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EXHIBIT 2.14
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement"), effective March 31,
1998, is by and among VISION TWENTY-ONE, INC., a Florida corporation ("Vision
Twenty-One"), VISION TWENTY-ONE OF WISCONSIN, INC. (the "Purchaser"), VISION
INSURANCE PLAN OF AMERICA, INC., a Wisconsin corporation (the "Company"), and
XXXXXX X. XXXXX, XXXXXX X. XXXXXXXX, XXXXXX X. XXXXX, XXXXXXX X. XXXXXXX, XXXXXX
X. XXXXXX, and XXXX X. XXXXXX, not individually but solely as Trustee of the
Xxxx X. Xxxxxx Trust u/t/a dated August 5, 1994 (individually, a "Stockholder"
and collectively, the "Stockholders").
R E C I T A L S
A. Stockholders own all of the issued and outstanding shares of capital
stock of the Company.
B. Purchaser desires to purchase from the Stockholders, and the
Stockholders desire to sell to Purchaser, all of the issued and outstanding
capital stock of the Company, pursuant to and in accordance with this Agreement.
C. The Stockholders also own substantially all of the issued and
outstanding shares of capital stock of EyeCare One Corp., a Delaware corporation
("EyeCare One").
D. Simultaneously with the consummation of this transaction, Vision
Twenty-One, EyeCare One and all of the stockholders of EyeCare One desire to
effect a business combination and merger of EyeCare One with and into Vision
Twenty-One upon the terms and subject to the satisfaction of the conditions
precedent contained in that certain Agreement and Plan of Reorganization between
Vision Twenty-One, EyeCare One and the Stockholders (the "Merger Agreement").
E. For financial and accounting reporting purposes, it is intended that
the transactions described herein and in the Merger Agreement be accounted for
as a pooling of interests (the "Pooling of Interests").
NOW, THEREFORE, in consideration of the mutual representations,
warranties and covenants contained herein, and on the terms and subject to the
conditions herein set forth, the parties hereto hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth below:
1.1. AAA. The term "AAA" shall mean the American Arbitration
Association.
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1.2. Active Stockholders. The term "Active Stockholders"
shall mean Xxxxxx X. Xxxxx, Xxxxxx X. Xxxxxxxx, Xxxxxxx X. Xxxxxxx and Xxxxxx X.
Xxxxxx.
1.3. Affiliate. The term "Affiliate" with respect to any
person or entity shall mean a person or entity that directly or indirectly
through one or more intermediaries, controls, or is controlled by or is under
common control with, such person or entity.
1.4. Assets. The term "Assets" shall mean all of the assets
of the Company.
1.5. Closing. The term "Closing" shall mean the consummation
of the transactions contemplated by this Agreement.
1.6. Closing Date. The term "Closing Date" shall mean March
31, 1998, or such other date as mutually agreed upon by the parties.
1.7. Code. The term "Code" shall mean the Internal Revenue
Code of 1986, as amended.
1.8. Commitments. The term "Commitments" shall have the
meaning set forth in Section 3.11.
1.9. Common Stock. The term "Common Stock" shall mean the
common stock, par value $.01 per share, of Vision Twenty-One.
1.10. Company Balance Sheet. The term "Company Balance Sheet"
shall have the meaning set forth in Section 3.8.
1.11. Company Balance Sheet Date. The term "Company Balance
Sheet Date" shall have the meaning set forth in Section 3.8.
1.12. Company Common Stock. The term "Company Common Stock"
shall mean the common stock of the Company.
1.13. Exchange Act. The term "Exchange Act" shall mean the
Securities Exchange Act of 1934, as amended.
1.14. Financial Statements. The term "Financial Statements"
shall have the meaning set forth in Section 3.8.
1.15. GAAP. The term "GAAP" shall mean generally accepted
accounting principles, applied on a consistent basis with prior periods, as set
forth in the opinions and pronouncements of the Accounting Principles Board of
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity or
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other practices and procedures as may be approved by a significant segment of
the accounting profession, which are applicable to the circumstances as of the
date of the determination.
1.16. Material Adverse Effect. The term "Material Adverse
Effect" shall mean a material adverse effect on the business, assets,
operations, condition (financial or otherwise) or results of operations, taken
as a whole, considering all relevant facts and circumstances, of the subject
company (which, in the case of the Company, shall include EyeCare One) and its
subsidiaries.
1.17. SEC. The term "SEC" shall mean the Securities and
Exchange Commission.
1.18. Securities Act. The term "Securities Act" shall mean the
Securities Act of 1933, as amended.
1.19. Stock. The term "Stock" shall have the meaning set forth
in Section 2.1.
1.20. Stock Purchase Consideration. The term "Stock Purchase
Consideration" shall mean the consideration set forth in Section 2.3 of this
Agreement.
2. PURCHASE AND SALE OF STOCK.
2.1. Purchase of Stock. Upon and subject to the terms and
conditions of this Agreement, Purchaser agrees to purchase and accept delivery
from each Stockholder of, and each Stockholder agrees to sell, assign, transfer
and deliver to Purchaser, at the Closing, all of the issued and outstanding
shares of common stock of the Company owned by such Stockholder (collectively,
for all of the Stockholders, the "Stock"), free and clear of all liens, pledges,
security interests, claims, charges, restrictions, equities or encumbrances of
any kind whatsoever.
2.2. The Closing. The Closing shall take place on the Closing
Date at the offices of Xxxxxxxx, Loop & Xxxxxxxx, LLP, 000 X. Xxxxxxx Xxxxxxxxx,
Xxxxx 0000, Xxxxx, Xxxxxxx 00000 or at such other location as the parties shall
mutually agree.
2.3. Stock Purchase Consideration. As consideration for the
Stock, Purchaser shall pay to the Stockholders the aggregate value of One
Million Four Hundred Thousand Dollars ($1,400,000) (the "Stock Purchase
Consideration"). The Stock Purchase Consideration shall consist of shares of
Vision Twenty-One Common Stock to be delivered to the Stockholders in proportion
to their respective ownership of the Company Common Stock as set forth on
Schedule 2.3. The aggregate number of One Common Stock to be delivered to the
Stockholders in proportion to their respective
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shares of Vision Twenty-One Common Stock to be delivered shall be that whole
number equal to (but not greater than) the Stock Purchase Consideration divided
by $9.46 (the "Valuation Price").
2.4. Fractional Shares. Notwithstanding any other provision
herein, no fractional shares of Common Stock will be issued. Fractional shares
shall be rounded down to the nearest whole number of shares.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS.
The Company and the Active Stockholders hereby jointly and severally represent
and warrant to Purchaser and Vision Twenty-One that the following are true and
correct on the date hereof; when used in this Section 3, the term "best
knowledge" (or words of similar import) shall mean actual knowledge, and in the
case of the Company, shall mean the actual knowledge of Xxxxxx X. Xxxxxxxx and
Xxxxxx X. Xxxxxx:
3.1 Organization and Good Standing; Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, with all requisite corporate power
and authority to carry on the business in which it is engaged, to own the
properties it owns, to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Company is duly qualified and licensed to
do business in each jurisdiction in which the character or location of the
properties owned or leased by the Company or the practice of the businesses
conducted by the Company makes such qualification necessary or desirable, except
where the failure to be so qualified would not have a Material Adverse Effect.
The Company does not own, directly or indirectly, any of the capital stock of
any other corporation or any equity, profit sharing, participation or other
interest in any corporation, partnership, joint venture or other entity.
3.2 Capitalization. The authorized capital stock of the
Company consists of 9,000 shares of Company Common Stock, of which 4,500 shares
are issued and outstanding. The Stockholders own all of the issued and
outstanding Company Common Stock in the amounts set forth on Schedule 3.2. Each
outstanding share of Company Common Stock has been legally and validly issued
and is fully paid and nonassessable except as set forth in Section
180.0622(2)(b) of the Wisconsin Statutes and the cases decided pursuant thereto.
No shares of Company Common Stock are owned by the Company in treasury. No
shares of Company Common Stock have been issued or disposed of in violation of
the preemptive rights, rights of first refusal or similar rights of the
Stockholders. The Company has no bonds, debentures, notes or other obligations
the holders of which have the right to vote (or are convertible into or
exercisable for securities having the right to vote) with the Stockholders on
any matter.
3.3 Transactions in Capital Stock. The Company has not
acquired any capital stock of the Company within the two (2) year period
preceding the execution of this Agreement. Except as set forth on Schedule 3.3,
there exist no options, warrants,
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subscriptions or other rights to purchase, or securities convertible into or
exchangeable for, any of the authorized or outstanding securities of the
Company, and no option, warrant, call, conversion right or commitment of any
kind exists which obligates the Company to issue any of its authorized but
unissued capital stock.
3.4 Continuity of Business Enterprise. Except as set forth on
Schedule 3.4 and except as contemplated by this Agreement, there has not been
any sale, distribution or spin-off of significant assets of the Company or any
of its Affiliates other than in the ordinary course of business within the two
(2) year period preceding the date of this Agreement.
3.5 Corporate Records. Copies of the Articles of Incorporation
and Bylaws, and all amendments thereto, of the Company have been delivered or
made available to Purchaser and Vision Twenty-One and are true, correct and
complete copies thereof, as in effect on the date hereof. The minute books of
the Company, copies of which have been delivered or made available to Purchaser
and Vision Twenty-One, contain accurate minutes of all meetings of, and accurate
consents to all actions taken without meetings by, the Board of Directors (and
any committees thereof) and the stockholders of the Company in the three (3)
years prior to the Closing Date, and contain all other material minutes and
consents of the directors and stockholders of the Company since their formation.
3.6 Authorization and Validity. The Company has the corporate
power and authority to execute this Agreement and carry out its obligations
hereunder. The execution, delivery and performance by the Company of this
Agreement and the other agreements contemplated hereby, and the consummation of
the transactions contemplated hereby and thereby to be performed by the Company,
have been duly authorized by the Company. This Agreement has been duly executed
and delivered by the Company and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as may be limited by applicable bankruptcy, insolvency or
similar laws affecting creditors' rights generally or the availability of
equitable remedies. The Company has obtained, in accordance with applicable law
and its Certificate of Incorporation and Bylaws, the approval of its
stockholders necessary for the consummation of the transactions contemplated
hereby.
3.7 No Conflict. Except as disclosed on Schedule 3.7, to the
best knowledge of the Company and the Active Stockholders, the execution and
delivery of the documents contemplated hereunder and the consummation of the
transactions contemplated thereby by the Company will not violate any provision
of the Company's organizational documents.
3.8 Financial Statements. The Company has furnished to
Purchaser and Vision Twenty-One its audited balance sheets and related audited
statements of operations, changes of net worth and of cash flows of the Company
for the years ended December 31, 1997, 1996 and 1995, and the related notes
thereto
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(collectively, the "Financial Statements"). The Financial Statements are
complete and correct in all material respects. The Financial Statements have
been prepared in accordance with GAAP, reflect all liabilities of the Company
required to be stated therein and fairly present in all material respects the
financial position of the Company at the dates and for the periods indicated. To
the best knowledge of the Company and the Active Stockholders, since December
31, 1998 (the "Company Balance Sheet Date") there has been no Material Adverse
Effect upon the assets or liabilities or in the business or condition, financial
or otherwise, or the results of operations or prospects of the Company, and, to
the best knowledge of the Company and the Active Stockholders, no fact or
condition exists or is contemplated or threatened which might cause such a
change in the future.
3.9 Absence of Certain Changes. Since the Company Balance
Sheet Date, there has not: been any material change in the business or
operations of the Company.
3.10 Commitments. Except for the contracts described on
Schedule 3.11, to the best knowledge of the Company and the Active Stockholders,
the Company is not a party to nor bound by, nor are any of the shares of Company
Common Stock subject to, nor are the Assets or the business of the Company bound
by, whether or not in writing, any agreements involving in excess of ten percent
(10%) of the total revenues of the Company. The agreements set forth on Schedule
3.11 (the "Commitments") have been entered into in the ordinary course of
business. Except as set forth on Schedule 3.11 and to the best knowledge of the
Company and the Active Stockholders, there are no existing events of default or
events, occurrences, acts or omissions that, with the giving of notice or lapse
of time or both, would constitute defaults by the Company or, to the best
knowledge of the Company and the Active Stockholders, any other party under any
Commitment, and no penalties have been incurred nor are amendments pending, with
respect to the Commitments, except as described on Schedule 3.11. The
Commitments are in full force and effect and are valid and enforceable
obligations of the Company, and to the best knowledge of the Company and the
Active Stockholders, are valid and enforceable obligations of the other parties
thereto, in accordance with their respective terms, and no defenses, off-sets or
counterclaims have been asserted, nor has the Company waived any rights
thereunder, except as described on Schedule 3.11.
4. REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER. Each
Stockholder severally represents and warrants to Purchaser about itself only,
that the following are true and correct on the date hereof:
4.1 Stock Ownership. Such Stockholder owns the number of
shares of Company Common Stock set forth opposite such Stockholder's name on
Schedule 3.3, free and clear of all liens, pledges, restrictions, voting trusts,
security interests or other encumbrances whatsoever.
4.2 Validity; Stockholders Capacity. This Agreement and each
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other agreement contemplated hereby have been duly executed and delivered by
such Stockholder and constitutes the legal, valid and binding obligations of
such Stockholder, enforceable against such Stockholder in accordance with their
respective terms, except as may be limited by applicable bankruptcy, insolvency
or similar laws affecting creditors' rights generally or the availability of
equitable remedies.
4.3 No Violation. Except as set forth on Schedule 4.3, to the
knowledge of the Stockholder, neither the execution, delivery or performance of
this Agreement or the other agreements to be executed and delivered by such
Stockholder in connection herewith, nor the consummation of the transactions
contemplated hereby or thereby, will (a) conflict with, or result in a violation
or breach of the terms, conditions or provisions of, or constitute a default
under, any agreement, indenture or other instrument under which such Stockholder
is bound or to which any of his property or shares of Company Common Stock are
subject, or result in the creation or imposition of any security interest, lien,
charge or encumbrance upon any of his property or shares of Company Common Stock
or (b) to the best knowledge of such Stockholder, violate or conflict with any
judgment, decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body applicable to such Stockholder.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents and warrants to the Company and the Stockholders that the following
are true and correct on the date hereof; when used in this SECTION 5, the term
"best knowledge" (or words of similar import) shall mean such knowledge, as
shall have been obtained after conducting due and diligent inquiry, of those
individuals listed on Schedule 5:
5.1. Organization and Good Standing; Qualification. The
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the State of Wisconsin, with all requisite corporate power and
authority to carry on the business in which it is engaged, to own the properties
it owns, to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The Purchaser is not qualified or licensed to
do business in any other jurisdiction.
5.2. Capitalization. The authorized capital stock of Purchaser
consists of 10,000 shares of Common Stock, of which 100 shares of Purchaser
Common Stock are issued and outstanding. Vision Twenty-One owns all of the
issued and outstanding shares of Purchaser Common Stock.
5.3. Authorization and Validity. Purchaser has the corporate
power and authority to execute this Agreement and carry out its obligations
hereunder. The execution, delivery and performance by Purchaser of this
Agreement and the other agreements contemplated hereby, and the consummation of
the transactions contemplated hereby and thereby to be performed by Purchaser,
have been duly authorized by Purchaser. This Agreement and the other agreements
contemplated hereby to be executed by Purchaser have been, or will be as of the
Closing, duly
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executed and delivered by Purchaser and constitute the legal, valid and binding
obligation of Purchaser, enforceable against Purchaser in accordance with its
terms, except as may be limited by applicable bankruptcy, insolvency or similar
laws affecting creditors' rights generally or the availability of equitable
remedies.
5.4. No Conflict. The execution and delivery of this Agreement
and the documents contemplated hereunder and the consummation of the
transactions contemplated thereby by Purchaser will not (i) violate any
provision of Purchaser's organizational documents, (ii) violate any provision of
or result in the breach of or entitle any party to accelerate (whether after the
giving of notice or lapse of time or both) any obligation under, any mortgage,
lien, lease, contract, license, permit, instrument or any other agreement to
which Purchaser is a party, (iii) result in the creation or imposition of any
lien, charge, pledge, security interest or other encumbrance upon any property
of Purchaser, or (iv) violate or conflict with any order, award, judgment or
decree or other restriction or any law, ordinance, rule or regulation to which
Purchaser or its property is subject except for those which would not have a
Material Adverse Effect.
6. REPRESENTATIONS AND WARRANTIES OF VISION TWENTY-ONE. Vision
Twenty-One represents and warrants to the Company and the Stockholders that the
following are true and correct on the date hereof; when used in this Section 6,
the term "best knowledge" (or words of similar import) shall mean such
knowledge, as shall have been obtained after conducting due and diligent
inquiry, of those individuals listed on Schedule 6:
6.1 Organization and Good Standing; Qualification. Vision
Twenty-One is a corporation duly organized, validly existing and in good
standing under the laws of the State of Florida, with requisite corporate power
and authority to carry on the business in which it is engaged, to own the
properties it owns, to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. Vision Twenty-One is duly qualified and
licensed to do business in each jurisdiction in which the character or location
of the properties owned or leased by Vision Twenty-One or the practice of the
businesses conducted by Vision Twenty-One makes such qualification necessary,
except where the failure to do so would not have a Material Adverse Effect.
6.2 Subsidiary. Vision Twenty-One owns all of the issued and
outstanding stock of Purchaser. All outstanding shares of capital stock of
Purchaser have been duly authorized and validly issued, are fully paid and
non-assessable, and are owned by Vision Twenty-One free and clear of all liens,
pledges, security interests, restrictions, voting trusts or other encumbrances
of any nature whatsoever.
6.3 Capitalization. The authorized capital stock of Vision
Twenty-One consists of 50,000,000 shares of Common Stock and 10,000,000 shares
of preferred stock, of which 12,282,913 shares of Common Stock (excluding
contingent shares) are issued and outstanding as of March 26, 1998. Options and
warrants to acquire an additional 2,062,214 shares of Vision Twenty-One Common
Stock are outstanding. The
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issuance and delivery of the shares of Common Stock to be issued by Vision
Twenty-One in connection with this Agreement have been duly and validly
authorized by all necessary corporate action on the part of Vision Twenty-One.
The Common Stock being transferred by Vision Twenty-One hereunder shall be free
and clear of all liens, pledges, restrictions, voting trusts, security interests
or other encumbrances of any nature whatsoever, except as set forth herein or in
the Registration Rights Agreement between the Stockholders and Vision
Twenty-One. Each outstanding share of Common Stock and the shares to be issued
hereunder have been legally and validly issued and are fully paid and
nonassessable. No shares of Common Stock have been, and the shares of Common
Stock to be issued pursuant to this Agreement will not be, issued or disposed of
in violation of the preemptive rights, rights of first refusal or similar rights
of any of Vision Twenty-One's stockholders.
6.4 Authorization and Validity. The execution, delivery and
performance by Vision Twenty-One of this Agreement and the other agreements
contemplated hereby, and the consummation of the transactions contemplated
hereby and thereby to be performed by Vision Twenty-One, have been duly
authorized by Vision Twenty-One. This Agreement and the other agreements
contemplated hereby to be executed by Vision Twenty-One have been duly executed
and delivered by Vision Twenty-One and constitute the legal, valid and binding
obligation of Vision Twenty-One, enforceable against Vision Twenty-One in
accordance with its terms, except as may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally or the
availability of equitable remedies.
6.5 No Conflict. The execution and delivery of this Agreement
and the documents contemplated hereunder and the consummation of the
transactions contemplated hereby and thereby by Vision Twenty-One will not (i)
violate any provision of Vision Twenty-One's Articles of Incorporation or
By-Laws, (ii) violate any provision of or result in the breach of or entitle any
party to accelerate (whether after the giving of notice or lapse of time or
both) any obligation under, any mortgage, lien, lease, material contract,
license, permit, instrument or any other material agreement to which Vision
Twenty-One is a party, (iii) result in the creation or imposition of any lien,
charge, pledge, security interest or other encumbrance upon any property of
Vision Twenty-One, or (iv) violate or conflict with any order, award, judgment
or decree or other restriction or any law, ordinance, rule or regulation to
which Vision Twenty-One or its property is subject or by which Vision Twenty-One
or its property may be bound or affected.
6.6 Securities. The Vision Twenty-One Common Stock to be
issued to the Stockholders, when issued, will be duly and validly issued, fully
paid and nonassessable.
6.7 Documents. Vision Twenty-One has furnished the Company
with a true and complete copy of each report and registration statement filed by
it with the SEC (the "Purchaser Documents") since its initial public offering,
which are all the documents that it was required to file with the SEC since such
date. As of their respective dates, the
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Purchaser Documents did not contain any untrue statements of material facts or
omit to state material facts required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading. As of their respective dates, the Purchaser Documents
complied in all material respects with the applicable requirements of the
Securities Act and the Exchange Act and the rules and regulations promulgated
under such statutes. The financial statements contained in the Purchaser
Documents, together with the notes thereto, have been prepared in accordance
with GAAP, reflect all liabilities of Vision Twenty-One required to be stated
therein and present fairly the financial condition of Vision Twenty-One at such
date and the results of operations and cash flows of Vision Twenty-One for the
period then ended. The Purchaser Documents do not contain any untrue statements
of material facts or omit to state any material facts required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading as of the date hereof
except for such facts as are disclosed herein and except for the transactions
contemplated hereby.
7. SECURITIES LAW MATTERS.
7.1 Investment Representations and Covenants. Each
Stockholder severally represents, warrants and covenants as follows:
a. Such Stockholder understands that the Vision Twenty-One
Common Stock will not be registered under the Securities Act or any state
securities laws on the grounds that the issuance of the Vision Twenty-One Common
Stock is exempt from registration pursuant to Section 4(2) of the Securities Act
and applicable state securities laws, and that the reliance of Vision Twenty-One
on such exemptions is predicated in part on the Stockholder's representations,
warranties, covenants and acknowledgments set forth in this Section.
b. Such Stockholder represents and warrants that he is an
"accredited investor" or "sophisticated investor" as defined under the
Securities Act and state "Blue Sky" laws, or that such Stockholder has utilized,
to the extent necessary to be deemed a sophisticated investor under the
Securities Act and State "Blue Sky" laws, the assistance of a professional
advisor.
c. Such Stockholder represents and warrants that the
Vision Twenty-One Common Stock to be acquired by the Stockholder upon
consummation of the transactions described in this Agreement will be acquired by
the Stockholder for his own account, not as a nominee or agent, and without a
view to resale or other distribution within the meaning of the Securities Act
and the rules and regulations thereunder, and that the Stockholder will not
distribute any of the Vision Twenty-One Common Stock in violation of the
Securities Act. All Vision Twenty-One Common Stock shall bear a restrictive
legend in substantially the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN
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REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY ONLY BE SOLD OR
OTHERWISE TRANSFERRED IF THE HOLDER HEREOF COMPLIES WITH THE ACT AND APPLICABLE
SECURITIES LAWS."
In addition, the Vision Twenty-One Common Stock shall bear any legend
required by the securities or "Blue Sky" laws of any state where the Stockholder
resides as well as any other legend deemed appropriate by Vision Twenty-One or
its counsel.
d. Such Stockholder (i) acknowledges that the Vision
Twenty-One Common Stock issued to it at the Closing must be held indefinitely by
it unless subsequently registered under the Securities Act or an exemption from
registration is available, (ii) is aware that any routine sales of Vision
Twenty-One Common Stock made pursuant to Rule 144 under the Securities Act may
be made only in limited amounts and in accordance with the terms and conditions
of that Rule and that in such cases where the Rule is not applicable, compliance
with some other registration exemption will be required, (iii) is aware that
Rule 144 is not immediately available for use for resale of any of the Vision
Twenty-One Common Stock to be acquired by the Stockholder upon consummation of
the transactions described in this Agreement, and (iv) acknowledges and agrees
that the registration of the Vision Twenty-One Common Stock shall be subject to
the terms and provisions of the Registration Rights Agreement.
e. Such Stockholder represents and warrants to Vision
Twenty-One that Stockholder, either alone or together with the assistance of
Stockholder's own professional advisor, has such knowledge and experience in
financial and business matters such that Stockholder is capable of evaluating
the merits and risks of an investment in the Vision Twenty-One Common Stock and
is able to sustain a complete loss of such investment.
f. Such Stockholder confirms that he has had the
opportunity to ask questions of and receive answers from Vision Twenty-One
concerning the terms and conditions of his investment in the Vision Twenty-One
Common Stock, and that he has received, to his satisfaction, such information
about Vision Twenty-One's operations as he has requested.
g. Such Stockholder agrees that it will not sell or
otherwise transfer or dispose of the Vision Twenty-One Common Stock or any
interest therein (unless such shares have been registered under the Securities
Act or after two years pursuant to Rule 144) without first complying with either
of the following conditions:
(i) Vision Twenty-One shall have received a
written legal opinion from legal counsel, which opinion and counsel shall be
satisfactory to Vision Twenty-One in the exercise of its reasonable judgment, or
a copy of a "no-action" or interpretive letter of the SEC specifying the nature
and circumstance of the proposed transfer, in either instance indicating or
opining, as the case may be, that the proposed
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transfer will not be in violation of any of the registration provisions of the
Securities Act and the rules and regulations promulgated thereunder; or
(ii) Vision Twenty-One shall have received an
opinion from its own counsel to the effect that the proposed transfer will not
be in violation of any of the registration provisions of the Securities Act and
the rules and regulations promulgated thereunder.
Such Stockholder acknowledges and agrees that the certificates or instruments
representing the Vision Twenty-One Common Stock to be issued to Stockholder
pursuant to this Agreement shall contain a restrictive legend noting the
restrictions on transfer described in this Section and required by federal and
applicable state securities laws, and that appropriate "stop-transfer"
instructions will be given to Vision Twenty-One's transfer agent in the event
such provisions and applicable federal and state securities laws are not
complied with by the Company.
8. COVENANTS OF PURCHASER, THE COMPANY AND THE STOCKHOLDERS.
Purchaser, the Company and the Stockholders agree as follows:
8.1 Fees and Expenses. Vision Twenty-One shall pay the costs
and expenses of its advisors and the reasonable and customary expenses of the
Company and Stockholders with respect to the negotiation and consummation of
this Agreement and the transactions contemplated herein.
8.2 Tax Matters.
a. Returns. The Company shall duly and timely file all Tax
Returns for the Company that are required to be filed on or before the Closing
Date and shall duly and timely pay all taxes shown on such Tax Returns to be
due. Vision Twenty-One shall duly and timely file the Company's final S
corporation income tax returns, provided, however, that such returns shall not
be filed without the consent of Stockholders, which shall not be unreasonably
withheld. Vision Twenty-One shall provide the Stockholders reasonable access to
the books and records of the Company to allow the Stockholders to review such
tax returns.
b. Audits. The Stockholders will allow Vision Twenty-One
and its counsel to participate, at their expense, in any audits of the federal,
state or local income tax returns of the Company relating to a period prior to
Closing. The Stockholders will not settle any such audit without the prior
written consent of Vision Twenty-One, which shall not be unreasonably withheld.
Vision Twenty-One will allow the Stockholders and their counsel to participate
in any matters relating to a federal, state or local tax return relating to a
period prior to Closing and will not settle any such matter without the consent
of the Stockholders, which shall not be unreasonably withheld. Vision Twenty-One
shall not amend any tax return of the Company relating to a period prior to
Closing without the consent of the Stockholders. Vision Twenty-One shall provide
the Stockholders
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reasonable access to the books and records of the Company for any tax matters
relating to the tax periods prior to Closing.
c. Reorganization Treatment. The parties intend that for
income tax purposes the Merger shall qualify as a reorganization within the
meaning of Section 368(a)(1)(B) of the Code and Vision Twenty-One shall report
the transactions contemplated hereunder as such on any tax return and shall take
no action that results in the Merger not qualifying as a reorganization within
the meaning of Section 368(a)(1)(B) of the Code.
8.3 Rule 144. Vision Twenty-One covenants that it will file
the reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations promulgated by the SEC thereunder to the
extent required from time to time to enable the Company to sell the Vision
Twenty-One Common Stock without registration under the Securities Act within the
limitations of the exemptions provided by (a) Rule 144 under the Securities Act,
as such Rule 144 may be amended from time to time, or (b) any similar rule or
regulation hereafter adopted by the SEC.
9. CLOSING DELIVERIES.
9.1 Deliveries of the Company and the Stockholders. At
the Closing, the Company or each Stockholder, as appropriate, shall deliver the
following, all of which shall be in a form reasonably satisfactory to Purchaser
and Parent:
a. certificates representing all of the issued
and outstanding shares of Company Common Stock, duly endorsed in blank by the
applicable Stockholders or accompanied by duly endorsed stock powers in blank,
with all necessary transfer tax and other revenue stamps, acquired at the
applicable Stockholder's expense, affixed and canceled. Each Stockholder agrees
to cure any deficiencies with respect to the endorsement of the certificates or
other documents of conveyance with respect to the Company Common Stock being
delivered by it or with respect to the stock powers accompanying such Company
Common Stock;
b. a copy of resolutions of the Boards of
Directors of the Company authorizing the execution, delivery and performance of
this Agreement and all other documents and agreements to be executed by the
Company in connection herewith, certified by the Assistant Secretary of the
Company as being true and correct copies of the originals thereof subject to no
modifications or amendments;
9.2 Deliveries of Purchaser. At the Closing, Purchaser
shall deliver the following, all of which shall be in a form reasonably
satisfactory to the Company and the Stockholders:
a. a copy of the resolutions of the Board of
Directors of Purchaser authorizing the execution, delivery and performance of
this Agreement and all
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other documents and agreements to be executed in connection herewith, certified
by the Secretary of Purchaser as being true and correct copies of the originals
thereof subject to no modifications or amendments.
9.3 Deliveries of Parent. At the Closing, Parent shall
deliver the following, all of which shall be in a form reasonably satisfactory
to the Company and the Stockholders:
a. a copy of the resolutions of the Board of
Directors of Parent authorizing the execution, delivery and performance of this
Agreement and all other documents and agreements to be executed in connection
herewith, certified by the Secretary of Parent as being true and correct copies
of the originals thereof subject to no modifications or amendments;
b. stock certificates representing the Vision
Twenty-One Common Stock.
10. POST CLOSING MATTERS.
10.1 Approval of Insurance Commissioner. Purchaser and
Parent shall pursue any approval of the Wisconsin Insurance Commissioner and any
other appropriate regulatory or governmental agency required in connection with
the transaction contemplated by this Agreement. The Company and the Stockholders
agree to cooperate with the Purchaser and Parent in obtaining such approval.
Purchaser and Parent agree to indemnify, defend and hold the Company and the
Stockholders harmless from and against any liability relating to obtaining, or
failing to obtain, such approvals, including, without limitation, any penalties,
charges or fines assessed or asserted relating thereto.
11. REMEDIES
11.1 Indemnification. The parties hereto hereby
acknowledge, affirm and agree to be bound by the provisions set forth in
Article 14 of the Merger Agreement; provided, however, that the breach of any
representation, warranty or covenant by a party hereto must be material to the
transactions contemplated by this Agreement and the Merger Agreement, taken as
a whole. Any claim of indemnifcation hereunder against the Stockholders shall
be applied against the limitations and exceptions in the Merger Agreement and
shall not create an independent obligation other than as set forth in the
Merger Agreement.
12. NON-COMPETITION AND CONFIDENTIALITY COVENANT.
12.1 The Stockholders' Non-Competition Covenant. The
Stockholders recognize that their covenants contained in this Article 12.1 are
an essential part of this Agreement and that, but for the agreement of the
Stockholders to
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comply with such covenants, Purchaser and Vision Twenty-One would not have
entered into this Agreement. The Stockholders acknowledge and agree that their
covenants not to compete are necessary to ensure the continuation of the
business of the Company, and that irreparable and irrevocable harm and damage
will be done to the Purchaser and Vision Twenty-One if the Stockholders compete
with the Purchaser or Vision Twenty-One after the Closing Date. Accordingly, and
as part of the consideration hereof, except for the Stockholder's ownership
interest in and operation of Vision Insurance Plan of America and except for the
employment agreement between Xxxxxx X. Xxxxxxxx and Vision Twenty-One, none of
the Stockholders shall for a period of five (5) years from the Closing Date,
directly or indirectly, either as principal, agent, independent contractor,
consultant, director, officer, employee, employer, advisor, stockholder,
partner, or in any other individual or representative capacity whatsoever: (a)
engage in any medical or optometric practice management business within the
State of Wisconsin; (b) engage in the conduct of a retail optical business
within the State of Wisconsin; (c) engage in the conduct of an optometry
business within twenty (20) miles of any office location of the EyeCare One
existing on the Closing Date; (d) solicit the employees of Vision Twenty-One to
become employed by any Stockholder or otherwise terminate their employment
relationship with Vision Twenty-One; (e) render advice or assistance, or have
any interest in, or provide any services to any competitor of the EyeCare One
or, in the case of Xxxxxx X. Xxxxxxxx, Vision Twenty-One; provided, however,
that ownership of no more than five percent (5%) of the stock of a publicly
traded corporation engaged in a competitive business shall not be deemed to be
engaging in a competing business; or (f) call upon or solicit any customers or
clients of the Company, EyeCare One or Vision Twenty-One for the purpose of
providing medical or optometric practice management services, retail optical
sales or services, or optometric services.
12.2 The Stockholders' Confidentiality Covenant. From the
date hereof, none of the Stockholders shall, directly or indirectly, use for any
purpose, or disclose to any third party, any information of the Purchaser,
Vision Twenty-One, any of its Affiliates, EyeCare One or the Company (whether
written or oral), including any business management or economic studies,
customer lists, proprietary forms, proprietary business or management methods,
marketing data, operational methods or procedures, fee schedules or trade
secrets of the Purchaser, Vision Twenty-One, any of its Affiliates, EyeCare One
or the Company, and including the terms and provisions of this Agreement and any
transaction or document executed by the parties pursuant to this Agreement.
Notwithstanding the foregoing, the Stockholders may disclose information that
they can establish (a) is or becomes generally available to and known by the
public or health community (other than as a result of an unpermitted disclosure
directly or indirectly by the Stockholders); (b) is or becomes available to the
Stockholders on a nonconfidential basis from a source other than the Purchaser
or Vision Twenty-One provided that such source is not and was not bound by a
confidentiality agreement with or other obligation of secrecy to the Purchaser,
Vision Twenty-One, EyeCare One or the Company; or (c) is required to be
disclosed by any federal or state law, rule or regulation or by any
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applicable judgment, order or decree or any court or governmental body or agency
having jurisdiction in the premises.
12.3 Remedies for Breach of Restrictive Covenants. Each of
the Stockholders acknowledges that violation of the restrictive covenants
contained in Sections 12.1 and 12.2 would cause irreparable harm to the
Purchaser and Vision Twenty-One which cannot be fully redressed by payment of
damages by the Stockholders. Accordingly, the Purchaser and Vision Twenty-One
shall be entitled in addition to any other right or remedy they may have, at law
or in equity, to an injunction, enjoining or restraining a Stockholder from any
violation or threatened violation of Sections 12.1 and 12.2. If any of the
rights, remedies or restrictions contained in this Article 12 shall be deemed by
a court of competent jurisdiction to be unenforceable by reason of the extent,
duration or geographical scope thereof or any other provision of this Agreement,
the parties hereto contemplate that the court shall reduce such extent,
duration, geographical scope or other provision and enforce this Article 12 in
its reduced form for all purposes in the manner contemplated hereby. The
restrictive covenants contained in this Article 12 shall be construed as an
agreement ancillary to the other provisions of this Agreement, and the existence
of any claim or cause of action of the Stockholders against Vision Twenty-One,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Vision Twenty-One of the restrictive covenants
contained in this Article 12.
12.4 Survival. The parties acknowledge and agree that this
Article 12 shall survive the Closing of the transactions contemplated herein.
13. DISPUTES.
13.1 Mediation and Arbitration. Any dispute, controversy
or claim (excluding claims arising out of an alleged breach of Article 15 of
this Agreement) arising out of this Agreement, or the breach thereof, that
cannot be settled through negotiation shall be settled (a) first, by the parties
trying in good faith to settle the dispute by mediation under the Commercial
Mediation Rules of the AAA (such mediation session to be held in Milwaukee,
Wisconsin, and to commence within 15 days of the appointment of the mediator by
the AAA), and (b) if the dispute, controversy or claim cannot be settled by
mediation, then by arbitration administered by the AAA under its Commercial
Arbitration Rules (such arbitration to be held in Milwaukee, Wisconsin, before a
single arbitrator and to commence within 15 days of the appointment of the
arbitrator by the AAA), and judgment on the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof.
14. MISCELLANEOUS
14.1 Taxes. The Stockholders shall pay all transfer
taxes, sales and other taxes and charges imposed by the State of Wisconsin, if
any, which may become payable in connection with the transactions and documents
contemplated hereunder. Vision
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Twenty-One shall pay all transfer taxes, sales and other taxes and charges
imposed by the State of Florida, if any, which may become payable in connection
with the transactions and documents contemplated hereunder.
14.2 Parties Bound. Except to the extent otherwise expressly
provided herein, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective heirs, representatives,
administrators, guardians, successors and assigns; and no other person shall
have any right, benefit or obligation hereunder (except pursuant to Section 14
hereof).
14.3 Notices. All notices, reports, records or other
communications that are required or permitted to be given to the parties under
this Agreement shall be sufficient in all respects if given in writing and
delivered in person, by telecopy, by overnight courier or by registered or
certified mail, postage prepaid, return receipt requested, to the receiving
party at the following address:
If to Purchaser or Vision Twenty-One addressed to:
Vision Twenty-One, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Facsimile No. (000)000-0000
Attn: Xxxxxxx X. Xxxxx, Chief Financial Officer
With copies to:
Xxxxxxxx, Loop & Xxxxxxxx
Post Office Box 172609
000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Facsimile No. (000) 000-0000
Attn: Xxxxxxx X. Xxxxx, Esquire
If to the Company addressed to:
Vision Insurance Plan of America, Inc.
0000 Xxxxx 00xx Xxxxxx, Xxxxx 0000X
Xxxx Xxxxx, Xxxxxxxxx 00000
Facsmile No. (000) 000-0000
Attn: Xxxxxx X. Xxxxxxxx, President
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With copies to:
Xxxxxxx & Xxxx, S.C.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Facsimile No. (000)000-0000
Attn: Xxxxxxx Xxxxxxx
or to such other address as such party may have given to the other parties by
notice pursuant to this Section 18.3. Notice shall be deemed given on the date
of delivery, in the case of personal delivery or telecopy, or on the delivery or
refusal date, as specified on the return receipt, in the case of overnight
courier or registered or certified mail.
14.4 Choice of Law. This Agreement shall be governed and
construed in accordance with the laws of the State of Wisconsin without giving
effect to its conflicts of laws.
14.5 Entire Agreement; Amendments and Waivers. This Agreement,
together with the documents contemplated by this Agreement and all Exhibits and
Schedules hereto and thereto, constitutes the entire agreement between the
parties pertaining to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no warranties,
representations or other agreements between the parties in connection with the
subject matter hereof. No supplement, modification or waiver of any of the
provisions of this Agreement shall be binding unless it shall be executed in
writing by the party to be bound thereby. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
14.6 Assignment. This Agreement may not be assigned by
operation of law or otherwise except that Vision Twenty-One shall have the right
to assign this Agreement, at any time, to any Affiliate or direct or indirect
wholly-owned subsidiary provided that Vision Twenty-One shall remain primarily
liable under this Agreement in the event of such assignment.
14.7 Attorneys' Fees. Except as otherwise specifically
provided herein, if any action or proceeding is brought by any party with
respect to this Agreement or the other documents contemplated with respect to
the interpretation, enforcement or breach hereof, the prevailing party in such
action shall be entitled to an award of all reasonable costs of litigation or
arbitration, including, without limitation, attorneys' fees, to be paid by the
losing party, in such amounts as may be determined by the court having
jurisdiction of such action or proceeding or by the arbitrators deciding such
action or proceeding.
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14.8 Announcements and Press Releases. Any press releases or
any other public announcements by any party hereto concerning this Agreement or
the transactions contemplated hereunder shall be approved in advance by the
other parties hereto; provided, however, that Vision Twenty-One may make such
disclosures as are required under federal and state securities laws in the
opinion of counsel to Vision Twenty-One and Vision Twenty-One will provide
copies of any announcements and press releases to the other parties hereto prior
to general disclosure.
14.9 Multiple Counterparts. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
14.10 Headings. The headings of the several articles and
sections herein are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of this
Agreement.
14.11 Severability. Each article, section and subsection of
this Agreement constitutes a separate and distinct undertaking, covenant or
provision of this Agreement. If any such provision shall finally be determined
to be unlawful, such provision shall be deemed severed from this Agreement, but
every other provision of this Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
"COMPANY"
VISION INSURANCE PLAN OF AMERICA, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxx X. Xxxxxxxx, President
"STOCKHOLDERS"
/s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxxx
/s/ Xxxxxx X. Xxxxx
----------------------------------------
Xxxxxx X. Xxxxx
/s/ Xxxx Xxxxxx
----------------------------------------
Xxxx Xxxxxx, as Trustee of Xxxx X.
Xxxxxx Trust u/t/a dated August 5, 1994
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxx
----------------------------------------
Xxxxxx X. Xxxxxx
"PURCHASER"
VISION TWENTY-ONE OF WISCONSIN, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxxx X. Xxxxxxxx, President
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx, Secretary
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"VISION TWENTY-ONE"
VISION TWENTY-ONE, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
-------------------------------------
Xxxxxxxx X. Xxxxxxxx, President
By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxxx, Secretary
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