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EXHIBIT 2.20
AMBULATORY SURGICAL CENTER ASSET PURCHASE AGREEMENT
THIS AMBULATORY SURGICAL CENTER ASSET PURCHASE AGREEMENT (this
"Agreement") is dated as of the 1st day of May, 1998, by and among ▇▇▇▇▇▇▇ EYE
INSTITUTE SURGERY CENTER, INC., a Florida corporation ("Seller"), VISION
TWENTY-ONE SURGERY CENTER, LTD., a Florida limited partnership ("Purchaser"),
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D. and ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ( together, the
"Shareholder").
W I T N E S S E T H:
WHEREAS, the Seller currently conducts an "ASC Business," defined as
the medical and administrative services rendered at a facility which provides
medically necessary and elective eye surgical care in which patients are
admitted to and discharged from such facility within the same working day and
are not permitted to stay overnight, and which facility is not part of a
hospital;
WHEREAS, the Seller currently conducts such ASC Business at its
facility located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇;
WHEREAS, the Shareholder owns all of the issued and outstanding shares
of capital stock of the Seller;
WHEREAS, Purchaser is a corporation with its principal place of
business at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇; and
WHEREAS, Seller desires to sell, assign and transfer all of its Assets
(as defined herein) to Purchaser and Purchaser desires to purchase, assume and
acquire such assets and assume certain liabilities of the Seller in exchange for
the consideration provided herein.
NOW, THEREFORE, in consideration of the respective covenants,
representations, warranties and agreements herein contained, and intending to be
legally bound hereby, the parties hereto hereby agree as follows:
ARTICLE I - PURCHASE AND SALE
1.1. Purchase and Sale of Assets. Subject to the terms and conditions
herein set forth, and in reliance upon the representations and warranties set
forth herein, Seller agrees to sell, convey, assign, transfer and deliver to
Purchaser, and Purchaser agrees to purchase, assume, accept and acquire, all of
Seller's right, title and interest in and to the assets of Seller relating to
the Seller's ASC Business consisting of all the assets (other than the Excluded
Assets specified in Section 1.2 hereof) as set forth on SCHEDULE 1.1, of every
kind, character and description, whether tangible, real, personal, or mixed, and
wheresoever located, whether carried on the books of Seller or not carried on
the books of Seller due to having been expended, fully depreciated, or otherwise
(collectively, the "Assets"), and including without limitation the following
(except to the extent that any of the following are specifically enumerated as
Excluded Assets in Section 1.2 hereof) to the extent permitted by applicable
law:
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(a) all machinery, equipment, tools, furniture, furnishings,
goods, and other tangible personal property;
(b) all supplies;
(c) all leases of instruments, equipment, furniture, machinery and
other items of tangible personal property (including rights to any security
deposits with respect to such leases);
(d) all prepaid items, notes and unbilled costs and fees
(excluding intercompany and related party debts);
(e) to the extent permitted by applicable law, all rights under
any written or oral contract, agreement, plan, instrument, registration,
license, certificate of occupancy, other permit or approval of any nature, or
other document, commitment, arrangement, undertaking, practice or authorization;
(f) all rights under any patents, trademarks, service marks, trade
names or copyrights, whether registered or unregistered, and any applications
therefor, except for the names "▇▇▇▇▇▇▇ Eye Institute" and "NewLight Eye Laser
Surgery Center";
(g) all data bases used in the Seller's ASC Business or under
development;
(h) all rights arising out of occurrences before or after the
Closing, including without limitation, all representations, warranties,
covenants and guaranties made or provided by third parties to or for the benefit
of Seller with respect to any of the Assets;
(i) all books and records of Seller, 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, whether such records are in hard copy form or are
electronically or magnetically stored; provided, however, that all financial
records necessary for the preparation of tax returns or to support previously
filed tax returns shall be retained by Seller, which shall maintain such records
for seven (7) years after the Closing Date and permit Purchaser to review or
obtain copies of such records, at Purchaser's cost, subsequent to the Closing
Date;
(j) all information, files, records, data, plans, contracts and
recorded knowledge, including supplier lists and employee records related to the
foregoing and the operation of the Seller's ASC Business; and
(k) all cash in registers or ▇▇▇▇▇ 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)
(l) all inventory
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(m) patient lists, including names, addresses and telephone
numbers;
(n) medical records;
(o) licenses (including, without limitation, Seller's license to
conduct its ASC Business issued by the State of Florida), certificates of need,
Medicare/Medicaid certifications and other governmental authorizations necessary
to provide medical or medical services and to be paid therefor by applicable
third party payors;
(p) eyeglasses, lenses and other eye wear;
(q) all accounts receivable of Seller existing as of the effective
date of this Agreement; and
(r) any other asset that legally can be owned by a party that is
not physician or optometrist-owned.
1.3. Excluded Assets. Notwithstanding the foregoing, the Assets shall
not include any of the following (collectively, the "Excluded Assets"):
(a) life insurance policies covering the life of the Shareholder
or any employee of Seller;
(b) personal effects listed on SCHEDULE 1.3;
(c) the names "▇▇▇▇▇▇▇ Eye Institute" and "NewLight Eye Laser
Surgery Center";
(d) the lease of real property located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, which location shall be leased to Purchaser
pursuant to the Lease Agreement described in Section 2.2(a)(v), and
which lease has been terminated as of the effective date of this
Agreement; and
(e) cash and cash equivalents in banks, certificates of deposit,
commercial paper and securities owned by Seller (but excluding cash
held in registers or ▇▇▇▇▇ cash drawers on the Closing Date which shall
be transferred to Purchaser).
1.3. The Purchase Price. Purchaser 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 Assets of Seller to
Purchaser, and the acceptance by Purchaser of such Assets and the assumption by
Purchaser of those liabilities listed on SCHEDULE 1.5 hereto, Purchaser shall
deliver to Seller at the Closing the consideration (the "Purchase Price") set
forth in SCHEDULE 1.3 hereto.
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1.4. Allocation of Purchase Price. The Purchase Price shall be
allocated among the Assets as set forth on SCHEDULE 1.4 annexed hereto and made
a part hereof. Each of the Seller, Shareholder and Purchaser hereby covenants
and agrees that he, she, or it will not take a position that is in any way
inconsistent with the terms of this Section 1.4 on any income tax return, before
any governmental agency charged with the collection of any income tax or in any
judicial proceeding.
1.5. Assumption of Certain Obligations and Liabilities. From and after
the Closing Date, Purchaser shall assume and agree to pay or perform, promptly
as they become due, only those obligations and liabilities of the Seller
expressly set forth on SCHEDULE 1.5 (the "Assumed Obligations"). Except for the
Assumed Obligations, the Purchaser shall not assume or be deemed to have assumed
and shall not be responsible for any other obligation or liability of Seller,
direct or indirect, known or unknown, absolute or contingent.
ARTICLE II - CLOSING, ITEMS TO BE DELIVERED,
THIRD PARTY CONSENTS AND FURTHER ASSURANCES
2.1. Closing. The closing of the transactions contemplated in this
Agreement (the "Closing") shall take place at or prior to May 8, 1998 (the date
that the Closing takes place is referred to herein as the "Closing Date") at the
office of ▇▇▇▇▇▇▇▇, Loop & ▇▇▇▇▇▇▇▇, LLP located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location or date as the
parties hereto shall mutually agree. Notwithstanding the foregoing language to
the contrary, the effective date of Closing shall be deemed to be May 1, 1998.
2.2. Deliveries of the Seller, Shareholder and Purchaser at the
Closing.
(a) Seller and Shareholder shall deliver to Purchaser the
following at or prior to the Closing:
(i) such bills of sale with warranties as to title,
assignments, endorsements and other good and sufficient instruments and
documents of conveyance and transfer as shall be necessary and effective to
transfer and assign to and vest in Purchaser all of Seller's right, title and
interest in and to the Assets, including without limitation (A) good and valid
title in and to all of the Assets owned by Seller, (B) good and valid leasehold
interests in and to all of the Assets leased by Seller as lessee, and (C) all of
Seller's rights under all agreements, contracts, commitments, instruments and
other documents included in the Assets to which Seller is a party or by which it
has rights on the Closing Date; the aforedescribed instruments shall include,
without limitation, the ▇▇▇▇ of Sale and Assignment (the "▇▇▇▇ of Sale") in the
form annexed hereto and made a part hereof as EXHIBIT 2.2(A)(I);
(ii) original instruments of consent or waiver duly executed
by third parties with respect to any contracts, agreements, leases or other
rights or obligations being transferred to Purchaser hereunder and requiring a
consent or waiver therefor;
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(iii) duly executed UCC-3 termination statements evidencing
the release of any and all liens upon any of the Assets held by any person or
entity;
(iv) a copy of resolutions of the Board of Directors of
Seller authorizing the execution, delivery and performance of this Agreement and
all related documents and agreements and the consummation of the transactions
contemplated in this Agreement;
(v) a duly executed Lease Agreement for the lease of the
real property described in SCHEDULE 3.1(q) (the "Lease Agreement"), in the form
annexed hereto and made a part hereof as EXHIBIT 2.2(a)(v) (the "Lease
Agreement"); and
(vi) such other certificates and documents as Purchaser or
its counsel may reasonably request.
Simultaneously with delivery of the items set forth in this Section 2.2(a),
Seller shall take all such steps as may be required to put Purchaser in actual
possession and operating control of the Assets.
(b) Purchaser shall deliver to Seller the following at or prior to
the Closing:
(i) the Purchase Price;
(ii) the ▇▇▇▇ of Sale;
(iii) a copy of the resolutions of the Board of Directors of
the general partner of the Purchaser on behalf of the Purchaser authorizing the
execution, delivery and performance of this Agreement and all related documents
and agreements and the consummation of the transactions contemplated in this
Agreement;
(iv) a duly executed Lease Agreement; and
(v) such other certificates and documents as Seller or its
counsel may reasonably request.
2.3. Further Assurances. Seller, from time to time after the Closing
and at the request of Purchaser, will execute, acknowledge and deliver to
Purchaser such other instruments of conveyance and transfer and will take such
other actions as Purchaser may reasonably require in order to vest more
effectively in Purchaser, or to put Purchaser more fully in possession of, any
of the Assets. Each of the parties hereto will cooperate with the other and
execute and deliver to the other parties hereto such other instruments and
documents and take such other actions as may be reasonably requested from time
to time by any other party hereto as necessary to carry out, evidence and
confirm the intended purposes of this Agreement.
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ARTICLE III - REPRESENTATIONS AND WARRANTIES
3.1. Representations and Warranties of Seller and Shareholder. Seller
and Shareholder hereby jointly and severally represent and warrant to Purchaser
that the following are true and correct as of the date hereof, and shall be true
and correct as of the Closing Date as if made on that date, except as set forth
on the Schedules attached hereto and made a part hereof, each of which
exceptions shall specifically identify and be limited to the relevant subsection
hereof to which it relates and shall be deemed to be a representation and
warranty as if made hereunder:
(a) Organization. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the State of Florida, 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. Seller is not duly
qualified and licensed to do business in any other jurisdiction. Seller does not
have any assets, employees or offices in any state other than the State of
Florida.
(b) Legal Power and Enforceable Obligations. Seller has the power,
authority and legal right to own, lease and operate the Assets, to conduct the
Practice as currently conducted, and to execute, deliver and perform this
Agreement. This Agreement and all the other documents and instruments required
to be delivered by Seller and/or Shareholder in accordance with the provisions
hereof have been, or upon their execution and delivery will have been, duly
executed and delivered on behalf of Seller and Shareholder and constitute, or
will constitute, the legal, valid and binding obligation of Seller and
Shareholder, enforceable against Seller and Shareholder in accordance with their
respective terms.
(c) No Violation. The execution, delivery and performance of this
Agreement by Seller and Shareholder do not and will not violate, conflict with
or result in the breach of any term, condition or provision of, or require the
consent of any other person under (i) any existing law, ordinance, or
governmental rule or regulation to which Seller or Shareholder is subject, (ii)
any judgment, order, writ, injunction, decree or award of any court, arbitrator
or governmental or regulatory official, body or authority which is applicable to
either Seller or Shareholder, (iii) Seller's Articles or Certificate of
Incorporation or Bylaws, or (iv) any mortgage, indenture, agreement, contract,
commitment, lease, plan or other instrument, document or understanding, oral or
written, to which either Seller or Shareholder is a party, by which either
Seller or Shareholder may have rights, or by which any of the Assets may be
bound or affected, or give any party with rights thereunder the right to
terminate, modify, accelerate or otherwise change the existing rights or
obligations of Seller or Shareholder thereunder. No authorization, approval or
consent of, and no filing with, any governmental or regulatory official, body or
authority is required in connection with the execution, delivery or performance
of this Agreement by Seller or Shareholder or the sale to Purchaser of the
Assets.
(d) No Third Party Options. There are no existing agreements with,
options or commitments to or rights of any person to acquire any of the Assets
or any interest therein.
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(e) Condition of Tangible Assets. All buildings, structures,
facilities, equipment and other material items of tangible property and assets
included in the Assets are in good operating condition and repair, subject to
normal wear and maintenance, are usable in the regular and ordinary course of
business and conform to all applicable laws, ordinances, codes, rules and
regulations relating to their construction, use and operation.
(f) Title to Assets; Required Approvals. Seller has and shall
transfer to Purchaser at the Closing good, valid and marketable title to all of
the Assets being sold and transferred hereunder, free and clear of all
mortgages, liens, pledges, security interests, charges, claims, restrictions and
other encumbrances and defects of title of any nature whatsoever, except as set
forth in SCHEDULE 3.1(f). Except as set forth in SCHEDULE 3.1(f), no consent,
approval, waiver or authorization is required to be obtained by Seller from any
third party with respect to the assignment to Purchaser of any contract,
agreement, lease, or other right or obligation of Seller other than pursuant to
those leases the failure of which to obtain would not, individually or in the
aggregate, have a material adverse effect upon the conduct of the Seller's ASC
Business. Seller shall use its best efforts to obtain all such consents,
approvals, waivers and authorizations with respect to those items disclosed on
SCHEDULE 3.1(f) before and after the Closing.
(g) Taxes. Seller has filed all tax returns and forms required to
be filed with respect to its ASC Business, and has paid in full all taxes,
estimated taxes, interest, penalties, assessments and deficiencies which have
become due with respect to the Seller's ASC Business, or will do so prior to the
Closing Date. Such returns and forms are true and correct in all material
respects, and Seller is not required to pay any other tax except as shown on
such returns. Seller is not a party to any pending action or proceeding and, to
Seller's knowledge, there is no action or proceeding threatened by any
government or authority against Seller for the assessment or collection of any
tax and no resolved claim for assessment or collection of any tax has been
asserted against Seller. The Shareholder is not a "foreign person" as described
in Section 1445 of the Internal Revenue Code of 1986, as amended. There is no
pending proceeding to reduce the assessed valuation of any portion of the
Assets. Seller has delivered to Purchaser a true and complete copy of its
federal and state tax returns for the years ended December 31, 1995, December
31, 1996, and December 31, 1997, which tax returns are or shall be accompanied
by all notes and schedules filed therewith. Such tax returns fairly present the
financial position of Seller for the periods covered thereby.
(h) Absence of Changes. Since December 31, 1997, Seller has not:
(i) incurred any liabilities, other than liabilities incurred
in the ordinary course of business consistent with past practice, or discharged
or satisfied any lien or encumbrance, or paid any liabilities, other than in the
ordinary course of business consistent with past practice, or failed to pay or
discharge when due any liabilities of which the failure to pay or discharge has
caused or will cause any material damage or risk of material loss to Seller or
any of its Assets or properties;
(ii) sold, encumbered, assigned or transferred any of its
Assets or properties;
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(iii) created, incurred, assumed or guaranteed any
indebtedness for money borrowed, or mortgaged, pledged or subjected any of the
Assets to any mortgage, lien, pledge, security interest, conditional sales
contract or other encumbrance of any nature whatsoever;
(iv) made or suffered any amendment or termination of any
material agreement, contract, commitment, lease or plan to which it is a party
or by which it is bound, or canceled, modified or waived any substantial debts
or claims held by it or waived any rights of substantial value, whether or not
in the ordinary course of business;
(v) suffered any damage, destruction or loss, whether or
not covered by insurance, materially and adversely affecting the Seller's ASC
Business and its related operations, assets, properties, prospects or condition
(financial or otherwise) or suffered any repeated, recurring or prolonged
shortage, cessation or interruption of supplies or utility or other services
required to conduct its ASC Business;
(vi) suffered any material adverse change in the Seller's
ASC Business and its related operations, assets, properties, prospects or
condition (financial or otherwise);
(vii) received notice or had knowledge of any actual or
threatened labor trouble, strike or other occurrence, event or condition of any
similar character which has had or might have an adverse effect on the Seller's
ASC Business or its related operations, Assets, properties, prospects or
condition (financial or otherwise);
(viii) increased or decreased the salaries or other
compensation of, or made any advance (excluding advances for ordinary and
necessary business expenses) or loan to, any of its employees or made any
increase in, or any addition to, other benefits to which any of its employees
may be entitled other than in the ordinary course of business consistent with
past practice;
(ix) changed any of the accounting principles followed by it
or the methods of applying such principles; or
(x) entered into any transaction other than in the ordinary
course of business consistent with past practice.
(i) Financial Statements; Consistent Treatment of Expenses. Seller
has delivered to Purchaser Seller's unaudited balance sheets and unaudited
statements of income and cash flows for the fiscal years ended December 31,
1995, December 31, 1996, and December 31, 1997, and Seller's unaudited balance
sheet and unaudited statements of income and cash flows for the four (4) month
period ended April 30, 1998, (collectively, the "Financial Statements"). Except
as set forth on SCHEDULE 3.1(i), the Financial Statements, including the notes
thereto, have been prepared utilizing generally accepted accounting principals
("GAAP") consistently applied by Seller in accordance with past practice
throughout the periods indicated. The Financial Statements fairly present the
financial condition and results of operation of Seller as at the respective
dates and for the
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periods indicated. Except as set forth on SCHEDULE 3.1(i), the Financial
Statements reflect all liabilities and obligations of the Seller, 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 April 30, 1998.
For purposes of this Agreement, the term "liabilities" shall include, without
limitation, any direct or indirect indebtedness, guaranty, endorsement, claim,
loss, damage, deficiency, cost, expense, obligation or responsibility, fixed or
unfixed, known or unknown, asserted or unasserted, ▇▇▇▇▇▇ or inchoate,
liquidated or unliquidated, secured or unsecured.
(j) Compliance with Law; Authorizations. Seller has complied in
all material respects with, and is not in any material violation of, any law,
ordinance or governmental or regulatory rules or regulations, whether federal,
state, local or foreign, to which Seller and its ASC Business and related
operations, assets or properties are subject ("Regulations"). Seller owns,
holds, possesses or lawfully uses in the operation of the its ASC Business all
franchises, licenses, permits, easements, rights, applications, filings,
registrations and other authorizations ("Authorizations") which are material for
Seller to conduct its ASC Business as currently conducted or for the ownership
and use of the assets owned or used by Seller in the conduct of the ASC
Business, free and clear of all liens, charges, restrictions and encumbrances
and in compliance with all Regulations. Seller is not in default, nor has Seller
received any notice of any claim of default, with respect to any such
Authorization. All such Authorizations are renewable by their terms or in the
ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine filing fees.
None of such Authorizations will be adversely affected by the consummation of
the transactions contemplated hereby.
(k) Litigation. No litigation, including any arbitration,
investigation or other proceeding of or before any court, arbitrator or
governmental or regulatory official, body or authority is pending or, to the
best knowledge of Seller and Shareholder, threatened against Seller or
Shareholder or relates to the Assets or the transactions contemplated by this
Agreement, nor does Seller or Shareholder know of any reasonably likely basis
for any such litigation, arbitration, investigation or proceeding, the result of
which could adversely affect Seller, Shareholder, the Assets or the transactions
contemplated hereby or thereby. Neither Seller nor Shareholder is a party to or
subject to the provisions of any judgment, order, writ, injunction, decree or
award of any court, arbitrator or governmental or regulatory official, body or
authority which may adversely affect Seller, the Shareholder, the Assets or the
transactions contemplated hereby.
(l) Labor Matters. Seller has not suffered any strike, slowdown,
picketing or work stoppage by any union or other group of employees affecting
its ASC Business. Seller is not a party to any collective bargaining agreement,
no such agreement determines the terms and conditions of employment of any
employee of Seller, no collective bargaining agent has been certified as a
representative of any of the employees of Seller, and no representation campaign
or election is now in progress with respect to any of the employees of Seller.
Seller has complied and is in compliance in all material respects with all laws
and regulations relating to the employment of labor, including, without
limitation, provisions relating to wages, hours, collective bargaining,
occupational safety and health, equal employment opportunity and the withholding
of income taxes and social security contributions. Seller has paid its employees
all wages, commissions and
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accruals for earned vacation, personal days and sick leave owing through the
Closing Date. Except as described in SCHEDULE 3.1(l), the consummation of the
transactions contemplated hereby will not cause Purchaser to incur or suffer any
liability relating to, or obligation to pay, any severance, termination or other
payment to any person or entity and any such claim made against Purchaser for
reason of any termination or separation of any employee on or before Closing, or
otherwise resulting from the sale of the Assets pursuant to this Agreement,
shall be the sole responsibility of Seller. No employee of Seller has any
contractual right to continued employment by Seller following the consummation
of the sale of the Assets pursuant to this Agreement and Purchaser shall be free
to offer employment to such employees of Seller as Purchaser may determine and
on such terms and conditions as Purchaser may determine. Set forth in SCHEDULE
3.1(l) is an accurate and complete list of all employees employed by Seller in
its ASC Business showing as to each the nature of the employee's job, years of
service, the amount or rate of compensation, all accruals of vacation, personal
days, sick leave, and any other benefits due the employee and other matters
which may be reasonably required by Purchaser.
(m) Employee Benefit Plans. Seller neither sponsors nor maintains
any employee benefit plans except as described in SCHEDULE 3.1(m). The Seller is
not a contributing employer under any multiemployer plan (as such term is
defined in Section 3(37) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")) nor has it withdrawn from participation in any such plan
after 1979. The Seller has not entered into any agreement to provide, nor does
it otherwise have any obligation to provide, any individual and/or his
designated beneficiary with any medical, life insurance or other fringe
benefits, following his retirement or other termination of employment, other
than pension benefits payable pursuant to its employee pension benefit plans (as
such term is defined in Section 3(2) of ERISA) described in SCHEDULE 3.1(m). Any
employee benefit plans (as such term is defined in Section 3(3) of ERISA)
maintained or sponsored by Seller for the benefit of Seller's employees and
described in SCHEDULE 3.1(m) are in compliance in all material respects with the
applicable provisions of ERISA and the regulations promulgated thereunder as
presently applied, and have so complied during all prior periods during which
such provisions were applicable. Seller has complied in all material respects
with the provisions of ERISA applicable to it as employer, plan sponsor, plan
administrator or fiduciary of any such employee benefit plans with respect to
any such employee benefit plans maintained by Seller or to which Seller was
obligated to contribute funds (or any other plan or individual arrangement which
may not be subject to ERISA). Seller has (i) made all contributions required of
it by law (including, without limitation, ERISA) or contract; and (ii) is and
has been in compliance with the material terms and provisions of all such
employee benefit plans. Seller has no accrued but unpaid obligations with
respect to any of such employee benefit plans except as set forth in the
Financial Statements or SCHEDULE 3.1(i).
(n) Necessary Assets. The Assets include all rights and property
necessary to the conduct of the Seller's ASC Business in the manner it is
presently conducted by Seller and no property excluded from the Assets hereof
constitutes property or rights material to such ASC Business.
(o) Availability of Documents; Compliance with Due Diligence
Requests. Seller has made available to Purchaser copies of all documents
including, without limitation, all
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agreements, contracts, commitments, insurance policies, leases, plans,
instruments, undertakings, authorizations, permits, licenses, trademarks, trade
names, service marks and applications therefor listed in this Agreement or in
the Schedules to this Agreement. Such copies are true and complete and include
all amendments, supplements and modifications thereto or waivers currently in
effect thereunder. Prior to the Closing Date, the Seller and Shareholder shall
have provided true and correct copies to Purchaser or answered truthfully in
writing all items described in Purchaser's written due diligence list which has
been provided to the Seller by Purchaser prior to the date first above written.
(p) Conditions Affecting Seller. 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 Seller's ASC Business, which are known to Seller which would
materially adversely affect the such ASC Business or the operations, prospects
or condition (financial or otherwise) of Seller considered as a whole, other
than such conditions as may affect as a whole the economy or the ambulatory
surgical center industry generally. Seller and Shareholder have used their
respective best efforts to keep available for Purchaser the services of the
employees, agents, patients and suppliers of Seller active in the conduct of the
Seller's ASC Business. Seller does not have any reason to believe that any loss
of any employee, agent, patient or supplier or other advantageous arrangement
will result because of the consummation of the transactions contemplated hereby.
(q) Real Property. All real property (including, without
limitation, all interests in and rights to real property) and improvements
located thereon which are owned or leased by Seller and used in connection with
the Seller's ASC Business or included in the Assets (the "Real Property") is
listed on SCHEDULE 3.1(q). The use and operation of the Real Property is in
compliance in all material respects with all applicable building code,
environmental, zoning and land use laws, and other applicable local, state and
federal laws and regulations, including, without limitation, those laws and
regulations relating to the generation, transportation, storage and disposal of
medical waste. No portion of the Real Property is the subject of, or affected
by, any condemnation or eminent domain proceeding or any covenant or other
restriction preventing or limiting Seller's right to convey right, title and
interest in the Real Property or to use the Real Property for the various
purposes for which the Real Property is currently being used. Each lease with
respect to the Real Property is in full force and effect and has not been
assigned, modified, supplemented or amended. Neither Seller nor the landlord
under any lease is in material default of the terms of any such lease and, to
Seller's knowledge, no circumstances or state of facts currently exist which,
with the giving of notice or the passage of time or both would permit the
landlord under any lease to terminate such lease.
(r) Medicare and Medicaid Programs. The Seller is qualified for
participation in the Medicare and Medicaid programs, and Seller is party to
provider agreements for such programs which are in full force and effect with no
events of default having occurred thereunder. Seller, 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. All such claims or reports
are complete and accurate in all material respects. Seller has paid or has
properly recorded on the Financial Statements all actually known and
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undisputed refunds, discounts or adjustments which have become due pursuant to
such claims, and Seller does not have any material liability to any Payor with
respect thereto, except as has been reserved for in the Seller's Financial
Statements or set forth on SCHEDULE 3.1(i). 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 Seller in order to be paid by a Payor for
services rendered. None of the Seller, Shareholder or any employee, director,
officer or consultant of Seller has been convicted of, or pled guilty or nolo
contendere to, patient abuse or neglect, or any other Medicare or Medicaid
program-related offense. None of the Seller, Shareholder or any employee,
director, officer or consultant of the Seller 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 the Seller's ambulatory surgical center license issued by the
State of Florida, and failure to provide quality care.
(s) Fraud and Abuse. None of the Seller, Shareholder or any
employee, director, officer or consultant of the Seller has engaged in any
activities which are prohibited under 42 U.S.C. ▇▇.▇▇. 1320-7, 7a or 7b or 42
U.S.C. ss.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:
(i) 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;
(ii) 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;
(iii) 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 the claimant's behalf or on behalf of another, with
intent to fraudulently secure such benefit or payment;
(iv) knowingly and willfully offering, paying, soliciting or
receiving any remuneration (including any kickback, bribe, or rebate), directly
or indirectly, in cash or in kind (1) 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
(2) 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
(v) referring a patient for designated health services (as
defined in 42 U.S.C. ss.1395nn) or providing designated health services to a
patient upon a referral from an entity or person with which Seller or an
immediate family member has a financial relationship, and to which no exception
under 42 U.S.C. ss.1395nn applies.
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(t) Ownership of Competitors. Except as set forth in SCHEDULE
3.1(t), neither Seller nor the Shareholder 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 of Purchaser
or the Seller.
(u) Commitments. Except as set forth on SCHEDULE 3.1(u) or as
otherwise disclosed pursuant to this Agreement, neither Seller nor Shareholder
(with respect to the Seller's ASC Business) is a party to nor bound by, nor are
the Assets 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 relating to any material matter or
transaction in which an interest is held by a person or entity that is an
affiliate of Seller;
(vi) agreement for the acquisition of services, supplies,
equipment, inventory, fixtures or other property, or agreements with public
relations or advertising agencies, accountants or attorneys (other than in
connection with this Agreement and the transactions contemplated hereby)
involving more than $2,000 in the aggregate;
(vii) powers of attorney;
(viii) contracts containing non-competition covenants;
(ix) agreements with Payors and contracts to provide medical
or health care services; or
(x) 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 Seller.
Except as set forth on SCHEDULE 3.1(u) and to Seller's and Shareholder'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 Seller or Shareholder or, to the
best knowledge of Seller and Shareholder, any other party to a Commitment, and
no penalties have been incurred nor are amendments pending, with respect to the
Commitments. The
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Commitments are in full force and effect and are valid and enforceable
obligations of Seller and Shareholder, and to the best knowledge of Seller and
Shareholder, 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 Seller and
Shareholder, may be made by any party thereto (other than Seller and
Shareholder), nor has Seller or Shareholder waived any rights thereunder. Except
as set forth on SCHEDULE 3.1(u), no consents or approvals are required under the
terms of any agreement listed on SCHEDULE 3.1(u) in connection with the
transactions contemplated herein, including, without limitation, the transfer of
any such agreement pursuant to this Agreement. Except as set forth on SCHEDULE
3.1(u), neither Seller nor Shareholder 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 neither Seller nor Shareholder knows of any
fact that would justify the exercise of such a right.
(v) Insurance. Seller carries property, liability, malpractice and
such other types of insurance pursuant to the insurance policies listed and
briefly described on SCHEDULE 3.1(v) (the "Insurance Policies"). The Insurance
Policies are all of the insurance policies of the Seller relating to the ASC
Business of Seller and the Assets. All of the Insurance Policies are issued by
insurers of recognized responsibility, and, to the best knowledge of the Seller
and Shareholder, 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 3.1(v), 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 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. Neither Seller nor
Shareholder 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
Seller and Shareholder, no such cancellation or increase of deductibles,
retainages or premiums is threatened. Neither Seller nor Shareholder has any
outstanding claims, settlements or premiums owed against any Insurance Policy,
and Seller and Shareholder have given all notices or have presented all
potential or actual claims under any Insurance Policy in due and timely fashion.
In the three (3) years before the effective date of this Agreement, Seller has
not filed a written application for any professional liability insurance
coverage which has been denied by an insurance agency or carrier, and the Seller
has been continuously insured for professional malpractice claims for at least
the past seven (7) years. SCHEDULE 3.1(v) also sets forth a list of all claims
under any Insurance Policy in excess of $10,000 per occurrence filed by Seller
in the three (3) years before the effective date of this Agreement.
(w) Accounts Receivable/Payable. The accounts receivable of Seller
relating to its ASC Business reflected on the Seller's Financial Statements (the
"Accounts Receivable"), to the extent uncollected on the date hereof, are, and
the accounts receivable of Seller relating to the ownership and operation of its
ASC Business to be reflected on the books of Seller on the Closing Date will be,
valid, existing and collectible within six (6) 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 size and nature of the receivable, and represent amounts due for
goods sold and delivered or services performed. There are not, and on
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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. Seller 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. Seller 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.
(x) Completeness of Disclosure. Neither this Agreement, nor any
Schedule, Exhibit, list, certificate or other instrument or document furnished
by Seller or Shareholder to Purchaser pursuant to this Agreement, contains any
untrue statement of a material fact or omits to state any material fact required
to be stated herein or therein or necessary to make the statements and
information contained herein or therein not misleading. Neither Seller nor
Shareholder has failed to disclose to Purchaser any event, condition or fact
which Seller or Shareholder knows, or has reasonable grounds to know, may
materially adversely affect the Assets or the operations, prospects or condition
(financial or otherwise) of the Seller's ASC Business.
3.2. Representations and Warranties of Purchaser. Purchaser hereby
represents and warrants to Seller and the Shareholder that the following are
true and correct as of the date hereof and shall be true and correct as of the
Closing Date as if made on that date:
(a) Organization and Good Standing. Purchaser is a limited
partnership duly organized, validly existing and in good standing under the laws
of the State of Florida.
(b) Authorization and Validity. Purchaser has the power, authority
and legal right to execute, deliver and perform this Agreement, and this
Agreement constitutes the legal, valid and binding obligation of Purchaser
enforceable against Purchaser in accordance with its terms.
(c) Validity of Contemplated Transactions. The execution, delivery
and performance of this Agreement by Purchaser do not and will not violate,
conflict with or result in the breach of any term, condition or provision of, or
require the consent of any other party under (i) any existing law, ordinance, or
governmental rule or regulation to which Purchaser is subject, (ii) any
judgment, order, writ, injunction, decree or award of any court, arbitrator or
governmental or regulatory official, body or authority which is applicable to
Purchaser, (iii) the Certificate of Limited Partnership or Partnership Agreement
of Purchaser, or (iv) any mortgage, indenture, agreement, contract, commitment,
lease, plan or other instrument, document or understanding, oral or written, to
which Purchaser is a party or by which Purchaser is otherwise bound. No
authorization, approval or consent of, and no registration or filing with, any
governmental or regulatory official, body or authority is required in connection
with the execution, delivery and performance of this Agreement by Purchaser.
(d) Completeness of Disclosure. Neither this Agreement nor any
other instrument or document furnished by Purchaser to Seller or Shareholder
pursuant to this Agreement, contains any untrue statement of a material fact or
omits to state any material fact required to be
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stated herein or therein or necessary to make the statements and information
contained herein or therein not misleading.
(e) Employment of Seller's Employees. Purchaser does not currently
intend to change the existing composition or employment terms of any of the
which have employment arrangements with Seller on the effective date of this
Agreement. Purchaser reserves the right, however, to change the number,
composition or employment terms of such personnel in the future.
(f) Patient Notifications. Purchaser shall be solely responsible
for complying with the requirements of Florida Statutes Section 455.667 and
other applicable requirements with respect to notifications of patients of the
sale of Seller's ASC Business and the disposition of medical records, at
Purchaser's sole cost.
ARTICLE IV - CONDITIONS PRECEDENT TO THE CLOSING
4.1. Conditions Precedent to Obligations of Purchaser. All obligations
of Purchaser under this Agreement are subject to the fulfillment or
satisfaction, prior to or at the Closing, of each of the following conditions
precedent:
(a) Compliance with this Agreement. Seller and Shareholder shall
have performed and complied with all agreements and conditions required by this
Agreement to be performed or complied with by them prior to the Closing.
(b) Due Diligence. Purchaser shall have completed to its
satisfaction a due diligence review of Seller, Shareholder, the Seller's ASC
Business and the Assets, which shall include verification that the Seller's ASC
Business has been run in the ordinary course since December 31, 1997, and that
the Assets, liabilities, obligations, revenues, vendor relations and patient
relations of Seller are as represented to and anticipated by Purchaser. Seller
agrees to cooperate and make available to Purchaser and its employees and
accountants, all of Seller's books and records and to make available Seller's
officers, employees and agents in assisting Purchaser to complete its due
diligence investigation. Purchaser may conduct its due diligence investigation
from the date first above written to, and including, the Closing Date.
(c) No Adverse Changes. No change other than as contemplated or
permitted by this Agreement, or other than in the ordinary course, shall have
occurred with respect to the operations, prospects or condition (financial or
otherwise) of the Seller's ASC Business or any of the Assets, which shall have
been material and adverse to Seller.
(d) Consents and Approvals. Purchaser shall have received those
written consents and approvals necessary or desirable for the transfer of the
Assets to Purchaser.
(e) Removal of Liens. Seller shall have obtained valid, binding
and enforceable releases, satisfactions and discharges of all liens, charges and
encumbrances affecting the Assets.
(f) Lease Agreement. Seller shall have entered into the Lease
Agreement.
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(g) Certification. Seller shall not have received 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 or Medicaid programs to conduct an ASC Business.
4.2. Conditions Precedent to Seller's and Shareholder's Obligations.
All obligations of Seller and Shareholder under this Agreement are subject to
the fulfillment or satisfaction, prior to or at the Closing, of each of the
following conditions precedent:
(a) Compliance with this Agreement. Purchaser shall have performed
and complied with all agreements and conditions required by this Agreement to be
performed or complied with by it prior to or at the Closing.
(b) Lease Agreement. Purchaser shall have entered into the Lease
Agreement.
4.3. Risk of Loss Prior to Closing. The risk of any loss, destruction
or other damage to the Assets, other than ordinary wear and tear, prior to the
completion of the Closing, shall be solely that of Seller.
ARTICLE V - [RESERVED]
ARTICLE VI - INDEMNIFICATION AND REMEDIES
6.1. Indemnification Obligation of Seller and Shareholder. From and
after the Closing, Seller and Shareholder, jointly and severally, shall
reimburse, indemnify and hold harmless Purchaser, and its successors and assigns
(an "Indemnified Buyer Party") against and in respect of:
(a) any and all damages, losses, deficiencies, liabilities, costs
and expenses incurred or suffered by any Indemnified Buyer Party that result
from, relate to or arise out of:
(i) any and all liabilities and obligations of Seller of any
nature whatsoever not disclosed in this Agreement and expressly assumed by
Purchaser;
(ii) any and all actions, suits, claims, or legal,
administrative, arbitration, governmental or other proceedings or investigations
against any Indemnified Buyer Party that relate to Seller or its ASC Business in
which the principal event giving rise thereto occurred prior to the Closing Date
or which result from or arise out of any action or inaction of Seller or any
employee, agent, representative or subcontractor of Seller prior to the Closing
Date; or
(iii) any misrepresentation, breach of warranty or
nonfulfillment of any agreement or covenant on the part of Seller under this
Agreement or from any misrepresentation in or omission from any certificate,
schedule, exhibit, statement, document or instrument furnished to
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Purchaser pursuant hereto or in connection with the negotiation, execution or
performance hereof; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and expenses and
court costs) incident to any of the foregoing or to the enforcement of this
Section 6.1.
6.2. Indemnification Obligation Of Purchaser. From and after the
Closing, Purchaser shall reimburse, indemnify and hold harmless Seller,
Shareholder and their respective successors and assigns (an "Indemnified Seller
Party") against and in respect of:
(a) any and all damages, losses, deficiencies, liabilities, costs
and expenses incurred or suffered by any Indemnified Seller Party that result
from, relate to or arise out of any misrepresentation, breach of warranty or
non-fulfillment of any agreement or covenant on the part of Purchaser under this
Agreement or from any misrepresentation in or omission from any certificate,
schedule, exhibit, statement, document or instrument furnished to Seller
pursuant hereto or in connection with the negotiation, execution or performance
hereof; and
(b) any and all actions, suits, claims, proceedings,
investigations, demands, assessments, audits, fines, judgments, costs and other
expenses (including, without limitation, reasonable legal fees and expenses)
incident to any of the foregoing or to the enforcement of this Section 6.2.
6.3. Procedure for Indemnification Claims. If at any time a claim shall
be made or threatened, or an action or proceeding shall be commenced or
threatened, against a party hereto (the "Aggrieved Party") which could result in
liability of the other party (the "Indemnifying Party") under its
indemnification obligations hereunder, the Aggrieved Party shall give to the
Indemnifying Party prompt notice of such claim, action or proceeding. Such
notice shall state the basis for the claim, action or proceeding and the amount
thereof (to the extent such amount is determinable at the time when such notice
is given) and shall permit the Indemnifying Party to assume the defense of any
such claim, action or proceeding (including any action or proceeding resulting
from any such claim). Failure by the Indemnifying Party to notify the Aggrieved
Party of its election to defend any such claim, action or proceeding within a
reasonable time shall be deemed a waiver by the Indemnifying Party of its right
to defend such claim, action or proceeding; provided, however, that the
Indemnifying Party shall not be deemed to have waived its right to contest and
defend against any claim of the Aggrieved Party for indemnification hereunder
based upon or arising out of such claim, action or proceeding.
If the Indemnifying Party assumes the defense of any such claim, action
or proceeding, the obligation of the Indemnifying Party as to such claim, action
or proceeding shall be limited to taking all steps necessary in the defense or
settlement thereof and, to the extent the Indemnifying Party is liable for
indemnification hereunder, to holding the Aggrieved Party harmless from and
against any and all losses, damages and liabilities caused by or arising out of
any settlement approved by the Indemnifying Party or any judgment or award
rendered in connection with such claim, action or
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proceeding. The Aggrieved Party agrees to cooperate and make available to the
Indemnifying Party all books and records and such officers, employees and agents
as are reasonably necessary and useful in connection with the defense. The
Aggrieved Party may participate, at its expense, in the defense of such claim,
action or proceeding provided that the Indemnifying Party shall direct and
control the defense of such claim, action or proceeding; provided, however, if
in the reasonable opinion of the Aggrieved Party any such claim, action or
proceeding involves an issue or matter which, if adversely determined, would
have a materially adverse effect on the Aggrieved Party, then the Aggrieved
Party shall have the right to control the defense or settlement of any such
claim, action or proceeding and its reasonable costs and expenses shall be
included as a part of the indemnification obligation of the Indemnifying Party.
The Indemnifying Party shall not, with respect to any such claim, action or
proceeding, consent to the entry of any judgment or award, or enter into any
settlement, except with the prior written consent of the Aggrieved Party, which
consent shall not be unreasonably withheld; provided, however, in the case of
any such judgment, award or settlement for money, it shall be a condition
thereto that the Indemnifying Party shall acknowledge its obligation to
indemnify the Aggrieved Party pursuant to this Article VI; and provided,
further, that any such judgment, award or settlement include, as an
unconditional term thereof, the release of the Aggrieved Party from all
liability by the third party claimant or plaintiff.
6.4. [RESERVED].
6.5. Indemnification Limitations. Notwithstanding the provisions of
Sections 6.1 and 6.2, 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 one (1) year after the Closing Date,
except that a claim for indemnification for a breach of the representations and
warranties contained in Sections 3.1(a), 3.1(b), 3.1(d), 3.1(f), 3.2(a), 3.2(b),
3.3(a) and 3.3(b) may be made at any time, and a claim for indemnification for a
breach of the representations and warranties contained in Sections 3.1(g),
3.1(k), 3.1(m), 3.1(r), 3.1(s) and 8.13 may be made at any time within the
applicable statute of limitations.
6.6. Other Rights and Remedies Not Affected. The indemnification rights
of the parties under this Article VI are independent of and in addition to such
rights and remedies as the parties may have at law or in equity or otherwise for
any misrepresentation, breach of warranty or failure to fulfill any agreement or
covenant hereunder on the part of any party hereto, including, without
limitation the right to seek an injunction against the violation of any of the
terms hereof or in aid of the exercise of any power granted hereby or by law,
the right to seek specific performance, recision or restitution, none of which
rights or remedies shall be affected or diminished hereby. All rights, powers,
options or remedies afforded to the parties hereunder or by law shall be
cumulative and not alternative and the exercise of a party's right, power,
option or remedy shall not bar other rights, powers, options or remedies allowed
herein or by law. The indemnification obligations hereunder shall survive the
consummation of the transactions described herein. Should either party employ an
attorney or attorneys to enforce any of the provisions hereof, or to protect its
interest in any matter arising hereunder, or to recover damages for the breach
hereof, the party prevailing shall be entitled to recover from the other party
all reasonable costs, charges and expenses, including attorney's fees, the value
of time charged by paralegals and/or other staff members operating under the
supervision of an attorney, and other legal costs, expended or incurred in
connection therewith, before, during
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and subsequent to any litigation, including arbitration and appellate
proceedings, bankruptcy or similar debtor/creditor proceedings, and proceedings
to enforce any indemnity agreement herein contained.
ARTICLE VII- POST CLOSING MATTERS
7.1. Survival of Representations and Warranties. All representations,
warranties, agreements and obligations made by the parties in this Agreement or
in any certificate, schedule, document or instrument furnished hereunder or in
connection with the negotiation, execution and performance of this Agreement
shall survive the Closing. Notwithstanding any investigation or audit conducted
before or after the Closing Date or the decision of any party to complete the
Closing, each party shall be entitled to rely upon the representations and
warranties set forth herein and therein and each such representation and
warranty shall be deemed to be material.
7.2. Maintenance of Books and Records. Each of Seller, Shareholder and
Purchaser shall preserve until the fifth anniversary of the Closing Date all
records possessed or to be possessed by such party relating to any of the
Assets, liabilities or the ASC Business of the Seller prior to the Closing Date.
After the Closing Date, Seller and Shareholder shall provide Purchaser with
access, upon prior reasonable written request specifying the need therefor,
during regular business hours, to (a) Seller and the employees of Seller and (b)
the books of account and records of Seller, and Purchaser and its
representatives shall have the right to make copies of such books and records.
7.3. Discharge of Business Obligations. From and after the Closing
Date, Seller shall pay and discharge, in accordance with past practice but not
less than on a timely basis, all obligations and liabilities incurred prior to
the Closing Date in respect of the Seller's ASC Business which are not assumed
by Purchaser pursuant to Section 1.6.
7.4. Payments Received. Seller, Shareholder and Purchaser each agree
that after the Closing they will hold and will promptly transfer and deliver to
the other, from time to time as and when received by them, any cash, checks with
appropriate endorsements (using their best efforts not to convert such checks
into cash) or other property that they may receive on or after the Closing Date
which properly belongs to the other party, and will account to the other for all
such receipts. From and after the Closing, Purchaser shall have the right and
authority to endorse without recourse the name of Seller on any check or any
other evidences of indebtedness received by Purchaser on account of the Seller's
ASC Business and the Assets transferred to Purchaser, hereunder.
7.5. Audit. Purchaser may cause an audit of the Financial Statements to
be conducted by Ernst & Young LLP or such other auditor of Purchaser's
selection, the cost of which shall be borne by Purchaser whether or not the
Closing takes place. Except as otherwise provided in this Section, all items
prepared by Ernst & Young LLP in connection with the audit (the "Prepared Audit
Materials") shall be for use solely by Purchaser. The Prepared Audit Materials
shall not be deemed to include those items that customarily remain the property
of the auditors such as their working papers and internal memos. Seller and
Shareholder represent and warrant to Purchaser that the preparation of audited
financial statements will not take an unreasonable amount of time or be of
unreasonable cost and that the audited financial statements will not materially
differ from the
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unaudited financial statements. Seller and Shareholder agree to fully cooperate
with any such audit and provide any documentation reasonably requested by the
auditor in order to complete such audit. Should the Seller reimburse Purchaser
for one-half (1/2) of the expenses set forth herein with respect to the audit
and pay any remaining balance owed to Ernst & Young LLP, if any, it shall be
entitled to copies of the Prepared Audit Materials. Seller agrees to submit to
and fully cooperate with a Medicare audit to be conducted by ▇▇▇▇▇▇▇▇
Consulting, the cost of which shall be paid for or reimbursed by Purchaser
whether or not the Closing takes place. All information obtained in connection
with the Medicare audit shall be made available to Purchaser.
7.6. Non-Compete. As part of the consideration hereof, neither Seller
nor Shareholder shall for a period of five (5) years from the Closing Date
directly or indirectly (a) engage in any ASC Business or medical or optometric
practice management business (except for Physician's management of his own
medical practice) within the State of Florida; (b) solicit the employees of
Purchaser or Vision Twenty-One, Inc., the parent company of Purchaser's general
partner ("Vision 21") to become employed by Seller or Shareholder or otherwise
terminate their employment relationship with Purchaser or Vision 21, or (c)
render advice or assistance, or have any interest in, or provide any services to
any competitor of Purchaser or Vision 21; provided, however, that (i) ownership
of no more than five percent (5%) of the stock of a publicly traded corporation
engaged in a competitive business shall not be deemed to be engaging in a
competing business, (ii) Shareholder's relationship(s) described on SCHEDULE
3.1(t) hereto shall not be deemed to be engaging in a competing business, and
(iii) Seller shall be entitled to hire the individuals specified on SCHEDULE 7.6
without violating this Section. Seller and Shareholder acknowledge that
violation of such covenant not to compete would cause irreparable harm to
Purchaser and Vision 21 which cannot be fully redressed by payment of damages by
Seller and/or Shareholder. Accordingly, Purchaser and Vision 21 shall be
entitled in addition to any other right or remedy it may have, at law or in
equity, to an injunction, enjoining or restraining Seller and/or Shareholder
from any violation or threatened violation of this Section. If any of the rights
or restrictions contained herein shall be deemed by a court of competent
jurisdiction to be unenforceable by reason of the extent, duration or
geographical scope thereof or any other provision of this Agreement, the parties
hereto contemplate that the court shall reduce such extent, duration,
geographical scope or other provision and enforce this Section in its reduced
form for all purposes in the manner contemplated hereby. The restrictive
covenants contained within this Section shall not be enforceable by Purchaser or
Vision 21 if Purchaser fails to pay Seller the Purchase Price or fails to
discharge the liabilities and obligations identified on SCHEDULE 1.5 when due.
The foregoing provisions shall not be construed to prohibit advertisements in
broadcast or print media initiated outside of and targeting patients outside of
Pasco County, Florida, which incidentally can be viewed, heard or read within
Pasco County, Florida. Seller, Shareholder and Purchaser acknowledge that Vision
21 is a third-party beneficiary of this Section 7.6 and the restrictive
covenants contained in this Section 7.6 are intended for the benefit of Vision
21.
7.7. Seller and Shareholder Confidentiality Covenant. From the date
hereof, the Seller and Shareholder shall not, directly or indirectly, use for
any purpose, other than in the performance of Shareholder's duties under the
Employment Agreement, or disclose to any third party, any information of
Purchaser (whether written or oral), including any business management or
economic studies, patient lists, proprietary forms, proprietary business or
management methods,
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marketing data, fee schedules, or trade secrets of Purchaser, 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
Seller and Shareholder may disclose information that the Seller or Shareholder
can establish (a) is or becomes generally available to and known by the public
or medical community (other than as a result of an unpermitted disclosure
directly or indirectly by Seller or Shareholder or their respective affiliates,
advisors, or representatives); (b) is or becomes available to the Seller or
Shareholder on a nonconfidential basis from a source other than Purchaser 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 Purchaser or its affiliates, advisors or representatives of which the Seller
or Shareholder has knowledge; or (c) has already been or is hereafter
independently acquired or developed by the Seller or Shareholder without
violating any confidentiality agreement with or other obligation of secrecy to
Purchaser, or its affiliates, advisors or representatives. Without limiting the
other possible remedies to Purchaser for the breach of this covenant, Seller and
Shareholder 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 Seller and Shareholder further agree that if any
restriction contained in this Section 7.7 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.
7.8. Acquisition of Ambulatory Surgical Center License. Seller and
Shareholder shall use their best efforts to assist Purchaser in obtaining a
transfer of the Seller's ambulatory surgical center license or obtaining a new
ambulatory surgical center license. The parties agree to execute all documents
reasonably requested by any party hereto to effectuate the transaction
contemplated in this Section 7.8.
7.9. Release of Shareholder From ASC Business Liabilities. Purchaser
shall use its best efforts to obtain from third party creditors the release of
Shareholder from any personal liabilities relating to the Seller's ASC Business
which are identified on SCHEDULE 1.5 and assumed by Purchaser pursuant to the
terms of this Agreement. If Purchaser has not obtained the release of Physician
from such personal liabilities within thirty (30) days of the Closing Date,
Purchaser shall pay such personal liabilities in full within five (5) days after
the expiration of such thirty (30) day period.
7.10. Additional Actions and Documents. From and after the Closing
Date, Seller and Shareholder will take or cause to be taken such further
actions, and execute, deliver and file such further documents and instruments as
Purchaser may request from time to time to evidence the transfer of the Assets
to Purchaser and to fully effectuate the purposes and terms of this Agreement.
ARTICLE VIII - MISCELLANEOUS
8.1. Taxes. Purchaser shall pay all state and local sales, documentary
and other transfer taxes, if any, due under Florida law as a result of the
purchase, sale or transfer of the Assets in accordance therewith whether imposed
by law on Seller, Shareholder or Purchaser and Purchaser shall indemnify,
reimburse and hold harmless the Seller in respect of the liability for payment
of or
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failure to pay any such taxes or the filing of or failure to file any reports
required in connection therewith.
8.2. Expenses. Except as otherwise provided in this Agreement, each
party hereto shall pay its own expenses incidental to the preparation of this
Agreement, the carrying out of the provisions hereof and the consummation of the
transactions contemplated hereby.
8.3. Contents of Agreement. This Agreement sets forth the entire
understanding of the parties hereto with respect to the subject matter hereof.
It shall not be amended or modified, and no provision hereof shall be waived,
except by written instrument duly executed by each of the parties hereto. Any
and all previous agreements and understandings between or among the parties
regarding the subject matter hereof, whether written or oral, are superseded by
this Agreement.
8.4. Assignment and Binding Effect. This Agreement may not be assigned
by any party hereto without the prior written consent of the other parties.
Subject to the foregoing, all of the terms and provisions of this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
permitted successors and assigns of the parties.
8.5. Waiver. No delay or failure on the part of either party in
exercising any right hereunder, and no partial or single exercise hereof, will
constitute a waiver of such right or of any other right hereunder.
8.6. Notices. Any notice, request, demand, waiver, consent, approval or
other communication which is required or permitted hereunder shall be in writing
and shall be deemed given only if delivered personally or sent by overnight,
registered or certified mail, postage prepaid, as follows:
If to Purchaser, to:
Vision Twenty-One Eye Surgery Centers, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Treasurer
With a copy to:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esquire
▇▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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If to Seller or Shareholder, to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Ketchey ▇▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as the addressee may have specified in a notice duly
given to the sender as provided herein. Such notice, request, demand, waiver,
consent, approval or other communication will be deemed to have been given as of
the date of delivery, in the case of personal delivery, or the delivery or
refusal date, as specified on the return receipt, in the case of overnight,
registered or certified mail.
8.7. Governing Law, Venue, Attorneys' Fees. This Agreement shall be
governed by and interpreted and enforced in accordance with the laws of the
State of Florida. Any judicial proceeding brought against any of the parties to
this Agreement based upon any dispute arising out of this Agreement or any
matter related hereto shall be brought in the appropriate court of Hillsborough
County in the State of Florida or the United States District Court for the
Middle District of Florida. By execution and delivery of the Agreement, each of
the parties to this Agreement consents to the exclusive jurisdiction of the
aforesaid courts and waives any objection to venue therein. The prevailing party
in any such proceeding shall be entitled to an award of its attorneys' fees,
paralegal fees, costs and expenses incurred at the trial and any and all
appellate levels and in any proceedings in Bankruptcy court.
8.8. No Benefit to Others. The representations, warranties, covenants
and agreements contained in this Agreement are for the sole benefit of the
parties hereto and, in the case of Article VI hereof, the other Indemnified
Parties, and their heirs, executors, administrators, legal representatives,
successors and assigns, and they shall not be construed as conferring any rights
on any other persons.
8.9. Headings, Gender and "Person". All section headings contained in
this Agreement are for convenience of reference only, do not form a part of this
Agreement and shall not affect in any way the meaning or interpretation of this
Agreement. Words used herein, regardless of the number and gender specifically
used, shall be deemed and construed to include any other number, singular or
plural, and any other gender, masculine, feminine or neuter, as the context
requires. Any reference to a "person" herein shall include an individual, firm,
corporation, partnership, trust, governmental authority or body, association,
unincorporated organization or any other entity.
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8.10. Schedules and Exhibits. All Schedules and Exhibits referred to
herein are intended to be and hereby are specifically made a part of this
Agreement.
8.11. Severability. Any provision of this Agreement which is invalid or
unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining provisions hereof, and any such invalidity or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
8.12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed to be an
original and all of which counterparts when taken together shall constitute but
one and the same instrument.
8.13. Brokerage. Each of the parties hereto represents and warrants to
the others that no broker is entitled to any commission or similar fee in
connection with the making and carrying out of this Agreement.
8.14. Remedies Not Exclusive. No remedy conferred by any of the
specific provisions of this Agreement or any document contemplated in this
Agreement is intended to be exclusive of any other remedy so conferred, 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 at equity or by
statute or otherwise. The election of one or more remedies hereunder by any
party hereto shall not constitute a waiver of the right to pursue other
available remedies hereunder.
8.15. Announcements and Press Releases. Any press releases or any other
public announcements by any party hereto concerning this Agreement or the
transactions contemplated hereunder shall be approved in advance by the other
parties hereto; provided, however, that Purchaser may make such disclosures as
are required under federal and state securities laws in the opinion of counsel
for Purchaser.
8.16. Time of Essence. Time is of the essence of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
"SELLER"
▇▇▇▇▇▇▇ EYE INSTITUTE SURGERY
CENTER, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
---------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D., its President
"PURCHASER"
VISION TWENTY-ONE SURGERY CENTER,
LTD.
By: VISION TWENTY-ONE EYE SURGERY
CENTERS, INC., its general partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇,Treasurer
"SHAREHOLDER"
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
---------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
/s/ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
---------------------------------------------
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
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