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EXHIBIT 10.38
"CONFIDENTIAL TREATMENT REQUESTED
BY VISION TWENTY-ONE, INC."
OPTICAL ASSET PURCHASE AGREEMENT
DATED: DECEMBER 1, 1996
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TABLE OF CONTENTS
Page
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1. DEFINITIONS............................................................................................ 1
1.1. AAA........................................................................................ 1
1.2. Accountants................................................................................ 1
1.3. Accounts Receivable........................................................................ 2
1.4. Acquisition Proposal....................................................................... 2
1.5. Affiliate.................................................................................. 2
1.6. Applicable Laws............................................................................ 2
1.7. Assumed Contracts.......................................................................... 2
1.8. Assumed Obligations........................................................................ 2
1.9. Audit...................................................................................... 2
1.10. Business Management Agreement.............................................................. 2
1.11. Business Records........................................................................... 2
1.12. Cash Compensation.......................................................................... 2
1.13. Claim Notice............................................................................... 2
1.14. Closing.................................................................................... 2
1.15. Closing Date............................................................................... 2
1.16. Code....................................................................................... 2
1.17. Commitments................................................................................ 3
1.18. Common Stock............................................................................... 3
1.19. Company Balance Sheet...................................................................... 3
1.20. Company Balance Sheet Date................................................................. 3
1.21. Compensation Plans......................................................................... 3
1.22. Competing Management Business.............................................................. 3
1.23. Competitor................................................................................. 3
1.24. Confidential Information Memorandum........................................................ 3
1.25. Controlled Group........................................................................... 3
1.26. Corporation Law............................................................................ 3
1.27. Damages.................................................................................... 3
1.28. Election Period............................................................................ 3
1.29. Employee Benefit Plans..................................................................... 4
1.30. Employee Policies and Procedures........................................................... 4
1.31. Employment Agreements...................................................................... 4
1.32. Environmental Laws......................................................................... 4
1.33. ERISA...................................................................................... 4
1.34. Exchange Act............................................................................... 4
1.35. Excluded Assets............................................................................ 4
1.36. FBCA....................................................................................... 4
1.37. Financial Statements....................................................................... 4
1.38. GAAP....................................................................................... 4
1.39. Governmental Authority..................................................................... 4
1.40. Indemnified Party.......................................................................... 4
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1.41. Indemnifying Party......................................................................... 4
1.42. Indemnity Notice........................................................................... 5
1.43. Initial Public Offering.................................................................... 5
1.44. Insurance Policies......................................................................... 5
1.45. Lease Assignments.......................................................................... 5
1.46. Leased Property............................................................................ 5
1.47. IRS........................................................................................ 5
1.48. Management Business........................................................................ 5
1.49. Material Adverse Effect.................................................................... 5
1.50. Non-optical Assets......................................................................... 5
1.51. Note....................................................................................... 5
1.52. Optical Assets............................................................................. 5
1.53. Optical Business........................................................................... 5
1.54. Payors..................................................................................... 5
1.55. Permitted Encumbrances..................................................................... 6
1.56. Personal Property Leases................................................................... 6
1.57. Prepaid Items.............................................................................. 6
1.58. Proposed Purchase Price Adjustment......................................................... 6
1.59. Proprietary Rights......................................................................... 6
1.60. Purchase Price............................................................................. 6
1.61. Real Property Leases....................................................................... 6
1.62. Registration Statement..................................................................... 6
1.63. Related Acquisitions....................................................................... 6
1.64. SEC........................................................................................ 6
1.65. Securities................................................................................. 6
1.66. Securities Act............................................................................. 6
1.67. State...................................................................................... 6
1.68. Tangible Personal Property................................................................. 6
1.69. Tax Returns................................................................................ 7
1.70. Third Party Claim.......................................................................... 7
1.71. Transaction................................................................................ 7
1.72. Vision 21 Financial Statements............................................................. 7
2. PURCHASE AND SALE OF OPTICAL ASSETS AND NON-OPTICAL
ASSETS................................................................................................. 7
2.1. Purchase and Sale of Optical Assets........................................................ 7
Purchase and Sale of Non-Optical Assets.................................................... 7
Excluded Assets............................................................................ 9
2.4. Assumption of Obligations and Liabilities.................................................. 9
2.5. Purchase Price............................................................................. 9
2.6. The Closing................................................................................ 10
2.7. Purchase Price Adjustments................................................................. 10
2.8. Subsequent Actions......................................................................... 11
2.9. Allocation of Purchase Price............................................................... 11
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SHAREHOLDER............................................................................................ 11
3.1. Organization and Good Standing; Qualification.............................................. 11
3.2. Continuity of Business Enterprise.......................................................... 11
3.3. Authorization and Validity................................................................. 12
3.4. Compliance................................................................................. 12
3.5. Consents................................................................................... 12
3.6. Financial Statements....................................................................... 12
3.7. Liabilities and Obligations................................................................ 13
3.8. Employee Matters........................................................................... 13
a. Cash Compensation............................................................... 13
b. Compensation Plans.............................................................. 13
c. Employment Agreements........................................................... 13
d. Employee Policies and Procedures................................................ 13
e. Unwritten Amendments............................................................ 14
f. Labor Compliance................................................................ 14
g. Unions.......................................................................... 14
h. Aliens.......................................................................... 14
3.9. Employee Benefit Plans..................................................................... 15
a. Identification.................................................................. 15
b. Administration.................................................................. 15
c. Examinations.................................................................... 15
d. Prohibited Transactions......................................................... 15
e. Claims and Litigation........................................................... 15
f. Qualification................................................................... 16
g. Funding Status.................................................................. 16
h. Excise Taxes.................................................................... 16
i. Multiemployer Plans............................................................. 16
j. Pension Benefit Guaranty Corporation............................................ 16
k. Retirees........................................................................ 16
l. Other Compensation.............................................................. 16
3.10. Absence of Certain Changes................................................................. 16
3.11. Title; Leased Assets....................................................................... 18
a. Real Property................................................................... 18
b. Personal Property............................................................... 18
c. Leases.......................................................................... 18
3.12. Commitments................................................................................ 19
a. Commitments; Defaults........................................................... 19
b. No Cancellation or Termination of Commitment.................................... 20
3.13. Insurance.................................................................................. 20
3.14. Proprietary Rights and Information......................................................... 21
3.15. Taxes...................................................................................... 21
a. Filing of Tax Returns........................................................... 21
b. Payment of Taxes................................................................ 22
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c. No Pending Deficiencies, Delinquencies, Assessments or
Audits.......................................................................... 22
d. No Extension of Limitation Period............................................... 22
e. All Withholding Requirements Satisfied.......................................... 22
f. Foreign Person.................................................................. 22
3.16. Compliance with Laws....................................................................... 22
3.17. Finder's Fee............................................................................... 23
3.18. Litigation................................................................................. 23
3.19. Condition of Fixed Assets.................................................................. 23
3.20. Distributions and Repurchases.............................................................. 23
3.21. Banking Relations.......................................................................... 23
3.22. Ownership Interests of Interested Persons; Affiliations.................................... 24
3.23. Investments in Competitors................................................................. 24
3.24. Environmental Matters...................................................................... 24
a. Environmental Laws.............................................................. 24
b. Permits......................................................................... 24
c. Superfund List.................................................................. 24
3.25. Certain Payments........................................................................... 25
3.26. Medicare and Medicaid Programs............................................................. 25
3.27. Fraud and Abuse............................................................................ 25
3.28. Payors..................................................................................... 26
3.29. Acquisition Proposals...................................................................... 26
3.30. Consistent Treatment of Expenses........................................................... 26
3.31. Accounts Receivable/Payable................................................................ 27
3.32. Projections................................................................................ 27
3.33. Tangible Personal Property................................................................. 27
3.34. Leases..................................................................................... 27
3.35. Contract Rights............................................................................ 28
3.36. Prepaid Items.............................................................................. 28
3.37. Completeness of Assets..................................................................... 28
3.38. Disclosure................................................................................. 28
4. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER...................................................... 28
4.1. Validity; Shareholder Capacity............................................................. 29
4.2. No Violation............................................................................... 29
4.3. Consents................................................................................... 29
4.4. Certain Payments........................................................................... 29
4.5. Finder's Fee............................................................................... 29
4.6. Ownership of Interested Persons; Affiliations.............................................. 29
4.7. Investments in Competitors................................................................. 30
5. REPRESENTATIONS AND WARRANTIES OF VISION 21............................................................ 30
5.1. Organization and Good Standing............................................................. 30
5.2. Capitalization............................................................................. 30
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5.3. Corporate Records.......................................................................... 30
5.4. Authorization and Validity................................................................. 30
5.5. Compliance................................................................................. 31
5.6. Consents................................................................................... 31
5.7. Finder's Fee............................................................................... 31
5.8. Capital Stock.............................................................................. 31
5.9. Vision 21 Financial Statements; Confidential Information
Memorandum................................................................................. 31
5.10. Liabilities and Obligations................................................................ 32
5.11. Compliance with Laws....................................................................... 32
5.12. Insolvency Proceedings..................................................................... 32
5.13. Employment of Company's Employees.......................................................... 32
6. SECURITIES LAW MATTERS................................................................................. 33
6.1. Investment Representations and Covenants of Shareholder.................................... 33
6.2. Current Public Information................................................................. 35
7. COVENANTS OF THE COMPANY, THE SHAREHOLDER AND NEW
P.C.................................................................................................... 35
7.1. Consummation of Agreement.................................................................. 35
7.2. Business Operations........................................................................ 35
7.3. Access..................................................................................... 36
7.4. Notification of Certain Matters............................................................ 36
7.5. Approvals of Third Parties................................................................. 36
7.6. Employee Matters........................................................................... 36
7.7. Contracts.................................................................................. 37
7.8. Capital Assets; Payments of Liabilities.................................................... 37
7.9. Mortgages, Liens and Guaranties............................................................ 37
7.10. Acquisition Proposals...................................................................... 38
7.11. Distributions and Repurchases.............................................................. 38
7.12. Requirements to Effect the Transaction..................................................... 38
7.13. Shareholder Retained Equity................................................................ 38
7.14. Termination of Retirement Plans............................................................ 38
7.15. Delivery of Schedules...................................................................... 39
8. COVENANTS OF VISION 21................................................................................. 39
8.1. Consummation of Agreement.................................................................. 39
8.2. Notification of Certain Matters............................................................ 39
8.3. Licenses and Permits....................................................................... 39
8.4. Release of Shareholder From Practice Liabilities........................................... 39
9. COVENANTS OF VISION 21, THE COMPANY, NEW P.C. AND THE
SHAREHOLDER............................................................................................ 39
9.1. Filings; Other Action...................................................................... 40
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9.2. Amendment of Schedules..................................................................... 40
9.3. Fees and Expenses.......................................................................... 41
....................................................................................................... 42
10. CONDITIONS PRECEDENT OF VISION 21...................................................................... 42
10.1. Representations and Warranties............................................................. 42
10.2. Covenants.................................................................................. 42
10.3. Legal Opinion.............................................................................. 42
10.4. Proceedings................................................................................ 42
10.5. No Material Adverse Change................................................................. 42
10.6. Government Approvals and Required Consents................................................. 42
10.7. Closing Deliveries......................................................................... 42
10.8. Due Diligence.............................................................................. 43
10.9. Financial Audit............................................................................ 43
10.10. Compliance Audit........................................................................... 43
10.11. Exemption Under State Securities Laws...................................................... 43
11. CONDITIONS PRECEDENT OF THE COMPANY, NEW P.C. AND THE
SHAREHOLDER............................................................................................ 43
11.1. Representations and Warranties............................................................. 43
11.2. Covenants.................................................................................. 43
11.3. Legal Opinions............................................................................. 43
11.4. Proceedings................................................................................ 43
11.5. Government Approvals and Required Consents................................................. 43
11.6. Closing Deliveries......................................................................... 44
11.7. No Change in Voting or Ownership Control................................................... 44
11.8. No Material Adverse Change; Delivery of Amended Confidential
Information Memorandum..................................................................... 44
12. CLOSING DELIVERIES; ESCROW OF DOCUMENTS................................................................ 44
12.1. Deliveries of the Company, New P........................................................... 44
12.2. Deliveries of Vision 21.................................................................... 46
12.3. Release of Escrow Materials................................................................ 47
13. POST CLOSING MATTERS................................................................................... 47
13.1. Further Instruments of Transfer............................................................ 47
14. REMEDIES............................................................................................... 48
14.1. Indemnification by the Company, New P...................................................... 48
14.2. Indemnification by Vision 21............................................................... 48
14.3. Conditions of Indemnification.............................................................. 49
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14.4. Remedies Not Exclusive..................................................................... 51
14.5. Costs, Expenses and Legal Fees............................................................. 51
14.6. Indemnification Limitations................................................................ 52
14.7. Tax Benefits; Insurance Proceeds........................................................... 52
14.8. Payment of Indemnification Obligation...................................................... 52
15. TERMINATION............................................................................................ 53
15.1. Termination................................................................................ 53
15.2. Effect of Termination...................................................................... 54
16. NON-COMPETITION AND CONFIDENTIALITY COVENANTS.......................................................... 54
16.1. Shareholder, New P.C. and Company Non-Competition Covenant................................. 54
16.2. Shareholder, New P.C. and Company Confidentiality Covenant................................. 56
16.3. Survival................................................................................... 57
17. DISPUTES............................................................................................... 57
17.1. Mediation and Arbitration.................................................................. 57
18. MISCELLANEOUS.......................................................................................... 58
18.1. Taxes...................................................................................... 58
18.2. Remedies Not Exclusive..................................................................... 58
18.3. Parties Bound.............................................................................. 58
18.4. Notices.................................................................................... 58
18.5. Choice of Law.............................................................................. 59
18.6. Entire Agreement; Amendments and Waivers................................................... 59
18.7. Confidentiality Agreements................................................................. 59
18.8. Reformation Clause......................................................................... 60
18.9. Assignment................................................................................. 60
18.10. Attorneys' Fees............................................................................ 60
18.11. Further Assurances......................................................................... 60
18.12. Announcements and Press Releases........................................................... 60
18.13. No Tax Representations..................................................................... 61
18.14. No Rights as Stockholder................................................................... 61
18.15. Multiple Counterparts...................................................................... 61
18.16. Headings................................................................................... 61
18.17. Severability............................................................................... 61
18.18. Form of Transaction........................................................................ 61
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OPTICAL ASSET PURCHASE AGREEMENT
This Optical Asset Purchase Agreement (this "Agreement"), dated as of
December 1, 1996, is by and among Sharona Optical, Inc. an Arizona corporation
(the "Company"), Millennium Vision, P.C., an Arizona professional corporation
("New P.C."), Xxxxxx X. Xxxxxx, M.D. and Xxxxxxx Xxxxxx (together, the
"Shareholder"), and Vision 21, Inc., a Florida corporation ("Vision 21").
RECITALS
A. Shareholder is a physician licensed to practice medicine in
the State (as defined herein) and currently conducts an Optical Business (as
defined herein) through the Company.
B. Shareholder owns all of the issued and outstanding shares
of capital stock of the Company and New P.C.
C. New P.C. is a newly-formed professional corporation which
has contemporaneously herewith acquired all of the medical assets of the
shareholder's wholly-owned professional corporation, Xxxxxx X. Xxxxxx, M.D.,
P.C.
D. Vision 21 provides business management services and
facilities for eye care professionals and related businesses and has
contemporaneously herewith acquired all of the non- medical assets of Xxxxxx X.
Xxxxxx, M.D., P.C.
E. The Company desires to sell, assign and transfer all of its
Optical Assets (as defined herein) to New P.C. and all of its Non-optical Assets
(as defined herein) to Vision 21 and New P.C. and Vision 21 desire 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.
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1.3. Accounts Receivable. The term "Accounts Receivable"
shall have the meaning set forth in Section 2.2(a).
1.4. Acquisition Proposal. The term "Acquisition Proposal"
shall have the meaning set forth in Section 3.29.
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 18.8.
1.7. Assumed Contracts. The term "Assumed Contracts" shall
have the meaning set forth in Section 2.2(d).
1.8. Assumed Obligations. The term "Assumed Obligations"
shall have the meaning set forth in Section 2.4.
1.9. Audit. The term "Audit" shall have the meaning set
forth in Section 3.6.
1.10. Business Management Agreement. The term "Business
Management Agreement" shall mean the Business Management Agreement entered into
between Xxxxxx X. Xxxxxx, M.D., P.A. and Vision 21 at the Closing.
1.11. Business Records. The term "Business Records" shall
have the meaning set forth in Section 2.2(f)
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
December 1, 1996, 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.
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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.
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 Management Business. The term "Competing
Management Business" shall have the meaning set forth in Section 16.1(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 Optical Business;
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 Shareholder dated as of
September 27, 1996, and any amendments or revisions thereto.
1.25. Controlled Group. The term "Controlled Group" shall
have the meaning set forth in Section 3.9(g).
1.26. Corporation Law. The term "Corporation Law" shall mean
the statutes, regulations and laws governing business corporations and
professional corporations 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 14.3(a).
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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).
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. Excluded Assets. The term "Excluded Assets" shall have
the meaning set forth in Section 2.3.
1.36. FBCA. The term "FBCA" shall mean the Florida Business
Corporation Act.
1.37. Financial Statements. The term "Financial Statements"
shall have the meaning set forth in Section 3.6.
1.38. 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.
1.39. Governmental Authority. The term "Governmental
Authority" shall mean any national, state, provincial, local or tribunal
governmental, judicial or administrative authority or agency.
1.40. Indemnified Party. The term "Indemnified Party" shall
have the meaning set forth in Section 14.3(a).
1.41. Indemnifying Party. The term "Indemnifying Party" shall
have the meaning set forth in Section 14.3(a).
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1.42. Indemnity Notice. The term "Indemnity Notice" shall
have the meaning set forth in Section 14.3(d).
1.43. 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.
1.44. Insurance Policies. The term "Insurance Policies" shall
have the meaning set forth in Section 3.13.
1.45. Lease Assignments. The term "Lease Assignments" shall
have the meaning set forth in Section 12.1(m).
1.46. Leased Property. The term "Leased Property" shall have
the meaning set forth in Section 2.2(c).
1.47. IRS. The term "IRS" shall mean the Internal Revenue
Service.
1.48. Management Business. The term "Management Business"
shall have the meaning set forth in Section 16.1(b)(i).
1.49. Material Adverse Effect. The term "Material Adverse
Effect" shall mean a material adverse effect on the Non-optical 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.
1.50. Non-optical Assets. The term "Non-optical Assets" shall
mean all of the assets of the Company except for the Optical Assets, as such
assets are more fully described in Section 2.2 and the Excluded Assets.
1.51. Note. The term "Note" shall mean the subordinated
promissory note, to be delivered to the Shareholder at the Closing.
1.52. Optical Assets. The term "Optical Assets" shall mean
the Company's right, title and interest in those assets set forth on Schedule
1.52.
1.53. Optical Business. The term "Optical Business" shall
mean the sale of lenses, eyeglasses and other prescription and non-prescription
eyewear.
1.54. Payors. The term "Payors" shall have the meaning set
forth in Section 3.28.
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1.55. Permitted Encumbrances. The term "Permitted
Encumbrances" shall have the meaning set forth in Section 3.11(b).
1.56. Personal Property Leases. The term "Personal Property
Leases" shall have the meaning set forth in Section 2.2(b).
1.57. Prepaid Items. The term "Prepaid Items" shall have the
meaning set forth in Section 2.2(l).
1.58. Proposed Purchase Price Adjustment. The term "Proposed
Purchase Price Adjustment" shall have the meaning set forth in Section 2.7(b).
1.59. Proprietary Rights. The term "Proprietary Rights" shall
have the meaning set forth in Section 3.14.
1.60. Purchase Price. The term "Purchase Price" shall mean
the consideration set forth in Section 2.5 of this Agreement.
1.61. Real Property Leases. The term "Real Property Leases"
shall have the meaning set forth in Section 2.2(c).
1.62. Registration Statement. The term "Registration
Statement" shall have the meaning set forth in Section 9.1.
1.63. Related Acquisitions. The term "Related Acquisitions"
shall mean the pending acquisitions by Vision 21 with third parties which are
expected to be completed simultaneously with this Transaction.
1.64. SEC. The term "SEC" shall mean the Securities and
Exchange Commission.
1.65. 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.
1.66. Securities Act. The term "Securities Act" shall mean
the Securities Act of 1933, as amended.
1.67. State. The term "State" shall mean the State in which
the Company is incorporated.
1.68. Tangible Personal Property. The term "Tangible Personal
Property" shall have the meaning set forth in Section 2.1(f).
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1.69. Tax Returns. The term "Tax Returns" shall have the
meaning set forth in Section 3.15(a).
1.70. Third Party Claim. The term "Third Party Claim" shall
have the meaning set forth in Section 14.3(a).
1.71. Transaction. The term "Transaction" shall mean the
purchase and sale of the Optical Assets and the Non-optical Assets and the
assumption of the Assumed Obligations pursuant to this Agreement.
1.72. Vision 21 Financial Statements. The term "Vision 21
Financial Statements" shall have the meaning set forth in Section 5.9.
2. PURCHASE AND SALE OF OPTICAL ASSETS AND NON-OPTICAL ASSETS.
2.1. Purchase and Sale of Optical Assets. Subject to the
terms and conditions herein set forth, the Company agrees to sell, convey,
assign, transfer and deliver to New P.C., and New P.C. agrees to purchase,
assume, accept and acquire, the Optical Assets owned by the Company as of the
Closing Date.
2.2. Purchase and Sale of Non-Optical 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
Optical Assets specified in Section 2.1 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-Optical Assets"), including without
limitation the following (except to the extent that any of the following are
specifically enumerated as Excluded Assets in Section 2.3 hereof) to the extent
permitted by applicable law:
(a) All of the accounts receivable or other rights to receive
payment owing to the Company ("Accounts Receivable");
(b) 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 2.2(b);
(c) 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
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are subject to the Real Property Leases are hereinafter referred to as "Leased
Property"), including, without limitation, estates created by, and rights
conferred under, the Real Property Leases described on Schedule 2.2(c), 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;
(d) 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 2.2(d);
(e) 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 2.2(e);
(f) 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;
(g) All franchises, licenses, permits, certificates, approvals and
other governmental authorizations necessary to own and operate any of the other
Non-optical Assets, a complete and correct list of which is set forth on
Schedule 2.2(g);
(h) 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;
(i) All of the Company's right, title and interest in, to and
under all telephone numbers used by the Company, including all extensions
thereto;
(j) 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-optical Assets;
(k) 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
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(l) All of the Company's prepaid expenses, prepaid insurance,
deposits and other similar items ("Prepaid Items").
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.
2.3. 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), (a) life insurance
policies covering the life of any employee of the Company, (b) personal effects
listed on Schedule 2.3; 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) (collectively,
the "Excluded Assets").
2.4. 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 2.4 (the "Assumed Obligations"). 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
Shareholders' 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 personal injuries relating to Optical Assets sold by
the Company to the Company's customers prior to the Closing Date.
2.5. 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-optical
Assets of the Company to Vision 21, and the acceptance by Vision 21 of such
Non-optical Assets and the assumption of the Assumed Obligations of the Company
by Vision 21, Vision 21 shall deliver to the Company at the Closing
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the consideration (the "Vision 21 Purchase Price") set forth in Schedule 2.5A
which shall be paid pursuant to a Note in substantially the form attached hereto
and made a part hereof as Schedule 2.5B. New P.C. agrees that, subject to the
terms and conditions of this Agreement, and in full consideration of the
aforesaid sale, transfer, conveyance, assignment and delivery of the Optical
Assets, New P.C. shall deliver to the Company at the Closing the consideration
set forth in Schedule 2.5C.
2.6. The Closing. The Closing shall take place on the
Closing Date at the offices of Xxxxxxxx, Loop & Xxxxxxxx, 000 X. Xxxxxxx
Xxxxxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 00000 or at such other location in the
State as the parties shall mutually agree.
2.7. 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 Xxxxxx X. Xxxxxx, M.D., P.A. 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 Shareholder its Purchase Price adjustment
(the "Proposed Purchase Price Adjustment") calculated in accordance with Section
2.7(a) hereof. The Shareholder 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 Shareholder believes that the Proposed Purchase
Price Adjustment has not been prepared on the basis set forth in Section 2.7(a)
or otherwise contests any item set forth therein, the Shareholder 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 Shareholder 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 Shareholder are
unable to resolve all of their disagreements with respect to the proposed
adjustments within 15 days following the delivery
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of the Shareholder's objection, the dispute shall be submitted to arbitration as
provided in Section 18.1 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 Shareholder and
his accountants full access to all relevant books, records and work papers
utilized in preparing the Proposed Purchase Price Adjustment.
2.8. 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.
2.9. Allocation of Purchase Price. The Purchase Price
shall be allocated among the Non-optical Assets and the Optical Assets as set
forth on Schedule 2.9. Each of Vision 21, the Company and the Shareholder
covenants and agrees that he or it shall not take a position that is in any way
inconsistent with the terms of this Section 2.9 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
SHAREHOLDER. The Company and the Shareholder, 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 corporation 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 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.
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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 three (3) full fiscal
years, and its unaudited interim balance sheet for the fiscal period ended
September 30, 1996 (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 twelve months
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. The Company
and the Shareholder expressly warrant that they will have prior to the Closing
fairly, accurately and
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completely provided all necessary information requested in or relevant to the
preparation of the audit to be conducted by the Accountants or their designees
prior to Closing (the "Audit"). The cost of the Audit shall be paid by Vision 21
and all materials prepared by Vision 21's Accountants in connection with the
Audit shall be solely the property of Vision 21.
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.
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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.
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 Shareholder, 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 Shareholder'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 3.8(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 Shareholder, 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 Shareholder, 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
Shareholder, 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.
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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 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 Shareholder, 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 Shareholder
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 Shareholder, 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 Shareholder, threatened, claims, suits,
or other proceedings exist with respect to any Employee Benefit Plan other than
normal benefit claims filed by participants or beneficiaries.
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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 Shareholder, no accumulated funding deficiency (within the
meaning of Section 412 of the 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 nor the
Shareholder 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 Shareholder.
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:
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a. suffered a Material Adverse Effect, whether
or not caused by any deliberate act or omission of the Company or the
Shareholder;
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;
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;
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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;
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 Shareholder has good, valid and
marketable title to all the personal property constituting the Non-optical
Assets. The personal property constituting the Non-optical Assets constitute the
only personal property necessary for the conduct of the Company's business
(except for the Optical Assets). Upon consummation of the transactions
contemplated hereby, such interest in the Non-optical 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
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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.
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-optical 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 Shareholder;
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 with Payors and
contracts to provide optical services and products; or
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xii) 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 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 the Company does
not know of any fact that would justify the exercise of such a right; and (ii)
neither the Company nor the Shareholder currently contemplates, or has reason
to believe any other person currently contemplates, any amendment or change to
any Commitment.
3.13. Insurance. The Company carries property, liability,
malpractice, workers' compensation and such other types of insurance pursuant to
the insurance policies listed and briefly described on Section 3.13 (the
"Insurance Policies"). The Insurance Policies are all of the insurance policies
of the Company relating to the business of the Company and the Non-optical
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-optical 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, complete and correct
copies of all Insurance Policies have been provided or made available to Vision
21.
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Except as set forth on Schedule 3.13, neither the Company nor the 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 the Company, no such
cancellation or increase of deductibles, retainages or premiums is threatened.
Except as set forth on Schedule 3.13, the Company does not have any outstanding
claims, settlements or premiums owed against any Insurance Policy, and the
Company has given all notices or has presented all potential or actual claims
under any Insurance Policy in due and timely fashion. 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 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 organizations engaged in Optical Business), 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 Shareholder, 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.
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
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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
Shareholder 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 complied with all
applicable laws, regulations and licensing requirements relating to the
operation of the Company and has filed with the proper authorities all 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 the Company of any federal, state or local law or
regulation that could, individually or in the aggregate, result in a Material
Adverse Effect. The Company 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
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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, the
Company 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.
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 Shareholder, which affect or could affect the Non-optical
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 Shareholder to effect the transactions
contemplated hereby. Neither the Company nor the Shareholder is (a) subject to
any continuing court or administrative order, judgment, writ, injunction or
decree applicable specifically to the Non-optical 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 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
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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 physician, hospital, pharmacy, home health agency,
organization engaged in Optical Business, 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 Shareholder 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 Shareholder, neither the Company nor any of the Non-optical
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.
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-optical 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.
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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. Medicare and Medicaid Programs. The Company is qualified for
participation in the Medicare and Medicare programs and is party to agreements
for such programs which are in full force and effect with no events of default
having occurred thereunder. The Company 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 and the Shareholder have paid or have 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 nor the
Shareholder 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 in order to
be paid by a Payor for optical services rendered or optical products sold.
Neither the Company, nor any of its directors, officers, employees, consultants
or the Shareholder 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 Shareholder, 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 optical services
and sell optical products, and failure to provide quality care or products.
3.27. Fraud and Abuse. To the best knowledge of the Company and the
Shareholder, the Company, and its officers and directors have not engaged in any
activities which are prohibited under 42 U.S.C. xx.xx. 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:
a. knowingly and willfully making or causing to be made
a false statement or representation of a material fact in any application for
any benefit or payment;
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b. knowingly and willfully making or causing to be made
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 customer for designated optical services
(as defined in 42 U.S.C. ss.1395nn) to or providing designated optical services
to a customer upon a referral from an entity or person with which the
Shareholder or an immediate family member has a financial relationship, and to
which no exception under 42 U.S.C. ss.1395nn applies.
3.28. Payors. Schedule 3.28 sets forth a true, correct and complete
list of the names and addresses of each 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 3.28, 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.
3.29. 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.
3.30. Consistent Treatment of Expenses. The Company has, in
presenting information concerning the Company's expenses to Vision 21 for the
purpose of determining the
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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.
3.31. 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 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.
3.32. 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 Shareholder which would
materially adversely affect the projected fiscal year 1997 earnings of the
Company disclosed to Vision 21 by Shareholder, other than such conditions as may
affect as a whole the economy or the optical industry generally.
3.33. Tangible Personal Property. Except as set forth on Schedule
3.33, 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.
3.34. Leases. With respect to each of the Real Property Leases and
Personal Property Leases, except as set forth on Schedule 3.34:
(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;
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(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;
(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.
3.35. Contract Rights. Except as set forth on Schedule
3.35, 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 Contracts. 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.
3.36. Prepaid Items. Each of the Prepaid Items may be
transferred to Vision 21 without the necessity of obtaining any consent or
approval.
3.37. Completeness of Assets. The Non-optical Assets
together with the Optical Assets, include all the properties used to conduct the
business of the Company as presently conducted.
3.38. Disclosure. To the best of the Company's and the
Shareholder's knowledge, no representation, warranty or statement made by the
Company or the Shareholder 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 Shareholder 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
Company which has not been set forth herein or in the Schedules provided
herewith.
4. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER. The
Shareholder 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:
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4.1. Validity; Shareholder Capacity. This 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 Shareholder and constitute
or will constitute legal, valid and binding obligations of the Shareholder,
enforceable against the Shareholder 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 Shareholder has legal capacity to enter into and perform this 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 Shareholder 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 Shareholder 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 Shareholder, 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 Shareholder.
4.4. Certain Payments. The Shareholder 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 Shareholder 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 Shareholder 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
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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 Shareholder nor any of his Affiliates
is, or with 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 physician, hospital, pharmacy, home health agency,
organization engaged in Optical Business 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 Shareholder does not own directly or indirectly any interests
or have any investment in any person that is a Competitor of the Company.
5. REPRESENTATIONS AND WARRANTIES OF VISION 21. Vision 21
represents and warrants to the Company 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; 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
5,465,673 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 5,465,673 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 Shareholder 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 Shareholder, 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
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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
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; Confidential
Information Memorandum. The balance sheet of Vision 21 as of September 30, 1996
and the related statements of income of Vision 21 for the first nine (9) months
of Vision 21's 1996 fiscal year, without giving effect to the Related
Acquisitions, including the costs incurred during such fiscal year associated
with any Registration Statement, shall be contained in the Confidential
Information Memorandum to be provided to the Shareholder and the Company by
Vision 21 prior to the Closing (collectively, with the related notes thereto,
the "Vision 21 Financial Statements"). The Vision 21 Financial Statements (a)
fairly present the financial condition and
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results of operations of Vision 21, without giving effect to the Related
Acquisitions, 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. Subject to the
foregoing and the other qualifications contained elsewhere in this Agreement, to
the best knowledge of Vision 21, the Confidential Information Memorandum, as
amended on December 17, 1996, is true and correct in all material respects.
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.
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
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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
Shareholder.
a. Shareholder 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 Shareholder's representations,
warranties, covenants and acknowledgements set forth in this Section.
b. Except as disclosed on Schedule 6.1(b)
attached hereto, Shareholder represents and warrants that Shareholder is an
"accredited investor" or "sophisticated investor" as defined under the
Securities Act and state "Blue Sky" laws, or that Shareholder has utilized, to
the extent necessary to be deemed a sophisticated investor under the Securities
Act and State "Blue Sky" laws, the assistance of a professional advisor.
c. Shareholder represents and warrants that the
Securities to be acquired by Shareholder upon consummation of the transactions
described in this Agreement will be acquired by Shareholder for Shareholder'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
Shareholder 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 Shareholder resides as well as
any other legend deemed appropriate by Vision 21 or its counsel.
d. Shareholder represents and warrants that the
address set forth below Shareholder's name on Schedule 6.1(d) is Shareholder's
principal residence.
e. Shareholder (i) acknowledges that the
Securities issued to Shareholder at the Closing must be held indefinitely by
Shareholder unless subsequently
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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 Shareholder for resale of any of the Securities to be
acquired by Shareholder 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 14(e), whereby Shareholder
shall be treated as an "affiliate" of Vision 21 under Rule 144.
f. Shareholder represents and warrants to
Vision 21 that Shareholder, either alone or together with the assistance of
Shareholder's own professional advisor, has such knowledge and experience in
financial and business matters such that Shareholder is capable of evaluating
the merits and risks of Shareholder's investment in any of the Securities to be
acquired by Shareholder upon consummation of the transactions described in this
Agreement.
g. Shareholder confirms that Shareholder has
received and read the Confidential Information Memorandum of Vision 21 dated
September 27, 1996 and the December 17, 1996 Supplement thereto. Shareholder
also confirms that Shareholder has had the opportunity to ask questions of and
receive answers from Vision 21 concerning the terms and conditions of
Shareholder's investment in the Securities, and the Shareholder has received to
Shareholder'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 Shareholder has requested.
h. In order to ensure compliance with the
provisions of paragraph (c) hereof, Shareholder agrees that after the Closing
Shareholder 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
Shareholder:
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.
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Shareholder also agrees that the certificates or instruments representing the
Securities to be issued to Shareholder 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. Shareholder 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. Shareholder 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. Shareholder
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.
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, THE SHAREHOLDER AND NEW P.C. The
Company, the Shareholder, and New P.C., jointly and severally, agree that
between the date hereof and the Closing (with respect to the Company's and New
P.C.'s covenants, the Shareholder agrees to use his best efforts to cause the
Company and New P.C. to perform):
7.1. Consummation of Agreement. The Company, the
Shareholder and New P.C. 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,
the Shareholder or New P.C. 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 Shareholder shall use their
best efforts to preserve the
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business of the Company intact. None of the Company, the Shareholder or New P.C.
shall take any action that would, individually or in the aggregate, result in a
Material Adverse Effect.
7.3. Access. The Company and the Shareholder 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
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, the
Shareholder and New P.C. 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, the Shareholder or New P.C. 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 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, the Shareholder and New P.C. shall secure
all necessary approvals and consents of landlords with respect to the real
property described on Schedule 2.2(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, the Shareholder or New P.C. 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
Shareholder 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;
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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
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
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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, the Shareholder
and New P.C. agree that from the date of this Agreement through the earlier of
the Closing Date or January 1, 1997, (a) none of the Shareholder, New P.C. or
the Company nor any of their respective officers and directors shall, and the
Shareholder, New P.C. and the Company shall direct and use their best efforts to
cause the Company's and New P.C.'s respective 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 Shareholder, New P.C. 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 Shareholder, New P.C.
and the Company will notify Vision 21 immediately if any such inquiries or
proposals are received by, any such information is requested from, or any such
negotiations or discussions are sought to be initiated or continued with, the
Company, New P.C. or the Shareholder.
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,
New P.C. and the Shareholder shall use their best efforts to take, or cause to
be taken, all actions necessary to effect the Transaction under applicable law.
7.13. Shareholder Retained Equity. Except as contemplated
herein, the Company shall not, and the Shareholder 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. Termination of Retirement Plans. Prior to Closing,
the Shareholder 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. Effective at the time of closing, the company shall cause New P.C. to
assume all of the obligations of the Company as the sponsoring employer and/or
plan administrator of the Retirement Plan in compliance with applicable law.
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Subsequent to Closing, the Company and Vision 21 shall review
the extent to which New P.C 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 New P.C. under Section 414(n) of the Code. If Vision 21
and New P.C. mutually agree that such qualification requirements can be
satisfied, New P.C. may elect to continue the Retirement Plan and make
contributions in accordance with its terms, provided that New P.C. 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.
7.15. Delivery of Schedules. The Company, New P.C. and the
Shareholder shall deliver to Vision 21 all Schedules required to be delivered by
them prior to the Closing.
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 Shareholder 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 Vision 21 subsequent
to the date of this Agreement and prior to the Closing Date under any Vision 21
Commitment 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 and to conduct the intended
business of Vision 21.
8.4. Release of Shareholder From Practice Liabilities.
Vision 21 shall use its best efforts to obtain from third party creditors the
release of Shareholder 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, NEW P.C. AND THE
SHAREHOLDER. Vision 21, the Company, New P.C. and the Shareholder agree as
follows:
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9.1. Filings; Other Action.
a. Vision 21, the Company, New P.C. and the
Shareholder 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, New P.C. and the Shareholder
shall furnish all information concerning the Company, New P.C. and the
Shareholder as may be reasonably requested in connection with any such action.
b. Each of the Company, New P.C., the
Shareholder 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, New P.C., the
Shareholder, and Vision 21 shall agree as to the information and documents
supplied by the Company, New P.C. and the Shareholder 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, New P.C. and the Shareholder
shall be 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 Shareholder, New P.C. and the Company
shall, upon request, furnish Vision 21 with all information concerning himself,
itself, their respective partners, the Company's or New P.C.'s respective
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 or
New P.C.'s respective 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
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Schedule that constitutes or reflects a material adverse change to the Company
or the Non-optical 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 Shareholder 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 Shareholder 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. Vision 21 shall pay all costs of the Audit
of the Company's Financial Statements and financial records by Vision 21's
auditors (or auditors designated by Vision 21's auditors). All items prepared by
Vision 21's auditors in connection with the Audit ("Prepared Audit Materials")
shall be for use solely by Vision 21; provided, however, that the Company may
utilize the Prepared Audit Materials solely in connection with its review of
Vision 21's calculation of the Purchase Price. The Prepared Audit Materials
shall not be deemed to include those items which customarily remain the property
of auditors such as their working papers and memos.
b. In the event the Transaction is not
consummated, the Company and Shareholder shall not be entitled to copies or
originals of the Prepared Audit Materials unless the Company or Shareholder pays
for or reimburses Vision 21 for all expenses of the auditor in connection with
the Audit in advance of receiving the Prepared Audit Materials (either from
Vision 21 or its auditor). For purposes of this Agreement, Audit expenses shall
include all expenses related to the Audit as well as expenses incurred to
present the financial statements in accordance with GAAP and all schedules
related thereto.
c. 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.
d. In the event that an Initial Public Offering
does not take place for any reason whatsoever, Vision 21 (but not the Company,
New P.C. or the Shareholder) 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 expenses associated solely in connection with the preparation of any
Registration Statement relating to such Initial Public Offering.
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e. 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 Shareholder.
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, New P.C. and the Shareholder 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, New P.C. and the Shareholder
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, New
P.C. or the Shareholder prior to the Closing Date.
10.3. Legal Opinion. Counsel to the Company, New P.C. and
the Shareholder 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, New P.C. or the Shareholder.
10.6. Government Approvals and Required Consents. The
Company, New P.C., the Shareholder 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).
10.7. 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 12.1.
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10.8. Due Diligence. Vision 21 shall have completed to its
satisfaction a due diligence review of the Company, New P.C. and the
Shareholder.
10.9. Financial Audit. Vision 21 shall have approved in
Vision 21's sole discretion an audit of the Company and the Practice which audit
shall have been performed by an accounting firm designated by Vision 21 at the
sole expense of Vision 21.
10.10. Compliance Audit. At the option of Vision 21, Vision
21 shall have approved in Vision 21's sole discretion an audit of the Company
for regulatory compliance which audit shall be at the sole expense of Vision 21.
10.11. Exemption Under State Securities Laws. The transfer
of Vision 21's Securities to the Shareholder 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).
11. CONDITIONS PRECEDENT OF THE COMPANY, NEW P.C. AND THE
SHAREHOLDER. Except as may be waived in writing by the Company, New P.C. and the
Shareholder, the obligations of the Company, New P.C. and the Shareholder
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, New P.C. and the Shareholder their opinion, dated as
of the Closing Date, in form and substance substantially similar to Exhibit
11.3.
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, New P.C., the Shareholder 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).
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11.6. Closing Deliveries. The Company, New P.C. and the
Shareholder shall have received all documents, instruments and agreements, duly
executed and delivered in form reasonably satisfactory to the Company and New
P.C., 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; Delivery of Amended
Confidential Information Memorandum. 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. Vision 21 shall deliver
an amended Confidential Information Memorandum updating the information
contained in the initial Confidential Information Memorandum on or before
December 17, 1996, and the Company, New P.C. and the Shareholder shall have the
right not to close the transactions contemplated in this Agreement if they
determine, based upon their review of the amended Confidential Information
Memorandum, that a material adverse change has occurred with respect to the
condition (financial or otherwise), operations, assets, liabilities or business
of Vision 21.
12. CLOSING DELIVERIES; ESCROW OF DOCUMENTS.
12.1. Deliveries of the Company, New P.C. and the
Shareholder. At or prior to December 24, 1996, the Company, New P.C. and the
Shareholder 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. copies of resolutions of the Boards of
Directors of the Company and New P.C. 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 Secretaries of the
Company and New P.C. 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, the President of New P.C., and of the Shareholder, dated the Closing
Date, as to the truth and correctness of the representations and warranties of
the Company, New P.C. and the Shareholder contained herein, on and as of the
Closing Date;
c. a certificate of the President of the
Company, the President of New P.C., and of the Shareholder, dated the Closing
Date, (i) as to the performance of and compliance in all material respects by
the Company, New P.C. and the Shareholder with all
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covenants contained herein on and as of the Closing Date and (ii) certifying
that all conditions precedent of the Company, New P.C. and the Shareholder to
the Closing have been satisfied;
d. a certificate of the Secretaries of the
Company and New P.C. 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 and New P.C. establishing that each of the Company
and New P.C. 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 and New P.C. are qualified to do business, to the effect that the
Company and New P.C. are qualified to do business and, if applicable, are in
good standing as a foreign corporation in each of such states;
g. an opinion of counsel to the Company, New
P.C. and Shareholder 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 medicine.
h. such appropriate documents of transfer,
including bills of sale, endorsements, assignments, drafts, checks or other
instruments, as to all of the Non-optical Assets and Optical 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-optical Assets have been released;
j. all authorizations, consents, permits and
licenses referenced in Section 3.5;
k. an executed Registration Rights Agreement
between Vision 21 and the Shareholder in substantially the form attached hereto
as Exhibit 12.1 (k) (the "Registration Rights Agreement");
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l. a non-foreign affidavit, as such affidavit
is referred to in Section 1445 (b) (2) of the Code, of the Shareholder, signed
under a penalty of perjury and dated as of the Closing Date, to the effect that
the Shareholder is a United States citizen or a resident alien (and thus not a
foreign person) and providing the Shareholder's United States taxpayer
identification number;
m. an assignment to Vision 21 of each lease for
real property described on Schedule 2.1(c) (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;
and
n. 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 December 24,
1996, Vision 21 shall deliver to the Company, New P.C. and the Shareholder, 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, New P.C. and
the Shareholder 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 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
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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; and
j. such other instrument or instruments of
transfer, prepared by the Company, New P.C. or the Shareholder as shall be
necessary or appropriate, as the Company, New P.C. the Shareholder 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) and
after counsel for the Shareholder, New P.C. and the Company have sent written
notice to Xxxxxxxx, Loop & Xxxxxxxx, LLP stating that the Shareholder, New P.C.
and the Company have reviewed the amended Confidential Information Memorandum
and have decided, based upon such review, to consummate the transactions
contemplated in this Agreement. In the event that the Shareholder, New P.C. and
the Company elect not to consummate the transactions contemplated in this
Agreement based upon their review of the amended Confidential Information
Memorandum, and counsel for the Shareholder, New P.C. and the Company informs
Xxxxxxxx, Loop & Xxxxxxxx, LLP in writing as to such decision, Xxxxxxxx, Loop &
Xxxxxxxx, LLP shall promptly return the foregoing materials to the parties
sending such materials.
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 Shareholder, New P.C. 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.
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14. REMEDIES.
14.1. Indemnification by the Company, New P.C. and
Shareholder. Subject to the terms and conditions of this Agreement, the Company,
New P.C. and the Shareholder, 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:
a. a breach of any representation, warranty or
covenant of the Company, New P.C. or the Shareholder 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
Shareholder, New P.C. or the Company (including its subsidiaries, if any), and
provided to Vision 21 or its counsel by the Company, New P.C. or the
Shareholder, 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 Shareholder, New P.C. 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, New P.C. or the Shareholder, 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; and
d. any liability arising from any alleged
unlawful sale or offer to sell or transfer any of the Common Stock by
Shareholder.
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, New P.C. and the Shareholder 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;
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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
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
Related 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
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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
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
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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 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 17.1 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.
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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,
4.1, 4.4, 4.6, 5.6 and 5.7 may be made 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 Shareholder 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 Shareholder 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 Shareholder
(other than pursuant to a requirement to indemnify Vision 21 under Sections 3.26
or 3.27, or unless the breach involves an intentional breach or fraud by the
Shareholder 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 Shareholder has an indemnification obligation to Vision 21 hereunder,
subject to Vision 21's approval as set forth below, the Shareholder may satisfy
such obligation by transferring to Vision 21 such number of shares of Vision 21
Common Stock owned by the Shareholder 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 Shareholder 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 Shareholder 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;
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b. The Shareholder 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.
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, New P.C. or the
Shareholder contained in this Agreement or in any certificate or other document
executed and delivered by the Company, New P.C. or the Shareholder pursuant to
this Agreement is or becomes untrue or breached in any material respect or if
the Company, New P.C. or the Shareholder 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 or New P.C. 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 or New P.C. 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, New P.C. and the Shareholder
for all reasonable attorneys' and accountants' fees incurred by the
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Company, New P.C. and the Shareholder in connection with this Agreement;
provided that Vision 21 shall only reimburse the Company, New P.C. and the
Shareholder 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 December 24, 1996.
15.2. Effect of Termination. In the event this Agreement is
terminated pursuant to Section 15.1, Vision 21, New P.C., the Company and the
Shareholder, 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
material breach of this Agreement shall stand fully released and discharged of
any and all obligations under this Agreement.
16. NON-COMPETITION AND CONFIDENTIALITY COVENANTS.
16.1. Shareholder, New P.C. and Company Non-Competition
Covenant.
a. The Shareholder, New P.C. and the Company
recognize that the covenants of the Shareholder, New P.C. and the Company
contained in this Section 16.1 are an essential part of this Agreement and that,
but for the agreement of the Shareholder, New P.C. and the Company to comply
with such covenants, Vision 21 would not have entered into this Agreement. The
Shareholder, New P.C. and the Company acknowledge and agree that the
Shareholder's, New P.C.'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
Shareholder, New P.C. or the Company compete with the Management Business or
Vision 21. The Shareholder, New P.C. and the Company accordingly agree that for
the periods set forth in the Business Management Agreement the Shareholder, New
P.C. and the Company shall not:
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 Shareholder's, New P.C.'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
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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 Shareholder, New P.C. 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 Shareholder's, New P.C.'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 Shareholder 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.
b. For the purposes of this Section 16.1, the
following terms shall have the meaning set forth below:
i) "Management Business" shall mean
management and administration of the non-medical aspects of medical,
ophthalmology and optometry practices, and Optical Business.
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 Shareholder's internal
management and administration of the Shareholder's medical practice or
participation in the management and administration of a physician group in which
the Shareholder devotes a significant amount of time to the practice of
medicine.
c. Should any portion of this Section 16.1 be
deemed unenforceable because of the scope, duration or territory encompassed by
the undertakings of the Shareholder, New P.C. or the Company hereunder, and only
in such event, then the Shareholder, New P.C. 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 Shareholder, New P.C. or the Company
against Vision 21, whether predicated on this
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Agreement or otherwise, shall not constitute a defense to the enforcement by
Vision 21 of this covenant; provided, however, that the Shareholder, New P.C.
and the Company shall not be bound by this covenant and shall not be obligated
to pay the liquidated damages contemplated in this Section 16.1 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 Shareholder, New P.C. 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 Shareholder, New P.C., 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 aggregate
amount of the aggregate consideration received by the Company 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. If the Shareholder or the Company
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 Shareholder or the Company or,
with respect to shares of Common Stock entitled to be received by the
Shareholder 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 Shareholder or the Company,
and (c) repayment by Shareholder to Vision 21 of the fair market value as
described above, of Vision 21 Common Stock sold by Shareholder; but in no event
shall Vision 21 be entitled to offset amounts in excess of the liquidated
damages sum pursuant to this Section 16.1. The Shareholder 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 Shareholder shall be made
within sixty (60) days of notification to Shareholder by Vision 21 that
Shareholder has violated this non-competition covenant.
16.2. Shareholder, New P.C. and Company Confidentiality
Covenant. From the date hereof, the Shareholder, New P.C. and the Company shall
not, directly or indirectly, use for any purpose, other than in connection with
the performance of the Shareholder's duties under the Shareholder's employment
agreement with the Company, or disclose to any third party, any information of
Vision 21, New P.C. 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 Shareholder, New P.C. and the Company may disclose information
that the Shareholder, New P.C. or the Company can establish (a) is or becomes
generally available to and known by the public or optical community (other than
as a result of an unpermitted disclosure directly or indirectly by the
Shareholder, New P.C. or the Company or their respective Affiliates, advisors,
or representatives); (b) is or becomes available to the Shareholder, New P.C. or
the Company on a nonconfidential basis from a source other
56
65
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 Shareholder, New P.C. or the Company has knowledge;
or (c) has already been or is hereafter independently acquired or developed by
the Shareholder, New P.C. 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 Shareholder,
New P.C. 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 Shareholder, New P.C. and the Company
further agree that if any restriction contained in this Section 16.2 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.
16.3. Survival. The parties acknowledge and agree that this
Article 16 shall survive the Closing of the transactions contemplated herein.
17. DISPUTES.
17.1. Mediation and Arbitration. Any dispute, controversy
or claim (excluding claims arising out of an alleged breach of Article 16 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,
if the amount in dispute is equal to or in excess of $200,000 or if the dispute
is solely of a non-monetary nature, and in Scottsdale, Arizona if the amount in
dispute is lower than $200,000, and in either case 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, if the amount in dispute is equal to or in excess of $200,000 or
if the dispute is solely of a non-monetary nature, and in Scottsdale, Arizona if
the amount in dispute is lower than $200,000, and in either case 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.
18. MISCELLANEOUS
18.1. Taxes. Shareholder, New P.C. 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. 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.
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18.2. 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.
18.3. 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.
18.4. 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:
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
Post Office Box 172609
000 X. Xxxxxxx Xxxxxxxxx, Xxxxx 0000
Xxxxx, Xxxxxxx 00000-0000
Facsimile No. (000) 000-0000
Attn: Xxxxxxx X. Xxxxx, Esquire
If to the Company, New P.C. and the Shareholder addressed to:
Sharona Optical Inc.
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, M.D.
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With copies to:
Xxxxxxx X. Xxxxxxxxx, Esquire
Sacks Tierney, P.A.
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
or to such other address as such party may have given to the other parties by
notice pursuant to this Section 18.4. 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.
18.5. 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.
18.6. 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 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.
18.7. Confidentiality Agreements. The provisions of any
prior confidentiality agreements and letters of intent between or among Vision
21, the Company and the Shareholder, as amended, shall terminate and cease to be
of any force or effect at and upon the Closing.
18.8. Reformation Clause. It is the intention of the
parties hereto to conform strictly to applicable laws regarding the practice and
regulation of medicine, 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-optical Asset by Vision 21 violates any Applicable Law, then the parties
hereto agree as follows: (a) the provisions of this
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Section 18.8 shall govern and control; (b) if none of the parties hereto are
materially economically disadvantaged, then any Non-optical 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 18.8.
18.9. 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.
18.10. 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 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.
18.11. 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.
18.12. 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.
18.13. 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.
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18.14. No Rights as Stockholder. The Company and the
Shareholder 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.
18.15. 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.
18.16. 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.
18.17. 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.
18.18. Form of Transaction. If after the execution hereof,
Vision 21 determines that the sale of the Non-optical Assets of the Company can
be better achieved through a different form of transaction without economic
injury to the Company, New P.C. or the Shareholder, or delay of the consummation
of the transaction, the Company, New P.C. and the Shareholder 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,
New P.c. and the Shareholder at Closing for all reasonable additional expenses
incurred by the Company, New P.C. and the Shareholder 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"
SHARONA OPTICAL, INC.
/s/ By: /s/ Xxxxxx X. Xxxxxx
---------------------------------- ---------------------------------
Witness Xxxxxx X. Xxxxxx, M.D., President
/s/
----------------------------------
Witness
"NEW P.C."
/s/ By: /s/ Xxxxxx X. Fellerller
---------------------------------- ---------------------------------
Witness Xxxxxx X. Xxxxxx, M.D., President
/s/
----------------------------------
Witness "SHAREHOLDER"
/s/ /s/ Xxxxxx X. Xxxxxx
---------------------------------- ------------------------------------
Witness Xxxxxx X. Xxxxxx, M.D.
/s/
----------------------------------
Witness
/s/ /s/ Xxxxxxx Xxxxxx
---------------------------------- ------------------------------------
Witness Xxxxxxx Xxxxxx
/s/
----------------------------------
Witness
"VISION 21"
VISION 21, INC.
By: /s/ Xxxxxxxx X. Xxxxxxxx
---------------------------------- ---------------------------------
Witness Xxxxxxxx X. Xxxxxxxx, President
----------------------------------
Witness
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Schedule 1.52
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Optical Assets
The following constitute the Optical Assets:
Optical records,
Patient lists;
Third-party payer contracts (except for rights to purchased
accounts receivable);
Eyeglasses, lenses and other eyewear;
Licenses, certificates of need, Medicare/Medicaid
certifications and other governmental authorizations necessary
to provide Professional Eye Care Services and to be paid
therefor by applicable third-party payers; and
Any other asset that legally cannot be owned by a party that
is not optical-owned.
72
Schedule 2.2(b)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Personal Property Leases
None.
73
Schedule 2.2(c)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Real Property Leases
None.
74
Schedule 2.2(d)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Assumed Contracts
None.
75
Schedule 2.2(e)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Tangible Personal Property
Please see attached list.
[LIST OF TANGIBLE PERSONAL PROPERTY OMITTED]
76
Schedule 2.2(g)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Franchises, Licenses, Permits, Certificates and Authorizations
City of Phoenix Business License No. 89002711.
77
Schedule 2.3
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Excluded Assets
None.
78
Schedule 2.4
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Assumed Obligations
None.
79
Schedule 2.5A
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Purchase Price
$61,837 in cash and 95,975 shares of Vision 21 common stock.
80
Schedule 2.9
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Purchase Price Allocation
To be completed after Purchase Price Adjustment.
81
Schedule 3
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Individuals - Best knowledge
Representations and Warranties of the Company
1. Xxxxxx X. Xxxxxx, M.D., Medical Director
2. Office Manager
82
Schedule 3.1
to Optical Asset Purchase Agreement among Sharona Optical, Inc.
(the "Company"), Xxxxxx X. Xxxxxx, M.D. (the "Shareholder")
and Vision 21, Inc. ("Vision 21")
Capital Stock or Other Interest Owned by the Company,
the Shareholder or Any Professional Employee in Any Competitor
None.
83
Schedule 3.2
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Sale, Distribution, or Spin-Off of Significant Assets
of the Company or Its Affiliates within the Last Two Years
None.
84
Schedule 3.4
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Violations or Conflicts Resulting from Execution,
Delivery and Consummation of Transaction By the Company
None.
85
Schedule 3.5
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Consents Required for Company from
Governmental Authority or Any Other Persons
None.
86
Schedule 3.7
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Liabilities of the Company
Not Reflected in Financial Statements
None.
87
Schedule 3.8(a)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Compensation of All Employees of the Company
See attached schedule.
* * *
[IN ACCORDANCE WITH RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933,
CONFIDENTIAL PORTIONS OF THIS AGREEMENT (INCLUDING THE INFORMATION ON THE
SCHEDULE CALLED FOR BY THIS SCHEDULE) HAVE BEEN OMITTED HEREFROM AND FILED
SEPARATELY WITH THE SECURITIES EXCHANGE COMMISSION.]
88
Schedule 3.8(b)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Compensation Plans, Arrangements or Practices Sponsored by the
Company or to which the Company Contributes on Behalf of Its
Employees (Other than Employment Agreements and Employee Benefit Plans)
Medical
Dental
Life
Prescriptions
3 pr Rx's yearly
89
Schedule 3.8(c)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Employment Agreements
None.
90
Schedule 3.8(d)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Employee Policies and Procedures
See attached.
Policy & Procedures manual.
[EMPLOYEE POLICIES AND/OR PROCEDURE MANUALS OMITTED]
91
Schedule 3.8(f)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Exceptions to Labor Compliance
None.
92
Schedule 3.8(g)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Union Participation of Company Employees
None.
93
Schedule 3.9(a)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Employee Benefit Plans Sponsored by the Company or to which the
Company Contributes on Behalf of Its Employees in the Past Three Years
Group medical and life insurance plans:
Dental
Prescriptions
Principal Mutual
Paid through PVES
94
Schedule 3.9(b)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Exceptions to Employee Benefit Plan Compliance
None.
95
Schedule 3.9(c)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Employee Benefit Plan Audits, Investigations or Enforcement Actions
None.
96
Schedule 3.9(d)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Employee Benefit Plan Prohibited Transactions
None.
97
Schedule 3.9(f)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Employee Benefit Plan Determination Letter or IRS Ruling
None.
98
Schedule 3.9(g)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Employee Benefit Plan Accumulated Funding Deficiency
Not applicable.
99
Schedule 3.9(h)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Employee Benefit Plan Excise Taxes
None.
100
Schedule 3.10
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Changes to Company since Balance Sheet Date
None.
101
Schedule 3.11(b)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Permitted Encumbrances on Personal Property
None.
102
Schedule 3.11(c)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Real Property Leases and Personal Property Leases
See Schedules 2.1(c) and 2.1(d).
103
Schedule 3.12
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Commitments of the Company
None.
104
Schedule 3.13
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Insurance Policies; Cancellations; Outstanding Claims,
Settlements or Premiums Owed; Professional Liability Insurance
Denials since January 1, 1994; and All Claims since January 1, 1994
See chart attached hereto and made a part hereof.
Paid through PVES.
000
XXXXXXXX XXXXXX EYE - Schedule 3.13: Insurance
Insured Xxxxxx X. Xxxxxx, M.D. Xxxxxxx Xxxx Xxxxxxx, Xxxxxx X. Xxxxxxxx, Paradise Valley Eye
Additional insureds: dba O.D. M.D. Specialists
Paradise Valley Eye
Specialists
Liability limits: $1 million / $3 million $2 million/$4 million $1 million/$3 million NO PROFESSIONAL
Professional liability Professional Liability Professional Liability LIABILITY
INSURANCE
Vicarious liability
endorsement for Xxxxxxx
Xxxx Xxxxxxx (not Umbrella:
direct liability coverage for $100,000 / $100,000 $5 million / $5 million
Xxxxxxx) (injuries to patients &
third parties; peer Commercial/General:
$100,000 / $100,000 review) $1 million / $2 million
(injuries to patients & third (UNCLEAR - CONFLICTING
parties; peer review) PROVISIONS.)
$10,000 medical expenses
MICA Chicago Insurance Co. MICA per person
EMPLOYER'S LIABILITY:
NOT COVERED
Also: $10,000 self-
insurance retention
Expiration date 11-16-97 8/14/97 12/1/97 1-1-98
Retroactive date 11-16-83 12/1/9/97
Occurrence vs. Claims made (tail offered at
Claims Made time insurance is cancelled)
Claims N/A N/A N/A
[CERTAIN INSURANCE POLICIES AND OTHER
POLICY DESCRIPTIONS ARE OMITTED]
106
Schedule 3.14
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Description of Proprietary Rights; Consents
None.
107
Schedule 3.15
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Good Faith Disputes Over Payment of
Taxes; Tax Deficiency or Delinquency
None.
108
Schedule 3.16
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
List of Licenses, Franchises, Permits and Governmental
Authorizations for Conduct of the Company's Business; Notices of Noncompliance
City of Phoenix Business License No. 89002711.
109
Schedule 3.17
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Finder's, Broker's or Agent's Fee Owed By the Company
None.
110
Schedule 3.18
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Company Litigation
None.
111
Schedule 3.21
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
List of Company Borrowing and Investing Arrangements
[IN ACCORDANCE WITH RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933,
CONFIDENTIAL PORTIONS OF THIS AGREEMENT (INCLUDING THE INFORMATION ON THIS
SCHEDULE) HAVE BEEN OMITTED HEREFROM AND FILED SEPARATELY WITH THE SECURITIES
EXCHANGE COMMISSION.]
112
Schedule 3.22
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Ownership Interests of Interested Persons and
Material Affiliations in the Last Three Years
Paradise Valley Eye Specialists
Eye Specialists of Arizona Network
113
Schedule 3.23
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Company Investments in Competitors
None.
114
Schedule 3.28
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Description of and Relationship with Payors
Managed Eye Care Contract with FHP.
115
Schedule 3.33
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Tangible Personal Property Exceptions
None.
116
Schedule 3.34
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Real Property Lease and Personal Property Leases Exceptions
None.
117
Schedule 3.35
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Assumed Contract Exceptions
None.
118
Schedule 4.2
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Violations or Conflicts Resulting from Execution,
Delivery or Consummation of Transaction By the Shareholder
None.
119
Schedule 4.5
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Finder's, Broker's or Agent's Fees Owed By the Shareholder
None.
120
Schedule 4.6
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Shareholder Ownership of Interested Persons and Material Affiliations
Paradise Valley Eye Specialists
Eye Specialists of Arizona Network
121
Schedule 4.7
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Shareholder Investments in Competitors
None.
122
Schedule 5
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Individuals - Best Knowledge
Representations and Warranties of Vision 21
1. Xxxxxxxx X. Xxxxxxxx
2. Xxxxxxx X. Xxxxxxx
3. Xxxxxxx X. Xxxxx
4. Xxxxxxxx X. Xxxxxxx
123
Schedule 5.1
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Jurisdictions where Vision 21 is Qualified to Do Business
1. Florida
2. Arizona
3. Minnesota
4. New York
124
Schedule 5.6
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Consents or Approvals Needed by Vision 21 from Any Governmental Authority
None.
125
Schedule 5.7
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Finder's, Brokers or Agent's Fees Owed by Vision 21
None.
126
Schedule 5.10
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Liabilities of Vision 21 Not Reflected in Financial Statements
None.
127
Schedule 6.1(b)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Exception to Shareholder "Accredited Investor"
or "Sophisticated Investor" Representation
None.
128
Schedule 6.1(d)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Shareholder's Principal Residence
[IN ACCORDANCE WITH RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933,
CONFIDENTIAL PORTIONS OF THIS AGREEMENT (INCLUDING THE INFORMATION ON THIS
SCHEDULE) HAVE BEEN OMITTED HEREFROM AND FILED SEPARATELY WITH THE SECURITIES
EXCHANGE COMMISSION.]
129
Schedule 8.4
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
Personal Liabilities of Shareholder for which
Vision 21 Will Use Best Efforts to Obtain Release
None.
130
Schedule 12.1(k)
to Optical Asset Purchase Agreement among Sharona Optical,
Inc. (the "Company"), Xxxxxx X. Xxxxxx, M.D. (the
"Shareholder") and Vision 21, Inc. ("Vision 21")
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement"), dated as of
___________________, 1996, is by and between Vision 21, Inc., a Florida
corporation and any successor ("Vision 21"), and Sharona Optical, Inc., an
Arizona corporation ("Shareholder") located at 0000 Xxxx Xxxxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxxxxxx 00000.
1. Registration Rights.
(a) In the event that Vision 21 proposes to file a
registration statement under the Securities Act for purposes of effecting an
underwritten public offering of shares of Vision 21 common stock for cash
(including, but not limited to, a registration statement relating to a
secondary offering of Vision 21 common stock, but excluding registration
statements relating to any employee benefit plan or a corporate
reorganization), Vision 21 shall give written notice of such proposed filing to
the Shareholder at least fifteen (15) days before the anticipated filing date,
and such notice shall offer Shareholder the opportunity to register such number
of the Shareholder's shares of common stock as Shareholder may request in
writing within ten (10) days after receipt of such notice; provided, however,
that the maximum number of shares of common stock that such Shareholder may
request to include in any registration statement shall be limited as provided
in Section 1(c).
(b) In the event that (i) one (1) year has elapsed from
the date of effectiveness of the registration statement filed in connection
with an underwritten initial public offering of shares of Vision 21 common
stock, and (ii) Vision 21 receives a written request from holders holding in
the aggregate a minimum of 300,000 shares of Vision 21 common stock issued to
the founding practices described in Vision 21's Confidential Information
Memorandum dated September 27, 1996, as amended, and issued to certain
professionals owning equity interests in such founding practices (the founding
practices and professionals of such practices holding share's of common stock
of Vision 21 are collectively referred to as the "Founding Shareholders"), that
Vision 21 file a registration statement under the Securities Act effecting an
offering of shares of Vision 21 common stock; then Vision 21 shall as soon as
practicable file a registration statement at its own expense effecting a public
offering of shares of Vision 21 common stock held by Founding Shareholders, as
well as any other Vision 21 shares owned by any other shareholders which Vision
21 wishes to include in the offering (which offering may be an underwritten
offering at Vision 21's sole discretion); provided however that Vision 21 shall
be obligated to effect only one registration statement containing each
Shareholder, and Vision 21 shall be obligated to file only two (2) registration
statements in the aggregate, pursuant to this Section 1(b).
131
(c) The maximum aggregate number of shares of common
stock that Shareholder may request to be registered under this Agreement shall
be sixty percent (60%) of Shareholder's original shares of Vision 21 common
stock. In no event shall the total number of Shareholder's shares of common
stock that Vision 21 is obligated to register under this Agreement exceed sixty
percent (60%) of Shareholder's original shares of Vision 21 common stock, and
in no event shall Vision 21 be obligated to register more than (i) in an
initial offering, thirty percent (30%) of Shareholder's original shares of
Vision 21 common stock or (ii) in a second offering, sixty percent (60%) of the
Shareholder's original shares minus the percent of the Shareholder's original
shares that the Shareholder registered in the first offering. The "original
shares" of Vision 21 as described herein shall be deemed to be the
_________________ shares of common stock received by the Shareholder on the
date of this Agreement.
(d) Vision 21 shall have the sole and exclusive right to
select the underwriters of any public offering of shares of Vision 21 common
stock, including any public offering conducted pursuant to the demand
registration right set forth in Section 1(b) above. The use of underwriters in
any demand registration right set forth in Section 1(b) above is subject to
Vision 21's ability to engage underwriters under terms and conditions deemed
reasonable by Vision 21.
(e) If the managing underwriter of any offering advises
Vision 21 that the total number of shares of Vision 21's common stock which
Vision 21, the Shareholder and any other persons intend to include in such
offering would adversely affect the success of such offering, then the amount
of shares of common stock to be offered for the account of Shareholder shall be
reduced to the extent necessary to reduce the total number of shares of common
stock to be included in such offering to the amount recommended by such
managing underwriter.
(f) Vision 21 shall not be required to (i) reduce the
amount of shares of common stock to be offered by Vision 21 in such offering
for any reason or (ii) include any shares of common stock of Shareholder in any
public offering for which a registration statement is or is proposed to be
filed if such shares of common stock are, at the time of effectiveness of such
registration statement, eligible to be sold under Rule 144 under the Securities
Act or otherwise eligible for sale to the public without registration.
(g) Vision 21 shall have the right to extend or delay the
effectiveness of any registration statement for a period of up to ninety (90)
days if, upon the advice of counsel, such delay is advisable and in the best
interests of Vision 21 because of the existence of non-public material
information, or to allow Vision 21 to complete any pending audit of its
financial statements or any public financing plan.
(h) Shareholder agrees to cooperate with Vision 21 in all
respects in connection with registration of the common stock, including timely
supplying all information and executing and returning all documents requested
by Vision 21 and its managing underwriter.
Exhibit 12.1(k) - Page 2
132
(i) Vision 21 shall not be required to include any of
Shareholder's shares of common stock in any registration statement unless
Shareholder accepts the terms of the underwriting as agreed upon between Vision
21 and its underwriters.
(j) Vision 21 shall have the right to defer the filing of
any registration statement if the Board of Directors of Vision 21 determines in
good faith that it would be seriously detrimental to Vision 21 and its
shareholders for such registration statement to be filed.
(k) This Agreement shall expire two (2) years from the
date of an initial public offering of Vision 21 common stock.
2. Covenants of Vision 21. Vision 21 hereby covenants and
agrees:
(a) To take such steps as may be necessary to comply with
the Blue Sky laws of such states as the managing underwriter may reasonably
request; provided that in no event shall Vision 21 be obligated to qualify to
do business in any state where it is not so qualified or to take any action
which would subject it to unlimited service of process in any state where it is
not at such time so subject;
(b) To use reasonable efforts to cause the registration
statement to become effective and to keep the registration statement effective
for such period as may be required under the terms of the underwriting
agreement relating thereto but no longer than for a period of forty-five (45)
days, to file such post-effective amendments as may be necessary to keep any
prospectus contained in such registration statement true and complete during
such period as the registration statement shall be effective, and to furnish
and file such other amendments, supplements, and other documents the managing
underwriter may reasonably request;
(c) To supply such numbers of prospectuses as may be
reasonably required by the managing underwriter;
(d) To pay the reasonable costs and expenses of the
registration statement including without limitation all registration and Blue
Sky filing fees, all fees and expenses of Vision 21's counsel (but not the fees
and expenses of counsel for Shareholder), all accounting costs (including costs
associated with the preparation of interim period financial statements), NASD
fees, printing costs, experts' fees, expenses, costs of post-effective
amendments, and all other usual and customary expenses in connection with the
registration statement, except for Shareholder's pro rata share of underwriting
discounts, fees, and selling commissions (calculated in the manner set forth in
Section 3(a)(ii) of this Agreement); and
(e) With respect to any registration statement filed
pursuant to this Agreement, where underwriters are utilized, to cooperate with
the underwriters to the best of its abilities and to enter into an underwriting
agreement with such underwriters containing such representations,
Exhibit 12.1(k) - Page 3
133
warranties, and covenants on the part of Vision 21 as are usual and customary
in an underwritten public sale of common stock.
3. Covenants of Shareholder.
(a) Shareholder hereby covenants and agrees:
(i) To cooperate with Vision 21 in its compliance
with all federal and state securities laws, including without limitation
providing such information and signing such documents as are necessary to
effect a registration or reasonably requested by underwriters pursuant to this
Agreement;
(ii) To pay his pro rata portion (calculated on
the basis of the ratio of the aggregate offering price attributable to the
shares of Shareholder being registered and sold in relation to the aggregate
offering price attributable to the total number of securities being registered
and sold, including securities being registered and sold by other selling
stockholders) of the underwriting discounts and selling commissions and to pay
all the fees and disbursements of his counsel; and
(iii) To the entry of stop transfer instructions
with the Company's transfer agent against the transfer of any shares of
Shareholder's Vision 21 common stock except in compliance with the restrictions
as set forth in this Section 3.
(b) Shareholder shall be considered an "affiliate" of
Vision 21 for purposes of Rule 144 under the Securities Act, even in the event
Shareholder is not technically an affiliate of Vision 21 as defined in Rule
144, and the Vision 21 common stock owned by Shareholder shall be subject to
the restrictions and limitations on resale imposed by Rule 144 on affiliates of
Vision 21. Shareholder shall not sell any of his shares of Vision 21 common
stock under Rule 144 unless Shareholder would be eligible to do so under the
provisions applicable to affiliates.
(c) In addition to the transfer restrictions otherwise
provided for herein, Shareholder shall not, whether or not Shareholder elects
to cause the registration of his shares pursuant to this Agreement, directly or
indirectly, offer, sell, offer to sell, contract to sell, pledge, grant any
option to purchase or otherwise dispose of any shares of Vision 21 common stock
(other than the shares covered by such registration, which may be sold in
accordance with the plan or plans of distribution described in the registration
statement) owned by Shareholder for a period of one hundred eighty (180) days
or such shorter period as negotiated by the Company following the effective
date of such registration statement without the prior written consent of Vision
21. In the event that Shareholder is a corporation, professional corporation
or professional limited liability company, Shareholder may after receiving the
written approval of Vision 21 (which approval shall not be unreasonably
withheld) transfer its shares of Vision 21 Common Stock to any of the
individuals and/or trusts described in Sections 7(a), (b) and (c) hereof. Such
Exhibit 12.1(k) - Page 4
134
transferee shall, for purposes of the transfer restrictions contained in this
Agreement, be deemed to have held such transferred shares for the same period
as Shareholder.
4. Indemnification of Shareholder.
Whenever registration with respect to any shares of Shareholder's
common stock is effected under the Securities Act pursuant hereto, Vision 21
will indemnify and hold harmless Shareholder, each underwriter, the directors,
officers, employees and agents of each underwriter, and each person, if any,
who controls each underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act from and against any and all
losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, (including any securities law
violations) insofar as such losses, claims, liabilities, expenses or damages
arise out of or are based on any untrue statement or alleged omission to state
in such document a material fact required to be stated in it or necessary to
make the statements in it not misleading, provided that Vision 21 will not be
liable to Shareholder to the extent that such loss, claim, liability, expense
or damage is based on an untrue statement or omission made in reliance on and
in conformity with information furnished to Vision 21 by Shareholder, or by
Shareholder through any attorney-in-fact, expressly for inclusion in the
registration statement or any prospectus included in such registration
statement.
5. Indemnification of Vision 21.
Whenever registration with respect to any shares of Shareholder's
common stock is effected under the Securities Act pursuant hereto, Shareholder
will indemnify and hold harmless Vision 21, each of Vision 21's directors and
officers, each person who controls Vision 21 within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act, each underwriter, the
directors, officers, employees and agents of each underwriter, and each person,
if any, who controls each underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, liabilities, expenses and damages (including any and all
investigative, legal and other expenses reasonably incurred in connection with,
and any amount paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become subject under the
Securities Act, the Exchange Act or other federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims,
liabilities, expenses or damages arise out of or are based on any untrue
statement or alleged untrue statement of a material fact required to be stated
in it or necessary to make the statements in it not misleading; provided that
Shareholder will not be liable except to the extent that such loss, claim,
liability, expense or damage arises from or is based upon an untrue statement
or omission or alleged untrue statement or omission made in reliance on and in
conformity with information furnished to Vision 21 by the Shareholder, or by
Exhibit 12.1(k) - Page 5
135
Shareholder through any attorney-in-fact, expressly for inclusion in the
registration statement or any prospectus included in such registration
statement.
6. Defense of Claim.
Promptly after receipt by an indemnified party of notice of the
commencement of any action, the indemnified party shall notify the indemnifying
party in writing of the commencement thereof if a claim in respect thereof is
to be made against an indemnifying party under this Agreement, but the omission
of such notice shall not relieve the indemnifying party from liability which it
may have to the indemnified party under this Agreement, except to the extent
that the indemnifying party is actually prejudiced by such failure to give
notice, and shall not relieve the indemnifying party from any liability which
it may have to any indemnified party otherwise than under this Agreement. In
case any action is brought against the indemnified party and it shall notify
the indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate in, and to the extent that it chooses, to
assume the defense thereof with counsel reasonably satisfactory to the
indemnified party, and after notice from the indemnifying party to the
indemnified party that it so chooses, the indemnifying party shall not be
liable for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof; provided however that (i) if the
indemnifying party fails to take reasonable steps necessary to defend
diligently the claim within twenty (20) days after receiving notice from the
indemnified party that the indemnified party believes the indemnifying party
has failed to diligently defend such claim, or (ii) if the indemnified party
who is a defendant in any action or proceeding which is also brought against
the indemnifying party reasonably shall have concluded that there are legal
defenses available to the indemnified party which conflict with the defense
strategy of the indemnifying party, or (iii) if representation under applicable
standards of professional conduct require separate representation of the
indemnified party and the indemnifying party, then the indemnified party shall
have the right to assume or continue its own defense as set forth above and the
indemnifying party shall reimburse the indemnified party for the costs of such
defense as provided in Section 4 and 5. In no event shall the indemnifying
party be responsible for the fees of more than one firm for all indemnified
parties.
7. Non-Transferability.
The registration rights and benefits set forth herein, including
indemnification by Vision 21 are granted for the sole and personal benefit of
Shareholder and may not be transferred or assigned except for (a) gifts to
his/her family members (b) assignment to a trust controlled by the Shareholder,
(c) transfers to Shareholder's heirs which occur by operation of law as a
result of the death of the Shareholder, or (d) if the Shareholder is a
corporation, professional corporation or professional limited liability
company, transfers or assignments to the individuals who are current equity
holders of Shareholder and by such equity holders to the individuals and/or
trusts described in subsection (i) and (ii) of this Section.
8. Survival of Indemnity.
Exhibit 12.1(k) - Page 6
136
The indemnifications provided by this Agreement shall be a continuing
right to indemnification and shall survive the registration and sale of any
securities by any person entitled to indemnification hereunder and the
expiration or termination of this Agreement.
9. Delay of Registration.
Shareholder agrees that he shall have no right to obtain or seek an
injunction restraining or otherwise delaying any registration statement filed
by Vision 21.
10. Notices.
(a) All communications under this Agreement shall be in
writing and shall be sufficient in all respects if when personally delivered
or mailed by prepaid certified or registered mail, return receipt requested,
addressed as follows:
(i) If to Vision 21, at:
Vision 21, Inc.
0000 Xxxxx Xxxxx Xxxx
Xxxxx, Xxxxxxx 00000
Attn: Xxxxxxxx X. Xxxxxxxx,
Chief Executive Officer
With a copy to:
Xxxxxxx X. Xxxxx, Esquire
c/o Shumaker, Loop & Xxxxxxxx, LLP
000 X. Xxxxxxx Xxxxxxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
or at such other address as Vision 21 may have furnished in writing to
Shareholder at the time outstanding, or
(ii) If to Shareholder at:
Sharona Optical, Inc.
0000 X. Xxxxxxxxxxx Xx.
Nos. 1 & 1A
Xxxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx, M.D.
With a copy to
Exhibit 12.1(k) - Page 7
137
Xxxxxx X. Xxxxxxxxx, Esquire
Sacks Tierney P.A. Lawyers
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000-0000
(b) Any notice so addressed, when mailed
by registered or certified mail shall be deemed to be given three days after so
mailed, and when delivered by hand shall be deemed to be given immediately.
11. Counterparts.
One or more counterparts of this Agreement may be signed by the
parties, each of which shall be an original but all of which together shall
constitute one and the same instrument.
12. Governing Law.
This Agreement shall be construed in accordance with and governed by
the internal laws of the State of Florida, which shall prevail in all matters
arising under or in connection with this Agreement.
13. Headings.
The headings in this Agreement are for convenience of reference only
and shall not be deemed to alter or affect the meaning or interpretation of any
provisions hereof.
14. Stock Lettering.
The Company shall have the right to provide a legend on the shares of
stock covered hereunder reflecting the restriction described hereunder.
Exhibit 12.1(k) - Page 8
138
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date and year first above written.
"VISION 21"
VISION 21, INC.
By:_____________________________________
Xxxxxxxx X. Xxxxxxxx, Chief
Executive Officer
"SHAREHOLDER"
SHARONA OPTICAL, INC.
________________________________________
Xxxxxx X. Xxxxxx, M.D., its President
Exhibit 12.1(k) - Page 9
