merger Agreement, the Management Agreement, the
Employment Agreement, the Stock Pledge and Escrow Agreement, the
Professional Service Provider Agreement, and the Noncompetition and
Nonsolicitation Agreement;
(f) Any licenses required by law for the operation of the
Corporation shall be in good standing and all regulatory requirements
shall have been met in connection with the sale of the Shares to ensure
the continued operation of Corporation following the sale of the
Shares; and
(g) Buyer shall be satisfied with its "due diligence" review
of each Corporation.
In the event Buyer reasonably believes prior to the Closing Date that
any of the foregoing conditions is not satisfied, then Buyer shall notify Seller
in writing and Seller shall cure such to the reasonable satisfaction of Buyer.
If Seller does not cure in thirty (30) days, then Buyer may, at its option,
terminate this Agreement, in which event Buyer shall be relieved of all
obligations hereunder and this Agreement shall be deemed null, void and of no
force or effect.
5.2 CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. Closing and all
obligations of Seller pursuant to this Agreement shall be conditioned upon the
following:
(a) All representations and warranties contained in Section 4
shall be true and correct as of the date of this Agreement and as of
the Closing Date;
(b) Buyer shall have delivered the Purchase Price recited in
Section 2.1 hereof;
(c) Buyer shall have performed all of its obligations under
this Agreement required to be performed as of the Closing Date,
including, but not limited to delivery of all documents set forth in
Section 5.3;
(d) Buyer shall have executed and delivered to the Seller
originals of the Merger Agreement, the Management Agreement, the
Employment Agreement, the Stock Pledge and Escrow Agreement, the
Professional Service Provider Agreement and the Noncompetition and
Nonsolicitation Agreement.
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In the event Seller reasonably believes prior to the Closing Date that
any of the foregoing conditions is not satisfied, then Seller shall notify Buyer
in writing and Buyer shall cure such to the reasonable satisfaction of Seller.
If Buyer does not cure in thirty (30) days then Seller may, at its option,
terminate this Agreement in which event Seller shall be relieved of all
obligations hereunder and this Agreement shall be deemed null, void and of no
force or effect.
5.3 BUYER'S DELIVERIES. At or prior to the Closing, Buyer shall deliver
to Seller the following documents:
(a) Corporate Resolutions. A copy of directors' resolutions of Buyer,
certified by its corporate secretary or assistant secretary as having been duly
and validly adopted and as being in full force and effect on the Closing Date,
authorizing the execution and delivery by Buyer of this Agreement, the other
instruments to be executed and delivered by Buyer as provided herein, and the
performance by Buyer of the transactions contemplated hereby;
(b) Consideration. The consideration described in Section 2.1;
(c) Opinion of Counsel for Buyer. An opinion of counsel from Buyer
dated as of the Closing, in form and substance reasonably satisfactory to
Seller's counsel, and where appropriate with reliance upon a certificate from
Buyer or the owner of Buyer to the effect that:
(1) Buyer is (i) duly incorporated, validly existing, and in
good standing under the laws of the State of Illinois, (ii) duly
qualified to transact business in Illinois, and is not required to be
so qualified in any other jurisdiction, and (iii) duly empowered and
authorized to hold and own its properties and carry on its business as
now conducted and as proposed to be conducted. Buyer has the corporate
power and authority to execute, deliver and perform this Agreement and
all other agreements contemplated hereby.
(2) Buyer has the full power and authority to execute,
deliver, and perform this Agreement and all other agreements and
documents necessary to consummate the contemplated transaction, and,
upon the requisite approvals thereof, all corporate actions of Buyer
necessary for such execution, delivery and performance will have been
duly taken.
(3) This Agreement and all agreements related to this
Agreement have been duly executed and delivered by Buyer and
constitutes the legal, valid, and binding agreement of Buyer
enforceable in accordance with their terms (subject as to enforcement
of remedies to the discretion of the courts in awarding equitable
relief and to applicable bankruptcy, reorganization, insolvency,
moratorium and similar laws effecting the rights of creditors
generally). The execution and delivery by Buyer of this Agreement, and
the performance of its obligations hereunder, do not require any action
or consent of any party other than Buyer pursuant to any contract,
agreement or other understanding of Buyer, or pursuant
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to any order or decree to which Buyer is a party or to which its
properties or assets are subject and will not violate any provision of
law, the articles of incorporation or bylaws of Buyer or any order of
any court or other agency of the government.
(4) To the best of such counsel's knowledge, with respect to
Buyer there are no actions, suits, claims, proceedings or
investigations pending or, to such counsel's knowledge, threatened
against Buyer at law or in equity, or before or by a federal, state,
municipal or other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, or any professional
licensing or disciplinary authority which would adversely effect the
transactions contemplated herein or any party's right to enter into
this Agreement; and
(5) Buyer is not in default with respect to any order, writ,
injunction or decree of any court or of any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign which would effect the rights of
Buyer to enter into and perform this Agreement
(d) Officer's Certificate. A Certificate of Buyer's President and
Secretary confirming the matters in Section 5.2(a); and
(e) Other Purchase Documents. All such documents and instruments Seller
and its counsel may reasonably request in connection with the consummation of
the transactions contemplated by this Agreement.
5.4 SELLER'S DELIVERIES. At or prior to the Closing, Seller shall
deliver to Buyer the following documents:
(a) Stock Certificates. Certificates, representing the Shares duly
endorsed by Seller for transfer;
(b) Executed Contracts. Copies of all executed contracts or other
material agreements entered into by or on behalf of each Corporation;
(c) Copy of Leases. Copies of all real estate and equipment leases
pertaining to each Corporation;
(d) Opinion of Counsel for Seller. Buyer shall have received an opinion
from counsel for Seller dated as of the Closing, in form and substance
reasonably satisfactory to Buyer's counsel, and where appropriate with reliance
upon a certificate from Seller or the Corporations to the effect that:
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(1) Corporation is (i) duly formed and validly existing as a
business corporation under the Illinois Business Corporation Act, (ii)
in good standing as a business corporation under the laws of the State
of Illinois, (iii) duly empowered and authorized to hold and own its
own properties and carry on its business as now conducted and as
proposed to be conducted; and (iv) is no longer organized as a service
corporation under Illinois law, and that Corporation is now a business
corporation organized under Illinois law.
(2) Seller has the full power and authority to execute,
deliver and perform this Agreement and all other agreements and
documents contemplated hereby to which Seller is a party and which are
necessary to consummate the contemplated transaction to which Seller is
a party; and, all action required of Seller necessary for such
execution, delivery and performance will have been duly taken.
(3) This Agreement and all agreements related to this
Agreement to which Seller is a party have been duly executed and
delivered by Seller and constitute the valid and binding agreement of
Seller enforceable in accordance with their terms (subject as to
enforcement of remedies to the discretion of the courts in awarding
equitable relief and to applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium and similar laws
effecting the rights of creditors generally). The execution and
delivery by Seller of this Agreement, and the performance of its
obligations thereunder, do not require, any action or consent of any
party other than Seller pursuant to any contract, agreement or other
understanding of Seller, or pursuant to any order or decree to which
Seller is a party or to which his properties or assets are subject and
will not violate any provisions of the articles of association or
bylaws of either Corporation or any order of any court or other agency
of the government.
(4) To the best of such counsel's knowledge, with respect to
Seller (except for the matters included in Schedule 3.5 hereto), there
are no actions, suits, claims, proceedings or investigations pending or
threatened against Seller at law or in equity, or before or by a
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or any
professional licensing or disciplinary authority which would adversely
effect the transactions contemplated herein or any party's right to
enter into this Agreement.
(5) Seller is not in default with respect to any order, writ,
injunction or decree of any court or of any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign which would effect the rights of
Seller to enter into and perform this Agreement.
(e) Seller's Certificate. A certificate from Seller confirming the
matters in Section 5.1(a) hereof.
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(f) Other Purchase Documents. All such documents and instruments Buyer
and its counsel may substantially request in connection with the consummation of
the transactions contemplated by this Agreement.
SECTION 6. INDEMNIFICATION; SET-OFF.
6.1 INDEMNIFICATION OF BUYER. Seller shall indemnify, defend and hold
Buyer and its officers, directors, shareholders, agents, employees,
representatives, successors and assigns harmless from and against any and all
damage, loss, cost, obligation, claims, demands, assessments, judgments or
liability (whether based on contract, tort, product liability, strict liability
or otherwise), including taxes, and all expenses (including interest, penalties
and reasonable attorneys' and accountants' fees and disbursements) incurred by
any of the above-named persons, resulting from or in connection with any one or
more of the following:
(a) Misrepresentations, breach of warranties, failure to perform any
covenant or agreement of Corporation contained herein;
(b) Debts, commitments, obligations of Corporation (except those
specifically assumed by Buyer), any transaction, event or act that occurred on
or prior to the Closing that materially adversely affects the value of the
Practice Assets;
(c) Claims, actions or suits by former employees of Corporation; or
(d) Corporation's failure to discharge pension or benefit plan
obligations.
Buyer agrees to give prompt notice to Seller of the assertion of any claim, or
the threat or commencement of any suit, action, proceeding or other matter in
respect of which indemnity may be sought under this Section 6.1. Seller may
participate in the defense of any such suit, action, proceeding or other matter
at Seller's expense. Seller shall not be liable under this Section 6.1 for any
settlement effected without Seller's consent of any claim, suit, action,
proceeding or other matter in respect of which indemnity may be sought under
this Section 6.1, which consent shall not be unreasonably withheld.
6.2 INDEMNIFICATION OF SELLER. Buyer and Omega shall indemnify, defend
and hold Seller harmless from any and all damage, loss, cost, obligation,
claims, demands, assessments, judgments or liability (whether based on contract,
tort, product liability, strict liability or otherwise), including taxes and all
expenses (including interest, penalties and reasonable attorneys' and
accountants' fees and disbursements) incurred by Seller, resulting from or in
connection with misrepresentations, breach of warranties or failure to perform
any covenant or Agreement of Buyer contained herein. Seller agrees to give
prompt notice to Buyer of the assertion of any claim, or the threat or
commencement of any suit, action, proceeding or other matter in respect of which
indemnity may be sought under this Section 6.2. Buyer may participate in the
defense
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of any such suit, action, proceeding or other matter at Buyer's expense. Buyer
shall not be liable under this Section 6.2 for any settlement effected without
Buyer's consent of any claim, suit, action, proceeding or other matter in
respect of which indemnity may be sought under this Section 6.2, which consent
shall not be unreasonably withheld.
6.3 SECURITY FOR INDEMNITY. To secure the indemnity under this
Agreement and certain other agreements, Buyer is entitled to exercise its rights
set forth in that certain Stock Pledge and Escrow Agreement, dated as of August
29, 1997, to which both Buyer and Seller are parties.
7. AMENDMENT AND WAIVER.
The parties hereto may by mutual agreement amend this Agreement in any
respect. Any party hereto may extend the time for the performance of any of the
obligations of the other, waive any inaccuracies and representations by the
other contained in this Agreement or in any document delivered pursuant hereto
which inaccuracies would constitute a breach of this Agreement, waive compliance
by the other with any of the covenants contained in this Agreement and
performance of any obligations by the other, waive the fulfillment of any
condition that is precedent to the performance by the party so waiving any of
its obligations under this Agreement. Any agreement on the part of any party for
any such amendment, extension or waiver must be in writing and signed by the
party agreeing 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
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver.
8. TERMINATION AND ABANDONMENT.
8.1 METHODS OF TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by the mutual written consent of Seller and Buyer;
(b) by Buyer, if all of the conditions set forth in Section
5.1 of this Agreement shall not have been satisfied or waived on or
prior to the Closing; or
(c) by Seller if all of the conditions set forth in Section
5.2 of this Agreement shall not have been satisfied or waived on or
prior to the Closing.
The following provisions notwithstanding, this Agreement will terminate on
August 31, 1997, unless an extension of time is mutually agreed to, as evidenced
by written consent of Seller and Buyer. If this Agreement is terminated pursuant
to this Section 8.1, it shall become null and void and of no further force or
effect, except as provided in Section 8.2.
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8.2 PROCEDURE UPON TERMINATION. In the event of termination and
abandonment of this Agreement by Seller or Buyer pursuant to Section 8.1 hereof,
written notice thereof shall forthwith be given to the other party or parties as
provided herein and this Agreement shall terminate and the transactions
contemplated hereby shall be abandoned, without further action by Seller or
Buyer, and Seller and Buyer shall each return to the other party any documents
or copies thereof in possession of such party furnished by such other party in
connection with the transaction contemplated by this Agreement. If this
Agreement is terminated as provided herein, no party to this Agreement shall
have any liability or further obligation to any other party to this Agreement
with respect to this Agreement or the transactions contemplated hereby except as
provided in this Section 8.2; provided, however, that no termination of this
Agreement pursuant to the provisions of this Section 8 shall relieve any party
of liability for breach of any provision of this Agreement occurring prior to
such termination; and provided, further, that any and all confidential or
proprietary information obtained from either party must be returned to that
party, and each party hereto agrees to maintain any and all confidential or
proprietary information obtained from the other party in strictest confidence
and not to divulge such information to any third party, except as may be
permitted or required by law.
SECTION 9. PATIENT REFERRALS.
The parties agree that nothing in this Agreement is intended to violate
state or federal health care laws or regulations including, but not limited to,
those listed in Section 3.8 herein, nor shall any portion of the consideration
be construed as a payment for or inducement of the referral of patients. Seller
shall be free to refer patients to whomever it sees fit in the exercise of
professional judgment, according to the convenience or preference of the
patient, or otherwise.
SECTION 10. GENERAL PROVISIONS.
10.1 PARTIES IN INTEREST AND ASSIGNMENT.
(a) This Agreement is binding upon, and is for the benefit of,
the parties hereto and their respective successors and authorized
assigns. Except as otherwise expressly provided, nothing in this
Agreement, express or implied, is intended or shall be construed to
confer upon any person other than the parties hereto, any right,
remedy, or claim, legal or equitable, under or by reason of this
Agreement or any provision thereof.
(b) Neither this Agreement nor any of the rights or duties of
any party hereto may be transferred or assigned to any person except by
a written agreement executed by each of the parties hereto, except that
Buyer reserves the right to assign this Agreement to any affiliate or
successor of itself.
10.2 CHOICE OF LAW; VENUE. This Agreement shall be governed by and
construed, interpreted and enforced in accordance with the laws of the State of
Illinois. Any mediation or
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binding arbitration brought with respect to this Agreement shall be conducted in
Vermilion County, Illinois.
10.3 ENTIRE AGREEMENT. This Agreement shall embody the entire agreement
between the parties hereto with respect to acquisition of the Shares and cancels
and supersedes all other previous agreements and understandings relating to the
subject matter of this Agreement, written or oral, between the parties hereto.
There are no agreements, representations or warranties between the parties
hereto as to the subject matter hereof other than those set forth or provided
herein. All Schedules called for by this Agreement and delivered to the parties
shall be considered a part hereof with the same force and effect as if the same
had been specifically set forth in this Agreement.
10.4 SURVIVAL. The covenants, representations and warranties contained
in this Agreement shall survive the Closing.
10.5 SECTION HEADINGS. The subject headings contained in this Agreement
are included for purposes of convenience only, and shall not affect the
construction or interpretation of its provisions.
10.6 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
10.7 CONFIDENTIALITY. The parties agree to maintain confidential the
terms and conditions of this Agreement and not to disclose any of such terms and
conditions to any third-party without the prior written consent of the other
party.
10.8 GENDER. Masculine pronouns used in this Agreement shall be
construed to include feminine and neuter pronouns, and words in the singular
shall include the plural, unless the context requires otherwise.
10.9 NOTICES. Any notices hereunder shall be deemed to have been given
by one party to the other if it is in writing and it is (a) delivered or
tendered in person, or (b) deposited in the United States Mail in a sealed
envelope, with postage prepaid, in either case addressed as follows:
If to Buyer: Omega Health Systems of Illinois, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
With a copy to: Baker, Donelson, Bearman & Xxxxxxxx
2000 First Tennessee Building
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Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
If to Seller: Xxxxx X. Xxxxxxx, M.D.
Ocular Care Associates, S.C.
000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
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With a copy to: Erwin, Martinkus, Xxxx & Xxxxx
000 Xxxx Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxx
or to such other address as the parties shall have previously designated by
notice to the serving party, given in accordance with this Section 10.9. Notices
shall be deemed to have been given on the date of delivery if delivered
personally, or on the third day after mailing as provided above; provided,
however, that a notice not given as above shall, if it is in writing, be deemed
given if and when actually received by a party.
10.10 MEDIATION AND ARBITRATION. In the event a dispute arises out of
or relating to this Agreement, or the breach thereof, and if said dispute cannot
be settled through negotiation, the parties agree to attempt in good faith to
settle the dispute by mediation under the Commercial Mediation Rules of the
American Arbitration Association. Unless the parties reach an agreement reduced
to writing, This mediation will be non-binding, but the parties must participate
in good faith in non-binding mediation, before resorting to binding arbitration.
Any controversy or claim arising out of or relating to this Agreement, or its
breach, not satisfied through either negotiation or mediation, shall be settled
by arbitration in accordance with the Commercial Arbitration Rules of the
American Arbitration Association. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction. As soon as
reasonably practicable after submission of a demand for binding arbitration,
Buyer and Seller shall select one arbitrator, agreeable to both parties. This
arbitrator will be selected from lists prepared by the American Arbitration
Association. From the American Arbitration Association list the parties will
submit to the American Arbitration Association a ranked list of arbitrators
which are acceptable. The highest ranking acceptable candidate will be selected
by the American Arbitration Association. If no arbitrators from the list
composed by the American Arbitration Association are acceptable by either of the
parties, the American Arbitration Association will compile a second list. This
procedure will be followed until the parties have selected an arbitrator. The
results of the arbitrator's finding will be binding on the parties.
10.11 PREVAILING PARTY. The parties agree that if either party should
institute arbitration proceedings to enforce or interpret any provisions of this
Agreement, the prevailing party in such arbitration shall be entitled to
receive, in addition to any other relief awarded such party, reasonable
attorneys' fees and expenses for the prosecution or defense of such arbitration.
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10.12 EXPENSES. Except as otherwise provided herein, each of the
parties shall pay its own costs and expenses incurred or to be incurred by it in
negotiating and preparing this Agreement and in consummating the transactions
contemplated by this Agreement.
IN WITNESS THEREOF the parties hereto have executed this Agreement as
of the day and year first above written.
BUYER:
OMEGA HEALTH SYSTEMS OF ILLINOIS,
INC.
By:
------------------------------------
Xxxxxx X. Xxxxxxx,
Vice President
SELLER:
---------------------------------------
XXXXX X. XXXXXXX, M.D.
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JOINDER AND GUARANTEE
OMEGA HEALTH SYSTEMS, INC., which has been represented by counsel in
connection with this transaction, and has read this Agreement and discussed it
with counsel, for good and valuable consideration joins in this Agreement for
purposes of (i) guaranteeing the payment of the consideration set forth in
Section 2, (ii) confirming and guaranteeing the representations and warranties
relating to Omega Health Systems, Inc. in this Agreement, (iii) confirming and
guaranteeing the representations and warranties made by Buyer, and (iv)
confirming and guaranteeing the performance of the indemnity obligations of
Buyer and Omega Health Systems, Inc.
DATED: August 29, 1997 OMEGA HEALTH SYSTEMS, INC.
By:
-------------------------------
Xxxxxx X. Xxxxxxx,
Executive Vice President
and Chief Financial Officer
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