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EXHIBIT 10.44
ASSET PURCHASE AGREEMENT
DATED: MAY 1, 1997
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Exhibit 10.44
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement (this "Agreement"), dated as of May 1,
1997, is by and among XXXXX XXXXXX & ASSOCIATES, P.A., a Florida professional
association (the "Company"), XXXX X. XXXXX, O.D., (the "Optometrist"), and
VISION TWENTY-ONE, INC., a Florida corporation ("Vision 21").
R E C I T A L S
A. Optometrist is an optometrist licensed to practice
optometry in the State (as defined herein) and currently conducts an optometry
practice through the Company.
B. Optometrist owns all of the issued and outstanding shares
of capital stock of the Company.
C. Vision 21 provides business management services and
facilities for eye care professionals and related businesses.
D. The Company desires to sell, assign and transfer all of its
assets to the extent permitted by law and Vision 21 desires to purchase, assume
and acquire such assets and assume certain liabilities of the Company in
exchange for capital stock of Vision 21 and other consideration, all as more
specifically provided herein.
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.
1.2. Accountants. The term "Accountants" shall mean
the accounting firm for Vision 21.
1.3. Accounts Receivable. The term "Accounts
Receivable" shall have the meaning set forth in Section 2.1(b).
1.4. Acquisition Proposal. The term "Acquisition
Proposal" shall have the meaning set forth in Section 3.31.
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1.5. 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.
1.6. Applicable Laws. The term "Applicable Laws"
shall have the meaning set forth in Section 19.8.
1.7. Assumed Contracts. The term "Assumed Contracts"
shall have the meaning set forth in Section 2.1(e).
1.8. Assumed Obligations. The term "Assumed
Obligations" shall have the meaning set forth in Section 2.3.
1.9. Business. The term "Business" shall have the
meaning set forth in Section 19.1(b)(i).
1.10. Business Management Agreement. The term
"Business Management Agreement" shall mean the Business Management Agreement
entered into between the Company and Vision 21 at the Closing.
1.11. Business Records. The term "Business Records"
shall have the meaning set forth in Section 2.1(g).
1.12. Cash Compensation. The term "Cash Compensation"
shall have the meaning set forth in Section 3.8(a).
1.13. Claim Notice. The term "Claim Notice" shall have
the meaning set forth in Section 14.3(a).
1.14. Closing. The term "Closing" shall mean the
consummation of the transactions contemplated by this Agreement.
1.15. Closing Date. The term "Closing Date" shall mean
June ___, 1997, or such other date as mutually agreed upon by the parties.
1.16. Code. The term "Code" shall mean the Internal
Revenue Code of 1986, as amended.
1.17. Commitments. The term "Commitments" shall have
the meaning set forth in Section 3.12(a).
1.18. Common Stock. The term "Common Stock" or "Vision
21 Common Stock" shall mean the common stock, par value $.01 per share, of
Vision 21.
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1.19. Company Balance Sheet. The term "Company Balance
Sheet" shall have the meaning set forth in Section 3.6.
1.20. Company Balance Sheet Date. The term "Company
Balance Sheet Date" shall have the meaning set forth in Section 3.6.
1.21. Compensation Plans. The term "Compensation
Plans" shall have the meaning set forth in Section 3.8(b).
1.22. Competing Business. The term "Competing
Business" shall have the meaning set forth in Section 17.1(b).
1.23. Competitor. The term "Competitor" shall mean any
person or entity which, individually or jointly with others, whether for its
own account or for that of any other person or entity, owns, or holds any
ownership or voting interest in any person or entity engaged in, the practice
of optometry, the operation of out patient eye surgical facilities, the
operation of refractive surgery centers and the operation of optical shops;
provided, however, that such term shall not include any Affiliate of Vision 21
or any entity with which Vision 21 has an agreement similar to the Business
Management Agreement in effect.
1.24. Confidential Information Memorandum. The term
"Confidential Information Memorandum" shall mean that certain disclosure
memorandum distributed by Vision 21 to the Company and Optometrist dated as of
December 1996, as amended by a supplement dated February 28, 1997, and any
further amendments or revisions thereto.
1.25. Controlled Group. The term "Controlled Group"
shall have the meaning set forth in Section 3.9(f).
1.26. Corporation Law. The term "Corporation Law"
shall mean the statutes, regulations and laws governing business corporations
and professional associations in the State.
1.27. Damages. The term "Damages" shall have the
meaning set forth in Section 14.1.
1.28. Election Period. The term "Election Period"
shall have the meaning set forth in Section 16.3(a).
1.29. Employee Benefit Plans. The term "Employee
Benefit Plans" shall have the meaning set forth in Section 3.9(a).
1.30. Employee Policies and Procedures. The term
"Employee Policies and Procedures" shall have the meaning set forth in Section
3.8(d).
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1.31. Employment Agreements. The term "Employment
Agreements" shall have the meaning set forth in Section 3.8(c).
1.32. Environmental Laws. The term "Environmental
Laws" shall have the meaning set forth in Section 3.24(a).
1.33. ERISA. The term "ERISA" shall mean the Employee
Retirement Income Security Act of 1974, as amended.
1.34. Exchange Act. The term "Exchange Act" shall mean
the Securities Exchange Act of 1934, as amended.
1.35. FBCA. The term "FBCA" shall mean the Florida
Business Corporation Act.
1.36. Financial Statements. The term "Financial
Statements" shall have the meaning set forth in Section 3.6.
1.37. GAAP. The term "GAAP" shall mean generally
accepted accounting principles, applied on a consistent basis with prior
periods, set forth in the opinions and pronouncements of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or in
such other statements by such other entity or other practices and procedures as
may be approved by a significant segment of the accounting profession, which
are applicable to the circumstances as of the date of the determination.
1.38. Governmental Authority. The term "Governmental
Authority" shall mean any national, state, provincial, local or tribunal
governmental, judicial or administrative authority or agency.
1.39. Indemnified Party. The term "Indemnified Party"
shall have the meaning set forth in Section 14.3(a).
1.40. Indemnifying Party. The term "Indemnifying
Party" shall have the meaning set forth in Section 14.3(a).
1.41. Indemnity Notice. The term "Indemnity Notice"
shall have the meaning set forth in Section 14.3(d).
1.42. Initial Public Offering. The term "Initial
Public Offering" shall mean the potential initial underwritten public offering
of Vision 21 Common Stock contemplated by Vision 21.
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1.43. Insurance Policies. The term "Insurance
Policies" shall have the meaning set forth in Section 3.13.
1.44. Inventory. The term "Inventory" shall have the
meaning set forth in Section 2.1(a).
1.45. Lease Assignments. The term "Lease Assignments"
shall have the meaning set forth in Section 11.3(j).
1.46. Leased Property. The term "Leased Property"
shall have the meaning set forth in Section 2.1(d).
1.47. IRS. The term "IRS" shall mean the Internal
Revenue Service.
1.48. Material Adverse Effect. The term "Material
Adverse Effect" shall mean a material adverse effect on the Non-optometric
Assets and the Company's business, operations, condition (financial or
otherwise) or results of operations, taken as a whole, considering all relevant
facts and circumstances.
1.49. Optometric Assets. The term "Optometric Assets"
shall have the meaning set forth in Section 2.2.
1.50. Non-optometric Assets. The term "Non-optometric
Assets" shall mean all of the assets of the Company except for the Optometric
Assets, as such assets are more fully described in Section 2.1.
1.51. Note. The term "Note" shall mean the
subordinated promissory note, to be delivered to the Optometrist at the
Closing.
1.52. Optometrist Employee. The term "Optometrist
Employee" shall mean those licensed optometrists who are employees of the
Company, but are not shareholders.
1.53. Optometrist Employment Agreement. The term
"Optometrist Employment Agreement" shall mean the Optometrist Employment
Agreement to be executed between Optometrist and the Company, and between any
Optometrist Employee and the Company.
1.54. Payors. The term "Payors" shall have the meaning
set forth in Section 3.27.
1.55. Permitted Encumbrances. The term "Permitted
Encumbrances" shall have the meaning set forth in Section 3.11(b).
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1.56. Personal Property Leases. The term "Personal
Property Leases" shall have the meaning set forth in Section 2.1(c).
1.57. Practice. The term "Practice" shall mean the
optometry and all other vision related health-care practices conducted from
time to time by the Company prior to and after the Closing Date.
1.58. Prepaid Items. The term "Prepaid Items" shall
have the meaning set forth in Section 2.1(m).
1.59. Professional Employee. The term "Professional
Employee" shall mean any Optometrist Employee.
1.60. Proprietary Rights. The term "Proprietary
Rights" shall have the meaning set forth in Section 3.14.
1.61. Purchase Price. The term "Purchase Price" shall
mean the consideration set forth in Section 2.4 of this Agreement.
1.62. Purchase Price Adjustment Amount. The term
"Purchase Price Adjustment Amount" shall have the meaning set forth in Section
2.6(b).
1.63. Real Property Leases. The term "Real Property
Leases" shall have the meaning set forth in Section 2.1(d).
1.64. Recent Acquisitions. The term "Recent
Acquisitions" shall mean the acquisitions by Vision 21 with third parties which
were completed in December 1996 and March and May 1997.
1.65. Registration Statement. The term "Registration
Statement" shall have the meaning set forth in Section 9.1.
1.66. SEC. The term "SEC" shall mean the Securities
and Exchange Commission.
1.67. Securities. The term "Securities" shall mean the
Note and the shares of Vision 21 Common Stock which shall be delivered to the
Company under the terms of the Note.
1.68. Securities Act. The term "Securities Act" shall
mean the Securities Act of 1933, as amended.
1.69. State. The term "State" shall mean the State in
which the Company is incorporated.
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1.70. Tangible Personal Property. The term "Tangible
Personal Property" shall have the meaning set forth in Section 2.1(f).
1.71. Tax Returns. The term "Tax Returns" shall have
the meaning set forth in Section 3.15(a).
1.72. Third Party Claim. The term "Third Party Claim"
shall have the meaning set forth in Section 14.3(a).
1.73. Transaction. The term "Transaction" shall mean
the purchase and sale of the Non-optometric Assets and the assumption of the
Assumed Obligations pursuant to this Agreement.
1.74. Vision 21 Financial Statements. The term "Vision
21 Financial Statements" shall have the meaning set forth in Section 5.8.
2. PURCHASE AND SALE OF NON-OPTOMETRIC ASSETS.
2.1. Purchase and Sale of Non-optometric Assets.
Subject to the terms and conditions herein set forth, and in reliance upon the
representations and warranties set forth herein, the Company agrees to sell,
convey, assign, transfer and deliver to Vision 21, and Vision 21 agrees to
purchase, assume, accept and acquire, the assets consisting of all the assets
(other than the Optometric Assets specified in Section 2.2 hereof) owned by the
Company as of the Closing Date, of every kind, character and description,
whether tangible, real, personal, or mixed, and wheresoever located, whether
carried on the books of the Company or not carried on the books of the Company
due to having been expended, fully depreciated, or otherwise (the
"Non-optometric Assets"), including without limitation the following (except to
the extent that any of the following are specifically enumerated as Optometric
Assets in Section 2.2 hereof) to the extent permitted by applicable law:
(a) All of the inventory owned by the Company ("Inventory");
(b) All of the accounts receivable or other rights to receive
payment owing to the Company ("Accounts Receivable");
(c) All of the Company's rights in, to and under all leases of
supplies, instruments, equipment, furniture, machinery and other items of
tangible personal property ("Personal Property Leases"), including, without
limitation, the Personal Property Leases described on Schedule 2.1(c);
(d) All of the Company's rights as a lessee in, to and under
all real property lease agreements (such real property lease agreements are
hereinafter referred to as "Real Property Leases" and the parcels of real
property in which the Company has a leasehold interest and that are subject to
the Real Property Leases are hereinafter referred to as "Leased Property"),
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including, without limitation, estates created by, and rights conferred under,
the Real Property Leases described on Schedule 2.1(d), and any and all estates,
rights, titles and interests in, to and under all warehouses, storage
facilities, buildings, works, structures, fixtures, landings, constructions in
progress, improvements, betterments, installations, and additions constructed
or located on or affixed to the Leased Property;
(e) All of the Company's rights in, to and under all contracts,
agreements, leases, insurance policies, purchase orders and commitments (the
"Assumed Contracts"), including, without limitation, the Assumed Contracts
described on Schedule 2.1(e);
(f) All tangible personal property (including supplies,
instruments, equipment, furniture and machinery) owned by the Company
("Tangible Personal Property"), including, without limitation, the Tangible
Personal Property described on Schedule 2.1(f);
(g) All books and records of the Company, including, without
limitation, all credit records, payroll records, computer records, computer
programs, contracts, agreements, operating manuals, schedules of assets,
correspondence, books of account, files, papers, books and all other public and
confidential business records (together the "Business Records"), whether such
Business Records are in hard copy form or are electronically or magnetically
stored;
(h) All franchises, licenses, permits, certificates, approvals
and other governmental authorizations necessary to own and operate any of the
other Non-optometric Assets, a complete and correct list of which is set forth
on Schedule 2.1(h);
(i) All (i) United States and foreign patents, patent
applications, trademarks, trademark applications and registrations, service
marks, service xxxx applications and registrations, copyrights, copyright
applications and registrations and trade names of the Company; (ii) proprietary
data and technical, manufacturing know-how and information (and all materials
embodying such information) of the Company; (iii) developments, discoveries,
inventions, ideas and trade secrets of the Company; and (iv) rights to xxx for
past infringement;
(j) All of the Company's right, title and interest in, to and
under all telephone numbers used in connection with the Practice, including all
extensions thereto;
(k) All rights in, to and under all representations,
warranties, covenants and guaranties made or provided by third parties to or
for the benefit of the Company with respect to any of the other Non-optometric
Assets;
(l) All cash in registers or xxxxx cash drawers (which shall on
the Closing Date be at least ninety percent (90%) of the average daily cash
balance held in such locations in the twelve (12) month period preceding the
Closing Date); and
(m) All of the Company's prepaid expenses, prepaid insurance,
deposits and other similar items ("Prepaid Items").
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If and to the extent the assignment of any personal property lease,
real property lease, contract, agreement, purchase order, work order,
commitment, license, permit, certificate or approval listed on the foregoing
Schedules shall require the consent of another party thereto, then (i) such
personal property lease, real property lease, contract, agreement, purchase
order, work order, commitment, license, permit, certificate or approval shall
constitute a Personal Property Lease, Real Property Lease, Assumed Contract or
License, as the case may be, only upon and subject to receipt of such consent;
(ii) such personal property lease, contract, agreement, purchase order, work
order, commitment, license, permit, certificate or approval shall not be a
Personal Property Lease, Real Property Lease, Assumed Contract or License, as
the case may be, if and for so long as the attempted assignment would
constitute a breach thereof; and (iii) the Company shall cooperate fully with
Vision 21 (or Vision 21's successor-in-interest) in seeking such consent or
reasonable arrangement designed to provide to Vision 21 (or such
successor-in-interest) the benefits, claim or rights arising thereunder.
2.2. No Sale of Optometric Assets; Other Excluded
Assets. The Company shall not sell, convey, assign, transfer or deliver to
Vision 21, and Vision 21 shall not be obligated to purchase, accept or acquire
(or make any payments or otherwise discharge any liability or obligation of the
Company with respect to), the Optometric Assets of the Company as set forth on
Schedule 2.2 and those other assets listed on the other Schedules attached
hereto which by law cannot be acquired by Vision 21 which shall also be deemed
to include (a) life insurance policies covering the life of any employee of the
Company, and (b) personal effects listed on Schedule 2.2(b); and (c) cash and
cash equivalents in banks, certificates of deposit, commercial paper and
securities owned by the Company (but excluding cash held in registers or xxxxx
cash drawers on the Closing Date); and (d) those assets of which the entire
costs of maintenance are deemed to be "Practice Expenses" as defined in the
Business Management Agreement.
2.3. Assumption of Obligations and Liabilities. At
the Closing, Vision 21 shall assume and agree to pay or perform, promptly as
they become due, only those obligations and liabilities of the Company
expressly set forth on Schedule 2.3 (the "Assumed Obligations") which shall
exclude the Business Management Agreement. Except for the Assumed Obligations,
Vision 21 shall not assume or be deemed to have assumed and shall not be
responsible for any other obligation or liability of the Company, direct or
indirect, known or unknown, absolute or contingent, including without
limitation (i) any and all obligations regarding any foreign, Federal, state or
local income, sales, use, franchise or other tax liabilities, (ii) any and all
obligations or liabilities relating to any fees or expenses of the Company's or
Optometrists' counsel, accountants or other experts incident to the negotiation
and preparation of any of the documents contemplated herein and consummation of
the transactions contemplated thereby, and (iii) any and all liabilities
relating to or arising from the provision of optometric services (or failure to
provide optometric services) prior to the Closing Date.
2.4. Purchase Price. Vision 21 agrees that, subject
to the terms and conditions of this Agreement, and in full consideration for
the aforesaid sale, transfer, conveyance, assignment and delivery of the Non-
optometric Assets of the Company to Vision
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21, and the acceptance by Vision 21 of such Non-optometric Assets and the
assumption of the Assumed Obligations of the Company by Vision 21, Vision 21
shall deliver to the Company at the Closing the consideration (the "Purchase
Price") set forth in Schedule 2.4A which shall be paid pursuant to a Note in
substantially the form attached hereto and made a part hereof as Exhibit 2.4B.
2.5. 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 in the
State as the parties shall mutually agree.
2.6. Purchase Price Adjustments.
(a) The Purchase Price shall be subject to adjustment to
the extent that Current Assets (as defined herein) or Current Liabilities
Assumed (as defined herein) materially differ from the amounts customarily
arising in the ordinary course of business of the Company as of November 30,
1996. The term "Current Assets" shall mean xxxxx cash, Accounts Receivable,
prepaid expenses, Inventory, supplies and other current assets (excluding cash
in banks, certificates of deposit, other cash equivalents, current portion of
capital leases and prepaid Income Taxes). The term "Current Liabilities
Assumed" shall mean the audited balances as of November 30, 1996 of trade
accounts payable, accrued payroll, accrued payroll taxes, accrued benefits, and
other current liabilities (excluding notes payable, current portion of capital
leases and long-term debt and income and franchise taxes and accrued
shareholder expenses). The adjustment shall be settled in cash (which shall be
set-off from moneys due the Company pursuant to the Business Management
Agreement) or Vision 21 Common Stock at Vision 21's option. The parties also
agree that to the extent the adjustments materially impact the goodwill created
by the transaction, there shall be an adjustment for the related impact of net
income created by the change in amortization of such goodwill and the Purchase
Price shall be increased or reduced to reflect the impact on net income settled
in cash or Vision 21 Common Stock at Vision 21's option.
(b) Within sixty (60) days following the Closing Date,
Vision 21 shall present to the Optometrist its Purchase Price adjustment (the
"Proposed Purchase Price Adjustment") calculated in accordance with Section
2.6(a) hereof. The Optometrist shall, within thirty (30) days after the
delivery by Vision 21 of the Proposed Purchase Price Adjustment, complete his
review thereof. In the event that the Optometrist believes that the Proposed
Purchase Price Adjustment has not been prepared on the basis set forth in
Section 2.6(a) or otherwise contests any item set forth therein, the
Optometrist shall, on or before the last day of such 30 day period, so object
to Vision 21 in writing, setting forth a specific description of the nature of
the objection and the corresponding adjustments the Optometrist believes should
be made. If no objection is received by Vision 21 on or before the last day of
such 30 day period, then the Proposed Purchase Price Adjustment delivered by
Vision 21 shall be final. If an objection has been made and Vision 21 and the
Optometrist are unable to resolve all of their disagreements with respect to
the proposed adjustments within 15 days following the delivery of the
Optometrist's objection, the dispute shall be submitted to arbitration as
provided in Section 18.1
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except that the arbitrator shall be instructed to deliver his determination of
the dispute to the parties no later than 30 days after the arbitration hearing.
Vision 21 shall provide to the Optometrist and his accountants full access to
all relevant books, records and work papers utilized in preparing the Proposed
Purchase Price Adjustment.
2.7. Subsequent Actions. If, at any time after the
Closing Date, Vision 21 shall determine or be advised that any deeds, bills of
sale, assignments, assurances or any other actions or things are necessary or
desirable to vest, perfect or confirm of record or otherwise in Vision 21 its
right, title or interest in, to or under any of the rights, properties or
assets of the Company acquired or to be acquired by Vision 21 as a result of,
or in connection with, the Transaction, or otherwise to carry out this
Agreement, the officers and directors of Vision 21 shall, at the sole cost and
expense of Vision 21, be authorized to execute and deliver, in the name and on
behalf of the Company, such deeds, bills of sale, assignments and assurances,
and to take and do, in the name and on behalf of the Company, all such other
actions and things as may be necessary or desirable to vest, perfect or confirm
any and all right, title and interest in, to and under such rights, properties
or assets in Vision 21 or otherwise to carry out this Agreement.
2.8. Allocation of Purchase Price. The Purchase Price
shall be allocated among the Non-optometric Assets as set forth on Schedule
2.8. Each of Vision 21, the Company and the Optometrist covenants and agrees
that he or it shall not take a position that is in any way inconsistent with
the terms of this Section 2.8 on any income tax return, before any governmental
agency charged with the collection of any income tax or in any judicial
proceeding.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
OPTOMETRIST. The Company and the Optometrist, jointly and severally, represent
and warrant to Vision 21 that the following are true and correct as of the date
hereof, and shall be true and correct through the Closing Date as if made on
that date; when used in this Section 3, the term "best knowledge" shall mean in
the case of the Company the best knowledge of those individuals listed on
Schedule 3:
3.1. Organization and Good Standing; Qualification.
The Company is a professional association duly organized, validly existing and
in good standing under the laws of the State, 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 not duly qualified and
licensed to do business in any other jurisdiction. The Company does not have
any assets, employees or offices in any state other than the State. Except as
set forth on Schedule 3.1, neither the Company, the Optometrist nor any
Professional Employee owns, 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 that is
engaged in a business that is a Competitor.
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3.2. Continuity of Business Enterprise. Except as set
forth on Schedule 3.2, 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.
3.3. Authorization and Validity. The execution,
delivery and performance by the Company of this Agreement and the other
agreements contemplated hereby, and the consummation of the transactions
contemplated hereby and thereby to be performed by the Company, have been duly
authorized by 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 Articles or
Certificate of Incorporation and Bylaws, the approval of its stockholders
necessary for the consummation of the transactions contemplated hereby.
3.4. Compliance. Except as disclosed on Schedule 3.4,
the execution and delivery of the documents contemplated hereunder and the
consummation of the transactions contemplated thereby by the Company will not
(i) violate any provision of the Company's organizational documents, (ii)
violate any material 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 material obligation under, any mortgage, lien, lease, contract,
license, instrument or any other agreement to which the Company is a party,
(iii) result in the creation or imposition of any material lien, charge,
pledge, security interest or other material encumbrance upon any property of
the Company or (iv) violate or conflict with any order, award, judgment or
decree or other material restriction or to the best of the Company's knowledge
violate or conflict with any law, ordinance or regulation to which the Company
or its property is subject.
3.5. Consents. No consent, approval, order or
authorization of or registration, declaration, or filing with, any Governmental
Authority or other person is required in connection with the execution and
delivery of the documents contemplated herein by the Company or the
consummation by such party of the transactions contemplated thereby, except for
those consents or approvals set forth on Schedule 3.5.
3.6. Financial Statements. The Company has furnished
to Vision 21 its unaudited balance sheet and related unaudited statements of
income, retained earnings and cash flows for its prior two (2) full fiscal
years, and its unaudited interim balance sheet for the fiscal period ended
March 31, 1997 (the "Company Balance Sheet", and the date thereof shall be
referred to as the "Company Balance Sheet Date") and related unaudited
statements of income, retained earnings and cash flows for the period then
ended (all collectively, with the related notes thereto, the "Financial
Statements"). The Financial Statements fairly present the financial condition
and results of operations of the Company as of the dates and for the periods
indicated except as otherwise indicated in the Financial Statements.
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3.7. Liabilities and Obligations. Except as set forth
on Schedule 3.7, the Financial Statements reflect all liabilities of the
Company, accrued, contingent or otherwise that would be required to be
reflected thereon, or in the notes thereto, prepared in accordance with GAAP,
except for liabilities and obligations incurred in the ordinary course of
business since the Company Balance Sheet Date. Except as set forth in the
Financial Statements or on Schedule 3.7, the Company is not liable upon or with
respect to, or obligated in any other way to provide funds in respect of or to
guarantee or assume in any manner, any debt, obligation or dividend of any
person, corporation, association, partnership, joint venture, trust or other
entity, and the Company does not know of any valid basis for the assertion of
any other claims or liabilities of any nature or in any amount.
3.8. Employee Matters.
a. Cash Compensation. Schedule 3.8(a) contains a
complete and accurate list of the names, titles and annual cash compensation as
of the Closing Date, including without limitation wages, salaries, bonuses
(discretionary and formula) and other cash compensation (the "Cash
Compensation") of all employees of the Company. In addition, Schedule 3.8(a)
contains a complete and accurate description of (i) all increases in Cash
Compensation of employees of the Company during the current fiscal year and the
immediately preceding fiscal year and (ii) any promised increases in Cash
Compensation of employees of the Company that have not yet been effected.
b. Compensation Plans. Schedule 3.8(b) contains a
complete and accurate list of all compensation plans, arrangements or practices
(the "Compensation Plans") sponsored by the Company or to which the Company
contributes on behalf of its employees, other than Employment Agreements listed
on Schedule 3.8(c) and Employee Benefit Plans listed on Schedule 3.9(a). The
Compensation Plans include without limitation plans, arrangements or practices
that provide for performance awards, and stock ownership or stock options. The
Company has provided or made available to Vision 21 a copy of each written
Compensation Plan and a written description of each unwritten Compensation
Plan. Except as set forth on Schedule 3.8(b), each of the Compensation Plans
can be terminated or amended at will by the Company.
c. Employment Agreements. Except as set forth on
Schedule 3.8(c), the Company is not a party to any employment agreement
("Employment Agreements") with respect to any of its employees. Employment
Agreements include without limitation employee leasing agreements, employee
services agreements and non-competition agreements.
d. Employee Policies and Procedures. Schedule
3.8(d) contains a complete and accurate list of all employee manuals and all
material policies, procedures and work-related rules (the "Employee Policies
and Procedures") that apply to employees of the Company. The Company has
provided or made available to Vision 21 a copy of all written Employee Policies
and Procedures and a written description of all material unwritten Employee
Policies and Procedures.
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e. Unwritten Amendments. Except as described on
Schedule 3.8(b), 3.8(c), or 3.8(d), no material unwritten amendments have been
made, whether by oral communication, pattern of conduct or otherwise, with
respect to any Compensation Plans or Employee Policies and Procedures.
f. Labor Compliance. To the best knowledge of the
Company and the Optometrist, the Company has been and is in compliance with all
applicable laws, rules, regulations and ordinances respecting employment and
employment practices, terms and conditions of employment and wages and hours,
except for any such failures to be in compliance that, individually or in the
aggregate, would not result in a Material Adverse Effect, and the Company is
not liable for any arrearages of wages or penalties for failure to comply with
any of the foregoing. The Company has not, to the best of Optometrist's and
the Company's knowledge, engaged in any unfair labor practices or discriminated
on the basis of race, color, religion, sex, national origin, age, disability or
handicap in its employment conditions or practices that would, individually or
in the aggregate, result in a Material Adverse Effect. Except as set forth on
Schedule 3.10(f), there are no (i) unfair labor practice charges or complaints
or racial, color, religious, sex, national origin, age, disability or handicap
discrimination charges or complaints pending or, to the actual knowledge of the
Company and the Optometrist, threatened against the Company before any federal,
state or local court, board, department, commission or agency (nor, to the best
knowledge of the Company and the Optometrist, does any valid basis therefor
exist) or (ii) existing or, to the actual knowledge of the Company, threatened
labor strikes, disputes, grievances, controversies or other labor troubles
affecting the Company (nor, to the best knowledge of the Company and the
Optometrist, does any valid basis therefor exist).
g. Unions. The Company has never been a party to
any agreement with any union, labor organization or collective bargaining unit.
No employees of the Company are represented by any union, labor organization or
collective bargaining unit. Except as set forth on Schedule 3.8(g), to the
actual knowledge of the Company, none of the employees of the Company has
threatened to organize or join a union, labor organization or collective
bargaining unit.
h. Aliens. All employees of the Company are, to the
best knowledge of the Company, citizens of, or are authorized in accordance
with federal immigration laws to be employed in, the United States.
3.9. Employee Benefit Plans.
a. Identification. Schedule 3.9(a) contains a
complete and accurate list of all employee benefit plans (within the meaning of
Section 3(3) of ERISA sponsored by the Company or to which the Company
contributes on behalf of its employees and all employee benefit plans
previously sponsored or contributed to on behalf of its employees within the
three (3) years preceding the date hereof (the "Employee Benefit Plans"). The
Company has provided or made available to Vision 21 copies of all plan
documents, determination letters, pending
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determination letter applications, trust instruments, insurance contracts,
administrative services contracts, annual reports, actuarial valuations,
summary plan descriptions, summaries of material modifications, administrative
forms and other documents that constitute a part of or are incident to the
administration of the Employee Benefit Plans. In addition, the Company has
provided or made available to Vision 21 a written description of all existing
practices engaged in by the Company that constitute Employee Benefit Plans.
Except as set forth on Schedule 3.9(a) and subject to the requirements of the
Code and ERISA, each of the Employee Benefit Plans can be terminated or amended
at will by the Company. Except as set forth on Schedule 3.9(a), no unwritten
amendment exists with respect to any Employee Benefit Plan. Except as set
forth on Schedule 3.9(b)-(l), each of the following paragraphs is true and
correct.
b. Administration. To the best knowledge of the
Company and the Optometrist, each Employee Benefit Plan has been administered
and maintained in compliance with all applicable laws, rules and regulations,
except where the failure to be in compliance would not, individually or in the
aggregate, result in a Material Adverse Effect. The Company and the
Optometrist have (i) made all necessary filings with respect to such Employee
Benefit Plans, including the timely filing of Form 5500 if applicable, and (ii)
made all necessary filings, reports and disclosures pursuant to and have
complied with all requirements of the IRS Voluntary Compliance Resolution
Program, if applicable, with respect to all profit sharing retirement plans and
pension plans in which employees of the Company participate.
c. Examinations. Except as set forth on Schedule
3.9(c), the Company has not received any notice that any Employee Benefit Plan
is currently the subject of an audit, investigation, enforcement action or
other similar proceeding conducted by any state or federal agency.
d. Prohibited Transactions. To the best knowledge
of the Company and the Optometrist, no prohibited transactions (within the
meaning of Section 4975 of the Code or Sections 406 and 407 of ERISA) have
occurred with respect to any Employee Benefit Plans.
e. Claims and Litigation. No pending or, to the
actual knowledge of the Company and the Optometrist, threatened, claims, suits,
or other proceedings exist with respect to any Employee Benefit Plan other than
normal benefit claims filed by participants or beneficiaries.
f. Qualification. As set forth in more detail on
Schedule 3.9(f), the Company has received a favorable determination letter or
ruling from the IRS for each of the Employee Benefit Plans intended to be
qualified within the meaning of Section 401(a) of the Code and/or tax-exempt
within the meaning of Section 501(a) of the Code. Except as set forth on
Schedule 3.9(e), no proceedings exist or, to the actual knowledge of the
Company have been threatened that could result in the revocation of any such
favorable determination letter or ruling.
g. Funding Status. To the best knowledge of the
Company and the Optometrist, no accumulated funding deficiency (within the
meaning of Section 412 of the
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Code), whether or not waived, exists with respect to any Employee Benefit Plan
or any plan sponsored by any member of a controlled group (within the meaning
of Section 412(n)(6)(B) of the Code) in which the Company is a member
("Controlled Group"). With respect to each Employee Benefit Plan subject to
Title IV of ERISA, the assets of each such plan are at least equal in value to
the present value of accrued benefits determined on an ongoing basis as of the
date hereof. The Company does not sponsor any Employee Benefit Plan described
in Section 501(c)(9) of the Code. None of the Employee Benefit Plans are
subject to actuarial assumptions.
h. Excise Taxes. Neither the Company nor any member
of a Controlled Group has any liability to pay excise taxes with respect to any
Employee Benefit Plan under applicable provisions of the Code or ERISA.
i. Multiemployer Plans. Neither the Company nor any
member of a Controlled Group is or ever has been obligated to contribute to a
multiemployer plan within the meaning of Section 3(37) of ERISA.
j. Pension Benefit Guaranty Corporation. None of
the Employee Benefit Plans are subject to the requirements of Title IV of
ERISA.
k. Retirees. The Company has no obligation or
commitment to provide medical, dental or life insurance benefits to or on
behalf of any of its employees who may retire or any of its former employees
who have retired except as may be required pursuant to the continuation of
coverage provisions of Section 4980B of the Code and Sections 501 through 508
of ERISA.
l. Other Compensation. Except as set forth on
Schedule 3.8(a), 3.8(b), 3.8(c), 3.8(d) and 3.9(a), neither the Company, the
Optometrist nor any Professional Employee is a party to any compensation or
debt arrangement with any person relating to the provision of healthcare
related services other than arrangements with the Company or the Optometrist.
3.10. Absence of Certain Changes. Except as set forth
on Schedule 3.10 or as contemplated by this Agreement, since the Company
Balance Sheet Date, the Company has not:
a. suffered a Material Adverse Effect, whether or
not caused by any deliberate act or omission of the Company or the Optometrist;
b. contracted for the purpose of acquiring any
capital asset having a cost in excess of $5,000 or made any single expenditure
in excess of $5,000;
c. incurred any indebtedness for borrowed money
(other than short-term borrowings in the ordinary course of business), or
issued or sold any debt securities;
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d. incurred or discharged any material liabilities
or obligations except in the ordinary course of business;
e. paid any amount on any indebtedness prior to the
due date, forgiven or cancelled any claims or any debt in excess of $5,000, or
released or waived any rights or claims except in the ordinary course of
business;
f. mortgaged, pledged or subjected to any security
interest, lien, lease or other charge or encumbrance any of its properties or
assets (other than statutory liens arising in the ordinary course of business
or other liens that do not materially detract from the value or interfere with
the use of such properties or assets);
g. suffered any damage or destruction to or loss of
any assets (whether or not covered by insurance) that has, individually or in
the aggregate, resulted in a Material Adverse Effect;
h. acquired or disposed of any assets having an
aggregate value in excess of $5,000, except in the ordinary course of business;
i. written up or written down the carrying value of
any of its assets, other than accounts receivable in the ordinary course of
business;
j. changed the costing system or depreciation
methods of accounting for its assets in any material respect;
k. lost or terminated any employee, patient,
customer or supplier that has, individually or in the aggregate, resulted in a
Material Adverse Effect;
l. increased the compensation of any director,
officer, key employee or consultant, except as disclosed on Schedule 3.8(a);
m. increased the compensation of any employee
(except for increases in the ordinary course of business consistent with past
practice) or hired any new employee who is expected to receive annualized
compensation of at least $15,000;
n. made any payments to or loaned any money to any
person or entity referred to in Section 3.22;
o. formed or acquired or disposed of any interest in
any corporation, partnership, joint venture or other entity;
p. redeemed, purchased or otherwise acquired, or
sold, granted or otherwise disposed of, directly or indirectly, any of its
capital stock or securities, or agreed to change the terms and conditions of
any such capital stock, securities or rights;
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q. entered into any agreement providing for total
payments in excess of $5,000 in any twelve (12) month period with any person or
group, or modified or amended in any material respect the terms of any such
existing agreement, except in the ordinary course of business;
r. entered into, adopted or amended any Employee
Benefit Plan, except as contemplated hereby or the other agreements
contemplated hereby; or
s. entered into any other commitment or transaction
or experienced any other event that would materially interfere with its
performance under this Agreement or any other agreement or document executed or
to be executed pursuant to this Agreement, or otherwise has, individually or in
the aggregate, resulted in a Material Adverse Effect.
3.11. Title; Leased Assets.
a. Real Property. The Company does not own any
interest (other than leasehold interests referred to on Schedule 3.11(c)) in
real property. The leased real property referred to on Schedule 3.11(c)
constitutes the only real property necessary for the conduct of the Company's
business.
b. Personal Property. Except as set forth on
Schedule 3.11(b), the Company and/or the Optometrist has good, valid and
marketable title to all the personal property constituting the Non-optometric
Assets. The personal property constituting the Non-optometric Assets
constitute the only personal property necessary for the conduct of the
Company's business (except for the Optometric Assets). Upon consummation of
the transactions contemplated hereby, such interest in the Non-optometric
Assets shall be free and clear of all security interests, liens, claims and
encumbrances, other than those set forth on Schedule 3.11(b) (the "Permitted
Encumbrances") and statutory liens arising in the ordinary course of business
or other liens that do not materially detract from the value or interfere with
the use of such properties or assets.
c. Leases. A list and brief description of (i) all
leases of real property and (ii) leases of personal property involving rental
payments within any twelve (12) month period in excess of $12,000, in either
case to which the Company is a party, either as lessor or lessee, are set forth
on Schedule 3.11(c). All such leases are valid and, to the knowledge of the
Company, enforceable 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.
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3.12. Commitments.
a. Commitments; Defaults. Except as set forth on
Schedule 3.12 or as otherwise disclosed pursuant to this Agreement, the Company
is not a party to nor bound by, nor are the Non-optometric Assets or the assets
or the business of the Company bound by, whether or not in writing, any of the
following (collectively, "Commitments"):
i) partnership or joint venture
agreement;
ii) guaranty or suretyship,
indemnification or contribution agreement or performance bond;
iii) debt instrument, loan agreement or
other obligation relating to indebtedness for borrowed money or money lent or
to be lent to another;
iv) contract to purchase real property;
v) agreement with dealers or sales or
commission agents, public relations or advertising agencies, accountants or
attorneys (other than in connection with this Agreement and the transactions
contemplated hereby) involving total payments within any twelve (12) month
period in excess of $2,000 and which is not terminable on thirty (30) days'
notice or without penalty;
vi) agreement relating to any material
matter or transaction in which an interest is held by a person or entity that
is an Affiliate of the Company or the Optometrist;
vii) agreement for the acquisition of
services, supplies, equipment, inventory, fixtures or other property involving
more than $2,000 in the aggregate;
viii) powers of attorney;
ix) contracts containing non-competition
covenants;
x) agreement providing for the purchase
from a supplier of all substantially all of the requirements of the Company of
a particular product or services;
xi) agreements regarding clinical
research;
xii) agreements with Payors and contracts
to provide optometric or health care services; or
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xiii) any other agreement or commitment not
made in the ordinary course of business or that is material to the business,
operations, condition (financial or otherwise) or results of operations of the
Company.
True, correct and complete copies of the written Commitments, and true, correct
and complete written descriptions of the oral Commitments, have heretofore been
delivered or made available to Vision 21. Except as set forth on Schedule 3.12
and to the Company's best knowledge, there are no existing or asserted
defaults, 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, any other party to a
material Commitment, and no penalties have been incurred nor are amendments
pending, with respect to the material Commitments, except as described on
Schedule 3.12. 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, 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 or, to the best knowledge of the Company, may
be made by any party thereto (other than the Company), nor has the Company
waived any rights thereunder, except as described on Schedule 3.12. Except as
set forth on Schedule 3.12, no consents or approvals are required under the
terms of any agreement listed on Schedule 3.12 in connection with the
transactions contemplated herein, including, without limitation, the transfer
of any such agreement pursuant to this Agreement.
b. No Cancellation or Termination of Commitment.
Except as disclosed pursuant to this Agreement or contemplated hereby and
except where such default would not have a Material Adverse Effect on the
Practice, (i) neither the Company nor the Optometrist has received notice of
any plan or intention of any other party to any Commitment to exercise any
right to cancel or terminate any Commitment, and the Company does not know of
any fact that would justify the exercise of such a right; and (ii) neither the
Company nor the Optometrist currently contemplates, or has reason to believe
any other person currently contemplates, any amendment or change to any
Commitment.
3.13. Insurance. The Company, the Optometrist and each
Professional Employee carries property, liability, malpractice, workers'
compensation and such other types of insurance pursuant to the insurance
policies listed and briefly described on Schedule 3.13 (the "Insurance
Policies"). The Insurance Policies are all of the insurance policies of the
Company, the Optometrist and each Professional Employee relating to the
business of the Company and the Non-optometric Assets. All of the Insurance
Policies are issued by insurers of recognized responsibility, and, to the best
knowledge of the Company, are valid and enforceable policies, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies. Except
as set forth in Schedule 3.13, no consent or approval is required for, and no
other impediment or restriction exists that will prohibit or limit, the
transfer of any such Insurance Policies included within the Non-optometric
Assets in accordance with the terms of this Agreement. All Insurance Policies
shall be maintained in force without interruption up to and including the
Closing Date. True,
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complete and correct copies of all Insurance Policies have been provided or
made available to Vision 21. Except as set forth on Schedule 3.13, neither the
Company nor the Optometrist has received any notice or other communication from
any issuer of any Insurance Policy cancelling such policy, materially
increasing any deductibles or retained amounts thereunder, and to the actual
knowledge of the Company, no such cancellation or increase of deductibles,
retainages or premiums is threatened. Except as set forth on Schedule 3.13,
neither the Company, the Optometrist nor any Professional Employee has any
outstanding claims, settlements or premiums owed against any Insurance Policy,
and the Company, the Optometrist and each Professional Employee has given all
notices or has presented all potential or actual claims under any Insurance
Policy in due and timely fashion. Except as set forth on Schedule 3.13, since
January 1, 1994, neither the Company, the Optometrist nor any Professional
Employee has filed a written application for any professional liability
insurance coverage which has been denied by an insurance agency or carrier, and
the Company, the Optometrist and each Professional Employee has been
continuously insured for professional malpractice claims for at least the past
seven (7) years (or such shorter periods of time that any Professional Employee
has been licensed to practice optometry). Schedule 3.13 also sets forth a list
of all claims under any Insurance Policy in excess of $10,000 per occurrence
filed by the Company, the Optometrist and each Professional Employee since
January 1, 1994.
3.14. Proprietary Rights and Information. Set forth on
Schedule 3.14 is a true and correct description of the following ("Proprietary
Rights"):
a. all trademarks, trade-names, service marks and
other trade designations, including common law rights, registrations and
applications therefor, and all patents and applications therefor currently
owned, in whole or in part, by the Company, and all licenses, royalties,
assignments and other similar agreements relating to the foregoing to which the
Company is a party (including the expiration date thereof if applicable); and
b. all agreements relating to technology, know-how
or processes that the Company is licensed or authorized to use by others (other
than technology, know-how or processes generally available to other healthcare
providers), or which it licenses or authorizes others to use.
The Company owns or has the legal right to use the Proprietary Rights, and to
the knowledge of the Company, such ownership or use does not conflict,
infringe or violate the rights of any other person. Except as disclosed on
Schedule 3.14, no consent of any person will be required for the use thereof by
Vision 21 upon consummation of the transactions contemplated hereby and the
Proprietary Rights are freely transferable. No claim has been asserted by any
person to the ownership of or for infringement by the Company of the
proprietary right of any other person, and the Company does not know of any
valid basis for any such claim. To the best knowledge of the Company and the
Optometrist, the Company has the right to use, free and clear of any adverse
claims or rights of others, all trade secrets, customer lists and proprietary
information required for the marketing of all merchandise and services formerly
or presently sold or marketed by it.
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3.15. Taxes.
a. Filing of Tax Returns. The Company has duly and
timely filed (in accordance with any extensions duly granted by the appropriate
governmental agency, if applicable) with the appropriate governmental agencies
all federal, state, local or foreign income, excise, corporate, franchise,
property, sales, use, payroll, withholding, provider, value added and other tax
returns and reports (collectively the "Tax Returns") required to be filed by
the United States or any state or any political subdivision thereof or any
foreign jurisdiction. All such Tax Returns or reports are complete and
accurate in all material respects and properly reflect the taxes of the Company
for the periods covered thereby.
b. Payment of Taxes. Except for such items as the
Company may be disputing in good faith by proceedings in compliance with
applicable law, which are described on Schedule 3.15, (i) the Company has paid
all taxes, penalties, assessments and interest that have become due with
respect to any Tax Returns that it has filed and has properly accrued on its
books and records for all of the same that have not yet become due, and (ii)
the Company is not delinquent in the payment of any tax, assessment or
governmental charge.
c. No Pending Deficiencies, Delinquencies,
Assessments or Audits. Except as set forth on Schedule 3.15, the Company has
not received any notice that any tax deficiency or delinquency has been
asserted against the Company. There is no unpaid assessment, proposal for
additional taxes, deficiency or delinquency in the payment of any of the taxes
of the Company that could be asserted by any taxing authority. There is no
taxing authority audit of the Company pending, or to the actual knowledge of
the Company, threatened, and the results of any completed audits are properly
reflected in the Financial Statements. The Company has not, to its best
knowledge, violated any federal, state, local or foreign tax law.
d. No Extension of Limitation Period. The Company
has not granted an extension to any taxing authority of the limitation period
during which any tax liability may be assessed or collected.
e. All Withholding Requirements Satisfied. All
monies required to be withheld by the Company and paid to governmental agencies
for all income, social security, unemployment insurance, sales, excise, use,
and other taxes have been collected or withheld and paid to the respective
governmental agencies.
f. Foreign Person. Neither the Company nor the
Optometrist is a foreign person, as such term is referred to in Section
1445(f)(3) of the Code.
3.16. Compliance with Laws. The Company has not
failed, and neither the Company nor the Optometrist is aware of any failure by
the Optometrist or any Professional Employee to comply with all applicable
laws, regulations and licensing requirements relating to the operation of the
Practice or failure to file with the proper authorities all necessary
statements and reports except where the failure to so comply or file would not,
individually or in the
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aggregate, result in a Material Adverse Effect. There are no existing
violations by the Company, and neither the Company nor the Optometrist is aware
of any existing violations by the Optometrist or any Professional Employee of
any federal, state or local law or regulation that could, individually or in
the aggregate, result in a Material Adverse Effect. The Company, the
Optometrist and each Professional Employee possesses all necessary licenses,
franchises, permits and governmental authorizations for the conduct of the
Company's business as now conducted, all of which are listed (with expiration
dates, if applicable) on Schedule 3.16. Except as set forth on Schedule 3.16,
the transactions contemplated by this Agreement will not result in a default
under or a breach or violation of, or adversely affect the rights and benefits
afforded by any such licenses, franchises, permits or government
authorizations, except for any such default, breach or violation that would
not, individually or in the aggregate, have a Material Adverse Effect. Except
as set forth on Schedule 3.16, since January 1, 1993, neither the Company, the
Optometrist nor, to the knowledge of the Company based on a certificate in
writing obtained from each Professional Employee, any Professional Employee has
received any notice from any federal, state or other governmental authority or
agency having jurisdiction over its, his or her properties or activities, or
any insurance or inspection body, that its, his or her operations or any of
its, his or her properties, facilities, equipment, or business practices fail
to comply with any applicable law, ordinance, regulation, building or zoning
law, or requirement of any public or quasi-public authority or body, except
where failure to so comply would not, individually or in the aggregate, have a
Material Adverse Effect.
3.17. Finder's Fee. Except as set forth on Schedule
3.17, the Company has not incurred any obligation for any finder's, brokers or
agent's fee in connection with the transactions contemplated hereby.
3.18. Litigation. Except as described on Schedule 3.18
or otherwise disclosed pursuant to this Agreement, there are no legal actions
or administrative proceedings or investigations instituted, to the actual
knowledge of the Company or the Optometrist, which affect or could affect the
Practice, the Non-optometric Assets or the operation, business, condition
(financial or otherwise), or results of operations of the Company which (i) if
successful could, individually or in the aggregate, have a Material Adverse
Effect or (ii) could adversely affect the ability of the Company or the
Optometrist to effect the transactions contemplated hereby. Neither the
Company nor the Optometrist is (a) subject to any continuing court or
administrative order, judgment, writ, injunction or decree applicable
specifically to the Non-optometric Assets, the Company or to its business,
assets, operations or employees or (b) in default with respect to any such
order, judgment, writ, injunction or decree. The Company has no knowledge of
any valid basis for any such action, proceeding or investigation. Except as
set forth on Schedule 3.18, all medical malpractice claims asserted, general
liability incidents and incident reports have been submitted to the Company's
insurer therefor. All claims made or threatened against the Company in excess
of its deductible are covered under its Insurance Policies.
3.19. Condition of Fixed Assets. All of the fixtures,
structures and equipment reflected in the Financial Statements and used by the
Company in its business, are
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in good condition and repair, subject to normal wear and tear, and conform in
all material respects with all applicable ordinances, regulations and other
laws, and the Company has no actual knowledge of any latent defects therein.
3.20. Distributions and Repurchases. No distribution,
payment or dividend of any kind has been declared or paid by the Company on any
of its capital stock since the Company Balance Sheet Date. No repurchase of
any of the Company's capital stock has been approved, effected or is pending,
or is contemplated by the Board of Directors of the Company.
3.21. Banking Relations. Set forth on Schedule 3.21 is
a complete and accurate list of all borrowing and investing arrangements that
the Company has with any bank or other financial institution, indicating with
respect to each relationship the type of arrangement maintained (such as
checking account, borrowing arrangements, safe deposit box, etc.) and the
person or persons authorized in respect thereof.
3.22. Ownership Interests of Interested Persons;
Affiliations. Except as set forth on Schedule 3.22, no officer, supervisory
employee or director of the Company, or their respective spouses, children or
Affiliates, owns directly or indirectly, on an individual or joint basis, any
interest in, has a compensation or other financial arrangement with, or serves
as an officer or director of, any customer or supplier of the Company or any
organization that has a material contract or arrangement with the Company.
Except as may be disclosed pursuant to this Agreement, neither the Company, nor
any of its directors, officers, employees or consultants, nor any Affiliate of
such person is, or within the last three (3) years was, a party to any
contract, lease, agreement or arrangement, including, but not limited to, any
joint venture or consulting agreement with any optometrist, hospital, pharmacy,
home health agency or other person which is in a position to make or influence
referrals to, or otherwise generate business for, the Company.
3.23. Investments in Competitors. Except as disclosed
on Schedule 3.23, neither the Company nor the Optometrist owns directly or
indirectly any interests or has any investment in any person that is a
Competitor of the Company.
3.24. Environmental Matters.
a. Environmental Laws. To the best knowledge of the
Company and the Optometrist, neither the Company nor any of the Non-optometric
Assets (including the leased real property described on Schedule 3.11(c)) are
currently in violation of, or subject to any existing, pending or, to the
actual knowledge of the Company threatened, investigation or inquiry by any
governmental authority or to any remedial obligations under, any federal, state
or local laws or regulations pertaining to health or the environment
("Environmental Laws"), except for any such violations, investigations or
inquiries that would not, individually or in the aggregate, result in a
Material Adverse Effect.
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b. Permits. The Company is not required to obtain,
and has no knowledge of any reason Vision 21 will be required to obtain, any
permits, licenses or similar authorizations to occupy, operate or use any
buildings, improvements, fixtures and equipment owned or leased by the Company
by reason of any Environmental Laws.
c. Superfund List. To the best knowledge of the
Company, none of the Non-optometric Assets (including the Company's leased real
property described on Schedule 3.11(c)) are on any federal or state "Superfund"
list or subject to any environmentally related liens, except such liens as
would not, individually or in the aggregate, result in a Material Adverse
Effect.
3.25. Certain Payments. Neither the Company nor any
director, officer or employee of the Company acting for or on behalf of the
Company, has paid or caused to be paid, directly or indirectly, in connection
with the business of the Company:
a. to any government or agency thereof or any agent
of any supplier or customer any bribe, kick-back or other similar payment; or
b. any contribution to any political party or
candidate (other than from personal funds of directors, officers or employees
not reimbursed by their respective employers or as otherwise permitted by
applicable law).
3.26. Medical Waste. With respect to the generation,
transportation, treatment, storage, and disposal, or other handling of medical
waste, to the best knowledge of the Company and the Optometrist, the Company
has complied with all material federal, state or local laws or regulations
pertaining to medical waste.
3.27. Medicare and Medicaid Programs. The Company, the
Optometrist and each Professional Employee is qualified for participation in
the Medicare and Medicare programs and is party to provider agreements for such
programs which are in full force and effect with no events of default having
occurred thereunder. The Company, the Optometrist and each Professional
Employee has timely filed all claims or other reports required to be filed
prior to the Closing Date with respect to the purchase of services by
third-party payors ("Payors"), including but not limited to Medicare and
Medicaid programs, except where the failure to file would not, individually or
in the aggregate, result in a Material Adverse Effect. All such claims or
reports are complete and accurate in all material respects. The Company, the
Optometrist and each Professional Employee has paid or has properly recorded on
the Financial Statements all actually known and undisputed refunds, discounts
or adjustments which have become due pursuant to such claims, and neither the
Company, the Optometrist nor any Professional Employee has any material
liability to any Payor with respect thereto, except as has been reserved for in
the Company Balance Sheet. There are no pending appeals, overpayment
determinations, adjustments, challenges, audits, litigation, or notices of
intent to reopen Medicare and/or Medicaid claims determinations or other
reports required to be filed by the Company, the Optometrist or any
Professional Employee in order to be paid by a Payor for
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services rendered. Neither the Company, nor any of its directors, officers,
employees, consultants or the Optometrist has been convicted of, or pled guilty
or nolo contendere to, patient abuse or neglect, or any other Medicare or
Medicaid program-related offense. Neither the Company, nor its directors,
officers, the Optometrist, or to the best of the Company's knowledge, its
employees or consultants, has committed any offense which may serve as the
basis for suspension or exclusion from the Medicare and Medicaid programs,
including but not limited to, defrauding a government program, loss of a
license to provide health services, and failure to provide quality care.
3.28. Fraud and Abuse. To the best knowledge of the
Company and the Optometrist, the Company, its officers and directors, the
Professional Employees, and the other persons and entities providing
professional services for the Company, have not engaged in any activities which
are prohibited under 42 U.S.C. Sections 1320-7, 7a or 7b or 42 U.S.C.
Section 1395nn (subject to the exceptions set forth in such legislation), or
the regulations promulgated thereunder or pursuant to similar state or local
statutes or regulations, or which are prohibited by rules of professional
conduct, including but not limited to the following:
a. knowingly and willfully making or causing to be
made a false statement or representation of a material fact in any application
for any benefit or payment;
b. knowingly and willfully making or causing to be
made a false statement or representation of a material fact for use in
determining rights to any benefit or payment;
c. failure to disclose knowledge by a Medicare or
Medicaid claimant of the occurrence of any event affecting the initial or
continued right to any benefit or payment on its own behalf or on behalf of
another, with intent to fraudulently secure such benefit or payment;
d. knowingly and willfully offering, paying,
soliciting or receiving any remuneration (including any kickback, bribe, or
rebate), directly or indirectly, overtly or covertly, in cash or in kind (i) in
return for referring an individual to a person for the furnishing or arranging
for the furnishing of any item or service for which payment may be made in
whole or in part by Medicare or Medicaid, or (ii) in return for purchasing,
leasing, or ordering, or arranging for or recommending purchasing, leasing, or
ordering any good, facility, service, or item for which payment may be made in
whole or in part by Medicare or Medicaid; and
e. referring a patient for designated
health services (as defined in 42 U.S.C. Section 1395nn) to or providing
designated health services to a patient upon a referral from an entity or
person with which the Optometrist or the Professional Employee or an immediate
family member has a financial relationship, and to which no exception under 42
U.S.C. Section 1395nn applies.
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3.29. Payors. Schedule 3.29 sets forth a true, correct
and complete list of the names and addresses of each Payor, including any
private pay patient as a single payor, of the Company's services which
accounted for more than 10% of the revenues of the Company in the three (3)
previous fiscal years. Except as set forth on Schedule 3.29, the Company has
good relations with such Payors and none of such Payors has notified the
Company that it intends to discontinue its relationship with the Company or to
deny any claims submitted to such Payor for payment.
3.30. Prohibitions on the Corporate Practice of
Optometry. To the best of the Company's and the Optometrist's knowledge, the
actions, transactions or relationships arising from, and contemplated by this
Agreement, do not violate any law, rule or regulation relating to the corporate
practice of optometry. The Company and the Optometrist accordingly agree that
the Company and the Optometrist will not, in an attempt to void or nullify any
document contemplated herein or any relationship involving Vision 21, the
Company or the Optometrist, xxx, claim, aver, allege or assert that any such
document contemplated herein or any such relationship violates any law, rule or
regulation relating to the corporate practice of optometry and expressly
warrant that this Section is valid and enforceable by Vision 21, and recognize
that Vision 21 has relied upon the statements herein in closing this
Transaction.
3.31. Acquisition Proposals. Except for the
negotiations, offers and agreements with Vision 21 and its representatives, the
Company has not received during the twelve (12) month period preceding the date
of this Agreement any proposal or offer (including, without limitation, any
proposal or offer of its stockholders) with respect to a merger, acquisition,
consolidation or similar transaction involving, or any purchase of all or any
significant portion of the assets or any equity securities of, the Company (any
such proposal or offer being hereinafter referred to as an "Acquisition
Proposal") nor has the Company or any of its employees, agents, representatives
or stockholders engaged in any negotiations concerning, or provided any
confidential information or data to, or had any discussions with, any person
relating to an Acquisition Proposal, or otherwise facilitated any effort or
attempted to make or implement an Acquisition Proposal.
3.32. Consistent Treatment of Expenses. The Company
has, in presenting information concerning the Company's expenses to Vision 21
for the purpose of determining the Company's value, separated out those
expenses which shall be borne by the Company in a manner which is consistent
with the treatment of expenses which shall be the responsibility of the Company
pursuant to the Business Management Agreement.
3.33. Accounts Receivable/Payable. The Accounts
Receivable of the Company relating to the ownership and operation of the
Practice reflected on the Company Balance Sheet, to the extent uncollected on
the date hereof, are, and the accounts receivable of the Company relating to
the ownership and operation of the Practice to be reflected on the books of the
Company on the Closing Date will be, valid, existing and collectible within six
months from the Closing Date (taking into consideration the allowance for
doubtful accounts set forth in the Financial Statements) using reasonably
diligent collection methods taking into account the
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size and nature of the receivable, and represent amounts due for goods sold and
delivered or services performed. There are not, and on the date of Closing
there will not be, any refunds, discounts, set-offs, defenses, counterclaims or
other adjustments payable or assessable with respect to the Accounts
Receivable. The Company has collected Accounts Receivable only in the ordinary
course and has not changed collection procedures or methods nor accelerated the
pace of such collection efforts in anticipation of the transactions
contemplated in this Agreement. The Company has paid accounts payable in the
ordinary course and has not changed payment procedures or methods nor delayed
the timing of such payments in anticipation of the transactions contemplated in
this Agreement.
3.34. Projections. There is no fact, development or
threatened development with respect to the markets, products, services,
clients, patients, facilities, personnel, vendors, suppliers, operations,
assets or prospects of the Practice which are known to the Company or the
Optometrist which would materially adversely affect the projected fiscal year
1997 earnings of the Company disclosed to Vision 21 by Optometrist, other than
such conditions as may affect as a whole the economy or the practice of
optometry generally.
3.35. Inventory. Except as set forth on Schedule 3.35,
to the best of the Company's and the Optometrist's knowledge: (i) the
Inventory is in its originally manufactured condition, fit for the use for
which it was intended, free from any known defect and in a quantity and quality
usable in the ordinary course of business; (ii) the Inventory does not contain
material amounts of items that are slow-moving, obsolete or of below-standard
quality; (iii) the qualities and quantities of Inventory are reasonable and
warranted in the present and anticipated circumstances of the Practice; and
(iv) there has been no decrease in the physical Inventory since the Company
Balance Sheet Date other than in the ordinary course of business.
3.36. Tangible Personal Property. Except as set forth
on Schedule 3.36, the Company's Tangible Personal Property is in good operating
condition, working order and repair (normal wear and tear excepted) and is
fully suitable for the uses for which it is employed in the conduct of the
Practice.
3.37. Leases. With respect to each of the Real
Property Leases and Personal Property Leases, except as set forth on Schedule
3.37:
(a) such lease is legal, valid, binding, enforceable
and in full force and effect;
(b) such lease will continue to be legal, valid,
binding, enforceable and in full force and effect on identical terms following
the Closing;
(c) no party to such lease is in material breach or
default, and no event has occurred that, with notice or lapse of time, would
constitute a material breach or default or permit termination, modification or
acceleration thereunder;
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(d) no party to such lease has repudiated in writing
any provision thereof;
(e) there are no disputes, oral agreements or
forbearance programs in effect as to such lease; and
(f) The Company has performed and satisfied in full
each material obligation to be performed by the Company under such lease.
3.38. Contract Rights. Except as set forth on Schedule
3.38, each of the Assumed Contracts is valid and enforceable and is in full
force and effect, and there is no material default or existing condition that,
with the giving of notice or the passage of time, would constitute such a
default by any parties thereto. The Company has performed and satisfied in
full each material obligation required to be performed by the Company under
each Assumed Contract. If services are to be provided to the Company under any
of such Assumed Contracts, such services have been and are being performed
satisfactorily and in a timely manner, substantially in accordance with the
terms of such Assumed Contract.
3.39. Prepaid Items. Except as described on Schedule
3.13, each of the Prepaid Items may be transferred to Vision 21 without the
necessity of obtaining any consent or approval.
3.40. Completeness of Assets. The Non-optometric
Assets, together with the Optometric Assets, include all the properties used to
conduct the Practice as presently conducted.
3.41. Disclosure. To the best of the Company's and the
Optometrist's knowledge, no representation, warranty or statement made by the
Company or the Optometrist in this Agreement or any of the exhibits or
schedules hereto, or any agreements, certificates, documents or instruments
delivered or to be delivered to Vision 21 in accordance with this Agreement or
the other documents contemplated herein, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
necessary to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading. The Company and the
Optometrist do not know of any fact or condition (other than general economic
conditions or legislative or administrative changes in health-care delivery)
which materially adversely affects, or in the future may materially affect, the
condition, properties, assets, liabilities, business, operations or prospects
of the Practice which has not been set forth herein or in the Schedules
provided herewith.
4. REPRESENTATIONS AND WARRANTIES OF THE OPTOMETRIST. The
Optometrist represents and warrants to Vision 21 that the following are true
and correct as of the date hereof, and shall be true and correct through the
Closing Date as if made on that date:
4.1. Validity; Optometrist Capacity. This Agreement,
the Optometrist Employment Agreement, and each other agreement contemplated
hereby or thereby have been, or will be as of the Closing Date, duly executed
and delivered by the Optometrist and constitute
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or will constitute legal, valid and binding obligations of the Optometrist,
enforceable against the Optometrist 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. The Optometrist has legal capacity to enter into and perform this
Agreement and his Optometrist Employment Agreement.
4.2. No Violation. Except as set forth on Schedule
4.2, neither the execution, delivery or performance of this Agreement, other
agreements of the Optometrist contemplated hereby or thereby, 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 the Optometrist is bound or to which any of his property
or the shares of common stock of the Company are subject, or result in the
creation or imposition of any security interest, lien, charge or encumbrance
upon any of his property or the shares of common stock of the Company or (b) to
the best knowledge of the Optometrist, violate or conflict with any judgment,
decree, order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body.
4.3. Consents. Except as may be required under the
Exchange Act, the Securities Act, the Corporation Law and state securities
laws, or otherwise disclosed pursuant to this Agreement, no consent,
authorization, approval, permit or license of, or filing with, any governmental
or public body or authority, or any other person is required to authorize, or
is required in connection with, the execution, delivery and performance of this
Agreement or the agreements contemplated hereby on the part of the Optometrist.
4.4. Certain Payments. The Optometrist has not paid
or caused to be paid, directly or indirectly, in connection with the business
of the Company:
a. to any government or agency thereof or any agent
of any supplier or customer any bribe, kick-back or other similar payment; or
b. any contribution to any political party or
candidate (other than from personal funds not reimbursed by the Company or as
otherwise permitted by applicable law).
4.5. Finder's Fee. Except as set forth on Schedule
4.5, the Optometrist has not incurred any obligation for any finder's, broker's
or agent's fee in connection with the transactions contemplated hereby.
4.6. Ownership of Interested Persons; Affiliations.
Except as set forth on Schedule 4.6, neither the Optometrist nor his spouse,
children or Affiliates, owns directly or indirectly, on an individual or joint
basis, any interest in, has a compensation or other financial arrangement with,
or serves as an officer or director of, any customer or supplier of the Company
or any organization that has a material contact or arrangement with the
Company. Neither the Optometrist nor any of his Affiliates is, or with the
last three (3) years was, a party
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to any contract, lease, agreement or arrangement, including, but not limited
to, any joint venture or consulting agreement with any optometrist, hospital,
pharmacy, home health agency or other person which is in a position to make or
influence referrals to, or otherwise generate business for, the Company.
4.7. Investments in Competitors. Except as disclosed
on Schedule 4.7, the Optometrist does not own directly or indirectly any
interests or have any investment in any person that is a Competitor of the
Company.
4.8. Litigation. Except as disclosed on Schedule 4.8,
there are no claims, actions, suits, proceedings (arbitration or otherwise) or
investigations pending or, to the Optometrist's knowledge, threatened against
the Optometrist at law or at equity in any court or before or by any
Governmental Authority, and, to the Optometrist's knowledge, there are no, and
have not been any, facts, conditions or incidents that may result in any such
actions, suits, proceedings (arbitration or otherwise) or investigations.
Except as set forth on Schedule 4.10, there have been no disciplinary,
revocation or suspension proceedings or similar types of claims, actions or
proceedings, hearings or investigations against the Optometrist or the Company.
4.9. Permits. To the best of the Optometrist's
knowledge, the Optometrist has all permits, licenses, orders and approvals of
all Governmental Authorities necessary to perform the services performed by the
Optometrist in connection with the conduct of the Practice. All such permits,
licenses, orders and approvals are in full force and effect and no suspension
or cancellation of any of them is pending or threatened. To the best of the
Optometrist's knowledge, none of such permits, licenses, orders or approvals
will be adversely affected by the consummation of the transactions contemplated
herein. The Optometrist is a participating optometrist, as such term is
defined by the Medicare or Medicaid programs, and the Optometrist has not been
disciplined, sanctioned or excluded from either the Medicare or Medicaid
programs and has not been subject to any plan of correction imposed by any
professional review body.
4.10. Staff Privileges. Schedule 4.10 lists all
hospitals at which the Optometrist has full staff privileges. Such staff
privileges have not been revoked, surrendered, suspended or terminated, and to
the Optometrist's knowledge, there are no, and have not been any, facts,
conditions or incidents that may result in any such revocation, surrender,
suspension or termination.
4.11. Intentions. Except as set forth on Schedule
4.11, the Optometrist intends to continue practicing optometry on a full-time
basis for at least the next five (5) years with the Company and does not know
of any fact or condition that materially adversely affects, or in the future
may materially adversely affect, his ability or intention to practice optometry
on a full-time basis for the next five (5) years with the Company.
5. REPRESENTATIONS AND WARRANTIES OF VISION 21. Vision 21
represents and warrants to the Company and the Optometrist that the following
are true and
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correct as of the date hereof and shall be true and correct as of the Closing
Date; when used in this Section 5, the term "best knowledge" shall mean the
best knowledge of those individuals listed on Schedule 5:
5.1. Organization and Good Standing. Vision 21 is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Florida, with all requisite corporation 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. At or prior to Closing, Vision 21 will be
qualified to do business as a foreign corporation in the jurisdictions listed
on Schedule 5.1.
5.2. Capitalization. The authorized capital stock of
Vision 21 consists of 50,000,000 shares of Vision 21 Common Stock, of which
8,123,065 shares are issued and outstanding. Immediately prior to the Closing,
the authorized capital stock of Vision 21 will consist of 50,000,000 shares of
Vision 21 Common Stock, of which 8,123,065 shares will be issued and
outstanding.
5.3. Corporate Records. The copies of the Articles of
Incorporation and Bylaws, and all amendments thereto, of Vision 21 that have
been delivered or made available to the Company and the Optometrist are true,
correct and complete copies thereof, as in effect on the date hereof. The
minute books of Vision 21, copies of which have been delivered or made
available to the Company and the Optometrist, 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
Vision 21, since its formation.
5.4. Authorization and Validity. The execution,
delivery and performance by Vision 21 of this Agreement and the other
agreements contemplated hereby, and the consummation of the transactions
contemplated hereby and thereby, have been duly authorized by Vision 21. This
Agreement and each other agreement contemplated hereby to be executed by Vision
21 have been or will be as of the Closing Date duly executed and delivered by
Vision 21 and constitute or will constitute legal, valid and binding
obligations of Vision 21, enforceable against Vision 21 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.
5.5. Compliance. The execution and delivery of the
documents contemplated hereunder and the consummation of the transactions
contemplated thereby by Vision 21 shall not (i) violate any provision of Vision
21's organizational documents, (ii) violate any material 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 material obligation under, any
mortgage, lien, lease, contract, license, instrument or any other agreement to
which Vision 21 is a party, (iii) result in the creation or imposition of any
material lien, charge, pledge, security interest or other material encumbrance
upon any property of Vision 21 or (iv) violate or conflict with any order,
award, judgment or decree or other material restriction or to the best of
Vision 21's
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knowledge violate or conflict with any law, ordinance or regulation to which
Vision 21 or its property is subject.
5.6. Consents. No consent, approval, order or
authorization of or registration, declaration, or filing with, any Governmental
Authority or other person is required in connection with the execution and
delivery of the documents contemplated herein by Vision 21 or the consummation
by such party of the transactions contemplated thereby, except for those
consents or approvals set forth on Schedule 5.6.
5.7. Finder's Fee. Except as disclosed on Schedule
5.7, Vision 21 has not incurred any obligation for any finder's, broker's or
agent's fee in connection with the transactions contemplated hereby.
5.8. Capital Stock. The issuance and delivery by
Vision 21 of shares of Vision 21 Common Stock in connection with the Note have
been duly and validly authorized by all necessary corporate action on the part
of Vision 21. The shares of Vision 21 Common Stock to be issued in connection
with the Note, when issued in accordance with the terms of this Agreement, will
be validly issued, fully paid and nonassessable and will not have been issued
in violation of any preemptive rights, rights of first refusal or similar
rights of any of Vision 21's stockholders, or any federal or state law,
including, without limitation, the registration requirements of applicable
federal and state securities laws.
5.9. Vision 21 Financial Statements. The audited
consolidated balance sheet and related statements of income and cash flows of
Vision 21 for its prior three (3) full fiscal years, and its unaudited interim
balance sheet for the fiscal quarter ended March 31, 1997 and the related
unaudited statement of income of Vision 21 for the period then ended, including
the costs incurred during such periods associated with any Registration
Statement (collectively, with the related notes thereto, the "Vision 21
Financial Statements"), (a) fairly present the financial condition and results
of operations of Vision 21 as of the dates and for the periods indicated; and
(b) have been prepared in conformity with GAAP (subject to normal year-end
adjustments and the absence of notes for any unaudited interim financial
statement), except as otherwise indicated in the Vision 21 Financial
Statements.
5.10. Liabilities and Obligations. Except as disclosed
on Schedule 5.10, the Vision 21 Financial Statements shall reflect all material
liabilities of Vision 21, accrued, contingent or otherwise, that would be
required to be reflected on a balance sheet, or in the notes thereto, prepared
in accordance with GAAP. Except as set forth on Schedule 5.10 or in the Vision
21 Financial Statements, Vision 21 is not liable upon or with respect to, or
obligated in any other way to provide funds in respect of or to guarantee or
assume in any manner, any debt, obligation or dividend of any person,
corporation, association, partnership, joint venture, trust or other entity,
and Vision 21 does not know of any valid basis for the assertion of any other
claims or liabilities of any nature or in any amount.
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5.11. Compliance with Laws. Vision 21 has not failed
to comply with any applicable laws, regulations and licensing requirements or
failed to file with the proper authorities any necessary statements and reports
except where the failure to so comply or file would not, individually or in the
aggregate, result in a Material Adverse Effect. There are no existing
violations by Vision 21 of any federal, state or local law or regulation that
could, individually or in the aggregate, result in a Material Adverse Effect.
Vision 21 possesses all necessary licenses, franchises, permits and
governmental authorizations for the conduct of Vision 21's business as now
conducted and after the Closing, as contemplated in this Agreement. The
transactions contemplated by this Agreement will not result in a default under
or a breach or violation of, or adversely affect the rights and benefits
afforded by any such licenses, franchises, permits or government
authorizations, except for any such default, breach or violation that would
not, individually or in the aggregate, have a Material Adverse Effect. Since
January 1, 1993, Vision 21 has not received any notice from any federal, state
or other governmental authority or agency having jurisdiction over its
properties or activities, or any insurance or inspection body, that its
operations or any of its properties, facilities, equipment, or business
practices fail to comply with any applicable law, ordinance, regulation,
building or zoning law, or requirement of any public or quasi-public authority
or body, except where failure to so comply would not, individually or in the
aggregate, have a Material Adverse Effect.
5.12. Insolvency Proceedings. Vision 21 is not
currently under the jurisdiction of a Federal or state court in a Title 11 or
similar case within the meaning of Section 368(a)(3)(A) of the Code.
5.13. Employment of Company's Employees. Vision 21
does not currently intend to change the existing composition or employment
terms of any of the non-professional personnel which have employment
arrangements with the Company on the effective date of this Agreement (except
as is necessary for Vision 21 to employ such individuals pursuant to the
Business Management Agreement). Vision 21 reserves the right, however, to
change the number, composition or employment terms of such non-professional
personnel in the future.
6. SECURITIES LAW MATTERS.
6.1. Investment Representations and Covenants of
Optometrist.
a. Optometrist understands that the Securities will
not be registered under the Securities Act or any state securities laws on the
grounds that the issuance of the Securities is exempt from registration
pursuant to Section 4(2) of the Securities Act under the Securities Act and
applicable state securities laws, and that the reliance of Vision 21 on such
exemptions is predicated in part on the Optometrist's representations,
warranties, covenants and acknowledgements set forth in this Section.
b. Except as disclosed on Schedule 6.1(b) attached
hereto, Optometrist represents and warrants that Optometrist is an "accredited
investor" or "sophisticated investor" as defined under the Securities Act and
state "Blue Sky" laws, or that Optometrist has utilized,
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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. Optometrist represents and warrants that the
Securities to be acquired by Optometrist upon consummation of the transactions
described in this Agreement will be acquired by Optometrist for Optometrist's
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, except as contemplated in this Agreement, and that
Optometrist will not distribute any of the Securities in violation of the
Securities Act. All Securities shall bear a restrictive legend in
substantially the following form:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "ACT") AND MAY ONLY BE SOLD OR OTHERWISE
TRANSFERRED IF THE HOLDER HEREOF COMPLIES WITH THE ACT AND APPLICABLE
SECURITIES LAWS."
In addition, the Securities shall bear any legend required by the
securities or "Blue Sky" laws of any state where Optometrist resides as well as
any other legend deemed appropriate by Vision 21 or its counsel.
d. Optometrist represents and warrants that the
address set forth below Optometrist's name on Schedule 6.1(d) is Optometrist's
principal residence.
e. Optometrist (i) acknowledges that the Securities
issued to Optometrist at the Closing must be held indefinitely by Optometrist
unless subsequently registered under the Securities Act or an exemption from
registration is available, (ii) is aware that any routine sales of Securities
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
currently available for use by Optometrist for resale of any of the Securities
to be acquired by Optometrist upon consummation of the transactions described
in this Agreement, and (iv) acknowledges and agrees that the transfer of the
Securities shall be further restricted by the "lock-up" provisions contained in
the Registration Rights Agreement in the form of Exhibit 12.1(o), whereby
Optometrist shall be treated as an "affiliate" of Vision 21 under Rule 144.
f. Optometrist represents and warrants to Vision 21
that Optometrist, either alone or together with the assistance of Optometrist's
own professional advisor, has such knowledge and experience in financial and
business matters such that Optometrist is capable of evaluating the merits and
risks of Optometrist's investment in any of the Securities to be acquired by
Optometrist upon consummation of the transactions described in this Agreement.
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g. Optometrist confirms that Optometrist has
received and read the Confidential Information Memorandum of Vision 21 dated
December 1996 and the February 28, 1997 supplement thereto. Optometrist also
confirms that Optometrist has had the opportunity to ask questions of and
receive answers from Vision 21 concerning the terms and conditions of
Optometrist's investment in the Securities, and the Optometrist has received to
Optometrist's satisfaction, such additional information, in addition to that
set forth herein, about Vision 21's operations and the terms and conditions of
the offering as Optometrist has requested.
h. In order to ensure compliance with the provisions
of paragraph (c) hereof, Optometrist agrees that after the Closing Optometrist
will not sell or otherwise transfer or dispose of Securities or any interest
therein (unless such shares have been registered under the Securities Act)
without first complying with either of the following conditions, the expenses
and costs of satisfaction of which shall be fully borne and paid for by
Optometrist:
i) Vision 21 shall have received a
written legal opinion from legal counsel, which opinion and counsel shall be
satisfactory to Vision 21 in the exercise of its reasonable judgment, or a copy
of a "no-action" or interpretive letter of the Securities and Exchange
Commission specifying the nature and circumstances of the proposed transfer and
indicating that the proposed transfer will not be in violation of any of the
registration provisions of the Securities Act and the rules and regulations
promulgated thereunder; or
ii) Vision 21 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.
Optometrist also agrees that the certificates or instruments representing the
Securities to be issued to Optometrist pursuant to this Agreement may 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 21's transfer
agent, if any, provided that this Section 6.1(h) shall no longer be applicable
to any Securities following their transfer pursuant to a registration statement
effective under the Securities Act or in compliance with Rule 144 or if the
opinion of counsel referred to above is to the further effect that transfer
restrictions and the legend referred to herein are no longer required in order
to establish compliance with any provisions of the Securities Act.
i. Optometrist understands that although an Initial
Public Offering is contemplated by Vision 21, there are no assurances that an
Initial Public Offering will occur or if it does occur that it will be
successful.
j. Optometrist agrees that he shall be considered an
"affiliate" of Vision 21 for purposes of Rule 144 and agrees to the
restrictions and limitations imposed by Rule 144 on affiliates. Optometrist
further agrees that he shall be considered an affiliate of Vision 21 for Rule
144 purposes even if he does not meet the technical definition of "affiliate"
under Rule 144.
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6.2. Current Public Information. At all times
following the registration of any of Vision 21's securities under the
Securities Act or Exchange Act pursuant to which Vision 21 becomes subject to
the reporting requirements of the Exchange Act, Vision 21 shall use
commercially reasonable efforts to comply with the requirements of Rule 144
under the Securities Act, as such Rule may be amended from time to time (or any
similar rule or regulation hereafter adopted by the SEC) regarding the
availability of current public information to the extent required to enable any
holder of shares of Common Stock to sell such shares without registration under
the Securities Act pursuant to Rule 144 (or any similar rule or regulation).
7. COVENANTS OF THE COMPANY AND THE OPTOMETRIST. The Company
and the Optometrist, jointly and severally, agree that between the date hereof
and the Closing (with respect to the Company's covenants, the Optometrist
agrees to use his best efforts to cause the Company to perform):
7.1. Consummation of Agreement. The Company and the
Optometrist shall use their best efforts to cause the consummation of the
transactions contemplated hereby in accordance with their terms and conditions;
provided, however, that this covenant shall not require the Company or the
Optometrist to make any expenditures that are not expressly set forth in this
Agreement or otherwise contemplated herein.
7.2. Business Operations. The Company shall operate
its business in the ordinary course. The Company and the Optometrist shall use
their best efforts to preserve the business of the Company intact. Neither the
Company nor the Optometrist shall take any action that would, individually or
in the aggregate, result in a Material Adverse Effect.
7.3. Access. The Company and the Optometrist shall,
at reasonable times during normal business hours and on reasonable notice,
permit Vision 21 and its authorized representatives, including without
limitation, the Accountants, reasonable access to, and make available for
inspection, all of the assets and business of the Company, including its
employees, customers and suppliers, and permit Vision 21 and its authorized
representatives to inspect and, at Vision 21's sole cost and expense, make
copies of all documents, records (other than patient optometric records) and
information with respect to the affairs of the Company, including, without
limitation, the Financial Statements, as Vision 21 and its representatives may
request, all for the sole purpose of permitting Vision 21 to become familiar
with the business and assets and liabilities of the Company.
7.4. Notification of Certain Matters. The Company and
the Optometrist shall promptly inform Vision 21 in writing of (a) any notice
of, or other communication relating to, a default or event that, with notice or
lapse of time or both, would become a default, received by the Company or the
Optometrist subsequent to the date of this Agreement and prior to the Closing
Date under any Commitment material to the Company's condition (financial or
otherwise), operations, assets, liabilities or business and to which it is
subject; or (b) any
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material adverse change in the Company's condition (financial or otherwise),
operations, assets, liabilities or business.
7.5. Approvals of Third Parties. As soon as
practicable after the date hereof, the Company and the Optometrist shall secure
all necessary approvals and consents of landlords with respect to the real
property described on Schedule 2.1(d) to the consummation of the transactions
contemplated hereby and shall use their best efforts to secure all necessary
approvals and consents of other third parties to the consummation of the
transactions contemplated hereby; provided, however, that this covenant shall
not require the Company or the Optometrist to make any material expenditures
that are not expressly set forth in this Agreement or otherwise contemplated
herein.
7.6. Employee Matters. Except as set forth in
Schedule 3.8(a) or as otherwise contemplated by this Agreement, the Company
shall not, without the prior written approval of Vision 21, except as required
by law:
a. increase the cash compensation of the Optometrist
or any other employees of the Company (other than in the ordinary course of
business and consistent with past practice);
b. adopt, amend or terminate any Compensation Plan;
c. adopt, amend or terminate any Employment
Agreement;
d. adopt, amend or terminate any Employee Policies
and Procedures;
e. adopt, amend or terminate any Employee Benefit
Plan;
f. take any action that could deplete the assets of
any Employee Benefit Plan, other than payment of benefits in the ordinary
course to participants and beneficiaries;
g. fail to pay any premium or contribution due or
with respect to any Employee Benefit Plan;
h. fail to file any return or report with respect to
any Employee Benefit Plan;
i. institute, settle or dismiss any employment
litigation except as could not, individually or in the aggregate, result in a
Material Adverse Effect;
j. enter into, modify, amend or terminate any
agreement with any union, labor organization or collective bargaining unit; or
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k. take or fail to take any action with respect to
any past or present employee of the Company that would, individually or in the
aggregate, result in a Material Adverse Effect.
7.7. Contracts. Except with Vision 21's prior written
consent, the Company shall not assume or enter into any contract, lease,
license, obligation, indebtedness, commitment, purchase or sale except in the
ordinary course of business that is material to the Company's business, nor
will it waive any material right or cancel any material contract, debt or
claim.
7.8. Capital Assets; Payments of Liabilities. The
Company shall not, without the prior written approval of Vision 21 (a) acquire
or dispose of any capital asset having a fair market value of $5,000 or more,
or acquire or dispose of any capital asset outside of the ordinary course of
business or (b) discharge or satisfy any lien or encumbrance or pay or perform
any obligation or liability other than (i) liabilities and obligations
reflected in the Financial Statements or (ii) current liabilities and
obligations incurred in the usual and ordinary course of business since the
Company Balance Sheet Date and, in either case (i) or (ii) above, only as
required by the express terms of the agreement or other instrument pursuant to
which the liability or obligation was incurred.
7.9. Mortgages, Liens and Guaranties. The Company
shall not, without the prior written approval of Vision 21, enter into or
assume any mortgage, pledge, conditional sale or other title retention
agreement, permit any security interest, lien, encumbrance or claim of any kind
to attach to any of its assets (other than statutory liens arising in the
ordinary course of business and other liens that do not materially detract from
the value or interfere with the use of such assets), whether now owned or
hereafter acquired, or guarantee or otherwise become contingently liable for
any obligation of another, except obligations arising by reason of endorsement
for collection and other similar transactions in the ordinary course of
business, or make any capital contribution or investment in any person.
7.10. Acquisition Proposals. The Company and the
Optometrist agree that from the date of this Agreement through the earlier of
the Closing Date or January 1, 1997, (a) neither the Optometrist nor the
Company nor any of its officers and directors shall, and the Optometrist and
the Company shall direct and use their best efforts to cause the Company's
employees, agents, and representatives not to, initiate, solicit or encourage,
directly or indirectly, any inquiries or the making or implementation of any
Acquisition Proposal or engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any person
relating to an Acquisition Proposal, or otherwise facilitate any effort or
attempt to make or implement an Acquisition Proposal; (b) the Optometrist and
the Company will immediately cease and cause to be terminated any existing
activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing and each will take the necessary steps to
inform the individuals or entities referred to in the first sentence hereof of
the obligations undertaken in this Section 7.10; and (c) the Optometrist and
the Company will notify Vision 21 immediately if any such inquiries or
proposals are received
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by, any such information is requested from, or any such negotiations or
discussions are sought to be initiated or continued with, the Company or the
Optometrist.
7.11. Distributions and Repurchases. No distribution,
payment or dividend of any kind will be declared or paid by the Company with
respect of its capital stock, nor will any repurchase of any of the Company's
capital stock be approved or effected.
7.12. Requirements to Effect the Transaction. The
Company and the Optometrist shall use their best efforts to take, or cause to
be taken, all actions necessary to effect the Transaction under applicable law.
7.13. Optometrist Accounts Payable and Optometrist
Retained Equity. The Company shall, and the Optometrist shall cause the
Company, to pay in a timely manner the accounts payable of the Optometrist.
Except as contemplated herein, the Company shall not, and the Optometrist shall
not permit the Company to, make payment of all or any portion of any retained
equity of the Company at any time prior to Closing.
7.14. Optometrist Employment Agreements. The Company
and the Optometrist shall cause, at or immediately prior to Closing, each
Optometrist Employee (except for those non-shareholder Optometrist Employees
identified on Schedule 7.14) who is then an employee of the Company and
Optometrist agrees at or immediately prior to Closing (i) to terminate his
employment agreement, if any, with the Company by mutual consent without any
liability therefor on the part of the Company and (ii) to enter into a new
Optometrist Employment Agreement with the Company in accordance with the terms
of the Business Management Agreement.
7.15. Optometrist Employment Agreements. The Company
and the Optometrist shall cause, at or immediately prior to Closing, each
Optometrist Employee who is then an employee of the Company (i) to terminate
his existing employment agreement, if any, with the Company by mutual consent
without any liability therefor on the part of the Company and (ii) to enter
into a new Optometrist Employment Agreement with the Company in accordance with
the terms of the Business Management Agreement.
7.16. Termination of Retirement Plans. Prior to
Closing, the Optometrist shall cause the Company to take all steps necessary to
discontinue benefits accruals under any Employee Benefit Plan that is intended
to be a qualified employee retirement plan under Section 401(a) of the Code (a
"Retirement Plan") effective as of Closing or as soon thereafter as may be
practical.
Subsequent to Closing, the Company and Vision 21 shall
review the extent to which the Company can resume contributions to the
Retirement Plan without violating the qualification requirements of Sections
410(b) and 401(a)(4) of the Code, taking into account any employees of Vision
21 who would be "leased employees" of the Company under Section 414(n) of the
Code. If Vision 21 and the Company mutually agree that such qualification
requirements
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can be satisfied, the Company may elect to continue the Retirement Plan and
make contributions in accordance with its terms, provided that the Company
shall agree to cover at its own expense any Vision 21 employees who are leased
employees if such coverage is required to maintain the tax-qualified status of
the Retirement Plan.
7.17. Delivery of Schedules. The Company and the
Optometrist shall deliver to Vision 21 all schedules required to be delivered
by them prior to the Closing.
7.18. Assignment of Fees for Optometry Services. On or
prior to the Closing Date, the Company shall obtain an irrevocable assignment
from all Professional Employees of any and all of their rights to receive
payment for the provision of optometry services which are part of the Accounts
Receivable to Vision 21 existing on the Closing Date, except for those fees
specified and set forth on Schedule 7.18. Each Professional Employee shall
undertake to endorse any payments received on account of such services to the
order of Vision 21 and to take such other action as may be necessary to confirm
to Vision 21 the rights to collect and retain for its own account such Accounts
Receivable. The Company shall cause its Professional Employees to agree that
such security interest of such lender(s) is intended to be a first priority
security interest and is superior to any right, title or interest which may be
asserted by such Professional Employees with respect to the Accounts Receivable
or the proceeds thereof. In the event that the assignment of rights described
in this Section shall be deemed, for any reason, to be ineffective as an
outright assignment, the Company shall cause each Professional Employee to
agree that such Professional Employee shall be deemed, effective as of the
Closing Date, to have granted to Vision 21 a first priority lien on and
security interest in and to any and all interests of such Professional Employee
in any of the Accounts Receivable, and all proceeds with respect thereto, to
secure the collection by Vision 21 of all Accounts Receivable, and this
Agreement shall be deemed to be a security agreement to the extent necessary to
give effect to the foregoing. The Company shall cause each Professional
Employee to execute and deliver, all such financing statements as the Company
or Vision 21 may request in order to perfect such security interest. The
Company shall not suffer any Professional Employee to grant any other lien on
or security interest in or to such Accounts Receivable or any proceeds thereof.
8. COVENANTS OF VISION 21. Vision 21 agrees that between the
date hereof and the Closing:
8.1. Consummation of Agreement. Vision 21 shall use
its best efforts to cause the consummation of the transactions contemplated
hereby in accordance with their terms and conditions and take all corporate and
other actions necessary to approve the Transaction; provided, however, that
this covenant shall not require Vision 21 to make any expenditures that are not
expressly set forth in this Agreement or otherwise contemplated herein.
8.2. Notification of Certain Matters. Vision 21 shall
promptly inform the Company and the Optometrist in writing of (a) any notice
of, or other communication relating to, a default or event that, with notice or
lapse of time or both, would become a default,
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received by Vision 21 subsequent to the date of this Agreement and prior to the
Closing Date under any agreement or commitment entered into by Vision 21
material to Vision 21's condition (financial or otherwise), operations, assets,
liabilities or business and to which it is subject; or (b) any material adverse
change in Vision 21's condition (financial or otherwise), operations, assets,
liabilities or business.
8.3. Licenses and Permits. Vision 21 shall use its
best efforts to obtain all licenses, permits, approvals or other authorizations
required under any law, statute, rule, regulation or ordinance, or otherwise
necessary or desirable to consummate the Transaction or provide the services
contemplated by the Business Management Agreement and to conduct the intended
business of Vision 21.
8.4. Release of Optometrist From Practice Liabilities.
Vision 21 shall use its best efforts to obtain from third party creditors the
release of Optometrist from any personal liabilities relating to the Practice
which are identified on Schedule 8.4 and assumed by Vision 21 pursuant to the
terms of this Agreement.
9. COVENANTS OF VISION 21, THE COMPANY AND THE OPTOMETRIST.
Vision 21, the Company and the Optometrist agree as follows:
9.1. Filings; Other Action.
a. Vision 21, the Company and the Optometrist shall
cooperate to promptly prepare and file at Vision 21's expense with the SEC, a
Registration Statement on Form S-1 (or other appropriate form) to be filed by
Vision 21 in connection with any Initial Public Offering of Vision 21
(including the prospectus constituting a part thereof, the "Registration
Statement"). Vision 21 shall obtain all necessary state securities law or
"Blue Sky" permits and approvals required to carry out the transactions
contemplated by this Agreement, and the Company and the Optometrist shall
furnish all information concerning the Company, the Non-optometric Assets and
the Optometrist as may be reasonably requested in connection with any such
action.
b. Each of the Company, the Optometrist and Vision
21 represents and warrants that none of the information or documents supplied
or to be supplied by it specifically for inclusion in a Registration Statement,
by exhibit or otherwise, will, at the time the Registration Statement and each
amendment and supplement thereof, if any, becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The Company, the Optometrist, and Vision 21 shall agree
as to the information and documents supplied by the Company and the Optometrist
for inclusion in the Registration Statement and shall indicate such information
and documents in a letter to be delivered at least ten (10) days prior to the
initial filing of the Registration Statement with the SEC. The Company and the
Optometrist shall be
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entitled to review the Registration Statement and each amendment thereto, if
any, prior to the time each becomes effective under the Securities Act.
c. The Optometrist and the Company shall, upon
request, furnish Vision 21 with all information concerning himself, itself,
their respective partners, the Company's subsidiaries, directors, officers, and
stockholders, and including financial statements with respect to the same, any
consents (and information necessary to obtain such consents) and such other
matters as may be reasonably requested by Vision 21 in connection with the
preparation of the Registration Statement and each amendment or supplement
thereto, or any other statement, filing, notice or application made by or on
behalf of each such party or any of the Company's subsidiaries to any
governmental entity in connection with the Transaction, any Initial Public
Offering and the other transactions contemplated by this Agreement.
9.2. Amendment of Schedules. Each party hereto agrees
that, with respect to the representations and warranties of such party
contained in this Agreement, such party shall have the continuing obligation
until the Closing to attach, supplement or amend promptly the Schedules with
respect to any matter that would have been or would be required to be set forth
or described in the Schedules in order to not materially breach any
representation, warranty or covenant of such party contained herein; provided
that no amendment or supplement to a Schedule that constitutes or reflects a
material adverse change to the Company or the Non-optometric Assets may be made
unless Vision 21 consents to such amendment or supplement, and no amendment or
supplement to a Schedule that constitutes or reflects a material adverse change
to Vision 21 may be made unless the Company and the Optometrist consent to such
amendment or supplement. For all purposes of this Agreement, including without
limitation for purposes of determining whether the conditions set forth in
Sections 10.1 and 11.1 have been fulfilled, the Schedules hereto shall be
deemed to be the Schedules as amended or supplemented pursuant to this Section
9.2. In the event that the Company is required to amend or supplement a
Schedule in accordance with this Section 9.2 and Vision 21 does not consent to
such amendment or supplement, or Vision 21 is required to amend or supplement a
Schedule in accordance with this Section 9.2 and the Company and the
Optometrist do not consent, this Agreement shall be deemed terminated by mutual
consent as set forth in Section 15.1(d) or Section 15.1(e) as appropriate.
9.3. Fees and Expenses.
a. Each of the Company and Vision 21 shall pay the
costs and expenses of their own legal counsel with respect to legal services
rendered in connection with the preparation and negotiation of this Agreement
and the transactions contemplated hereby.
b. In the event that an Initial Public Offering does
not take place for any reason whatsoever, Vision 21 (but not the Company or the
Optometrist) shall have sole responsibility for the payment of all legal fees
(except as set forth in Section 9.3(c)), accounting fees (except as set forth
in Section 9.3(c)), underwriters' expenses and other fees, costs and
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expenses associated solely in connection with the preparation of any
Registration Statement relating to such Initial Public Offering.
c. If any Initial Public Offering is consummated as
contemplated by this Agreement, all legal fees, audit fees, printing costs,
filing fees, blue sky fees and underwriters' discounts and fees associated
solely with the Initial Public Offering shall be paid by Vision 21 from the
proceeds of the Initial Public Offering, except for those expenses, fees and
underwriters' discounts related to any shares sold by the Optometrist.
9.4. Release of Optometrist From Practice Liabilities.
Vision 21 shall use its best efforts to obtain the release of the Optometrist
from any liabilities relating to the Practice of which the Optometrist and the
Company are jointly obligated which are set forth on Schedule 9.4.
10. CONDITIONS PRECEDENT OF VISION 21. Except as may be waived
in writing by Vision 21, the obligations of Vision 21 hereunder are subject to
the fulfillment at or prior to the Closing Date of each of the following
conditions precedent:
10.1. Representations and Warranties. The
representations and warranties of the Company and the Optometrist contained
herein shall have been true and correct in all material respects when initially
made and shall be true and correct in all material respects as of the Closing
Date.
10.2. Covenants. The Company and the Optometrist shall
have performed and complied in all material respects with all covenants
required by this Agreement to be performed and complied with by the Company or
the Optometrist prior to the Closing Date.
10.3. Legal Opinion. Counsel to the Company and the
Optometrist shall have delivered to Vision 21 their opinions, dated as of the
Closing Date, in form and substance substantially similar to Exhibit 10.3 which
Vision 21, Vision 21's counsel, the underwriters of the Initial Public Offering
and their counsel shall be permitted to rely upon.
10.4. Proceedings. No action, proceeding or order by
any court or governmental body or agency shall have been threatened orally or
in writing, asserted, instituted or entered to restrain or prohibit the
carrying out of the transactions contemplated hereby.
10.5. No Material Adverse Change. No material adverse
change in the condition (financial or otherwise), operations, assets,
liabilities or business of the Company shall have occurred since the Company
Balance Sheet Date, whether or not such change shall have been caused by the
deliberate act or omission of the Company or the Optometrist.
10.6. Government Approvals and Required Consents. The
Company, the Optometrist and Vision 21 shall have obtained all necessary
government and other third-party approvals and consents (other than consents
technically required as a result of the transactions
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contemplated hereby under the terms of managed care contracts to which the
Company or any of its employees are a party).
10.7. Certification. Neither the Company nor the
Optometrist shall have received any notice of or been made a party to any
judicial or administrative proceeding, or threatened to so be made a party, in
any action or proceeding that seeks to deny the continued use or receipt of any
necessary permit, license, authorization, certification or approval under the
Medicare and Medicaid programs to provide optometry services.
10.8. Closing Deliveries. Vision 21 shall have
received all documents and agreements, duly executed and delivered in form
reasonably satisfactory to Vision 21, referred to in Section 14.1.
10.9. Due Diligence. Vision 21 shall have completed to
its satisfaction a due diligence review of the Company and the Optometrist.
10.10. Exemption Under State Securities Laws. The
transfer of Vision 21's Securities to the Optometrist as contemplated in this
Agreement shall qualify for one or more exemptions from registration under the
State's securities laws. Vision 21 shall pay all filing fees in connection
with any filing required to qualify the transfer of the Securities for such
exemption(s).
10.11. Assignment of Professional Employees' Rights in
Accounts Receivable. The Company shall have caused the Professional Employees
to assign any and all of their rights with respect to Accounts Receivable to
Vision 21 and shall cause such Professional Employees to execute such other
agreements and instruments as contemplated in Section 7.18.
11. CONDITIONS PRECEDENT OF THE COMPANY AND THE OPTOMETRIST.
Except as may be waived in writing by the Company and the Optometrist, the
obligations of the Company and the Optometrist hereunder are subject to
fulfillment at or prior to the Closing Date of each of the following conditions
precedent:
11.1. Representations and Warranties. The
representations and warranties of Vision 21 contained herein shall be true and
correct in all respects when initially made and shall be true and correct in
all material respects as of the Closing Date.
11.2. Covenants. Vision 21 shall have performed and
complied in all material respects with all covenants and conditions required by
this Agreement to be performed and complied with by it prior to the Closing
Date.
11.3. Legal Opinions. Counsel to Vision 21 shall have
delivered to the Company and the Optometrist their opinion, dated as of the
Closing Date, in form and substance substantially similar to Exhibit 11.3.
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11.4. Proceedings. No action, proceeding or order by
any court or governmental body or agency shall have been threatened in writing,
asserted, instituted or entered to restrain or prohibit the carrying out of the
transactions contemplated hereby.
11.5. Government Approvals and Required Consents. The
Company, the Optometrist and Vision 21 shall have obtained all necessary
government and other third-party approvals and consents (other than consents
technically required as a result of the transactions contemplated hereby under
the terms of managed care contracts to which the Company or any of its
employees are a party).
11.6. Closing Deliveries. The Company and the
Optometrist shall have received all documents, instruments and agreements, duly
executed and delivered in form reasonably satisfactory to the Company, referred
to in Section 12.2.
11.7. No Change in Voting or Ownership Control. There
shall have been no changes in the voting or ownership control of Vision 21 from
the date first above written to the Closing Date.
11.8. No Material Adverse Change. No material adverse
change in the condition (financial or otherwise), operations, assets,
liabilities or business of Vision 21 shall have occurred since the end of the
last fiscal period reported in the Vision 21 Financial Statements, whether or
not such change shall have been caused by the deliberate act or omission of
Vision 21.
12. CLOSING DELIVERIES; ESCROW OF DOCUMENTS.
12.1. Deliveries of the Company and the Optometrist.
At or prior to ______, 1997, the Company and the Optometrist shall deliver to
Vision 21, c/x Xxxxxxxx, Loop & Xxxxxxxx, LLP, counsel to Vision 21, the
following, all of which shall be in a form reasonably satisfactory to Vision 21
and shall be held by Xxxxxxxx, Loop & Xxxxxxxx, LLP in escrow pending Closing,
pursuant to an escrow agreement or letter in form and substance mutually
acceptable to the parties hereto:
a. a copy of resolutions of the Board of Directors
of the Company authorizing (i) the execution, delivery and performance of this
Agreement and all related documents and agreements, and (ii) the consummation
of the Transaction, certified by the Secretary of the Company as being true and
correct copies of the originals thereof subject to no modifications or
amendments;
b. a certificate of the President of the Company,
and of the Optometrist, dated the Closing Date, as to the truth and correctness
of the representations and warranties of the Company and the Optometrist
contained herein, on and as of the Closing Date;
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c. a certificate of the President of the Company,
and of the Optometrist, dated the Closing Date, (i) as to the performance of
and compliance in all material respects by the Company and the Optometrist with
all covenants contained herein on and as of the Closing Date and (ii)
certifying that all conditions precedent of the Company and the Optometrist to
the Closing have been satisfied;
d. a certificate of the Secretary of the Company
certifying as to the incumbency of the directors and officers of each such
corporation and as to the signatures of such directors and officers who have
executed documents delivered pursuant to the Agreement on behalf of each such
corporation;
e. a certificate, dated within ten (10) days prior
to the Closing Date, of the Secretary of State of the state of incorporation
for the Company establishing that the Company is in existence, has paid all
franchise or similar taxes, if any, and, if applicable, otherwise is in good
standing to transact business in its state of organization;
f. certificates, dated within ten (10) days prior to
the Closing Date, of the Secretary of State of the states in which the Company
is qualified to do business, to the effect that the Company is qualified to do
business and, if applicable, is in good standing as a foreign corporation in
each of such states;
g. an opinion of counsel to the Company and
Optometrists dated as of the Closing Date, in form and substance satisfactory
to Vision 21, which Vision 21, Vision 21's counsel and the underwriters of any
Initial Public Offering and their counsel are permitted to rely upon and which
shall include an opinion, subject to normal and customary exceptions that to
the best of their knowledge the transactions and arrangements contemplated by
this Agreement are in conformity with State laws, rules and regulations
governing the practice of optometry.
h. such appropriate documents of transfer, including
bills of sale, endorsements, assignments, drafts, checks or other instruments,
as to all of the Non-optometric Assets, and any other appropriate instruments
in such reasonable or customary form as shall be requested by Vision 21 and its
counsel;
i. such instruments satisfactory to Vision 21 that
all liens, claims, pledges, security interests and other encumbrances on all of
the Non-optometric Assets have been released;
j. all authorizations, consents, permits and
licenses referenced in Section 3.5;
k. the executed Business Management Agreement in
substantially the form attached hereto as Exhibit 12.1 (k), as revised in
accordance with changes reasonably deemed necessary or advisable by legal
counsel retained by Vision 21 in the State to address regulatory and compliance
issues;
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l. an executed Optometrist Employment Agreement
between the Company and the Optometrist in substantially the form attached
hereto as Exhibit 12.1 (l);
m. an executed Optometrist Employment Agreement
between the Company and each Optometrist Employee who is then an employee of
the Company in substantially the form attached hereto as Exhibit 12.1 (m);
n. an executed Optometrist Employment Agreement
between the Company and each Optometrist Employee who is then an employee of
the Company in substantially the form attached hereto as Exhibit 12.1 (n);
o. an executed Registration Rights Agreement between
Vision 21 and the Optometrist in substantially the form attached hereto as
Exhibit 12.1 (o) (the "Registration Rights Agreement");
p. a non-foreign affidavit, as such affidavit is
referred to in Section 1445 (b) (2) of the Code, of the Optometrist, signed
under a penalty of perjury and dated as of the Closing Date, to the effect that
the Optometrist is a United States citizen or a resident alien (and thus not a
foreign person) and providing the Optometrist's United States taxpayer
identification number;
q. an assignment to Vision 21 of each lease for real
property described on Schedule 2.1(d) (the "Lease Assignments"), or if desired
by Vision 21, a new lease or leases between the landlords under such leases and
Vision 21 in form and substance reasonably satisfactory to Vision 21;
r. an executed Agreement to Continue Practice After
Transfer Event and Stock Pledge Agreement substantially in the form of Exhibit
12.1(r); and
s. such other instrument or instruments of transfer
prepared by Vision 21 as shall be necessary or appropriate, as Vision 21 or its
counsel shall reasonably request, to carry out and effect the purpose and
intent of this Agreement.
12.2. Deliveries of Vision 21. At or prior to ______,
1997, Vision 21 shall deliver to the Company and the Optometrist, c/x Xxxxxxxx,
Loop & Xxxxxxxx, LLP, counsel to Vision 21, the following, all of which shall
be in a form reasonably satisfactory to the Company and the Optometrist and
shall be held by Xxxxxxxx, Loop & Xxxxxxxx, LLP in escrow pending Closing,
pursuant to an escrow agreement or letter in form and substance mutually
acceptable to the parties hereto:
a. a copy of the resolutions of the Board of
Directors of Vision 21 authorizing (i) the execution, delivery and performance
of this Agreement, and all related documents and agreements, and (ii) the
consummation of the Transaction, certified by Vision
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21's Secretary as being true and correct copies of the originals thereof
subject to no modifications or amendments;
b. a certificate of an officer of Vision 21 dated
the Closing Date as to the truth and correctness of the representations and
warranties of Vision 21 contained herein, on and as of the Closing Date;
c. a certificate of an officer of Vision 21 dated
the Closing Date, (i) as to the performance and compliance of Vision 21 with
all covenants contained herein on and as of the Closing Date and (ii)
certifying that all conditions precedent of Vision 21 to the Closing have been
satisfied;
d. a certificate, dated within ten (10) days prior
to the Closing Date, of the Secretary of State of the State of Florida
establishing that Vision 21 is in existence, has paid all franchise or similar
taxes, if any, and, if applicable, otherwise is in good standing to transact
business in such state;
e. certificates (or photocopies thereof), dated
within ten (10) days prior to the Closing Date, of the Secretary of State of
each state in which Vision 21 is qualified to do business, to the effect that
Vision 21 is qualified to do business and, if applicable, is in good standing
as a foreign corporation in each of such states;
f. an opinion of Xxxxxxxx, Loop & Xxxxxxxx, LLP,
counsel to Vision 21, dated as of the Closing Date, pursuant to Section 11.3;
g. the executed Registration Rights Agreement;
h. the executed Lease Assignments;
i. the Note in the original principal amount set
forth in this Agreement;
j. the Agreement to Continue Practice After Transfer
Event and Stock Pledge; and
k. such other instrument or instruments of transfer,
prepared by the Company or the Optometrist as shall be necessary or
appropriate, as the Company, the Optometrist or their counsel shall reasonable
request, to carry out and effect the purpose and intent of this Agreement.
12.3. Release of Escrow Materials. Xxxxxxxx, Loop &
Xxxxxxxx, LLP shall release the agreements, certificates, instruments,
documents and other materials described in Sections 12.1 and 12.2 to the
appropriate parties to effectuate the transactions contemplated in this
Agreement only after all such materials have been delivered by all applicable
parties (or the parties receiving such documents have waived in writing such
delivery requirement). In the
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event that all of the Optometrist, the Company and Vision 21 have not notified
the Escrow Agent in writing that they are satisfied with or have waived all of
the foregoing documents and issues by 5:00 p.m. on June __, 1997, the Escrow
Agent shall immediately return any consideration by Vision 21 held by it to
Vision 21 and shall destroy all of the other Escrowed Materials held by it.
13. POST CLOSING MATTERS.
13.1. Further Instruments of Transfer. From and after
the Closing Date, at the request of Vision 21 and at Vision 21's sole cost and
expense, the Optometrist and the Company shall deliver any further instruments
of transfer and take all reasonable action as may be necessary or appropriate
to carry out the purpose and intent of this Agreement.
13.2. Practice Advisory Council; Local Advisory
Council; National Appeals Council. Vision 21 and the Company shall establish a
practice advisory council composed of delegates from Vision 21 and the Company
which shall advise Vision 21 and the Company and determine certain issues as
more fully described in the Business Management Agreement. Vision 21 shall
also establish a local advisory council composed of delegates from certain
practice groups acquired by Vision 21 in connection with the Recent
Acquisitions. Such delegates shall be appointed from practice groups which are
located in a market area to be identified by Vision 21 and in which the Company
is located. The local advisory council board shall advise Vision 21 and the
practice groups within the market area as to policy and strategy issues and
shall determine certain types of issues and disputes between Vision 21 and such
practice groups which issues and disputes are identified in the Business
Management Agreement and other management agreements entered into between
Vision 21 and practice groups. The Company shall have the right to appoint one
(1) member to a local advisory council who shall serve an initial two (2) year
term. After the initial two-year term, election of members to the local
advisory council shall be in accordance with by-laws which shall be adopted and
amended by the local advisory council. Vision 21 shall also establish a
national appeals council which shall have, among other duties and
responsibilities, the power to adopt and amend its by-laws, to review and
approve as limited herein certain decisions of the local advisory councils, and
to resolve deadlocks among the members of such local advisory councils.
14. REMEDIES.
14.1. Indemnification by the Company and Optometrist.
Subject to the terms and conditions of this Agreement, the Company and the
Optometrist, jointly and severally, agree to indemnify, defend and hold Vision
21 and its directors, officers, members, managers, employees, agents, attorneys
and affiliates harmless from and against all losses, claims, obligations,
demands, assessments, penalties, liabilities, costs, damages, reasonable
attorneys' fees and expenses (collectively, "Damages") asserted against or
incurred by such entities and individuals (including, but not limited to, any
reduction in payments to or revenues of the Company) arising out of or
resulting from:
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a. a breach of any representation, warranty or
covenant of the Company or the Optometrist contained herein or in any schedule
or certificate delivered hereunder;
b. any liability under the Securities Act, the
Exchange Act or any other federal or state "Blue Sky" or securities law or
regulation, at common law or otherwise, (i) arising out of or based upon any
untrue statement or alleged untrue statement of a material fact relating to the
Optometrist or the Company (including its subsidiaries, if any), and provided
to Vision 21 or its counsel by the Company or the Optometrist, specifically for
inclusion in a Registration Statement or any prospectus forming a part thereof,
or any amendment thereof or supplement thereto, (ii) arising out of or based
upon any omission or alleged omission to state therein a material fact relating
to the Optometrist or the Company (including its subsidiaries, if any) required
to be stated therein or necessary to make the statements therein not
misleading, and not provided to Vision 21 or its counsel by the Company or the
Optometrist, provided, however, that such indemnity shall not inure to the
benefit of Vision 21 to the extent that such untrue statement (or alleged
untrue statement) was made, in, or omission (or alleged omission) occurred in,
any preliminary prospectus, and such information was not so included by Vision
21 and properly delivered to shareholders of Vision 21 who acquire Vision 21
Common Stock in any Initial Public Offering;
c. any filings, reports or disclosures made pursuant
to the IRS Voluntary Compliance Resolution Program, if applicable;
d. any liability arising from any alleged unlawful
sale or offer to sell or transfer any of the Common Stock by Optometrist; and
e. any liability of Optometrist or the Company of
any nature whatsoever not disclosed in this Agreement and expressly assumed by
Vision 21.
14.2. Indemnification by Vision 21. Subject to the
terms and conditions of this Agreement, Vision 21 hereby agrees to indemnify,
defend and hold the Company and the Optometrist harmless from and against all
damages asserted against or incurred by it or him arising out of or resulting
from:
a. a breach by Vision 21 of any representation,
warranty or covenant of Vision 21 contained therein or in any schedule or
certificate delivered hereunder;
b. any liability under the Securities Act, the
Exchange Act or any other federal or state "Blue Sky" or securities law or
regulation, at common law or otherwise, arising out of or based upon any untrue
statement or alleged untrue statement of a material fact relating to Vision 21,
contained in any preliminary prospectus, Registration Statement or any
prospectus forming a part thereof, or any amendment thereof or supplement
thereto, arising out of or based upon any omission or alleged omission to state
therein a material fact relating to Vision 21 (including its subsidiaries),
required to be stated therein or necessary to make the statements therein not
misleading; and
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c. any filings, reports or disclosures made pursuant
to the IRS Voluntary Compliance Resolution Program, if applicable.
Notwithstanding anything in this Section 14.2, Vision 21 shall not be
liable for any Damages resulting from any matter not disclosed to Vision 21 by
any of the third parties to be acquired by Vision 21 in connection with the
Recent Acquisitions.
14.3. Conditions of Indemnification. All claims for
indemnification under this Agreement shall be asserted and resolved as follows:
a. A party claiming indemnification under this
Agreement (an "Indemnified Party") shall promptly (and, in any event, at least
ten (10) days prior to the due date for any responsive pleadings, filings or
other documents) (i) notify the party from whom indemnification is sought (the
"Indemnifying Party") of any third-party claim or claims asserted against the
Indemnified Party ("Third Party Claim") that could give rise to a right of
indemnification under this Agreement and (ii) transmit to the Indemnifying
Party a written notice ("Claim Notice") describing in reasonable detail the
nature of the Third Party Claim, a copy of all papers served with respect to
such claim (if any), an estimate of the amount of damages attributable to the
Third Party Claim and the basis of the Indemnified Party's request for
indemnification under this Agreement. Except as set forth in Section 14.6, the
failure to promptly deliver a Claim Notice shall not relieve the Indemnifying
Party of its obligations to the Indemnified Party with respect to the related
Third Party Claim except to the extent that the resulting delay is materially
prejudicial to the defense of such claim. Within thirty (30) days after
receipt of any Claim Notice (the "Election Period"), the Indemnifying Party
shall notify the Indemnified Party (i) whether the Indemnifying Party disputes
its potential liability to the Indemnified Party under this Article 14 with
respect to such Third Party Claim and (ii) whether the Indemnifying Party
desires, at the sole cost and expense of the Indemnifying Party, to defend the
Indemnified Party against such Third Party Claim.
b. If the Indemnifying Party notifies the
Indemnified Party within the Election Period that the Indemnifying Party elects
to assume the defense of the Third Party Claim, then the Indemnifying Party
shall have the right to defend, at its sole cost and expense, such Third Party
Claim by all appropriate proceedings, which proceedings shall be prosecuted
diligently by the Indemnifying Party to a final conclusion or settled at the
discretion of the Indemnifying Party in accordance with this Section 14.3(b).
The Indemnifying Party shall have full control of such defense and proceedings,
including any compromise or settlement thereof. The Indemnified Party is
hereby authorized, at the sole cost and expense of the Indemnifying Party (but
only if the Indemnified Party is entitled to indemnification hereunder), to
file, during the Election Period, any motion, answer or other pleadings that
the Indemnified Party shall deem necessary or appropriate to protect its
interests or those of the Indemnifying Party and not prejudicial to the
Indemnifying Party (it being understood and agreed that if an Indemnified Party
takes any such action that is prejudicial and causes a final adjudication that
is adverse to the Indemnifying Party, the Indemnifying Party shall be relieved
of its obligations hereunder with respect to such Third Party Claim). If
requested by the Indemnifying Party, the
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Indemnified Party agrees, at the sole cost and expense of the Indemnifying
Party, to cooperate with the Indemnifying Party and its counsel in contesting
any Third Party Claim that the Indemnifying Party elects to contest, including,
without limitation, the making of any related counterclaim against the person
asserting the Third Party Claim or any cross-complaint against any person. The
Indemnified Party may participate in, but not control, any defense or
settlement of any Third Party Claim controlled by the Indemnifying Party
pursuant to Section 14.3(b) and shall bear its own costs and expenses with
respect to such participation; provided, however, that if the named parties to
any such action (including any impleaded parties) include both the Indemnifying
Party and the Indemnified Party, and the Indemnified Party has been advised by
counsel that there may be one or more legal defenses available to it that are
different from or additional to those available to the Indemnifying Party, then
the Indemnified Party may employ separate counsel at the expense of the
Indemnifying Party, and upon written notification thereof, the Indemnifying
Party shall not have the right to assume the defense of such action on behalf
of the Indemnified Party; provided further that the Indemnifying Party shall
not, in connection with any one such action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys at any time for the
Indemnified Party, which firm shall be designated in writing by the Indemnified
Party.
c. If the Indemnifying Party fails to notify the
Indemnified Party within the Election Period that the Indemnifying Party elects
to defend the Indemnified Party pursuant to Section 14.3(b), or if the
Indemnifying Party elects to defend the Indemnified Party pursuant to Section
14.3(b) but fails diligently and promptly to prosecute or settle the Third
Party Claim, then the Indemnified Party shall have the right to defend, at the
sole cost and expense of the Indemnifying Party (if the Indemnified Party is
entitled to indemnification hereunder), the Third Party Claim by all
appropriate proceedings, which proceedings shall be promptly and vigorously
prosecuted by the Indemnified Party to a final conclusion or settled. The
Indemnified Party shall have full control of such defense and proceedings,
provided, however, that the Indemnified Party may not enter into, without the
Indemnifying Party's consent, which shall not be unreasonably withheld, any
compromise or settlement of such Third Party Claim. Notwithstanding the
foregoing, if the Indemnifying Party has delivered a written notice to the
Indemnified Party to the effect that the Indemnifying Party disputes its
potential liability to the Indemnified Party under this Article 14 and if such
dispute is resolved in favor of the Indemnifying Party, the Indemnifying Party
shall not be required to bear the costs and expenses of the Indemnifying
Party's defense pursuant to this Section or of the Indemnifying Party's
participation therein at the Indemnified Party's request, and the Indemnified
Party shall reimburse the Indemnifying Party in full for all costs and expenses
of such litigation. The Indemnifying Party may participate in, but not control
any defense or settlement controlled by the Indemnified Party pursuant to this
Section 14.3(c), and the Indemnifying Party shall bear its own costs and
expenses with respect to such participation; provided, however, that if the
named parties to any such action (including any impleaded parties) include both
the Indemnifying Party and the Indemnified Party, and the Indemnifying Party
has been advised by counsel that there may be one or more legal defenses
available to the Indemnified Party, then the Indemnifying Party may
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employ separate counsel and upon written notification thereof, the Indemnified
Party shall not have the right to assume the defense of such action on behalf
of the Indemnifying Party.
d. In the event any Indemnified Party should have a
claim against any Indemnifying Party hereunder that does not involve a Third
Party Claim, the Indemnified Party shall transmit to the Indemnifying Party a
written notice (the "Indemnity Notice") describing in reasonable detail the
nature of the claim, an estimate of the amount of damages attributable to such
claim and the basis of the Indemnified Party's request for indemnification
under this Agreement. If the Indemnifying Party does not notify the
Indemnified Party within sixty (60) days from its receipt of the Indemnity
Notice that the Indemnifying Party disputes such claim, the claim specified by
the Indemnified Party in the Indemnity Notice shall be deemed a liability of
the Indemnifying Party hereunder. If the Indemnifying Party has timely
disputed such claim, as provided above, such dispute shall be resolved by
mediation or arbitration as provided in Section 18.1 if the parties do not
reach a settlement of such dispute within thirty (30) days after notice of a
dispute is given.
e. Payments of all amounts owing by an Indemnifying
Party pursuant to this Article 14 relating to a Third Party Claim shall be made
within thirty (30) days after the latest of (i) the settlement of such Third
Party Claim, (ii) the expiration of the period for appeal of a final
adjudication of such Third Party Claim or (iii) the expiration of the period
for appeal of a final adjudication of the Indemnifying Party's liability to the
Indemnified Party under this Agreement. Payments of all amounts owing by an
Indemnifying Party pursuant to Section 14.3(d) shall be made within thirty (30)
days after the later of (i) the expiration of the sixty (60) day Indemnity
Notice period or (ii) the expiration of the period for appeal, if any, of a
final adjudication or arbitration of the Indemnifying Party's liability to the
Indemnified Party under this Agreement.
14.4. Remedies Not Exclusive. The remedies provided in
this Agreement shall not be exclusive of any other rights or remedies available
to one party against the other, either at law or in equity. This Article 14
regarding indemnification shall survive Closing.
14.5. Costs, Expenses and Legal Fees. Each party
hereto agrees to pay the costs and expenses (including attorneys' fees and
expenses) incurred by the other parties in successfully (a) enforcing any of
the terms of this Agreement, or (b) proving that another party breached any of
the terms of this Agreement.
14.6. Indemnification Limitations. Notwithstanding the
provisions of Sections 14.1 and 14.2, (a) no party shall be required to
indemnify another party with respect to a breach of a representation, warranty
or covenant unless the claim for indemnification is brought within two (2)
years after the Closing Date, except that a claim for indemnification for a
breach of the representations and warranties contained in Sections 3.1, 3.2.,
3.3, 3.11, 3.14, 3.20, 4.3, 4.5, 4.8, 5.1, 5.2, 5.3, 5.4 and 6.1 may be made at
any time, and a claim for indemnification for a breach of the representations
and warranties contained in Sections 3.9, 3.15, 3.17, 3.18, 3.24, 3.25, 3.26,
3.27, 3.28, 3.30, 4.1, 4.4, 4.6, 5.6 and 5.7 may be made
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at any time within the applicable statute of limitations; (b) indemnification
based upon Sections 14.1(b) through (d) and 14.2(b) may be made at any time
within the applicable statute of limitations; and (c) the Optometrist shall not
be required to indemnify Vision 21 pursuant to Section 16.1 unless, and to the
extent that, the aggregate amount of Damages incurred by Vision 21 shall exceed
an amount equal to two percent (2%) of the total Purchase Price; and (c) the
Optometrist shall not be required to indemnify Vision 21 with respect to a
breach of a representation, warranty or covenant for Damages in excess of the
aggregate Purchase Price received by the Optometrist (other than pursuant to a
requirement to indemnify Vision 21 under Sections 3.27 or 3.28, or unless the
breach involves an intentional breach or fraud by the Optometrist or the
Company which shall be unlimited).
14.7. Tax Benefits; Insurance Proceeds. The total
amount of any indemnity payments owed by one party to another party to this
Agreement shall be reduced by any correlative tax benefit received by the party
to be indemnified or the net proceeds received by the party to be indemnified
with respect to recovery from third parties or insurance proceeds and such
correlative insurance benefit shall be net of the insurance premium, if any,
that becomes due as a result of such claim.
14.8. Payment of Indemnification Obligation. In the
event that the Optometrist has an indemnification obligation to Vision 21
hereunder, subject to Vision 21's approval as set forth below, the Optometrist
may satisfy such obligation by transferring to Vision 21 such number of shares
of Vision 21 Common Stock owned by the Optometrist having an aggregate fair
market value (which is prior to any Initial Public Offering based upon the
valuation given at Closing hereof or after an Initial Public Offering the fair
market value at such time based on the last reported sale price of Vision 21
Common Stock on a principal national securities exchange or other exchange on
which the Vision 21 Common Stock is then listed or the last quoted ask price on
any over-the-counter market through which the Vision 21 Common Stock is then
quoted on the last trading day immediately preceding the day on which the
Optometrist transfers shares of Vision 21 Common Stock to Vision 21 hereunder)
equal to the indemnification obligation, provided that each of the following
conditions are satisfied:
a. The Optometrist shall transfer to Vision 21 good,
valid and marketable title to the shares of Vision 21 Common Stock, free and
clear of all adverse claims, security interests, liens, claims, proxies,
options, stockholders' agreements and encumbrances;
b. The Optometrist shall make such representation
and warranties as to title to the stock, absences of security interests, liens,
claims, proxies, stockholders' agreements and other encumbrances and other
matters as reasonably requested by Vision 21; and
c. The other terms and conditions of any transaction
contemplated pursuant to this Section and the effects thereof, including any
legal or tax consequences, shall be reasonably satisfactory to Vision 21.
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15. TERMINATION.
15.1. Termination. This Agreement may be terminated
and the Transaction may be abandoned:
a. at any time prior to the Closing Date by mutual
agreement of all parties;
b. at any time prior to the Closing Date by Vision
21 if any representation or warranty of the Company or the Optometrist
contained in this Agreement or in any certificate or other document executed
and delivered by the Company or the Optometrist pursuant to this Agreement is
or becomes untrue or breached in any material respect or if the Company or the
Optometrist fails to comply in any material respect with any covenant or
agreement contained herein, and any such misrepresentation, noncompliance or
breach is not cured, waived or eliminated within twenty (20) days after receipt
of written notice thereof;
c. at any time prior to the Closing Date by the
Company if any representation or warranty of Vision 21 contained in this
Agreement is or becomes untrue in any material respect or if Vision 21 fails to
comply in any material respect with any covenant or agreement contained herein,
and any such misrepresentation, noncompliance or breach is not cured, waived or
eliminated within twenty (20) days after receipt or written notice thereof;
d. at any time prior to the Closing Date by the
Company in the event of the failure of any of the conditions precedent set
forth in Article 13 of this Agreement;
e. at any time prior to the Closing Date by Vision
21 in the event of the failure of any of the conditions precedent set forth in
Article 12 of this Agreement;
f. by Vision 21 if at any time prior to the Closing
Date, Vision 21 deems termination to be advisable, provided, however, that if
Vision 21 exercises its right to terminate this Agreement under this
subsection, Vision 21 shall reimburse the Company and the Optometrist for all
reasonable attorneys' and accountants' fees incurred by the Company and the
Optometrist in connection with this Agreement; provided that Vision 21 shall
only reimburse the Company and the Optometrist up to an aggregate maximum
amount of One Hundred Thousand and No/100 Dollars ($100,000.00) for such fees;
or
g. by Vision 21 or the Company if the Transaction
shall not have been consummated by June __, 1997.
15.2. Effect of Termination. In the event this
Agreement is terminated pursuant to Section 15.1, Vision 21, the Company and
the Optometrist, shall each be entitled to pursue, exercise and enforce any and
all remedies, rights, powers and privileges available at law or in equity,
subject to the limitations set forth in Section 15.1. In the event of a
termination of this Agreement under the provisions of this Article 15, a party
not then in
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material breach of this Agreement shall stand fully released and discharged of
any and all obligations under this Agreement.
16. OPTOMETRIST EMPLOYMENT AGREEMENT.
16.1. Optometrist Employment Agreement. The parties
acknowledge that in accordance with the terms of this Agreement, Optometrist,
as employee, and the Company, as employer, have entered into the Optometrist
Employment Agreement and that Vision 21 is entitled to enforce such Optometrist
Employment Agreement as an intended third party beneficiary. Additionally, the
Company, the Optometrist and Vision 21 acknowledge that Vision 21 would suffer
severe harm in the event of Optometrist's resignation prior to the expiration
of the five (5) year term of such Optometrist Employment Agreement (without
first obtaining the written consent of Vision 21) or a breach or default of
Optometrist's obligations under such Optometrist Employment Agreement, and the
Company and Vision 21 agree that Vision 21 shall be entitled to recover from
Optometrist any and all damages incurred by Vision 21 caused by such
resignation, breach or default. Notwithstanding the foregoing, Vision 21 shall
not be entitled to recover its damages caused by such resignation, breach or
default if such resignation, breach or default was caused by: (i) the death or
disability of Optometrist, (ii) circumstances not caused by an act or omission
of Optometrist and which circumstances are beyond his control, or (iii) loss of
Optometrist's license to practice as an optometrist, unless such loss of
license is due to an act or omission of Optometrist. Notwithstanding the
foregoing, Optometrist shall have no obligation to pay the damages contemplated
in this Section 16.1 if (a) the Business Management Agreement has been
terminated pursuant to a material breach by Vision 21, or (b) Optometrist cures
any such breach or default of the Optometrist Employment Agreement within a
period of thirty (30) days after notice from Vision 21 of such breach or
default.
16.2. Survival. The parties acknowledge and agree that
this Article 16 shall survive the Closing of the transactions contemplated
herein.
17. NON-COMPETITION AND CONFIDENTIALITY COVENANTS.
17.1. Optometrist and Company Non-Competition Covenant.
a. The Optometrist and the Company recognize that
the covenants of the Optometrist and the Company contained in this Section 17.1
are an essential part of this Agreement and that, but for the agreement of the
Optometrist and the Company to comply with such covenants, Vision 21 would not
have entered into this Agreement. The Optometrist and the Company acknowledge
and agree that the Optometrist's and the Company's covenants not to compete are
necessary to ensure the continuation of the Management Business (as defined
below) and are necessary to protect the reputation of Vision 21, and that
irreparable and irrevocable harm and damage will be done to Vision 21 if the
Optometrist or the Company compete with the Management Business or Vision 21.
The Optometrist and the Company accordingly agree that for the periods set
forth in the Business Management Agreement the Optometrist and the Company
shall not:
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i) 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, either for the Optometrist's or the
Company's own benefit or for the benefit of any other person or entity
knowingly (A) hire, attempt to hire, contact or solicit with respect to hiring
any employee of Vision 21 (or of any of its direct or indirect subsidiaries) or
(B) induce or otherwise counsel, advise or encourage any employee of Vision 21
(or of any of its direct or indirect subsidiaries) to leave the employment of
Vision 21;
ii) act or serve, directly or indirectly,
as a principal, agent, independent contractor, consultant, director, officer,
employee, employer or advisor or in any other position or capacity with or for,
or acquire a direct or indirect ownership interest in or otherwise conduct
(whether as stockholder, partner, investor, joint venturer, or as owner of any
other type of interest), any Competing Management Business as such term is
defined herein; provided, however, that this clause (ii) shall not prohibit the
Optometrist or the Company from being the owner of up to 1% of any class of
outstanding securities of any company or entity if such class of securities is
publicly traded; or
iii) 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, either for the Optometrist's or the
Company's own benefit or for the benefit of any other person or entity, call
upon or solicit any customers or clients of the Management Business; provided
however, that the Optometrist may send out a general notice to the customers or
clients of the Management Business announcing the termination of his
arrangement with Vision 21 and may advertise in a general manner without
violating this covenant. The parties hereto acknowledge and agree that for
purposes of this Section, patients which have in the past received optometric
care from the Company and/or shall in the future receive optometric care from
the Company are not deemed to be customers or clients of the Management
Business.
b. For the purposes of this Section 17.1, the
following terms shall have the meaning set forth below:
i) "Management Business" shall mean
management and administration of the non-optometric and non-medical aspects of
medical, ophthalmology and optometry practices.
ii) "Competing Management Business" shall
mean an individual, business, corporation, association, firm, undertaking,
company, partnership, joint venture, organization or other entity that either
(A) conducts a business substantially similar to the Management Business within
the State, or (B) provides or sells a service which is the same or
substantially similar to, or otherwise competitive with the services provided
by the Management Business within the State; provided, however, that "Competing
Management Business" shall not include Vision 21, or the Optometrist's internal
management and administration of the
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Optometrist's or the Company's optometric practice or participation in the
management and administration of a optometrist group in which the Optometrist
or the Company devote a significant amount of time to the practice of
optometry.
c. Should any portion of this Section 17.1 be deemed
unenforceable because of the scope, duration or territory encompassed by the
undertakings of the Optometrist or the Company hereunder, and only in such
event, then the Optometrist, the Company and Vision 21 consent and agree to
such limitation on scope, duration or territory as may be finally adjudicated
as enforceable by a court of competent jurisdiction after the exhaustion of all
appeals.
d. This covenant 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 Optometrist or the Company against Vision 21,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by Vision 21 of this covenant; provided, however,
that the Optometrist and the Company shall not be bound by this covenant and
shall not be obligated to pay the liquidated damages contemplated in this
Section 17.1 if at the time of a breach of this covenant the Business
Management Agreement has already been terminated pursuant to Section 6.2(a)
thereof. Without limiting other possible remedies to Vision 21 for breach of
this covenant, the Optometrist and the Company agree that injunctive or other
equitable relief will be available to enforce the covenants of this provision,
such relief to be without the necessity of posting a bond, cash or otherwise.
The Optometrist, the Company and Vision 21 further expressly acknowledge that
the damages that would result from a violation of this non-competition covenant
would be impossible to predict with any degree of certainty, and agree that
liquidated damages in the amount of the aggregate consideration received by the
Optometrist pursuant to this Agreement is reasonable in light of the severe
harm to the Management Business and Vision 21 which would result in the event
that a violation of this non-competition covenant were to occur. For purposes
of calculating the liquidated damages contemplated in this Section and for
purposes of calculating the liquidated damages contemplated in the Business
Management Agreement and the Optometrist Employment Agreement between the
Optometrist and the Company, the aggregate consideration received by
Optometrist pursuant to this Agreement shall be in those amounts and in such
form as set forth in Schedule 17.1. If the Optometrist violates this
non-competition covenant, Vision 21 shall, in addition to all other rights and
remedies available at law or equity, be entitled to (a) cancel the number of
shares of Common Stock held by the Optometrist or the Company or, with respect
to shares of Common Stock entitled to be received by the Optometrist or the
Company, terminate its obligation to deliver such number of shares of Common
Stock, valued as set forth in Section 6.6(a) of the Business Management
Agreement, (b) set off all or any of such liquidated damages sum against
amounts payable under the Note held by the Optometrist or the Company, and (c)
repayment by Optometrist to Vision 21 of the fair market value as described
above, of Vision 21 Common Stock sold by Optometrist; but in no event shall
Vision 21 be entitled to offset amounts in excess of the liquidated damages sum
pursuant to this Section 17.1. The Optometrist and the Company agree to
deliver to Vision 21 the certificates representing any such shares canceled by
Vision 21 or the Note. Payment and satisfaction by Optometrist shall be made
within sixty (60) days of
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notification to Optometrist by Vision 21 that Optometrist has violated this
non-competition covenant.
e. Notwithstanding anything contained herein, this
Section 17.1 shall not be construed to (i) limit the freedom of any patient of
the Optometrist or the Company to choose the facility or optometrist from whom
such patient shall receive health-care services or (ii) limit or interfere with
the Optometrist's ability to exercise his professional judgment in treating his
patients or his ability to provide optometric services to his patients.
17.2. Optometrist and Company Confidentiality Covenant.
From the date hereof, the Optometrist and the Company shall not, directly or
indirectly, use for any purpose, other than in connection with the performance
of the Optometrist's duties under the Optometrist Employment Agreement with the
Company, or disclose to any third party, any information of Vision 21 or the
Company, as appropriate (whether written or oral), including any business
management or economic studies, patient lists, proprietary forms, proprietary
business or management methods, marketing data, fee schedules, or trade secrets
of Vision 21 or of the Company, as applicable, 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
Optometrist and the Company may disclose information that the Optometrist or
the Company can establish (a) is or becomes generally available to and known by
the public or optometric community (other than as a result of an unpermitted
disclosure directly or indirectly by the Optometrist or the Company or their
respective Affiliates, advisors, or representatives); (b) is or becomes
available to the Optometrist or the Company on a nonconfidential basis from a
source other than Vision 21 or its Affiliates, advisors or representatives,
provided that such source is not and was not bound by a confidentiality
agreement with or other obligation of secrecy to Vision 21 or its Affiliates,
advisors or representatives of which the Optometrist or the Company has
knowledge; or (c) has already been or is hereafter independently acquired or
developed by the Optometrist or the Company without violating any
confidentiality agreement with or other obligation of secrecy to Vision 21, the
Company or their respective Affiliates, advisors or representatives. Without
limiting the other possible remedies to Vision 21 for the breach of this
covenant, the Optometrist and the Company agree that injunctive or other
equitable relief shall be available to enforce this covenant, such relief to be
without the necessity of posting a bond, cash or otherwise. The Optometrist
and the Company further agree that if any restriction contained in this Section
17.2 is held by any court to be unenforceable or unreasonable, a lesser
restriction shall be enforced in its place and the remaining restrictions
contained herein shall be enforced independently of each other.
17.3. Survival. The parties acknowledge and agree that
this Article 17 shall survive the Closing of the transactions contemplated
herein.
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18. DISPUTES.
18.1. Mediation and Arbitration. Any dispute,
controversy or claim (excluding claims arising out of an alleged breach of
Article 17 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
Tampa, Florida, and to commence within 15 days of the appointment of the
mediator by the AAA), and (b) if the controversy, claim or dispute cannot be
settled by mediation, then by arbitration administered by the AAA under its
Commercial Arbitration Rules (such arbitration to be held in Tampa, Florida,
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.
19. MISCELLANEOUS
19.1. Taxes. Optometrist and the Company shall pay all
transfer taxes, sales and other taxes and charges, imposed by the State, if
any, which may become payable in connection with the transactions and documents
contemplated hereunder (excluding any of such taxes which may be attributable
to services to be provided by Vision 21 under the Business Management
Agreement). Vision 21 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
(excluding any of such taxes which may be attributable to services to be
provided by Vision 21 under the Business Management Agreement).
19.2. Remedies Not Exclusive. No remedy conferred by
any of the specific provisions of this Agreement or any document contemplated
by this Agreement is intended to be exclusive of any other remedy, and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or otherwise. The election of any one or more remedies by any party hereto
shall not constitute a waiver of the right to pursue other available remedies.
19.3. 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.
19.4. 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:
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If to Vision 21 addressed to:
Vision 21, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxxx, Chief Financial Officer
With copies to:
Xxxxxxxx, Loop & Xxxxxxxx
000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Facsimile No. (000) 000-0000
Attn: Xxxxxxx X. Xxxxx, Esquire
If to the Company and the Optometrist addressed to:
Xxxxx Xxxxxx & Associates, P.A.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxx Xxxxx, O.D.
With copies to:
MacFarlane, Ausley, Xxxxxxxx & XxXxxxxx
000 Xxxxx Xxxxxxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx X. Xxxxxxx, Esquire
or to such other address as such party may have given to the other parties by
notice pursuant to this Section 19.4. 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.
19.5. Choice of Law. This Agreement shall be
construed, interpreted, and the rights of the parties determined in accordance
with, the laws of the State of Florida except with respect to matters of law
concerning the internal affairs of any corporate or partnership entity which is
a party to or the subject of this Agreement, and as to those matters the law of
the state of incorporation or organization of the respective entity shall
govern.
19.6. 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
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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 specifically designated to be a supplement,
modification or waiver of this Agreement and 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.
19.7. Confidentiality Agreements. The provisions of
any prior confidentiality agreements and letters of intent between or among
Vision 21, the Company and the Optometrist, as amended, shall terminate and
cease to be of any force or effect at and upon the Closing.
19.8. Reformation Clause. It is the intention of the
parties hereto to conform strictly to applicable laws regarding the practice
and regulation of optometry, whether such laws are now or hereafter in effect,
including the laws of the United States of America, the State or any other
applicable jurisdiction, and including any subsequent revisions to, or judicial
interpretations of, those laws, in each case to the extent they are applicable
to this Agreement (the "Applicable Laws"). Accordingly, if the ownership of
any Non-optometric Asset by Vision 21 violates any Applicable Law, then the
parties hereto agree as follows: (a) the provisions of this section 19.8 shall
govern and control; (b) if none of the parties hereto are materially
economically disadvantaged, then any Non-optometric Asset, the ownership of
which violates any Applicable Law, shall be deemed to have never been owned by
Vision 21; (c) if one or more of the parties hereto is materially economically
disadvantaged, then the parties hereto agree to negotiate in good faith such
changes to the structure and terms of the transactions provided for in this
Agreement as may be necessary to make these transactions, as restructured,
lawful under applicable laws and regulations, without materially disadvantaging
either party; (d) this Agreement shall be deemed reformed; and (e) the parties
to this Agreement shall execute and deliver all documents or instruments
necessary to effect or evidence the provisions of this Section 19.8.
19.9. Assignment. The Agreement may not be assigned by
operation of law or otherwise except that Vision 21 shall have the right to
assign this Agreement, at any time, to any Affiliate or direct or indirect
wholly-owned subsidiary. In the event of such assignment, Vision 21 shall
remain liable hereunder.
19.10. 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
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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.
19.11. Further Assurances. From time to time hereafter
and without further consideration, each of the parties hereto shall execute and
deliver such additional or further instruments of conveyance, assignment and
transfer and take such other actions as any of the other parties hereto may
reasonably request in order to more effectively consummate the transactions
contemplated hereunder or as shall be reasonably necessary or appropriate in
connection with the carrying out of the parties' respective obligations
hereunder for the purposes of this Agreement.
19.12. Announcements and Press Releases. Any press
releases or any other public announcements concerning this Agreement or the
transactions contemplated hereunder shall be approved in advance by Vision 21
and the Company; provided, however, that such approval shall not be
unreasonably withheld and if any party reasonably believes that it has a legal
obligation to make a press release and the consent of the other party cannot be
obtained, then the release may be made without such approval.
19.13. No Tax Representations. Each party acknowledges
that it is relying solely on its advisors to determine the tax consequences of
the transactions contemplated hereunder and that no representation or warranty
has been made by any party as to the tax consequences of such transactions
except as otherwise specifically set forth in this Agreement.
19.14. No Rights as Stockholder. The Optometrist shall
have no rights as a stockholder with respect to any shares of Common Stock
until the issuance of a stock certificate evidencing such shares. Except as
otherwise provided in the Agreement, no adjustment shall be made for dividends
or distributions or other rights for which the record date is prior to such
date any stock certificate is issued.
19.15. 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.
19.16. 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.
19.17. 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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19.18. Form of Transaction. If after the execution
hereof, Vision 21 determines that the sale of the Non-optometric Assets of the
Company can be better achieved through a different form of transaction without
economic injury to the Company or the Optometrist, or delay of the consummation
of the transaction, the Company and the Optometrist shall cooperate in revising
the structure of the transaction and shall negotiate in good faith to so amend
this Agreement; provided, that Vision 21 shall reimburse the Company and the
Optometrist at Closing for all reasonable additional expenses incurred by the
Company and the Optometrist as a result of such change in form.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first written above.
"COMPANY"
XXXXX XXXXXX & ASSOCIATES, P.A.
/s/ By: /s/ Xxxx X. Xxxxx
--------------------------- ---------------------------
Witness Xxxx X. Xxxxx, O.D., President
/s/
---------------------------
Witness
"OPTOMETRIST"
/s/ /s/ Xxxx X. Xxxxx
--------------------------- ------------------------------
Witness Xxxx X. Xxxxx, O.D.
/s/
---------------------------
Witness
"VISION 21"
VISION TWENTY-ONE, INC.
/s/ By: /s/ Xxxxxxxx X. Xxxxxxxx
--------------------------- ------------------------------
Witness Xxxxxxxx X. Xxxxxxxx, President
/s/
---------------------------
Witness
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Schedule 2.1(c)
to Asset Purchase Agreement among Xxxxx Xxxxxx & Associates, P.A.
(the "Company"), Xxxx X. Xxxxx, O.D. (the "Optometrist")
and Vision Twenty-One, Inc. ("Vision 21")
Pursuant to that certain Escrow Agreement dated May 1, 1997, by and
among the Company, the Optometrist, Vision 21 and Xxxxxxx X. Xxxxx, as Escrow
Agent, subsequent to the Closing Date Schedules 2.1(c) through 17.1 and
Exhibits 2.4B through 12.1(r) of the Asset Purchase Agreement shall be
delivered to the Escrow Agent.
