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EXHIBIT 2.21
MEMBERSHIP INTEREST PURCHASE AGREEMENT
This MEMBERSHIP INTEREST PURCHASE AGREEMENT is made and entered into as
of December 10, 1999, by and among U.S. ORTHOPEDICS TEXAS, LLC, a Texas limited
liability company ("USO"), AMEDISYS SURGERY CENTERS, L.C., a Texas limited
liability company ("ASC"), AMBULATORY SYSTEMS DEVELOPMENT OF TEXAS, INC., a
Texas corporation ("ASDT"), AMBULATORY SYSTEMS DEVELOPMENT CORPORATION, a
California corporation ("ASDC," and collectively with ASDT and ASC, the
"Members"), and for purposes of the transfer of the Management Agreement, U.S.
Orthopedics, Inc., a North Carolina corporation ("USO, Inc."). USO and the
Members are sometimes collectively referred to as the "Parties" and are
sometimes referred to herein separately as a "Party."
RECITALS
A. ASC owns sixty-seven percent (67%) of the membership interests of
West Texas Ambulatory Surgery Center, L.L.C., a Texas limited liability company
(the "LLC").
B. The LLC operates an ambulatory surgery center located in Odessa,
Texas (the "Center") which is a multi-specialty surgery center providing
orthopedic surgery, ophthalmology, otolaryngology, gynecological surgery,
urological surgery, general surgery pain management and endoscopic services.
C. The other membership interests of the LLC are owned ten percent
(10%) by ASDT, ten percent (10%) by ASDC and thirteen percent (13%) by certain
physician.
D. The Members desires to sell to USO, and USO desires to purchase from
the Members, their Interests in the LLC on the terms and subject to the
conditions hereinafter set forth.
E. ASC manages the Center pursuant to a Management Agreement (the
"Management Agreement"), a copy of which is attached hereto as Exhibit A, and
ASC will transfer to USO Inc. all of its rights under the Management Agreement
and USO, Inc. desires to assume the obligations of ASC under the Management
Agreement.
F. USO and recipients of the sums to be paid by USO hereunder, desire
to enter into a noncompete covenant for the purpose of protecting the value of
the Interests purchased by USO from the Members.
THEREFORE, the parties agree as follows:
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SECTION 1. DEFINITIONS.
1.1. DEFINITIONS. As used herein, the following terms have the
respective meanings set forth below or set forth in the Section of the Agreement
following such term:
ASC -- Introductory paragraph.
ASDC -- Introductory paragraph.
ASDT -- Introductory paragraph.
AGREEMENT -- means this Membership Interest Purchase Agreement, as
amended from time to time by the parties hereto, together with all Schedules and
Exhibits hereto.
CENTER -- Recitals.
CLOSING -- means the transfer by USO to the Members of the
consideration set forth herein, the transfer by the Members to USO of the
Membership Interest, and the consummation of the other transactions contemplated
by this Agreement to occur on the Closing Date.
CLOSING DATE -- Section 5.1.
CONTRACTS AND OTHER AGREEMENTS -- Section 6.10.
DAMAGES -- Section 10.1.
EFFECTIVE TIME -- Section 5.1.
ENVIRONMENTAL PROTECTION LAW -- means any environmental laws or
regulations of the United States, the State of Texas, and the ordinances of any
applicable county or municipality, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980,
the Resource Conservation and Recovery Act of 1981, and the Superfund Amendments
and Reauthorization Act of 1986, each as amended, and all rules and regulations
promulgated in connection therewith.
GAAP -- means generally accepted accounting principles as set forth in
the opinions, statements and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants, the Financial
Accounting Standards Board and such other Persons who shall be approved by a
significant segment of the accounting profession, as in effect on the date of
any statement, report or determination that purports to be, or is required to
be, prepared or made in accordance with GAAP.
GOVERNMENTAL AUTHORITY -- Section 6.12.
INTANGIBLE PROPERTY -- Section 6.9.
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INTEREST(S) -- means with respect to ASC, sixty-seven percent (67%),
with respect to ASDT, ten percent (10%), and with respect to ASDC, ten percent
(10%), the membership interests of the LLC.
LLC -- Recitals.
LICENSES -- Section 6.12.
LIEN -- means any lien, pledge, claim, charge, security interest or
encumbrance of any nature whatsoever.
USO -- Introductory paragraph.
MA PURCHASE PRICE -- Section 3.3.
MANAGEMENT AGREEMENT -- Recitals.
MEDICARE/MEDICAID ACCOUNTS RECEIVABLE -- means those Accounts
Receivable which are obligations of the Medicare or Medicaid programs.
NONCOMPETE PAYMENTS -- Section 12.1.
PARTY/PARTIES -- Introductory paragraph.
PERMITTED LIENS -- Section 4.1(d).
PERSON -- means an individual, sole proprietorship, partnership,
corporation, limited liability company, trust, joint venture, unincorporated
organization, or a government or agency or political subdivision thereof.
PURCHASE PRICE -- Section 3.1.
TANGIBLE PERSONAL PROPERTY -- Section 6.8.
1.2. GAAP. Where the character or amount of any asset or liability or
item of income or expense, or any other accounting computation is required to be
made hereunder, it shall be done in accordance with GAAP, consistently applied
from period to period.
SECTION 2. PURCHASE AND SALE OF INTEREST; ASSIGNMENT AND ASSUMPTION OF
MANAGEMENT AGREEMENT
2.1. SALE OF THE INTEREST. Subject to the terms and conditions of this
Agreement, at the Closing, the Members shall validly sell, assign, transfer and
convey to USO free and clear of all Liens, and USO shall purchase and accept,
the Interests.
2.2. ASSIGNMENT AND ASSUMPTION OF MANAGEMENT AGREEMENT. ASC and USO,
Inc. have agreed that ASC shall assign to USO, Inc. its rights under the
Management Agreement and
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USO, Inc. shall assume, perform and discharge those obligations of ASC under the
Management Agreement, but only to the extent performance or discharge of such
obligations relates to the period subsequent to the Effective Time.
SECTION 3. PURCHASE PRICE.
3.1 PURCHASE PRICE. The purchase price for the Interests shall be the
sum of $696,000 (such sum being referred to herein as the "Purchase Price"), to
be allocated to the Members as set forth on Schedule 3.1.
3.2. MANAGEMENT AGREEMENT. The purchase price for the Management
Agreement to be paid to the Members shall be $288,478 (the "MA Purchase Price"),
to be allocated to the Members as set forth on Schedule 3.2.
SECTION 4. PRE-CLOSING OBLIGATIONS.
4.1. THE MEMBER'S COVENANTS. The Members covenant and agree that during
the period from the date of this Agreement to the Closing Date, the Members
shall carry out the obligations set forth in this Section, unless USO shall have
otherwise given its prior written consent:
(a) CONDUCT OF BUSINESS. The LLC shall carry on its business
and activities diligently and in substantially the same manner as previously
carried out, without any significant reduction or change of service, and shall
not take actions outside of the ordinary course of its business.
(b) EXCLUSIVE DEALING. The Members shall not, directly or
indirectly, encourage, initiate or engage in discussions or negotiations with,
or provide any information to any Person, other than USO, concerning any merger,
consolidation or sale of substantial assets of the LLC, or the purchase or sale
of the Members' Interest in the LLC; and each shall promptly communicate to USO
any inquiries or communications concerning any such transaction which it may
receive or of which it may become aware.
(c) REVIEW OF LLC. USO may, prior to the Closing Date, through
its representatives, review the properties, books and records of LLC and its
financial and legal condition as USO deems necessary or advisable to familiarize
itself with such properties and other matters; such review shall not, however,
affect the representations and warranties made by the Members hereunder. The
Members shall permit USO and its representatives to have, after the date of
execution hereof, full access to all properties of LLC and to all the books and
records of LLC and cause the officers of LLC to furnish USO with such financial
and operating data and other information with respect to the business and
properties of LLC as USO shall from time to time reasonably request.
(d) GOVERNMENTAL FILINGS. The Members shall assist in the
making of any filings required as a condition to the consummation of the
transactions contemplated in this Agreement.
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4.2. EMPLOYEES. Prior to the Closing Date, ASC shall transfer to the
LLC all employment, nondisclosure, noncompetition and nonsolicitation agreements
and contracts between ASC and its employees at the Center and all rights
thereunder and copies of all information for each employee of ASC involved
directly or indirectly in Center.
SECTION 5. CLOSING.
5.1. CLOSING DATE. The Closing shall take place on December 8, 1999
("Closing Date") at the offices of Xxxxxx, Xxxxxxx & Xxxxxxxx LLP, or at such
other date or place as the parties hereto shall agree in writing. The
transactions contemplated by this Agreement shall be effective for accounting
purposes as of 12:01 A.M. (CST) on December 1, 1999.
5.2. TRANSFER OF INTEREST. At the Closing, the Members shall sell,
transfer, assign, grant, deliver and convey to USO all of the Members' Interest
in the LLC, free and clear of any and all Liens, and ASC shall transfer and
assign all of its rights under the Management Agreement to USO and USO shall
assume the obligations of ASC under the Management Agreement. The transactions
contemplated by this Agreement shall be evidenced by delivery by the Members, to
USO of certificates representing the Interest in the LLC endorsed in blank or
accompanied by duly executed assignment documents and other documents of
transfer acceptable in form and substance to USO in its judgment reasonably
exercised.
5.3. TRANSFER OF MANAGEMENT AGREEMENT. At the Closing, ASC shall sell,
transfer, assign, grant, deliver and convey to USO, Inc. all of ASC' right,
title and interest in and to the Management Agreement and USO, Inc. shall assume
all obligations under the Management Agreement pursuant to an Assignment and
Assumption Agreement.
5.4. EVIDENCE OF TRANSFER. At the Closing and thereafter, as USO may
from time to time request, the Members shall execute and deliver to USO, Inc.
such documents and instruments of conveyance as may be appropriate and shall
take or cause to be taken such actions as USO, Inc. may request in order to
accomplish the transfer of the Interest and the consummation of the matters
contemplated by this Agreement. At the Closing and thereafter, as USO may from
time to time request, the Members shall execute and deliver to USO such
documents and instruments of conveyance as may be appropriate and shall take or
cause to be taken such actions as USO may request in order to accomplish the
transfer of the Management Agreement and the consummation of the matters
contemplated by this Agreement. All such documents shall be in form and
substance reasonably satisfactory to USO. Without limiting the foregoing, the
Members agree to take all steps necessary and execute all documents necessary to
transfer all of its interest in the Medicare/Medicaid Accounts Receivable to USO
and to ensure that USO receives all proceeds from the Medicare/Medicaid Accounts
Receivable.
SECTION 6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE MEMBERS
The Members, jointly and severally, hereby represent and warrant to USO
and agree, as of the Closing Date, as follows (when a representation or warranty
is made "to the best of the Members' knowledge" such phrase shall mean the
actual knowledge of the Members after reasonable investigation):
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6.1. CORPORATE. The LLC is a limited liability company duly formed,
validly existing and in good standing under the laws of the State of Texas. The
Members have delivered to USO complete and correct copies of the LLC's Articles
or Organization and the Operating Agreement as currently in effect. The LLC has
the power and authority to own and hold its properties and to carry on its
business as now conducted, including the right to use the name, "West Texas
Ambulatory Surgery Center." The LLC does not currently use any fictitious names.
6.2. AUTHORIZATION. This Agreement and all other agreements,
certificates and instruments contemplated hereby to be executed and delivered by
the Members have been duly authorized by all necessary action of each Member.
This Agreement and each other agreement or instrument contemplated hereby to be
executed and delivered by the Members has been duly executed and delivered by
the Members, and constitutes a legal, valid and binding obligation of the
Members enforceable against the Members in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other laws affecting creditors' rights generally and by general
principles of equity (regardless of whether such principles are considered in a
proceeding at law or in equity).
6.3. OWNERSHIP OF THE INTEREST/MANAGEMENT AGREEMENT RIGHTS. The Members
represent and warrant that it each owns that percentage of the outstanding
Interests of the LLC on Schedule 6.3 and that the only other Interests of the
LLC are listed on Schedule 6.3.1 and that there are no other Interests of the
LLC issued and outstanding. Each Members represents and warrants that he/it owns
his/its Interest free and clear of all pledges, security interests, liens,
charges, encumbrances, equities, claims, options or limitations of every kind
and has the full power to sell and transfer its Interest to USO without
obtaining the consent or approval of any other Person or Governmental Authority.
ASC has good and marketable title to its rights, title and interest in the
Management Agreement and as of the Closing Date, USO will acquire good and
marketable title to ASC's right, title and interest in the Management Agreement.
6.4. TAXES. The LLC has paid, or will pay on or prior to any applicable
due date, all income, employment, property and other taxes and duties accrued or
owed by LLC in connection with the operation of the LLC.
6.5. INSURANCE. Since its existence and through the Closing Date, LLC
has maintained, in full force and effect, (i) professional liability and
comprehensive general liability and property damage insurance coverage in the
minimum amounts and of the type set forth on Schedule 6.5, and (ii) all
necessary insurance for the protection of LLC's employees as required of
employers by the State of Texas and otherwise, including, unemployment and
worker's compensation coverage. The Members shall provide USO with certificates
issued by LLC's insurance carrier (or its agent) evidencing that the insurance
coverages described above are and have during such five-year period been in full
force and effect.
6.6. LITIGATION. The Members have set forth on Schedule 6.6 any and all
claims for professional liability or otherwise currently pending or, to the best
of the Members' knowledge, threatened against LLC, together with a description
of each such claim which either individually or in the aggregate could or will
have a material adverse affect on LLC or the Interest and LLC has been advised
by its professional liability insurance carrier that all professional liability
claims known to such insurance carrier are included on Schedule 6.6. Except as
set forth on Schedule 6.6,
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there are no judgments unsatisfied against LLC or consent decrees or injunctions
to which LLC is subject. LLC is not a party to any pending or, to the best of
the Members' knowledge, threatened 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 or omissions of
LLC or initiated thereof by such parties. To the best of any Members' knowledge,
is not subject to any claim, order, judgment, decree or governmental restriction
which adversely affects the Interest or which would prevent the consummation of
the transactions contemplated by this Agreement. There is no claim, action or
proceeding now pending or, to the best of any Members' knowledge, threatened
against LLC which will, or could (i) prevent or delay consummation of the
transactions contemplated by this Agreement, or (ii) either individually or in
the aggregate have a material adverse affect on LLC or the Interest.
6.7. REAL ESTATE. The Center (including any improvements thereto) is
sufficient and adequate to permit LLC to conduct the business of the Center as
it is presently being conducted, are in good operating condition and repair and
comply in all material respects with existing laws, including, without
limitation, all Environmental Protection Laws and all building, zoning, health,
safety or other ordinances, codes or regulations. No hazardous substances or
materials are maintained, stored or have been disposed of on any of the property
of the Center, except in compliance with Environmental Protection Laws, and
there are no underground storage tanks or asbestos-containing materials on any
of the property of the Center, except as set forth in Schedule 6.7 hereto.
6.8. TANGIBLE PERSONAL PROPERTY. Schedule 6.8 -- Tangible Personal
Property is a true and correct list of the furniture, fixtures and equipment,
useable inventories of medical and office supplies, and all other furniture,
fixtures, equipment, machinery, office supplies, warranty rights, supplies,
medical and other records, and other tangible personal property owned, leased or
used by LLC in the operation of the Center (the "Tangible Personal Property").
The Tangible Personal Property is sufficient and adequate to permit LLC to
conduct the business of the Center as it is presently being conducted, each item
of Tangible Personal Property that is material to the Center is in good
operating condition and repair, and neither LLC nor any LLC Physician has
received notice that any item of Tangible Personal Property or the use thereof
is in violation of any existing law or any building, zoning, health, safety or
other ordinance, code or regulation. LLC is not in default with respect to any
item of Tangible Personal Property purported to be leased by it, and no event
has occurred which constitutes, or with due notice or lapse of time or both may
constitute, a default under any such lease. Neither LLC nor any LLC Physician
holds any Tangible Personal Property of any other person, firm or corporation
pursuant to any consignment or similar arrangement.
6.9. INTANGIBLE PROPERTY. Schedule 6.9 -- Intangible Property is a true
and correct list of all United States and state trademarks, service marks, trade
names, patents, copyrights, trade secrets, technical data and proprietary
know-how (either registered or applied for) owned by, registered in the name of,
licensed to, or used in the business of LLC (the "Intangible Property"). Such
list includes a summary description of each such item and specifies, where
applicable, the date the license or registration was granted or applied for, the
expiration date and the current status thereof. To the best of and Members'
knowledge, there is no restriction affecting the use of any of the Intangible
Property by LLC, and no license has been granted with respect thereto. To the
best of any Members' knowledge, each item of Intangible Property is valid and in
good standing, is not currently being challenged or infringed, is not involved
in any pending or threatened administrative or judicial proceeding, and does not
conflict with any rights of any other person, firm or
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corporation. LLC has only operated or transacted business under its own name or
the fictitious names set forth in Schedule 6.9 -- Intangible Property.
6.10. CONTRACTS AND OTHER AGREEMENTS. The Members has described on
Schedule 6.10 -- Contracts all contracts, agreements, leases, subleases,
franchises and licenses of LLC (the "Contracts and Other Agreements") and has
furnished to USO copies and/or descriptions of all Contracts and Other
Agreements affecting the Interest being purchased, sold, or leased hereunder,
excluding Contracts and Other Agreements which are not material and which in the
aggregate provide for the expenditure of less than $2,500. All Contracts and
Other Agreements are in full force and effect, and LLC has performed all
obligations required with respect to, and neither LLC nor any LLC Physician is
in material default under, any such Contracts and Other Agreements. Neither the
execution or delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (a) conflict with, constitute a material breach,
material violation or termination of any provision of any Contracts and Other
Agreements to which LLC and/or any LLC Physician is a party or by which such
parties are bound; (b) result in the creation or imposition of any Lien against
any of the Interests; or (c) violate any law, regulation, judgment, rule, order
or any other restriction of any kind or character applicable to LLC, any LLC
Physician, or the Interest.
6.11. PERSONNEL. Schedule 6.11 is a list of all employees of ASC and/or
LLC (in relation to the Center only), the method of payment (i.e., hourly,
salaried), date of hire, the current rate of earnings of each employee, and all
written agreements with respect thereto. There has not been any (i) termination
of any "defined benefit plan" within the meaning of the Employee Retirement
Income Security Act of 1974 ("ERISA") maintained by ASC or any person, firm or
corporation ("Affiliate") which is under "common control" (within the meaning of
Section 4001(b) of ERISA) with ASC, or (ii) commencement of any proceeding to
terminate any such plan pursuant to ERISA, or otherwise or (iii) written notice
given to LLC or any Affiliate of the intention to commence or seek the
commencement of any such proceeding.
6.12. LICENSES. Schedule 6.12 is a list of all licenses, permits,
authorizations, approvals and consents (collectively, the "Licenses") ASC, LLC
and/or any LLC Physician has obtained in connection with the Center, including,
without limitation, any License required to be held or obtained in connection
with the purchase, storage or dispensing of scheduled narcotics or other
prescription drugs. To the best of any Members' knowledge, there are no other
licenses, permits, authorizations, approvals or consents required by any
federal, state, or local government or government department, agency, board,
commission, bureau or instrumentality (collectively, "Governmental Authority")
to properly operate or conduct the business of the Center. To the best of any
Members' knowledge, each License has been duly obtained, is valid and in full
force and effect, and is not subject to any pending or threatened administrative
or judicial proceeding to revoke, cancel or declare such License invalid in any
respect. To the best of any Members' knowledge, neither any Member or LLC is in
material default or in violation with respect to any of the Licenses, and no
event has occurred which constitutes, or with due notice or lapse of time or
both may constitute, a default by any Member of LLC under, or violation of, any
License. To the best of any Members' knowledge, the Members and/or LLC has
completed and submitted, on a timely basis, all reports and filings associated
with the Center as are required by any Governmental Authority. The Members
and/or LLC will take all necessary actions to transfer, or assist USO in
transferring, the Licenses to USO or its designee.
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6.13. ADVERSE EVENTS. For the twelve (12) month period prior to the
Closing Date, there has not been any damage, destruction or loss, whether or not
covered by insurance, which materially adversely affected the Interest or any
event or series of events that has resulted in, or is reasonably likely to
result in, a material diminution in the revenues generated by the Center.
6.14. CREDITORS. The Members have provided USO with a list of the name,
nature of business, address and telephone number of each person or business
organization which is known to the Members to be a creditor of LLC on the date
hereof and a statement of the amount owed such creditor as of the date hereof.
The creditor list includes persons and business organizations who have asserted
claims against LLC or the Interest, even though such claims are disputed. The
transfer of the Interest to USO does not and will not constitute a fraudulent
transfer or fraudulent conveyance under any applicable state or federal law or
regulation or under any similar laws relating to creditors' rights generally and
the Purchase Price constitutes fair and adequate consideration for the Interest.
The Members have not entered into this Agreement or made any transfer or
incurred any obligations hereunder or in connection herewith, with the actual
intent to disturb, hinder, delay or defraud LLC's present or future creditors or
other persons.
6.15. ACCOUNTS RECEIVABLE. All accounts receivable of LLC existing as
of the Effective Time (the "Accounts Receivable") related to the provision of
services by LLC which are payable to or for the benefit of LLC are reflected on
Schedule 6.15 hereof, which Schedule shall be prepared by LLC as of the
Effective Time and attached to this Agreement as soon as practicable following
the Closing Date. To the best of any Members' knowledge, the Accounts Receivable
are (or will be) collectible in amounts not less than the aggregate amount
reflected on Schedule 6.15 and are subject to no existing or pending
counterclaims or setoffs.
6.16. COMPLIANCE WITH LAWS. LLC is not in violation of, nor has either
received notice of a potential violation of, any law, order, writ, injunction or
decree of any court, governmental department or instrumentality (including any
Environmental Protection Law), which violation could reasonably be expected to
materially and adversely affect any Asset or the use of any Asset for its
intended purpose.
6.17. ABSENCE OF UNDISCLOSED LIABILITIES.
(a) Except as and to the extent of the amounts specifically
reflected or reserved against in the LLC's Balance Sheet dated October 31, 1999
as set forth on Schedule 6.17 or except as otherwise set forth on Schedule
6.17.1, the LLC has no liabilities, except for liabilities incurred since the
date thereof in the ordinary course of business.
(b) The LLC is not bound by any agreement, or subject to any
charter or other corporate restriction or any unusual legal requirement, which
has, or in the future can reasonably be expected to have, a material adverse
effect on the LLC.
6.18. ACCURACY AND MATERIALITY. No representation or warranty of any
Member contained in this Agreement or any other document prepared by any Member
and delivered to USO incident to this Agreement contains any untrue statements
of a material fact, or, to the best of any Members' knowledge, fails to state a
material fact necessary in order to make the statements made in this Agreement
or such document not misleading. The Schedules and Exhibits to this Agreement
correctly and completely set forth the information called for in such Schedules
and Exhibits.
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Each of the representations, warranties and covenants contained in this
Section 6 shall be deemed to be material to and have been relied upon by USO and
shall be binding and enforceable against the Members notwithstanding any
independent investigation made by USO.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF USO.
USO represents and warrants to ASC, as of the Closing Date, as follows:
7.1. CORPORATE. USO is a limited liability company duly formed, validly
existing and in good standing under the laws of the State of Texas. USO has all
requisite power and authority to enter into and perform its obligations under
this Agreement and to consummate the transactions set forth in this Agreement.
7.2. AUTHORIZATION. This Agreement and all other agreements,
certificates and instruments contemplated hereby to be executed and delivered by
USO have been duly authorized by all necessary corporate action. This Agreement
and each other agreement or instrument contemplated hereby to be executed by USO
has been duly executed and delivered by USO and constitutes a legal, valid and
binding obligation of USO enforceable against USO in accordance with its terms,
except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting creditors' rights generally
and by general principles of equity (regardless of whether such principles are
considered in a proceeding at law or in equity).
7.3. OTHER CONTRACTS. Neither the execution nor delivery of this
Agreement nor the consummation of the transactions contemplated herein will
conflict with, or constitute a breach, violation or termination of, any
provision of any agreement to which USO is a party or by which it is bound.
SECTION 8. CONDITIONS AND ADDITIONAL AGREEMENTS.
8.1. USO'S CONDITIONS TO CLOSE. The Closing and all obligations of USO
pursuant to this Agreement shall be conditioned upon the following:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Members contained in this Agreement or in any Schedule or
Exhibit delivered pursuant hereto shall be true and correct on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date, and (if the Closing Date shall occur on a
date other than the date of this Agreement) the Members shall have delivered to
USO on the Closing Date a certificate, dated the Closing Date and signed by an
authorized officer of each Member, to such effect;
(b) NO ADVERSE CHANGE. There shall not have been any material
adverse change in the LLC or the Management Agreement (either individually or in
the aggregate) from the date of USO's execution of this Agreement through the
Closing Date if the date of execution of this Agreement and the Closing Date are
not one and the same;
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(c) INSOLVENCY. There shall not have been any insolvency
(whether voluntary or involuntary) of LLC from the date of USO's execution of
this Agreement through the Closing Date if the date of execution of this
Agreement and the Closing Date are not one and the same;
(d) SCHEDULED NARCOTICS. All scheduled narcotics used in the
Center shall have been transferred to USO or otherwise disposed of, all in
accordance with applicable federal, state and local law;
(e) LICENSES. All Licenses shall have been properly
transferred to USO or with respect to Licenses which cannot be transferred, USO
shall have obtained the necessary licenses and permits;
(f) OBLIGATIONS PERFORMED. The Members shall have performed
all of their obligations under this Agreement required to be performed as of the
Closing Date;
(g) MANAGEMENT AGREEMENT. USO, Inc. shall have received
executed originals of the Assignment of Management Agreement from ASC;
(h) CONSENTS. The transactions contemplated hereby shall not
(i) require the consent, waiver, authorization or approval of any Governmental
Authority, domestic or foreign, or of any other Person, except such consents,
waivers, authorizations or approvals as have been obtained and are in full force
and effect, or (ii) conflict with or result in any breach or violation of the
terms and conditions of, or constitute (or with notice or lapse of time, or
both, constitute) a default under applicable federal, state, local or foreign
statute, regulation, order, judgment or decree;
(i) DUE DILIGENCE. USO shall have been satisfied with its "due
diligence" examinations of the LLC and the Center and shall not have discovered
any conditions or set of facts which in USO's sole determination, individually
or in the aggregate, would have a material adverse effect on the LLC or the
Center;
(j) NO INJUNCTION. At the Closing Date, there shall not be (i)
any effective injunction, writ, or temporary restraining order or any other
order of any nature issued by a court or governmental agency of competent
jurisdiction directing that the proposed transfer of the Interest not be
consummated or (ii) any action, suit, or proceeding pending or threatened by or
before any court or governmental body in which it is or may be sought to
prohibit, substantially delay, or rescind the transfer of the Interest, or limit
in any way USO's rights as contemplated herein, or obtain an award of damages in
connection with the transfer of the Interest;
(k) LEGAL OPINION. The Members shall have furnished USO with a
favorable opinion, dated the Closing Date, of the Members' counsel, in form and
substance satisfactory to USO and its counsel, to the effect set forth in
Exhibit B-1 hereto; and
(l) PROCEEDINGS. All proceedings to be taken in connection
with the transactions contemplated by this Agreement and all documents incident
thereto shall be satisfactory in form and substance to USO and its counsel, and
USO shall have received copies of all such documents and other evidences as it
or its counsel may reasonably request in order to
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establish the consummation of such transaction and the taking of all proceedings
in connection therewith.
In the event that any of the foregoing conditions is not satisfied, then USO
may, at its option, terminate this Agreement in which event USO shall be
relieved of all obligations hereunder and this Agreement shall be deemed null,
void and of no force or effect.
8.2. USO'S DELIVERIES. At or prior to the Closing, USO shall deliver to
the Members, as appropriate:
(a) PURCHASE PRICE.
i. By check or wire transfer (at USO's option), cash in
an amount equal to ASC's portion of the Purchase
Price and MA Purchase Price as set forth on Schedule
3.1 and any portion of the Noncompete Payments due at
Closing pursuant to Section 12.1;
ii. By check or wire transfer (at USO's option) cash in
an amount equal to one-half of the ASDT portion of
the Purchase Price and MA Purchase Price as set forth
on Schedule 3.1 and delivery of a promissory note for
the remainder; and
iii. By check or wire transfer (at USO's option) cash in
an amount equal to one-half of the ASDC portion of
the Purchase Price as set forth on Schedule 3.1 and
the Noncompete Payment and delivery of a promissory
note for the remainder.
(b) ASSUMPTION OF MANAGEMENT AGREEMENT. An agreement by which
USO, Inc. assumes the obligations under the Management Agreement in
substantially the form of Exhibit C hereto (the "Assignment and Assumption
Agreement").
8.3. THE MEMBER'S CONDITIONS TO CLOSE. The Closing and all obligations
of the Members pursuant to this Agreement shall be conditioned upon the
following:
(a) REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained in Section 7 shall be true and correct on and as of the
Closing Date with the same effect as though such representations and warranties
had been made on and as of such date;
(b) OBLIGATIONS PERFORMED. USO shall have performed all of its
obligations under this Agreement required to be performed as of the Closing
Date, including, without limitation, the assumption of the Assumed Obligations;
(c) LEGAL OPINION. USO shall have furnished the Members with a
favorable opinion, dated the Closing Date, of USO's counsel, in form and
substance satisfactory to the Members and their counsel, to the effect set forth
in Exhibit B-2 hereto; and
(d) CONSENTS. The transactions contemplated hereby shall not
(i) require the consent, waiver, authorization or approval of any Governmental
Authority, domestic or foreign, or of any other Person, except such consents,
waivers, authorizations or approvals as have been
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obtained and are in full force and effect, or (ii) conflict with or result in
any breach or violation of the terms and conditions of, or constitute (or with
notice or lapse of time, or both, constitute) a default under applicable
federal, state, local or foreign statute, regulation, order, judgment or decree.
In the event that any of the foregoing conditions is not satisfied, then the
Members may, at their option, terminate this Agreement in which event the
Members shall be relieved of all obligations hereunder and this Agreement shall
be deemed null, void and of no force or effect.
8.4. THE MEMBER'S DELIVERIES. At or prior to the Closing, the Members
shall deliver, or cause to be delivered, to USO the following documents:
(a) CORPORATE RESOLUTIONS. Copies of members' resolutions of
ASC and the other Members, certified by the Members' 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
each Members of this Agreement, the other agreements and instruments to be
executed and delivered by each Member as provided herein, and the performance by
each Member of the transactions contemplated hereby;
(b) CONSENT OF LLC. Consent of the members of LLC pursuant to
the Regulations of LLC authorizing the Members to sell their Interests in LLC to
USO;
(c) MEMBERSHIP CERTIFICATES. Certificates representing the
Interests in the LLC endorsed in blank or accompanied by duly executed
assignment documents and other documents of transfer acceptable in form and
substance to USO in its judgment reasonably exercised;
(d) CERTIFICATE OF GOOD STANDING. Certificate of Good Standing
by the Secretary of State of Texas as to the good standing of each Member, dated
as of a date not more than ten days prior to the Closing Date;
(e) INCUMBENCY CERTIFICATE. An incumbency and signature
certificate for the officers of each Member, certified by the secretary or
assistant secretary of each Member;
(f) DRUG SCHEDULE. A listing of the controlled substances
located at the Center together with a certification that all such controlled
substances have been ordered and maintained in compliance with applicable laws
and regulations;
(g) CERTIFIED COPIES OF LEASES. Certified copies of any and
all real estate and/or equipment leases pertaining to the Center, certified by
an officer of each Member;
(h) ASSIGNMENT OF MANAGEMENT AGREEMENT. An assignment of the
Management Agreement by ASC to USO, Inc. in substantially the form of Exhibit C
hereto (the "Assignment and Assumption Agreement"); and
(i) OTHER PURCHASE DOCUMENTS. All such documents and
instruments USO and its counsel may reasonably request in connection with the
consummation of the transactions contemplated by this Agreement.
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8.5. POST-CLOSING COVENANTS.
(a) GENERAL. In case at any time after the Closing any further
action is necessary or desirable to carry out the purposes of this Agreement,
the Members and/or its members will take such further action (including the
execution and delivery of such further instruments and documents) as any other
party may request, all at the sole cost and expense of the requesting party
(unless the requesting party is entitled to indemnification therefor).
SECTION 9. TERMINATION AND ABANDONMENT
9.1. 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 written consent of the Members and USO;
(b) By USO, if all of the conditions set forth in Section 8.1
of this Agreement shall not have been satisfied or waived on or prior to the
Closing Date; or
(c) By the Members, if all of the conditions set forth in
Section 8.3 of this Agreement shall not have been satisfied or waived on or
prior to the Closing Date.
If this Agreement is terminated pursuant to this Section 9.1, it shall become
null and void and of no further force or effect, except as provided in Section
9.2.
9.2. PROCEDURE UPON TERMINATION. In the event of termination and
abandonment of this Agreement by the Members or USO pursuant to Section 9.1
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
the Members or USO, and the Members and USO 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 transactions contemplated by this Agreement;
provided, however, that the obligations set forth in Sections 10.1, 10.2 and
11.8 shall survive any termination. No termination of this Agreement pursuant to
the provisions of this Section 9 shall relieve any party of liability for a
breach of any provision of this Agreement occurring prior to such termination.
SECTION 10. INDEMNIFICATION.
10.1. INDEMNIFICATION BY THE MEMBERS. The Members shall indemnify,
defend and hold USO and its officers, directors, members, agents, employees,
representatives, successors and assigns (collectively, "USO Indemnified
Parties"), 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 USO Indemnified
Parties (collectively, "Damages"), resulting from or in connection with any one
or more of the following:
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(a) Any misrepresentation, breach of warranty or failure to
perform any covenant or agreement made or undertaken by the Members in this
Agreement or in any other agreement delivered to USO pursuant to this Agreement;
(b) Any and all commitments, agreements, debts, liabilities
and obligations of the Members or ASC debts related to the LLC, other than the
Assumed Obligations, which are accrued, absolute, contingent or otherwise,
whether known or unknown, and whether or not disclosed in this Agreement;
(c) Any transaction, event, act or omission, which occurred on
or prior to the Closing Date which relates to the LLC or the operation of the
Center;
(d) Any failure of LLC to pay all of its liabilities or other
failure of LLC to take appropriate action which would make the transfers
contemplated herein ineffective as against creditors of LLC; and
(e) Any and all claims, actions, suits or proceedings brought
or commenced by any former employee, contractor, consultant or principal of ASC
or LLC or any action, suit, proceeding or claim incident to any of the
foregoing.
10.2. INDEMNIFICATION BY USO. USO shall indemnify, defend and hold the
Members, their officers, directors, shareholders, agents, employees,
representatives, successors and assigns, ("Member Indemnified Parties"),
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 Member Indemnified
Parties, resulting from or in connection with any one or more of the following:
(a) Any misrepresentation, breach of warranty or failure to
perform any covenant or agreement made or undertaken by USO in this Agreement or
in any other agreement delivered to the Members pursuant to this Agreement;
(b) Any transaction, event, act or omission of USO which
occurs after the Closing Date which relates to the LLC or the operation by USO
of the Center; and
(c) Any action, suit, proceeding or claim incident to any of
the foregoing.
SECTION 11. GENERAL PROVISIONS.
11.1. 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 assigns and is expressly
not for the benefit of any person other than USO and the Members.
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(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.
11.2. CHOICE OF LAW. This Agreement shall be governed by and construed,
interpreted and enforced in accordance with the laws of the State of Texas,
without regard to the conflicts of law principles of such State.
11.3. ENTIRE AGREEMENT. This Agreement shall embody the entire
agreement between the parties hereto with respect to acquisition of the Interest
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 other than those set forth or provided herein. All Exhibits and
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.
11.4. AMENDMENT. This Agreement may not be amended or modified except
by a writing signed by an authorized representative of the party against whom
enforcement of the change is sought.
11.5. NO WAIVER. Each party hereto may, by written notice to the other
parties hereto: (a) extend the time for the performance of any of the
obligations or other actions of such party under this Agreement; (b) waive any
inaccuracies in the representations, warranties, conditions or covenants of such
other party contained in this Agreement; or (c) waive or modify performance of
any of the obligations of such other party under this Agreement. Except as
provided in the foregoing sentence, no waiver of the performance or breach of,
or default under, any condition or obligation hereof shall be deemed to be a
waiver of any other performance, or breach of, or default under the same or any
other condition or obligation of this Agreement.
11.6. SURVIVAL. The covenants, representations and warranties contained
in this Agreement shall survive the Closing.
11.7. SECTION HEADINGS. The headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.8. 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.
11.9. PREVAILING PARTY. The parties agree that if any party should
institute litigation against any of the other parties to enforce any provisions
of this Agreement, the prevailing party in such litigation 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 litigation.
11.10. USE OF MARKS. As of the Closing Date, ASC shall cease to use any
of the Intangible Property comprising a portion of the LLC without the express
prior consent of USO.
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11.11. EXPENSES. Except as otherwise provided in this Agreement, the
parties hereto shall bear their respective expenses incurred in connection with
the preparation, execution and performance of this Agreement and the
transactions contemplated hereby, including all fees and expenses of agents,
representatives, counsel and accountants.
11.12. NOTICES. Any notices or other communications required or
contemplated under this Agreement shall be in writing and personally delivered,
evidenced by a signed receipt, or mailed by certified mail, return receipt
requested, postage prepaid, to the addresses indicated below on the signature
page or to such other person or address as the parties may provide by notice to
the other. The date of notice shall be the date of delivery of the notice if
personally delivered or the date of mailing if the notice is mailed by certified
mail.
11.13. EXHIBITS AND SCHEDULES. The Exhibits and Schedules attached
hereto are a part of this Agreement as if fully set forth herein.
11.14. COUNTERPARTS. This Agreement may be executed in counterpart each
of which shall be deemed an original and all of which together shall be
considered one and the same agreement. The parties agree that a facsimile may be
executed as an original.
11.15. REVIEW AND CONSULTATION. The Members has had access to and
reviewed such information and have consulted with all legal counsel, tax
counsel, accountants and other experts and advisors deemed necessary by the
Members in connection with the transactions contemplated herein. USO has had
access to and reviewed such information and have consulted with all legal
counsel, tax counsel, accountants and other experts and advisors deemed
necessary by USO in connection with the transactions contemplated herein.
11.16. SEVERABILITY. In the event that any one or more of the
provisions of this Agreement or any application thereof shall be found by a
court of competent jurisdiction to be invalid, illegal or unenforceable in any
respect, the validity, legality or enforceability of the remaining provisions of
this Agreement and any other application thereof shall not in any way be
affected or impaired thereby; provided, however, that to the extent permitted by
applicable law, any invalid, illegal or unenforceable provision may be
considered for the purpose of determining the intent of the parties in
connection with the other provisions of this Agreement.
11.17. TELECOPY EXECUTION AND DELIVERY. A facsimile telecopy or other
reproduction of this Agreement may be executed by one or more parties hereto,
and an executed copy of this Agreement may be delivered by one or more Parties
hereto by facsimile or similar instantaneous electronic transmission device
pursuant to which the signature of or on behalf of such party can be seen, and
such execution and delivery shall be considered valid, binding and effective for
all purposes. At the request of any party hereto, all parties hereto agree to
execute an original of this Agreement as well as any facsimile, telecopy or
other reproduction thereof.
SECTION 12. NONCOMPETE COVENANT.
12.1. COVENANT NOT TO COMPETE. In consideration of the Purchase Price
and the MA Purchase Price, each of the Members hereby agree that, for the period
of five (5) years immediately following the Closing, such Members will not in
any manner directly or indirectly:
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(a) Disclose or divulge to any other persons, partnership,
corporation, business organization, firm, or other entity whatsoever, or use for
such Member's own benefit or for the benefit of any other person, partnership,
corporation, business organization, firm, or other entity directly or indirectly
in competition with USO, any knowledge, information, business methods,
techniques, or patient lists, letters, files, records, or other information, of
the LLC other than as may be required by a court with jurisdiction over such
Members and USO.
(b) Solicit, divert, or otherwise interfere with the LLC's
former patients, patronage, employees, or agents, not to include a patient's
choice to follow.
(c) Own, operate, manage, participate in, or provide services
to any person or entity operating an ambulatory surgery center within fifteen
(15) miles of Odessa, Texas; provided, however, that treating of patients in
other centers/hospitals within such fifteen (15) mile radius or hospital
ownership by a Member physicians shall not be a violation of this clause.
12.2. REMEDIES. Each Member represents and acknowledges that the
covenants contained in this Section 12 have been given in connection with a sale
of a business interest. In addition to any other remedies available to USO, each
Member further acknowledges that the provisions of this Section 12 may be
enforced to: (i) restrain violation thereof by such Member; (ii) compel specific
performance of the terms and conditions of this Section 12; and (iii) by suit to
recover damages from such Member for his or her violation of any of the terms of
this Section 12. In this regard, each Member also acknowledges that any
violation of this Section 12 will result in substantial and continuing damages
to USO, including, but not limited to, direct loss of revenue, interference with
USO's business relationships, and disruptions to the operation of USO's
business.
12.3. REASONABLE RESTRICTIONS. Each Member acknowledges that the
restrictions set forth in this Section 12 are reasonable in scope, and essential
to USO's legitimate business interest, including, without limitation, protection
of the value of Interest purchased from the Members.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Asset
Purchase Agreement as of the date and year first above written.
AMEDISYS SURGERY CENTERS, L.C.
Amedisys Surgery Centers, L.C.
0000 Xxxxx Xxxxxxxx Xxxxxx Xxxx., Xxxxx 000
Baton Rouge, Louisiana 70816
By its Manager
AMEDISYS, INC.
By: /s/ XXXXXXX X. XXXXXXXX
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Secretary
AMBULATORY SYSTEMS DEVELOPMENT OF TEXAS, INC.
Ambulatory Systems Development of Texas, Inc.
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
By: /s/ XXXXXX XXXX, President
-------------------------
Name: Xxxxxx Xxxx
Title: President
AMBULATORY SYSTEMS DEVELOPMENT CORPORATION
Ambulatory Systems Development Corporation
000 Xxxxxxxxxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
By: /s/ XXXXXX X. XXXX
-----------------------
Name: Xxxxxx X. Xxxx
Title: President
U.S. ORTHOPEDICS TEXAS, LLC:
U.S. Orthopedics Texas, LLC
00000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
By its Manager
U.S. ORTHOPEDICS, INC.
By: /s/ XXXXXX XXXXXXXX
---------------------------
Xxxxxx Xxxxxxxx, President
U.S. ORTHOPEDICS, INC.
00000 Xxxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxx, Xxxxxxxx 00000
By: /s/ XXX XXXXXXXX
---------------------------
Xxx Xxxxxxxx, President
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