U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
[X] Quarterly Report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarterly period ended June 30, 2000
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period from _________ to ________
SURGICARE, INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
DELAWARE 58-1597246
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
6699 CHIMNEY ROCK, SUITE 105
HOUSTON, TEXAS 77081
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
ISSUER'S TELEPHONE NUMBER: (713) 665-1406
NOT APPLICABLE
(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 20 2000, and effective October 21, 2000, Town & Country
SurgiCare, Inc. ("Town & Country"), a wholly-owned subsidiary of SurgiCare, Inc.
("SurgiCare") purchased from HealthFirst Memorial Village Surgery Center, Ltd.
("MVSC"), a Texas limited partnership an undivided 60% interest in the assets of
Memorial Village Surgery Center (the "Center"), an ambulatory surgery center
located in Houston, Texas. A proportionate share of the operating liabilities of
the Center were also assumed by Town & Country.
Pursuant to the terms of the Acquisition Agreement, dated as of October 20,
2000, by and among SurgiCare, MVSC, and other named parties, SurgiCare paid to
MVSC $4,490,000 in cash, and issued to MVSC 1,357,663 shares of SurgiCare's
common stock, par value $.005 per share. MVSC concurrently distributed the cash
and shares to its general and limited partners in agreed amounts.
Funds for the cash portion of the purchase price paid by SurgiCare in the
acquisition were obtained from borrowings under three related loan agreements,
two of which are among SurgiCare, Bellaire SurgiCare, Inc. ("Bellaire"), a
wholly owned subsidiary of SurgiCare, and DVI Financial Services, Inc. and one
of which is among SurgiCare, Bellaire and DVI Business Credit, Inc.
The consideration paid to MVSC was determined through arm's-length
negotiations between SurgiCare, MVSC and other related entities.
Following the asset purchase, Town & Country and MVSC, as the owner of the
remaining 40% of the assets comprising the Center contributed their respective
ownership interests in the assets comprising the Center to a newly formed Texas
limited partnership, SurgiCare Memorial Village, L.P., and received
proportionate partnership interests therein, with Town & Country becoming the
general partner. The partnership also assumed the operating liabilities of the
Center from Town & Country and MVSC.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
It is impractical to provide at this time the financial statements and pro
forma financial information required by Item 7(a) and 7(b) for the acquired
business described above. The Company anticipates filing this information in an
amendment to this Form 8-K on or prior to December, 15 2000.
(c) Exhibits:
2.1 Acquisition Agreement, dated October 20, 2000, by and among SurgiCare,
Inc., Town & Country SurgiCare, Inc., HealthFirst Memorial Village Surgery
Center, Ltd., and other named parties. Exhibits and schedules referred to
therein are omitted pursuant to Item 601(b)(2) of Regulation S-K. Upon request,
the Company will file supplementally with the Commission a copy of any omitted
exhibit or schedule.
2
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SurgiCare, Inc.
By: /s/ Charles S. Cohen
---------------------------------------
CHARLES S. COHEN
Chief Operating Officer
Date: November 8, 2000
3
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------ -----------
2.1 Asset Purchase Agreement, dated October 20, 2000, by and among
Memorial Village Surgery Center, L.P., SurgiCare, Inc. and other
entities.
ACQUISITION AGREEMENT
among
SURGICARE, INC.
TOWN & COUNTRY SURGICARE, INC.
("Sub")
and
HEALTHFIRST MEMORIAL VILLAGE
SURGERY CENTER, LTD.
(the "Partnership")
HFMV, INC.
and
THE LIMITED PARTNERS OF THE PARTNERSHIP
October 20, 2000
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TABLE OF CONTENTS
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ARTICLE 1 BASIC TRANSACTION.......................................................................................1
1.1 Purchase of Assets.......................................................................................1
1.2 Excluded Assets..........................................................................................2
1.3 The Purchase Price.......................................................................................2
1.4 Market Price.............................................................................................3
1.5 Intentionally Omitted....................................................................................3
1.6 Assumed Liabilities......................................................................................3
1.7 Excluded Liabilities.....................................................................................4
1.8 Waiver Of Purchase Rights................................................................................5
1.9 Allocation of the Purchase Price Among the Assets........................................................5
1.10 Contribution of Assets; Assumption of Liabilities.....................................................5
1.11 Closing and Effective Date............................................................................6
1.12 Partnership Distributions.............................................................................7
1.13 Effective Date........................................................................................7
1.14 Disclaimer of Warranties..............................................................................7
ARTICLE 2 REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP.......................................................8
2.1 Organization, Power and Authority of The Partnership.....................................................8
2.2 Binding Obligation.......................................................................................8
2.3 Capitalization and Ownership of the Partnership..........................................................8
2.4 Financial Statements of the Partnership..................................................................9
2.5 Liabilities of the Partnership...........................................................................9
2.6 Tax Matters..............................................................................................9
2.7 The Real Property........................................................................................9
2.8 Good Title to and Condition of the Assets...............................................................11
2.9 Licenses................................................................................................11
2.10 Compliance with Laws.................................................................................11
2.11 Medicare Participation;Accreditation.................................................................12
2.12 Relationships with its Managed Care Customers........................................................12
2.13 The Equipment Leases and Contracts...................................................................13
2.14 Compensation and Benefits............................................................................13
2.15 Insurance Policies...................................................................................13
2.16 Litigation Involving The Partnership or any Partner..................................................14
2.17 The Records..........................................................................................14
2.18 No Material Adverse Change...........................................................................14
2.19 Absence of Certain Acts or Events....................................................................14
2.20 Environmental Matters................................................................................15
2.21 Labor Relations......................................................................................15
2.22 Pension, Profit Sharing and Retirement Plans.........................................................15
2.23 Receivables..........................................................................................16
2.24 Medical Staff Matters................................................................................16
2.25 Fraud and Abuse......................................................................................16
2.26 Certain Payments.....................................................................................17
2.27 No Finders or Brokers................................................................................17
2.28 Accuracy of Information..............................................................................17
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF THE LIMITED PARTNERS.................................................17
3.1 Authority...............................................................................................17
3.2 No Violation............................................................................................17
3.3 No Broker's Fees........................................................................................18
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER................................................................18
4.1 Organization, Power and Authority of Buyer; Due Authorization...........................................18
4.2 Binding Obligation; Noncontravention....................................................................18
4.3 No Finders or Brokers...................................................................................18
4.4 Litigation..............................................................................................19
4.5 Accuracy of Information.................................................................................19
4.6 Capital Stock...........................................................................................19
4.7 Authorization of Buyer Stock............................................................................19
4.8 Buyer Common Stock......................................................................................19
ARTICLE 5 CERTAIN PRE-CLOSING COVENANTS..........................................................................19
5.1 Commercially Reasonable Efforts.........................................................................19
5.2 Conduct of Business Pending the Closing.................................................................19
5.3 Access to Facilities, Properties and Records............................................................20
5.4 No Disclosure...........................................................................................20
5.5 No Other Discussions....................................................................................21
5.6 Casualty................................................................................................21
5.7 Costs of Agreement......................................................................................21
5.8 Interim Operating Reports...............................................................................21
5.9 Employee Matters........................................................................................21
5.10 Tail Insurance.......................................................................................22
5.11 Termination of Employee Participation in 401(k) Plan.................................................22
5.12 Notification; Updates to Disclosure Schedules........................................................22
ARTICLE 6 CONDITIONS TO THE OBLIGATIONS OF BUYER.................................................................23
6.1 Accuracy of Representations and Warranties and Compliance with Obligations..............................23
6.2 Receipt of Necessary Consents and Governmental Permits..................................................23
6.3 No Adverse Litigation...................................................................................24
6.4 Material Changes........................................................................................24
6.5 Incumbency Certificate..................................................................................24
6.6 Tail Insurance Coverage.................................................................................24
6.7 Satisfactory Completion of Due Diligence................................................................24
6.8 Financing...............................................................................................24
6.9 Board Approval..........................................................................................24
6.10 Center Lease.........................................................................................24
6.11 Private Placement Memorandum.........................................................................24
6.12 Documents to be Delivered at Closing.................................................................25
ARTICLE 7 CONDITIONS TO THE OBLIGATIONS OF THE PARTNERSHIP.......................................................25
7.1 Accuracy of Representations and Warranties and Compliance with Obligations..............................25
7.2 No Adverse Litigation...................................................................................25
7.3 Payment of Purchase Price...............................................................................25
7.4 Good Standing Certificate...............................................................................25
7.5 Incumbency Certificate..................................................................................25
7.6 Approval by the Partners................................................................................25
7.7 Documents to be Delivered at Closing....................................................................26
ARTICLE 8 CERTAIN POST-CLOSING COVENANTS.........................................................................26
8.1 Execution of Further Documents..........................................................................26
8.2 Buyer Appointed Attorney for The Partnership and the Partners...........................................26
8.3 Record Retention........................................................................................26
8.4 Sales Taxes and Other Governmental Charges..............................................................27
8.5 Retained Cash...........................................................................................27
8.6 No Termination of the Obligations by Subsequent Dissolution.............................................27
8.7 Acquisition Debt........................................................................................27
ARTICLE 9 NONCOMPETITION.........................................................................................27
9.1 Prohibited Activities...................................................................................27
9.2 Damages.................................................................................................28
9.3 Reasonable Restraint....................................................................................28
9.4 Severability, Reformation...............................................................................28
9.5 Independent Covenant....................................................................................28
9.6 Materiality.............................................................................................28
ARTICLE 10 INDEMNIFICATION.......................................................................................28
10.1 Agreement by the Partnership to Indemnify............................................................28
10.2 Agreement by Buyer and Sub to Indemnify..............................................................30
ARTICLE 11 MISCELLANEOUS.........................................................................................31
11.1 Amendment and Modification...........................................................................31
11.2 Assignment...........................................................................................31
11.3 Intentionally Omitted................................................................................31
11.4 Binding Effect.......................................................................................31
11.5 Entire Agreement.....................................................................................31
11.6 Headings.............................................................................................32
11.7 Execution in Counterpart.............................................................................32
11.8 Notices..............................................................................................32
11.9 Dispute Resolution; Jurisdiction and Forum; Jury Waiver..............................................33
11.10 Governing Law........................................................................................34
11.11 Interpretation of Agreement..........................................................................34
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ACQUISITION AGREEMENT
This Acquisition Agreement (this "Agreement") is made and entered into as
of October 20, 2000, by and among SurgiCare, Inc., a Delaware corporation
("Buyer"), Town & Country SurgiCare, Inc., a Delaware corporation ("Sub"),
HealthFirst Memorial Village Surgery Center, Ltd., a Texas limited partnership
(the "Partnership"), HFMV, Inc., a Texas corporation, (the "General Partner")
and the limited partners of the Partnership named on the signature pages hereto
(the "Limited Partners"; together with the General Partner, the "Partners").
BACKGROUND
A. The Partnership presently owns and operates a freestanding ambulatory
surgery center known as the Memorial Village Surgery Center (the "Center"),
located at 12727 Kimberly Lane, Suite 100, Houston, Texas 77024 (the "Real
Property"). The General Partner is the general partner of the Partnership.
B. This Agreement sets forth the terms and conditions whereby (a) the
Partnership shall sell to Sub and Sub shall purchase from the Partnership, a 60%
undivided interest in substantially all of the assets of the Partnership,
(b) Sub shall contribute all of its interest in the assets so purchased from the
Partnership to a new Texas limited partnership ("Newco") formed to own and
operate the Center, and (c) the Partnership shall contribute the remaining 40%
undivided interest in the assets of the Partnership to Newco, all as hereinafter
described.
NOW, THEREFORE, the parties hereto agree as follows:
AGREEMENT
BASIC TRANSACTION
1.1......Purchase of Assets. The Partnership agrees to sell to Sub, and
Buyer agrees to cause Sub to purchase, free and clear of all liens, claims,
charges, encumbrances and obligations (except those which Buyer has expressly
agreed in Section 1.6 to cause Sub to assume), on the terms and subject to the
conditions set forth in this Agreement, an undivided sixty percent (60%)
interest in the all of the assets of the Partnership (the "Assets"), but
excluding the Excluded Assets listed in Section 1.2 below. The Assets shall
include, without limitation, the following:
(a) All cash, and all cash deposits and accounts receivable of the
Partnership, if any, remaining after the retention by the Partnership
of the cash and cash deposits described in Section 1.2 as constituting
part of the Excluded Assets;
(b) All medical and pharmaceutical supplies, medicines and drugs;
(c) All furniture, fixtures, equipment, computers, computer software
programs, spare parts, tools, supplies, leasehold improvements and all
other tangible assets that the Partnership owns, to the extent the
same are assignable;
(d) All books, files, operating records, medical records and other
documents of any kind whatsoever, whether in hard copy or on computer
tapes, computer disks, or any other medium or form that the
Partnership owns;
(e) All licenses, permits, approvals, qualifications, registrations and
rights to the use of fictitious names, to the extent the same are
assignable;
(f) All rights in, to and under (i) the lease pursuant to which the Center
occupies the Center's current facilities and premises and (ii) all
operating leases and leases of equipment;
(g) All assignable contracts and third party payor agreements, including
the Partnership's Medicare provider agreement and provider number and
Medicaid participation agreement;
(h) All prepaid and deferred items, including prepaid rentals, insurance,
taxes, unbilled charges and deposits relating to the operations of the
Center; and
(i) All other assets, whether tangible or intangible used by the
Partnership in the ownership and operation of the Center and the
business conducted by the Partnership thereat remaining after payment
of the Partnership's liabilities; and
The Assets shall include, but shall not be limited to, the assets listed on
Exhibit A attached hereto.
1.2 Excluded Assets. Anything to the contrary in Section 1.1
notwithstanding, the Assets shall exclude the following assets of the
Partnership (collectively, the "Excluded Assets"):
(a) cash and cash deposits of the Partnership in the amount of $86,749
(the "Retained Cash");
(b) the rights of the Partnership, and the Partners under this Agreement;
(c) the Partnership's agreement of limited partnership, correspondence
with legal counsel, tax records and any minutes of meetings of the
Partners copies of all of which (except correspondence with counsel)
shall be provided to Buyer);
(d) all rights to receive any refunds relating to any federal, state or
local taxes paid by the Partnership; and
(e) all insurance payments for insured liabilities that are not Assumed
Liabilities (as defined below).
1.3 The Purchase Price. The purchase price (the "Purchase Price") for the
Assets shall be determined as set forth hereinafter in this Section
1.3. As consideration for the Assets, subject to the terms and
conditions set forth in this Agreement, Buyer shall at the Closing
(a) cause Sub to pay to the Partnership $2,000,000 (the "GP Cash
Consideration");
(b) issue to the Partnership 145,986 shares (the"GP Shares") of the common
stock of Buyer, par value $.005 per share ("Common Stock") of which GP
Shares 109,490 shares (the "Escrowed GP Shares") will be deposited by
Buyer in escrow pursuant to that Escrow Agreement among Buyer, the
Partnership, the General Partner and the escrow agent named therein,
in the form of Exhibit B hereto (the "GP Escrow Agreement");
(c) cause Sub to pay to the Partnership, in addition to the amount set
forth in clause (a) hereof, an amount (the "LP Cash Consideration")
equal to $30,000 in cash multiplied by the number of units of limited
partnership interest in the Partnership owned by all of the Limited
Partners (83 units) (the "LP Units"); and
(d) issue to the Partnership, in addition to the shares of Common Stock
set forth in clause (b) hereof, that whole number (rounded down) of
shares of Common Stock (the "LP Shares") which shall have a total
value (determined by multiplying the number of shares of Common Stock
by the Market Price) equal to (i) $40,000 multiplied by (ii) the
number of LP Units (83 units) together with cash for fractional
shares, as set forth on Schedule 1.3(d) hereto.
1.4 Market Price. As used herein, "Market Price" means the average, for the
six (6) month period ending on the day preceding the Closing Date, of the
(i) last reported sale prices of the Common Stock on the NASDAQ National Market
(the "NNM"), if such Common Stock is traded thereon, or (ii) if the Common Stock
is not traded on the NNM, the closing bid prices of the Common Stock as reported
by the National Association of Securities Dealers, Inc. through (A) the NNM or
similar organization if the NNM is no longer reporting such information, or (B)
the NASDAQ Small Cap Market or OTC Bulletin Board.
1.5 Intentionally Omitted.
1.6 Assumed Liabilities. Buyer agrees that it will at the Closing cause the
Sub and Newco to assume and agree to pay, discharge and perform when lawfully
due only the liabilities and obligations of the Partnership
(a) under (i) the Center Lease, and (ii) those contracts and equipment
leases ("Contracts") which Buyer agrees in writing prior to Closing to
cause Sub or Newco to assume (the "Assumed Liabilities"), but only to
the extent that such obligations (1) if arising or attributable to the
period prior to the Closing Date, are reflected as liabilities on the
Balance Sheet, (2) arise or are attributable to the period after the
Closing Date, (3) do not arise from or relate to any breach by the
Partnership or the Partners of any provision of such Center Lease or
Contracts, (4) do not arise from or relate to any event, circumstance
or condition occurring or existing on or prior to the Closing Date
that, with notice or lapse of time would constitute or result in a
breach of any of such Center Lease or Contracts unless reflected as
liabilities on the Balance Sheet, and (5) are ascertainable (in nature
and amount) solely by reference to the express terms of such Center
Lease or Contracts; and
(b) reflected as liabilities of the Partnership on Schedule 1.6(b) hereto,
as and to the extent that (i) such liabilities represent bona fide
liabilities of the Partnership for goods or services actually
received, (ii) do not exceed the amounts therefor set forth on such
Balance Sheet, and (iii) do not exceed in the aggregate the amount of
$1,873,251, which amount shall exclude the accounts payable identified
as excluded on Schedule 1.6(b).
1.7 Excluded Liabilities. Anything herein to the contrary notwithstanding,
the parties agree that none of Buyer, Sub or Newco shall assume, pay or be
responsible for any obligation, duty or liability of the Partnership or Partners
other than the Assumed Liabilities, including without limitation the following
(the "Excluded Liabilities");
(a) the obligations of the Partnership and the Partners arising out of, or
relating to the execution, delivery or performance of this Agreement
or the other agreements contemplated to be executed and delivered in
connection herewith;
(b) any obligation of the Partnership, the Center, or any Partner for
federal, state, local or foreign income, excise, or license tax
liability (including interest and penalties) arising from the
operations of the Partnership and the Center up to the Effective Date
or arising out of the sale and transfer of the Assets pursuant hereto;
(c) any obligation for any transfer, sales or other taxes, fees or levies
imposed by any state or other governmental entity on or arising out of
the sale and transfer of the Assets by the Partnership or the Partners
pursuant hereto;
(d) except as described in Section 1.6, any obligation of the Partnership
or the Partners for expenses incurred in connection with the sale of
the Assets pursuant hereto, including without limitation the fees and
expenses of their counsel and independent accountants;
(e) except as described in Section 1.6, any claim or contingent liability
arising from the operations of the Center or based upon any acts or
omissions of the Partnership or any Partner or their respective
employees, agents or independent contractors or any other event or
circumstance that has occurred or existed prior to the Effective Date,
including without limitation any malpractice claim, workers'
compensation claim or claim of discrimination, unlawful termination or
sexual harassment, and all liabilities or obligations arising under
the Medicare or Medicaid programs or any other governmental or third
party payor program or any claim or contingent liability arising out
of environmental conditions at the Real Property or other
environmental matters arising or attributable to the period prior to
the Closing;
(f) except as described in Section 1.6, any late fee, interest or similar
charge on any trade payable or other current liability not shown on
the Balance Sheet;
(g) except as described in Section 1.6, any indebtedness of the
Partnership, the Center or any Partner;
(h) except as described in Section 1.6, any intercompany payable owed by
the Partnership, the Center or any Partner to any other Partner or any
Affiliate of any such Partner;
(i) any obligation or liability of the Partnership or the Partners listed
on Schedule 1.7; and
(j) any other liability of the Partnership, the Center or any Partner,
known or unknown, fixed or contingent, the existence of which
constitutes or will constitute a breach of any representation or
warranty of the Partnership contained in or made pursuant to Article 2
of this Agreement.
1.8 Waiver Of Purchase Rights. The General Partner and each Limited Partner
hereby irrevocably waive any and all rights he or it may have pursuant to the
terms of the Partnership's limited partnership agreement or otherwise to
purchase any or all of the assets of the Partnership.
1.9 Allocation of the Purchase Price Among the Assets. The Purchase Price
shall be allocated among each item or class of the Assets as specifically set
forth in the attached Schedule 1.9. Partners and Buyer agree that they will
prepare and file their federal and any state or local income tax returns based
on such allocation of the Purchase Price. Partners and Buyer agree that they
will prepare and file any notices or other filings required pursuant to Section
1060 of the Internal Revenue Code of 1986, as amended (the "Code"), and that any
such notices or filings will be prepared based on such allocation of the
Purchase Price.
1.10 Contribution of Assets; Assumption of Liabilities. Concurrently with
the Closing on the Closing Date,
(a) Sub shall contribute to Newco all of the right, title and interest of
Sub in and to the Assets, in exchange for (i) the general partner
interest in Newco (which shall be equal to not less than one percent
(1%) of the partnership interests in Newco), and (ii) limited
partnership interests in Newco ("Newco Units") (which shall represent
the difference between 60% of the partnership interest in Newco minus
the general partner interest in Newco received by Sub), as set forth
in the Agreement of Limited Partnership of Newco set forth as Exhibit
C hereto (the "Newco LP Agreement");
(b) The Partnership shall contribute to Newco all of the Partnership's
right, title and interest in and to the remaining undivided interest
in the Assets), in exchange for limited partnership interests in Newco
equal to the remaining 40% of the Newco Units, as set forth in the
Newco LP Agreement; and
(c) Newco shall assume, and be primarily liable for the payment when
lawfully due of, the Assumed Liabilities.
1.11 Closing and Effective Date.
1.11.1 The Closing. The closing of the transactions provided for herein
(the "Closing") will take place at the offices of Andrews & Kurth, L.L.P., 600
Travis, Suite 4200, Houston, Texas 77002, at 11:00 a.m., C.D.T., October 20,
2000, or at such other date, time or place as Buyer and Partners shall agree.
Such time and date are referred to herein as the "Closing Date".
1.11.2 Deliveries at the Closing. At the Closing:
(a) Buyer shall, or shall cause Sub to, deliver the cash portion of the
Purchase Price in accordance with Section 1.3 hereof by wire transfer
of immediately available funds to the account designated in writing by
the Partnership to Buyer not less than 3 days prior to the Closing, in
the aggregate amount of the GP Cash Consideration and the LP Cash
Consideration;
(b) Buyer shall deposit in escrow pursuant to the GP Escrow Agreement the
Escrowed GP Shares;
(c) Buyer shall deliver to the Partnership the GP Shares other than the
Escrowed GP Shares;
(d) Buyer shall deliver to the Partnership the LP Shares;
(e) the parties shall execute and deliver to each other the following
documents (the parties executing and delivering each such document as
indicated in the parentheticals) :
(i) the GP Escrow Agreement (General Partner, Escrow Agent
and Buyer);
(ii) Newco Limited Partnership Agreement (Sub and Limited
Partners);
(iii)Assignment and Assumption Agreement in the form of
Exhibit D hereto (Partnership and Sub);
(iv) Assignment and Assumption Agreement in the form of
Exhibit E hereto (Sub and Newco);
(v) Investment Representation Letter in the form of Exhibit
F hereto (each of the Partners);
(vi) Bill of Sale and Assignment in the form of Exhibit G
hereto (Partnership and Sub);
(vii)Contribution Agreement in the form of Exhibit H hereto
(Sub and Newco);
(viii) certificate required by Section 6.1 hereof
(Partnership);
(ix) certificate required by Section 7.1 hereof (Buyer and
Sub);
(x) Management Agreement in the form of Exhibit I hereto
(Newco and Buyer or Buyer's affiliate)
(xi) Registration Rights Agreement, in the form of Exhibit J
hereto (Buyer and Partners);
(xii)Share Transfer Restriction Agreement in the form of
Exhibit K hereto (Buyer and General Partner); and
(xiii) such other documents or instruments as shall be
necessary to effectuate the transactions contemplated
by this Agreement (Buyer, Sub, Newco, the Partnership
and Partners).
1.12 Partnership Distributions. Concurrently with, or as soon as
practicable following, the Closing, the Partnership shall make the following
distributions to the Partners: (i) the GP Cash Consideration and the GP Shares
other than the Escrowed GP Shares shall be distributed by the Partnership (or,
if requested by the Partnership in order to distribute such amounts more easily,
directly by Buyer) to the General Partner; (ii) the LP Cash Consideration shall
be distributed by the Partnership (or, if requested by the Partnership in order
to distribute such amounts more easily, directly by Buyer) to the Limited
Partners pro rata in accordance with their interests as set forth on Schedule
1.12 hereto; (iii) the LP Shares shall be distributed to the Limited Partners by
the Partnership (or, if requested by the Partnership in order to distribute such
amounts more easily, directly by Buyer) in accordance with Schedule 1.3(d), and
(iv) the Newco Units received by the Partnership shall be distributed by the
Partnership (or, if requested by the Partnership in order to distribute such
Newco Units more easily, directly by Newco) to the Limited Partners pro rata in
accordance with their interests as set forth on Schedule 1.12 hereto.
1.13 Effective Date. Regardless of when the Closing occurs it shall be
effective as of 12:01 a.m. on October 21, 2000 (the "Effective Date"), and Buyer
and Partners agree to acknowledge and use said Effective Date for all purposes,
including for accounting and federal and state tax reporting purposes.
1.14 Disclaimer of Warranties. There are no representations or warranties
regarding the tangible Assets other than those expressly set forth in this
Agreement. SPECIFICALLY, THERE ARE NO IMPLIED WARRANTIES, INCLUDING WITHOUT
LIMITATION ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE,
WITH RESPECT TO THE EQUIPMENT, INVENTORY OR SUPPLIES, ANY AND ALL OF WHICH
IMPLIED WARRANTIES ARE HEREBY DISCLAIMED BY THE PARTNERSHIP AND PARTNERS.
REPRESENTATIONS AND WARRANTIES OF THE PARTNERSHIP
In order to induce Buyer to enter into this Agreement and to consummate the
transactions contemplated hereunder, the Partnership hereby makes the following
representations and warranties, subject to the qualifications and exceptions set
forth in the Disclosure Schedule attached hereto (which Disclosure Schedule
references the specific sections in this Article 2 that the disclosed exception
relates to):
1.15 Organization, Power and Authority of The Partnership. The Partnership
is a limited partnership duly organized and legally existing and in good
standing under the laws of the State of Texas. The General Partner is a
corporation duly organized and legally existing in good standing under the laws
of its state of incorporation (as described on the Disclosure Schedule. The
Partnership has full partnership power and authority, and the General Partner
has full corporate power and authority, (a) to own or lease its properties and
to carry on its business as it is now being conducted, (b) subject to receipt of
the consents and approvals described in Schedule 2.2 and Section 5.2, to enter
into this Agreement and to sell, convey, transfer, assign and deliver the Assets
to Sub as provided herein and (c) to carry out the other transactions and
agreements contemplated hereby. Without limiting the generality of the
foregoing, the Partnership and General Partner have obtained all necessary
approvals from their respective boards of directors, shareholders, and partners,
as the case may be, necessary for the execution, delivery and performance of
this Agreement by the Partnership.
1.16 Binding Obligation. The execution and delivery of this Agreement by
the Partnership and the General Partner, and the consummation of the
transactions contemplated hereby, will not: (a) conflict with or violate any
provision of (i) the agreement of limited partnership of the Partnership, or
(ii) the articles of incorporation or bylaws of the General Partner, or any law,
ordinance or regulation or any decree or order of any court or administrative or
other governmental body which is either applicable to, binding upon or
enforceable against the Partnership and the General Partner; or (b) subject to
receipt of the consents described in Section 5.2, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify or cancel, or require any notice
under, any mortgage, contract, agreement, indenture, trust or other instrument
which is either binding upon or enforceable against the Partnership or the
General Partner or their respective assets and properties, which conflict,
violation, breach or default could have a material adverse effect upon the
Assets or the business, financial condition, prospects or results of operations
of the Center (a "Material Adverse Effect"). Except as described in Schedule
2.2, no permit, consent, approval or authorization of, or declaration to or
filing with, any regulatory or other government authority is required in
connection with the execution and delivery of this Agreement by the Partnership
and the General Partner and the consummation by them of the transactions
contemplated hereby.
1.17 Capitalization and Ownership of the Partnership. The Partnership
currently has only 83 units of limited partnership interest issued and
outstanding, all of which are of the same class and series, and have the same
rights, powers and obligations. The Limited Partners own, both beneficially and
of record, all of the issued and outstanding units of limited partnership
interest in the Partnership. The General Partner owns, both beneficially and of
record, all of the issued and outstanding general partnership interests of the
Partnership, and is the only general partner of the Partnership. All of the
issued and outstanding general partnership interests and units of limited
partnership interest of the Partnership are validly authorized and issued and
are fully paid and non-assessable. The general partnership interest owned by the
General Partner, and the units of limited partnership interest owned by the
Limited Partners are the exclusive forms of ownership of the Partnership. There
are outstanding no options, warrants, purchase rights, subscription rights,
conversion rights, exchange rights or other contracts or commitments that could
require the Partnership to issue, sell or cause to become outstanding any
additional units of limited partnership interest or any additional general
partnership interest in the Partnership.
1.18 Financial Statements of the Partnership. The Partnership has
previously furnished to Buyer the following financial statements of the
Partnership: (a) unaudited balance sheet as of December 31, 1999; (b) unaudited
balance sheet as of August 31, 2000 (the "Balance Sheet Date"); (c) unaudited
statements of income and cash flows for the year ended December 31, 1999; and
(d) unaudited statements of income and cash flow for the period from January 1,
2000 through the Balance Sheet Date. Such financial statements present fairly
the financial position of the Partnership at each of the said balance sheet
dates and the results of its operations and cash flows for each of the said
periods covered, and they have been prepared on an accrual basis and are in
conformity with generally accepted accounting principles applied on a consistent
basis ("GAAP") (except such interim financial statements are not audited and do
not include footnote disclosures). The unaudited balance sheet of the
Partnership at the Balance Sheet Date is attached hereto as Schedule 2.4 and is
referred to herein individually as the "Balance Sheet."
1.19 Liabilities of the Partnership. The Partnership does not have any
liabilities or obligations, either accrued, absolute, contingent or otherwise:
except for those (a) in the amounts shown on its Balance Sheet and not
heretofore paid or discharged; (b) specifically set forth in or incorporated by
express reference in any of the Schedules attached hereto; or (c) trade
payables, accrued employee benefits and other normal liabilities incurred in the
ordinary course of business since the Balance Sheet Date.
1.20 Tax Matters. The Partnership (a) has timely filed all tax returns and
reports required to be filed by it, including without limitation all federal,
state, local and foreign income, franchise and withholding tax returns and
statements, (b) has paid in full or made adequate provision by the establishment
of reserves for all taxes and other charges which have become due, and (c) does
not have any knowledge of any tax deficiency proposed or threatened against it.
There are no tax liens upon any property or assets of the Partnership. The
Partnership has made all payments of estimated taxes when due in amounts
sufficient to avoid the imposition of any penalty. All taxes and other
assessments and levies which the Partnership was required by law to withhold or
to collect have been duly withheld and collected and have been or will be paid
over to the proper governmental entity on or before the due date, unless some or
all of said taxes or other assessments and levies are being disputed in good
faith (which disputes are described in Schedule 2.6 attached hereto), in which
case any undisputed portion will be paid over as stated above.
1.21 The Real Property. The Real Property is owned by the entity listed on
Schedule 2.7, which Schedule sets forth the name, type of entity and
jurisdiction of organization of such entity (the "Landlord"), and is leased by
the Partnership from the Landlord pursuant to that certain Lease Agreement dated
November 17, 1995 (the "Center Lease"). Landlord is not an Affiliate of the
General Partner, the Partnership or, to the knowledge of the Partnership, any
Limited Partner. Except for the Partnership's rights under the Center Lease, to
the knowledge of the Partnership, no one has any option or right of first
refusal to purchase, lease or rent the Real Property or any portion thereof. In
addition, the Partnership makes the following representations and warranties
regarding the Real Property:
The Center Lease is in full force and effect and constitutes the valid and
binding agreement of the parties thereto. As of the Closing Date, no party will
be in default under the Center Lease and no event or condition shall have
occurred or exist which, with the passage of time, the giving of notice or both,
would cause either the Partnership or (to the knowledge of the Partnership)
Landlord to be in default thereunder.
The improvements made by or for the Partnership and which located on the
Real Property and used by the Center have been approved by all governmental
authorities having jurisdiction. A permanent certificate of occupancy and all
licenses, permits, authorizations and approvals required by all governmental
authorities having jurisdiction have been issued for such improvements and, as
of the Closing, all of the foregoing will be in full force and effect.
No zoning, building, flood control, fire, safety, toxic materials,
hazardous waste or other law, code, order, regulation or restriction is violated
in any material respect by the continuing maintenance, operation or use of any
of the Real Property by the Partnership or the Center.
To the Partnership's knowledge, there are no material structural defects in
any of the improvements located on the Real Property which affect the Center. To
the Partnership's knowledge, the heating, electrical, plumbing and drainage
systems at or servicing the Real Property and all facilities and equipment
relating thereto are in good working condition and repair (subject to normal
wear and tear) and, together with the Assets, the Real Property is adequate for
the business of the Center as it is presently conducted.
To the Partnership's knowledge, no portion of the Real Property is subject
to or affected by any special assessment, whether or not such special assessment
constitutes a lien on the Real Property, and the Partnership has received no
notice or invoice related to any such special assessment. The Partnership and
the General Partner have provided Buyer with complete and accurate copies of all
property tax statements for the current and the preceding tax year, and the
Partnership has no knowledge of any proposed increase in the assessed value of
the Real Property for property tax purposes.
To the knowledge of the Partnership, the Real Property is not located in a
state or federally designated flood hazard area. The Real Property (a) has
direct access to public roads or access to public roads by means of a perpetual
access easement, such access being sufficient to satisfy the current and
reasonably anticipated normal transportation requirements of the Center's
business, taking the Center in its current configuration and capacity level, and
(b) includes adequate parking facilities and is served by all utilities,
including but not limited to water, electricity, natural gas, sewer and
telephone, in such quantity and quality as are sufficient to satisfy the current
normal utilization levels of the Center.
None of the Partnership, the General Partner or (to the knowledge of the
Partnership) Landlord has received notice of any condemnation proceeding with
respect to any portion of the Real Property and, to the knowledge of the
Partnership, no such proceeding is contemplated by any governmental authority.
1.22 Good Title to and Condition of the Assets. At the Closing, the
Partnership will have good title to all of the Assets (other than the rights of
equipment lessors under equipment leases), free and clear of all liens,
mortgages, pledges, encumbrances or charges of every kind, nature, and
description whatsoever. The Assets constitute, in the aggregate, all of the
property necessary for the conduct of the business of the Center in the manner
and at the utilization levels at which such business is currently being
conducted. The leasehold improvements, equipment, machinery, and vehicles
included in the Assets are in good operating condition, ordinary wear and tear
excepted. The inventory included in the Assets consists of items of a quality
and quantity usable in the normal course of the Partnership's business. The
Partnership has the right to use, free and clear of any royalty or other payment
obligation, and without any claim of infringement, all service marks, trade
names, logos, trade secrets and copyrights used or needed by the Partnership in
the conduct of business of the Center; and the Partnership has not received any
notice of any conflict with or violation or infringement of any asserted rights
of any other person or entity with respect to any such trade name or other
intangible asset used in the operation of the Center.
1.23 Licenses. The Partnership is duly licensed by the Texas Department of
Health (the "Department") to provide ambulatory surgical services. The
Partnership has all other licenses, permits, orders and approvals of
governmental or administrative authorities which are needed or required by law
to operate the Center in the manner operated by it and to use its assets as
those assets are currently used, without limitation or restriction. The Center
is in compliance with the requirements of all such licenses, permits, orders or
approvals. Attached hereto as Schedule 2.9(a) is an accurate list and summary
description of all such licenses, permits, orders and approvals owned or held by
the Partnership relating to the ownership, development or operations of the
Center, all of which are now and as of the Closing shall be in full force and
effect, in good standing and not subject to meritorious challenge. No suspension
or cancellation of any of such licenses, permits, orders or approvals is
pending, or, to the knowledge of the Partnership, threatened. There are no, and
at the Closing there will be no, provisions in, or agreements relating to, any
such licenses, permits, orders or approvals which would preclude or limit Buyer
from operating the Center as it is currently operated, and using all the beds of
the Center as they are currently classified. The Partnership has no knowledge of
any fire code violations in the Center. Attached hereto as Schedule 2.9(c) is
the most recent state licensing report and list of deficiencies, if any, and the
most recent fire marshal survey and list of deficiencies, if any for the Center.
The Partnership has cured all deficiencies noted therein.
1.24 Compliance with Laws. The Partnership and the Center are in compliance
in all material respects with all applicable statutes, laws, rules, regulations,
orders and requirements (collectively, "Laws") of all governmental authorities
having jurisdiction over the Partnership and the operations of the Center,
including, without limitation, agencies concerned with occupational safety,
environmental protection, employment practices, the Internal Revenue Service,
Medicare, Medicaid and the Health Care Financing Administration ("HCFA")
(including, without limitation, all applicable statutes, laws, rules,
regulations, manual provisions, and requirements pertaining to payments and
other consideration to referral sources). Neither the Partnership nor the
General Partner has received notification of any asserted past or present
failure to comply with any Laws within the past three (3) years and, to the
knowledge of the Partnership and the General Partner, no proceeding with respect
to any violation of Laws is contemplated. The Partnership and the Center are in
full compliance with all health care Laws, including Laws regulating the
disposal of medical waste. The Partnership has timely filed all reports, data
and other information required to be filed with such commissions, boards,
bureaus and agencies where a failure to file timely would have a material
adverse effect on the Partnership's assets or the Center. Neither the
Partnership nor the Center has made any claims for (i) services not provided,
(ii) "separately billable" laboratory services furnished by a third party
laboratory or (iii) services not properly authorized by a physician. The
Partnership has not received notice of violation of any rules or regulations
relating thereto, whether corrected or not, within the last three years. In
addition, the Center does not, and has not provided (and does not and has not
billed for) in violation of the Stark Law, "designated health services," as such
term is defined by the Stark Law. None of the Partnership, the General Partner,
or any of its or their employees or agents has made or agreed to make any
payment in connection with the business of the Center that is prohibited by any
Law.
1.25 Medicare Participation;Accreditation. Schedule 2.11(a) includes copies
of all correspondence from (i) the Department, Medicare and Medicaid (or
representatives thereof) relating to the most recent surveys undertaken by the
Department (both on behalf of the Department and on behalf of HCFA) in
connection with the Center, and (ii) the Accreditation Association for
Ambulatory Health Care, Inc. ("AAAHC") relating to the most recent survey or
resurvey undertaken by AAAHC in connection with the Center (the "Current
Surveys"). Except as set forth on Schedule 2.11(b) (i) all deficiencies noted in
the Current Surveys have been corrected, and (ii) the Center is qualified for
participation in the Medicare and Medicaid programs, has current and valid
provider contracts with the Medicare and Medicaid programs, is in compliance
with the conditions of participation in such programs in all material respects
and has received all approvals or qualifications necessary for reimbursement.
The Center presently has the Medicare certified provider numbers described on
Schedule 2.11(c) hereto (collectively, the "Provider Numbers"). Subject to
carrier approval of submitted claims, such Provider Numbers and contracts allow
the Center to provide reimbursable ambulatory surgical services without further
consent and approval by any governmental authorities, including, without
limitation, the Department and HCFA, and which are eligible for reimbursement
under and as provided in the Medicare and Medicaid programs.
1.26 Relationships with its Managed Care Customers. The Partnership has no
knowledge of any written or oral communication, fact, event or action which
exists or has occurred within 90 days prior to the date of this Agreement which
indicates that any current party with whom the Partnership has a managed care
contract and which accounted for over 5% of the total net revenues of the Center
for the year ended December 31, 1999 or the seven month period ended on the
Balance Sheet Date will terminate or fail to renew its contract or other
significant business relationship with the Center.
1.27 The Equipment Leases and Contracts. Schedules 2.13 (a) and 2.13
(b) attached hereto set forth (a) a true and complete list of each lease of
personal property used at the Center to which the Partnership is a party or by
which the Partnership or the Center is bound, and (b) any other agreement,
contract or commitment relating to the Center to which the Partnership is a
party or by which the Partnership or the Center is bound (other than the Center
Lease and any insurance policies). The Partnership has delivered to Buyer or its
counsel true and complete copies of the documents and instruments described in
Schedules 2.13(a)and 2.13 (b) and all of the agreements, contracts, leases and
instruments listed therein are valid and binding, and the Partnership has not,
nor (to the knowledge of the Partnership) has any other party thereto has
breached any provision of, or is in default of the terms of, and there are no
facts or circumstances which would reasonably indicate that the Partnership will
or may be in such breach or default, which invalidity, breach or default could
have a Material Adverse Effect. Neither the Partnership nor any Partner is bound
by any noncompetition covenant or other agreement that, upon completion of the
transactions contemplated hereby, will restrict Buyer or Sub from carrying on
its business anywhere in the world. To the knowledge of the Partnership and the
General Partner, none of the Partnership, any Partner, or any Affiliate (as
hereinafter defined) of the Partnership, any Partner or any manager, officer,
director or employee of the Partnership or any Partner nor any member of the
medical staff of the Center, has any direct or indirect interest in any customer
or supplier of the Center, in any person from whom or to whom the Partnership
leases real or personal property used by the Center or in any other person with
whom the Partnership or any Partner is doing business in connection with the
Center. No Affiliate of the Partnership is a party to any contract or lease
included in the Assets.
1.28 Compensation and Benefits. Schedule 2.14 attached hereto sets forth a
true and complete list of (a) the name and current annual salary of each
employee and each consultant who provides services to the Center and whose
current annual compensation is in excess of $25,000, (b) the profit sharing,
bonus or any other form of compensation (other than salary) paid or payable by
the Partnership to or for the benefit of each such person for the Partnership's
most recent fiscal year and (c) any written or oral employment or other
agreement of the Partnership or the General Partner with any of the
Partnership's officers, employees or consultants who provides services to the
Center. The Partnership has previously furnished Buyer with a true and complete
copy (or a written description, if oral) of each agreement, contract or
commitment that is listed on Schedule 2.14. There has not been any default in
any obligation to be performed by the Partnership or any Partner under any such
instrument which could have a Material Adverse Effect.
1.29 Insurance Policies. The Partnership carries insurance, including
without limitation malpractice insurance with coverage limits of at least
$1,000,000 per occurrence and $3,000,000 in the aggregate, with reputable
insurers, covering all of its assets, properties and business. Attached as
Schedule 2.15 is a brief description of all outstanding insurance policies of or
benefiting the Partnership that are currently in effect, including coverage
limits and deductibles applicable thereto. All premiums which have become due
under such policies of insurance have been paid in full, all of such policies
are now in full force and effect and neither the Partnership nor any Partner has
received notice from any insurer, agent or broker of the cancellation of any of
such policy or bond or any denial of any claim made by the Partnership or other
notice denying or disputing any coverage for any such claim or the amount of any
claim. The Partnership has no claim against any of its insurers under any of
such policies pending or anticipated and there has been no occurrence of any
kind which would give rise to any such claim.
1.30 Litigation Involving The Partnership or any Partner. Except as set
forth on Schedule 2.16, there are no actions, suits, claims, governmental
investigations or arbitration proceedings pending or, to the knowledge of the
Partnership, threatened against or affecting the Partnership or any Partner or
any of the Assets and, to the knowledge of the Partnership, there is no basis
for any of the foregoing. Except as set forth on Schedule 2.16, there are no
outstanding orders, decrees or stipulations issued by any federal, state, local
or foreign judicial or administrative authority in any proceeding to which the
Partnership is or was a party. Schedule 2.16 contains a complete and accurate
description of the status of any matter covered thereby that references this
Section 2.16, and except as set forth on Schedule 2.16 the Partnership carries
insurance that will cover the costs, expenses and damages of each of the matters
described therein affecting such party (which insurance coverage shall continue
in effect as to such identified matters following the Closing). The Partnership
and each Partner acknowledges that Buyer is not assuming any liability or
responsibility with respect to any matter described in Schedule 2, including,
without limitation, 2.16. No employee or former employee of the Partnership has
made any claim of sexual harassment, discrimination, wrongful termination or any
violation of OSHA, and neither the Partnership nor any Partner has received any
notice that the EEOC or any state agency has issued a "right to sue" letter with
respect to any employee or former employee of the Partnership or the General
Partner in connection with the operation of the Center. Neither the U. S.
Department Health and Human Services nor any state agency has, to the knowledge
of the Partnership, conducted, or has given the Partnership or the General
Partner any notice that it intends to conduct, any audit or other review of the
Center's participation in the Medicare or the Medicaid program or any other
governmental program and, to the knowledge of the Partnership, no such audit or
review would result in any material liability by the Partnership, the General
Partner or (as to matters relating to the Center and attributable to the period
prior to and including the Closing) Buyer, Sub or Newco for any reimbursement,
penalty interest with respect to payments received by the Partnership or the
General Partner on behalf of the Partnership thereunder. Neither the Partnership
nor the General Partner knows of any reason why the Center will not or may not
be able to continue its business, as presently conducted, following the Closing.
1.31 The Records. The books and records of the Partnership and the Partners
included in the Assets are accurate and complete in all material respects and
there are no material matters as to which appropriate entries have not been made
in such books and records.
1.32 No Material Adverse Change. Since the Balance Sheet Date, there has
not been (a) any change in the business, properties or financial condition of
the Center, other than changes occurring in the ordinary course of business
which in the aggregate have not had a Material Adverse Effect, or (b) to the
best of knowledge of the Partnership, any threatened or prospective event or
condition of any character whatsoever which could have a Material Adverse
Effect.
1.33 Absence of Certain Acts or Events. Except as expressly contemplated by
this Agreement approved in writing by Buyer, since the Balance Sheet Date the
Partnership has not: (a) paid any bonus or increased the rate of compensation of
any of its employees who provide services to the Center (other than previously
scheduled bonuses and annual increases in accordance with the Partnership's past
practices); (b) sold, transferred or encumbered any of the Center's assets other
than in the ordinary course of business; (c) obligated itself to make capital
expenditures relating to the Center where the unpaid balance as of the Effective
Date will be more than $5,000; (d) incurred any material obligations or
liabilities or entered into any material transaction relating to the Center,
except for this Agreement and the transactions contemplated hereby, in excess of
$5,000; or (e) suffered any theft, damage, destruction or casualty loss in
excess of $10,000.
1.34 Environmental Matters. Each of the Partnership and the Partners
(a) has not conducted or authorized the generation, transportation, storage,
treatment or disposal on or at the Center of any solid, liquid, hazardous, toxic
or dangerous wastes, except in compliance with the Environmental Laws (as
defined below), (b) has not received notice or has any knowledge that any
governmental authority or any employee or agency thereof has determined or
threatens to determine that there is any violation of Environmental Laws at or
caused by the Center or at the Real Property, and (c) has not had any
communication or agreement from or with any governmental authority or agency
having jurisdiction over the Center or Real Property or any private entity
(including without limitation the Landlord or any prior owners of the Real
Property) relating any actual or alleged violation of the Environmental Laws.
For the purposes of this Section 2.20, the "Environmental Laws" shall mean the
Comprehensive Environmental Response, Compensation and Liability Act, as amend,
42 U.S.C. Sec. 9601 et seq., the Emergency Planning and Community Right-to-Know
Act, as amended, 42 U.S.C. Sec. 11001 et seq., the Medical Waste Tracking Act of
1988, 42 U.S.C. Sec. 6992 et seq., and the National Institute for Occupational
Self-Safety and Health Infectious Waste Disposal Guidelines, Publication No.
88-119 of the U.S. Department of Health and Human Services, and any other
federal, state or local environmental laws, water quality standards, ordinances
or regulations that may now impose standards of conduct or liability concerning
solid, liquid, hazardous, toxic or dangerous wastes, substances or materials.
1.35 Labor Relations. The Partnership is not a party to or bound by any
collective bargaining agreement or any other agreement with a labor union, and
there has been no effort by any labor union during the 24 months prior to the
date hereof to organize any employees of the Center into one or more collective
bargaining units. To the knowledge of the Partnership, neither the Partnership,
any Partner, agent, representative or employee of the Partnership has been
accused of committing any unfair labor practice on behalf of the Partnership.
There has been no strike, walkout or work stoppage involving any of the
employees of the Partnership or the General Partner during the 24 months prior
to the date hereof. To the knowledge of the Partnership, no key employee or
group of employees has any plans to terminate his, her or their employment at
the Center or to decline to continue to work at the Center (if offered
employment) for Sub or Newco. 1.36 Pension, Profit Sharing and Retirement Plans.
Except as described Schedule 2.22, neither the Partnership nor, with respect to
the business of the Center, any Partner, now maintains or has ever maintained
any qualified or unqualified pension, profit sharing or retirement plan. Neither
the Partnership nor, with respect to the business of the Center, any Partner
participates in, or has ever participated in, any multi-employer pension or
retirement plan. None of Buyer, Sub or Newco will incur any obligation or
liability under or relating to any such plan as a result of the transactions
contemplated by this Agreement, or otherwise.
1.37 Receivables. The Partnership has previously delivered to Buyer lists
(including agings) of all accounts receivable (the "Receivables") of the
Partnership as of December 31, 1999 and as of the Balance Sheet Date. All of the
Receivables either listed thereon or set forth or reflected in the Balance
Sheets were, as of the dates as of which the information is given therein, and
as of the Closing Date all of the Receivables will be, valid accounts receivable
which have arisen from bona fide transactions in the ordinary course of the
Partnership's business, not subject to any defense or right of set-off of any
account debtor with respect thereto, and are collectible (net of reserves for
doubtful accounts set forth on the Balance Sheet).
1.38 Medical Staff Matters. The Partnership has heretofore delivered to
Buyer true and complete copies of the bylaws and the rules and regulations of
the medical staff of the Center. With regard to the medical staff of the Center,
there are no pending or, to the best knowledge of the Partnership, threatened
disputes with applicants, staff members or health professional affiliates, and
all appeal periods in respect of any medical staff member or applicant against
whom an adverse action has been taken have expired. The Partnership has provided
Buyer with a written description of all adverse actions taken against medical
staff members or applicants within the past two years.
1.39 Fraud and Abuse. Neither the Partnership nor any Partner (as to such
Partner's activities and arrangements at the Center) has engaged in any
activities that are prohibited under federal Medicare and Medicaid statutes, 42
U.S.C. 1320A-7b, the False Claims Act or the regulations promulgated pursuant
to such statutes, or any similar federal, state or local Laws or which are
prohibited by binding rules of professional conduct, including but not limited
to the following activities:
(a) knowingly and willfully making or causing to be made a false statement or
representation of a material fact in any application for any benefit or
payment;
(b) knowingly and willfully making or causing to be made any false statement or
representation of a material fact for use in determining rights to any
benefit or payment;
(c) failing to disclose knowledge by a 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 secure such benefit or
payment fraudulently; and
(d) knowingly and willfully soliciting or receiving any remuneration (including
any kickback, bribe or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay such remuneration (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, Medicaid or other applicable third
party payors, or (ii) in return for purchasing, leasing or ordering or
arranging for or recommending the purchasing, leasing or order of any good,
facility, service, or item for which payment may be made in whole or in
part by Medicare, Medicaid or other applicable third party payors.
1.40 Certain Payments. Neither the Partnership nor, to the Partnership's
best knowledge, anyone acting on behalf of the Partnership, has directly or
indirectly paid or delivered or agreed to pay or deliver any fee, commission or
other sum of money or item of property, however characterized, to any person,
government official or other party which is in any manner related to the
Partnership or the Center which is illegal or improper under any federal, state
or local law.
1.41 No Finders or Brokers. As a result of any act or failure to act by the
Partnership, any Partner, or any of their Affiliates, no person or entity has,
or as a result of the transactions contemplated hereby will have, any right,
interest or claim against or upon Buyer or any of its Affiliates or Newco for
any commission, fee or other compensation as a finder, broker or in any similar
capacity.
1.42 Accuracy of Information. No representation, statement or information
made or furnished in writing by the Partnership or any Partner to Buyer,
contained in this Agreement and the various Schedules and Exhibits attached
hereto prepared by or relating to the Partnership, any Partner or the Center and
the other information and statements referred to herein and previously furnished
to Buyer pursuant hereto, contains or shall contain any untrue statement of a
material fact or omits or shall omit any material fact necessary to make the
information contained therein not misleading.
As used in this Agreement, "to the knowledge of the Partnership," "known to
the Partnership," "to the knowledge of the General Partner", "known to the
General Partner," and similar phrases shall mean all matters in any documents or
files in the possession of the Partnership or the General Partner and the actual
knowledge, or knowledge, which would be obtained in the exercise of due care in
the performance of their duties, of the managers, officers and directors of the
General Partner.
REPRESENTATIONS AND WARRANTIES OF THE LIMITED PARTNERS
Each of the Limited Partners, severally and not jointly, represents and
warrants, as to such Limited Partner only, as follows:
1.43 Authority. Such Limited Partner has approved this Agreement, and this
Agreement, when executed, will constitute a valid and binding legal obligation
enforceable against him in accordance with its terms.
1.44 No Violation. To the knowledge of such Limited Partner without other
investigation, the execution and delivery of this Agreement by the Limited
Partners does not, and the consummation of the transactions contemplated hereby
will not, (a) violate any provision of, or result in the creation of any lien or
security interest under, any agreement, indenture, instrument, lease, security
agreement, mortgage or lien to which such Limited Partner is a party or by which
any of such Limited Partner's assets or properties are bound; (b) violate any
provision of the charter or bylaws of Partner; (c) violate any order,
arbitration award, judgment, writ, injunction, decree, statute, rule or
regulation applicable to such Limited Partner; or (d) violate any other
contractual or legal obligation or restriction to which such Limited Partner is
subject.
1.45 No Broker's Fees. Such Limited Partner has not done anything to cause
or incur any liability or obligation for investment banking, brokerage,
finder's, agent's or other fees, commissions, expenses or charges in connection
with the negotiation, preparation, execution or performance of this Agreement or
the consummation of the transactions contemplated hereby, and such Limited
Partner does not know of any claim by anyone for such a fee, commission, expense
or charge.
REPRESENTATIONS AND WARRANTIES OF BUYER
In order to induce the Partnership to enter into this Agreement and to
consummate the transactions contemplated hereby, Buyer makes the following
representations and warranties:
1.46 Organization, Power and Authority of Buyer; Due Authorization. Each of
Buyer and Sub is a corporation duly organized and legally existing in good
standing under the laws of the State of Delaware, with full corporate power and
authority to enter into this Agreement and to carry out the transactions and
agreements contemplated hereby. Each of Buyer and Sub is authorized to transact
business in the State of Texas. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action of Buyer and Sub.
1.47 Binding Obligation; Noncontravention. This Agreement has been duly
executed and delivered by Buyer and Sub and is a valid and binding obligation of
Buyer and Sub, enforceable against each of them in accordance with its terms.
Neither the execution and delivery of this Agreement by Buyer and Sub nor the
consummation of the transactions contemplated hereby will: (a) conflict with or
violate any provision of the respective certificates of incorporation or bylaws
of Buyer and Sub or of any law, ordinance, regulation or decree or order of any
court or administrative or other governmental body which is either applicable
to, binding upon or enforceable against Buyer or Sub; or (b) result in a breach
of, constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify or cancel, or require any
notice under, any mortgage, contract, agreement, indenture or other instrument
which is either binding upon or enforceable against Buyer or Sub, which
conflict, violation, breach or default could have a material adverse effect upon
the business, financial condition, prospects or results of operations of Buyer
or Sub. No permit, consent, approval or authorization of, or declaration to or
filing with, any regulatory or other government authority is required in
connection with the execution and delivery of this Agreement by Buyer and Sub
and the consummation of the transactions contemplated hereby, except as required
by Section 6.2.
1.48 No Finders or Brokers. As a result of any act or failure to act by
Buyer or Sub, no person or entity has, or as a result of the transactions
contemplated hereby will have, any right, interest or claim against or upon the
Partnership or any Partner for any commission, fee or other compensation as a
finder, broker or any similar capacity.
1.49 Litigation. There are no actions, suits, claims, governmental
investigations or arbitration proceedings pending or, to the knowledge of Buyer
or Sub, threatened against or affecting Buyer or Sub in connection with or
relating to the transactions contemplated by this Agreement and, to the
knowledge of Buyer or Sub, there is no basis for any of the foregoing.
1.50 Accuracy of Information. No representation, statement or information
made or furnished in writing by Buyer to the Partnership contained in this
Agreement and the various Schedules and Exhibits attached hereto prepared by or
relating to Buyer or Sub and the other information and statements referred to
herein and previously furnished by Buyer to the Partnership pursuant hereto,
contained or shall contain any untrue statement of a material fact or omits or
shall omit any material fact necessary to make the information contained therein
not misleading.
1.51 Capital Stock. The authorized capital stock of Buyer is as set forth
on Schedule 4.6 (showing amounts authorized by class or series, outstanding
shares of each class or series, and number of any treasury shares). All of the
issued and outstanding shares of the capital stock of Buyer have been duly
authorized and validly issued, are fully paid and nonassessable.
1.52 Authorization of Buyer Stock. The shares of Buyer's Common Stock
deliverable to the Partnership or the Partners pursuant to this Agreement will
have been duly authorized prior to the Closing, and upon consummation of the
transactions contemplated by this Agreement, will be validly issued, fully paid
and nonassessable.
1.53 Buyer Common Stock. The shares of Buyer's Common Stock deliverable to
the Partnership or the Partners pursuant to this Agreement shall, when issued,
and delivered to the Partnership or the Partners be, at the time of such
issuance and delivery, free and clear of any liens, claims, charges, options,
preemptive rights or encumbrances of any kind or character, other than
restrictions or encumbrances set forth in this Agreement or in any other
documents or agreement the form of which is set forth as an Exhibit to this
Agreement.
CERTAIN PRE-CLOSING COVENANTS
1.54 Commercially Reasonable Efforts. Each of the parties hereto will use
commercially reasonable efforts to cause to be satisfied, as soon as practicable
and prior to the Closing Date, all of the conditions to the obligations of the
other parties to close the purchase, sale and contribution of the Assets
pursuant to this Agreement, including without limitation obtaining all
governmental consents and licenses, if any, that are required in order for Newco
to own and operate the Center at and after the Closing
1.55 Conduct of Business Pending the Closing. From and after the execution
and delivery of this Agreement and until the Closing Date, except as expressly
contemplated by this Agreement or with the prior written consent of Buyer, the
Partnership will conduct the business and operations of the Center in the
ordinary course and in substantially the same manner as such business and
operations have been conducted prior to the date of this Agreement. Without
limiting the generality of the foregoing:
1.55.1 The Partnership will (a) use commercially reasonable efforts to
preserve intact its current business organization, keep available the services
of its current officers and employees, and maintain its relations and good will
with all suppliers, patients, landlords, creditors, employees and others having
business relationships with the Partnership, and (b) maintain all of the
property of the Center in good repair, order and condition, reasonable wear and
tear excepted, and maintain insurance of such types and in such amounts upon all
of its properties and with respect to the conduct of its business as are in
effect on the date of this Agreement; and
The Partnership will not (a) pay any bonus or increase the rate of
compensation of any employee of the Center, or enter into any new employment
agreement or employee benefit plan, or amend any existing employment agreement
with any employee of the Center or any existing employee benefit plan, (b) sell,
lease, transfer or assign any assets used or useful in connection with the
Center other than in the ordinary course of business, (c) make or obligate
itself to make capital expenditures relating to the Center, the unpaid balance
on which aggregates more than $5,000 as of the Effective Date, or (d) enter
into, or permit any of the assets used or useful in the business and operations
of the Center to become bound by, any contract not in the ordinary course of
business consistent with past practice, or incur any other material obligations
or liabilities or enter into any material transaction relating to the Center.
1.56 Access to Facilities, Properties and Records. From and after the
execution and delivery of this Agreement, the Partnership will afford to the
representatives of Buyer access, during normal business hours and upon
reasonable notice, to the Partnership's premises, to the Center's employees
(including the Administrator of the Center) and to the members of the medical
staff of the Center, all in order to enable Buyer to inspect and evaluate the
Assets and the Center. The Partnership and the General Partner shall cause their
employees to assist Buyer in arranging meetings with members of the medical
staff; Buyer will provide sufficient notice and the opportunity for a designated
employee of the Partnership or the General Partner to attend any such meetings
with medical staff members. The Partnership will furnish to Buyer's
representatives during such period all such information relating to the
foregoing investigation as they may reasonably request; provided, however, that
any such investigation by Buyer (a) shall be conducted in a manner that does not
unduly interfere with the business of the Center and (b) shall not affect the
right of Buyer to rely on the representations and warranties made by the
Partnership in or pursuant to this Agreement. Buyer will hold in confidence all
documents and information concerning the Partnership so furnished and, if the
sale of the Assets pursuant hereto shall not be consummated, such confidence
shall be maintained and Buyer will not use or disclose to any person any such
document or information (except to the extent that such information can be shown
to be previously available to Buyer, publicly available or disclosed to Buyer by
a person who is not obligated to maintain the confidentiality of such
information).
1.57 No Disclosure. Without the prior written consent of Buyer and the
Partnership, none of the parties hereto will, prior to the Closing Date,
disclose the existence of any term or condition of this Agreement to any person
or entity, except that such disclosure may be made by a party (a) to any person
in a business relationship with such party to whom such disclosure is necessary
in order to satisfy each of the conditions to the consummation of the
transactions provided for in this Agreement, and (b) to the extent such party
believes in good faith that such disclosure is required by law (in which case
such party will consult with Buyer and the Partnership prior to making such
disclosure).
1.58 No Other Discussions. The Partnership will not, prior to the Closing
Date, enter into discussions, provide information regarding the Center or
negotiate with or entertain or accept the unsolicited offer of any other party
concerning or in connection with a potential sale of all or any part of the
assets or ownership interests of the Partnership to, or the merger or
consolidation of the Partnership with, any person or entity other than Buyer. If
any person or entity requests that the Partnership breach this Section 5.5, the
Partnership shall immediately notify Buyer of such request or requirement.
1.59 Casualty. If any of the Assets are damaged, lost or destroyed (whether
by fire, theft, vandalism or other cause or casualty) in whole or in part prior
to Closing, and the fair market value of such damage or destruction is less than
$400,000, Buyer may, at its option, either (a) reduce the Purchase Price by the
fair market value of the Assets destroyed, such value to be determined as of the
date immediately prior to such destruction or, as the case may be, by the
estimated cost to restore the damaged Assets, or (b) require the Partnership,
upon Closing to transfer the proceeds (or the right to the proceeds) of
applicable insurance to Buyer, and Buyer may restore such Assets. If any part of
the Assets are so damaged, lost or destroyed in whole or in part prior to
Closing, and the fair market value is greater than $400,000, Buyer may, at its
option, either (i) require the Partnership upon Closing to transfer the proceeds
(or the right to the proceeds) of applicable insurance to Buyer, and Buyer may
restore such Assets, (ii) terminate this Agreement in its entirety or
(iii) reduce the Purchase Price by the fair market value of the Assets
destroyed, such value to be determined as of the date immediately prior to such
destruction or, as the case may be, by the estimated cost to restore the damaged
Assets.
1.60 Costs of Agreement. Each of the parties hereto agrees to bear all of
its own expenses incurred in preparing or complying with this Agreement,
including without limitation all legal and accounting expenses and fees.
1.61 Interim Operating Reports. The Partnership shall cause the management
personnel of the Center to notify Buyer in writing of any material adverse
change in the financial position or earnings of the Center, any unexpected
emergency or other unanticipated change in the business of the Center, any
governmental complaints, investigations or hearings or adjudicatory proceedings
(or communications indicating that the same may be contemplated) or any
litigation, arbitration or other such matter that has been filed or threatened
against the Partnership or any of the Partners in connection with the Center. As
soon as available, the Partnership shall provide Buyer with an unaudited balance
sheet and income statement of the Center which reflects the operations of the
Center for each calendar month after the Balance Sheet Date and prior to the
Effective Date, which interim financial statements shall be prepared in
accordance with GAAP and in a manner consistent with the policies and practices
heretofore used by the Partnership in the preparation of its interim financial
statements.
1.62 Employee Matters. The Partnership acknowledges that Buyer has made no
commitment to hire any employees of the Partnership, the Center or the General
Partner on or after the Closing and, except for any obligations to employees
included in the Assumed Liabilities, the Partnership shall be responsible for
any liabilities to such employees. The Partnership will assist Buyer in any
attempts by Buyer to employ the current employees of the Center, as reasonably
requested by Buyer, and to transition such employees to the welfare and benefit
programs offered by Buyer to its employees. Buyer will notify the Partnership at
the earliest practicable time, but not less than one week, prior to the Closing
of any such current employees that will not be hired by Buyer.
1.63 Tail Insurance. The Partnership will obtain "tail" insurance, in form
and substance acceptable to Buyer, to insure against liabilities of the Center
relating to all periods prior to the Closing Date to the extent reasonably
required to insure the Partnership against liability for their prior acts, the
cost thereof to be paid for by the Partnership. The minimum coverage under such
"tail" insurance shall be at least equivalent to the coverage historically
provided to the Center. If such tail insurance has not been obtained as of the
Closing Date, the Partnership will maintain its existing professional liability
insurance in place until such tail insurance is obtained.
1.64 Termination of Employee Participation in 401(k) Plan. To the extent
allowed by applicable laws and regulations, effective as of the Closing, at the
Partnership's expense, the Partnership will take all steps and make all filings
necessary or appropriate in order to terminate the participation of the Center's
employees in the 401(k) Plan referred to in Schedule 2 (referencing Section
2.22) (the "Plan"), and the Partnership shall take any and all corporate action
necessary to authorize and direct the administrator of the Plan to take such
actions. The Partnership shall be solely responsible for any unfunded or
underfunded obligations of the Partnership to the Plan or any beneficiary
thereof. Buyer agrees to use its commercially reasonable efforts to facilitate
the rollover of any and all funds and accounts held for the beneficiaries of the
Plan who voluntarily elect to make such rollovers into one or more of the
pension and/or profit sharing plans maintained by Buyer or its affiliates, as
and to the extent such rollovers are permissible under applicable laws and
regulations and the terms of Buyer's plan.
1.65 Notification; Updates to Disclosure Schedules.
(a) From and after the date of this Agreement until the Closing Date, each
party hereto shall promptly notify the others in writing of: (i) the
discovery by such party of any event, condition, fact or circumstance that
occurred or existed on or prior to the date of this Agreement and that
caused or constitutes in any material respect an inaccuracy in or breach of
any representation or warranty made by such party in this Agreement; (ii)
any event, condition, fact or circumstance that occurs, arises or exists
after the date of this Agreement and that would cause or constitute in any
material respect an inaccuracy in or breach of any representation or
warranty made by such party in this Agreement if (A) such representation or
warranty had been made as of the time of the occurrence, existence or
discovery of such event, condition, fact or circumstance or (B) such event,
condition, fact or circumstance had occurred, arisen or existed on or prior
to the date of this Agreement; (iii) any breach of any covenant or
obligation of such party; and (iv) any event, condition, fact or
circumstance that would make the satisfaction of any of the conditions set
forth in Articles 6 or 7, as the case may be, impossible or unlikely on or
prior to the Closing Date.
(b) If any event, condition, fact or circumstance that is required to be
disclosed pursuant to Section 5.12 (a) requires any change in any Schedule,
or if any such event, condition, fact or circumstance would require such a
change assuming any such Schedule were dated as of the date of the
occurrence, existence or discovery of such event, condition, fact or
circumstance, then the party which has delivered such Schedule shall
promptly deliver to the opposing parties an update to such Schedule
specifying such change. For all purposes of this Agreement, no such update
shall be deemed to supplement or amend the parties' Schedules for the
purpose of (i) determining the accuracy of any of the representations and
warranties made by such party in this Agreement or (ii) determining whether
any of the conditions set forth in Articles 6 or 7, as the case may be,
have been satisfied, but if the Closing shall occur, then the Schedules, as
so supplemented or amended, shall be deemed to be the Schedules accepted
and relied upon by the opposing parties at the Closing for all purposes.
CONDITIONS TO THE OBLIGATIONS OF BUYER
The obligation of Buyer to cause Sub to purchase the Assets and to
contribute such Assets to Newco shall be subject to the fulfillment at or prior
to the Closing Date of each of the following conditions:
1.66 Accuracy of Representations and Warranties and Compliance with
Obligations. The respective representations and warranties of the Partnership,
the General Partner and the Limited Partners contained in this Agreement which
are qualified by the words "material", "materially", "in all material respects",
"Material Adverse Effect" or words of similar import, shall be true and correct
on and as of the Closing Date, and all other representations and warranties of
the Partnership and the Limited Partners shall be true and correct in all
material respects on and as of the Closing Date, all with the same force and
effect as though made at and as of that time. The Partnership, the General
Partner and the Limited Partners shall have performed and complied with all of
their obligations required by this Agreement to be performed or complied with at
or prior to the Closing Date. The Partnership shall have delivered to Buyer a
certificate, dated as of the Closing Date and signed by a duly authorized
officer or officers of the Partnership or the General Partner, certifying as to
all resolutions of the partners of the Partnership and of the board of directors
of the General Partner relating to this Agreement and the transactions
contemplated hereby.
1.67 Receipt of Necessary Consents and Governmental Permits. All necessary
consents or approvals of third parties to each of the transactions contemplated
hereby, the absence of which would, in Buyer's reasonable judgment, affect the
rights of Buyer or Sub hereunder, shall have been obtained and shown by written
evidence reasonably satisfactory to Buyer, including without limitation the
consent of Landlord with respect to Sub's assumption of the Center Lease. Sub
shall also have obtained all licenses, certificates, permits and rulings of, and
made all notices to, all governmental authorities (and any waiting periods shall
have expired in connection therewith) that may be required in connection with
the acquisition of the Assets and the continuation of the operation of the
business of the Center by Sub following the Closing.
1.68 No Adverse Litigation. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit or invalidate the sale of the Assets to Sub or
any other transaction contemplated hereby, or which might affect the right of
Buyer or Sub to own the Assets or to control Sub.
1.69 Material Changes. The Center shall not have suffered any change, loss
or damage since the Balance Sheet Date which, in the reasonable judgment of
Buyer, materially and adversely affects or impairs the operations or prospects
of the Center.
1.70 Incumbency Certificate. The Partnership shall have delivered a
certificate of incumbency of each officer of the Partnership or the General
Partner who executes documents, instruments and agreements on behalf of the
Partnership pursuant hereto.
1.71 Tail Insurance Coverage. The Partnership shall have obtained (at their
expense) "tail" or "prior acts" malpractice insurance coverage for any potential
claims for pre-Closing Date business conducted by the Partnership or shall have
continued its current professional liability insurance, as described in Schedule
2.15.
1.72 Satisfactory Completion of Due Diligence. Buyer shall have completed
its due diligence investigation of the prospects, business, assets, contracts,
rights, liabilities and obligations of the Center, including financial,
marketing, medical staff, employee, legal, regulatory and environmental matters
to its satisfaction. Buyer shall be under no obligation to continue with its due
diligence investigation or to consummate the Closing if, at any time, the
results of its due diligence investigation are not satisfactory to Buyer for any
reason in its sole discretion.
1.73 Financing. Buyer shall have received, from one or more financial
institutions, investors, or other sources acceptable to Buyer, financing in such
amount, and subject to such terms and conditions (including, without limitation,
interest rate, maturity, security, and other terms) as shall be acceptable to
Buyer, sufficient in amount to fund the cash payments contemplated to be made by
Buyer or Sub (together with reasonable working capital) pursuant to this
Agreement, provided, that Newco shall not be obligated by the terms of such
financing arrangements to make payments of principal or interest on any amount
loaned in connection with such financing.
1.74 Board Approval. This Agreement and the transactions provided for
herein shall have been approved by the board of directors of Buyer.
1.75 Center Lease. The Landlord shall have executed and delivered an
amendment to the Center Lease in substantially the form of Exhibit L hereto.
1.76 Private Placement Memorandum. The Partners shall have received a
private placement memorandum relating to Buyer's Common Stock and to Newco. Each
Partner shall have executed and delivered to Buyer an offeree questionnaire in
form and substance reasonably satisfactory to Buyer and its counsel.
1.77 Documents to be Delivered at Closing. Each of the documents and
agreements provided for herein to be delivered at the Closing shall have been
duly executed and delivered by the other parties thereto.
CONDITIONS TO THE OBLIGATIONS OF THE PARTNERSHIP
The obligation of the Partnership to sell and transfer to Sub the Assets,
shall be subject to the fulfillment at or prior to the Closing Date of each of
the following conditions:
1.78 Accuracy of Representations and Warranties and Compliance with
Obligations. The representations and warranties of Buyer and Sub contained in
this Agreement which are qualified by the words "material", "materially", "in
all material respects", "Material Adverse Effect" or words of similar import,
shall be true and correct on and as of the Closing Date, and all other
representations of Buyer and Sub contained in this Agreement shall be true and
correct in all material respects at and as of the Closing Date, all with the
same force and effect as though made at and as of that time. Buyer and Sub shall
each have performed and complied with all of its obligations required by this
Agreement to be performed or complied with at or prior to the Closing Date.
Buyer and Sub shall have delivered to the Partnership certificates, dated as of
the Closing Date and signed by a duly authorized officer of each of Buyer and
Sub, certifying as to all resolutions of the board of directors of each of Buyer
and Sub relating to this Agreement and the transactions contemplated hereby.
1.79 No Adverse Litigation. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit or invalidate the sale of the Assets to Buyer
and Sub or any other transaction contemplated hereby.
1.80 Payment of Purchase Price. Buyer shall have paid the Purchase Price,
as provided in Section 1.3.
1.81 Good Standing Certificate. Buyer and Sub shall each have delivered a
good standing certificate or certificate of existence issued by the Secretary of
State of the State of Delaware and by the Secretary of State of Texas which is
dated no more than 20 business days prior to the Closing Date and which reflects
the good standing or valid existence of Buyer and Sub in such respective
jurisdictions.
1.82 Incumbency Certificate. Buyer and Sub shall each have delivered a
certificate of incumbency of all officers of Buyer or Sub who are executing
documents or instruments and agreements on behalf of Buyer or Sub pursuant
hereto.
1.83 Approval by the Partners. The Partners of the Partnership shall have
approved this Agreement, and the transactions contemplated hereby, in accordance
with the terms of the Partnership's Agreement of Limited Partnership.
1.84 Documents to be Delivered at Closing. Each of the documents and
agreements provided for herein to be delivered at the Closing shall have been
duly executed and delivered by the other parties thereto.
CERTAIN POST-CLOSING COVENANTS
1.85 Execution of Further Documents. From and after the Closing, upon the
reasonable request of any party, the other parties shall execute, acknowledge
and deliver all such further assignments, conveyances, powers of attorney and
other assurances as may be required to (i) transfer to and vest in Buyer and
Sub, and to protect their respective right, title and interest in, the Assets
and all of their rights, title and interests in any of the leases and contracts
included in the Assets for which consents to the assignment are to be obtained
subsequent to the Closing, and (ii) give effect to the provisions of this
Agreement.
1.86 Buyer Appointed Attorney for The Partnership and the Partners.
Effective at the Closing Date, the Partnership hereby constitutes and appoint
Buyer, Sub and their successors and assigns, and each of them, the true and
lawful attorney or attorneys of the Partnership, in the name of either Buyer,
Sub or the Partnership (as Buyer or Sub shall determine in its sole discretion)
but for the benefit and at the expense of Sub and Newco (except as otherwise
herein provided):
(a) to institute and prosecute all proceedings which Buyer or Sub may deem
proper in order to collect, assert or enforce any claim, right or title of
any kind in or to the Assets as provided for in this Agreement;
(b) to defend or compromise any and all actions, suits or proceedings in
respect of any of the Assets, and to do all such acts and things in
relation thereto as Buyer shall deem advisable; and
(c) to take all action which Buyer or Sub may reasonably deem proper in order
to provide for Sub and Newco the benefits of any of the Assets where any
required consent of another party to the sale or assignment thereof to Sub
or Newco pursuant to this Agreement shall not have been obtained.
The Partnership acknowledges that the foregoing powers are coupled with an
interest and shall be irrevocable. Buyer shall be entitled to retain for the
account of Sub any amounts collected pursuant to the foregoing powers, including
any amounts payable as interest in respect thereof.
1.87 Record Retention. After the Closing (at reasonable times and on
reasonable notice), Buyer shall permit one duly designated representative of the
Partners (a) to have access to the Records for purposes of preparing the
Partners' tax returns, or as needed to defend the Partners in any judicial or
administrative actions relating to the Partnership and (b) to make copies of
such Records at the Partners' cost and expense. Buyer shall retain the Records
in accordance with its internal record retention policy, which policy shall be
consistent with applicable industry standards.
1.88 Sales Taxes and Other Governmental Charges. The Partnership shall be
responsible for all sales taxes, documentary stamps, transfer taxes, recording
fees and similar governmental charges incurred by any party or the Partnership
in connection with the transactions contemplated by this Agreement. The parties
do not anticipate any significant taxes, fees or charges of this type.
1.89 Retained Cash. The parties acknowledge that the Retained Cash is to be
used by the Partnership to pay bona fide liabilities of the Partnership other
than the Assumed Liabilities, in order to facilitate the dissolution of the
Partnership within a reasonable time after all of the Partnership's obligations
hereunder are discharged or provided for. The Partnership agrees that it will
not make any distribution of the Retained Cash to any Partner, provided that
payment of management fees and fees for services rendered by Lone Star
Ambulatory Care, LC. If, following payment of all bona fide liabilities of the
Partnership, upon dissolution of the Partnership, any amount of Retained Cash
shall remain unspent, such amount shall promptly be paid over to Buyer.
1.90 No Termination of the Obligations by Subsequent Dissolution. Each of
the parties hereto specifically agrees that its obligations hereunder,
including, without limitation, obligations pursuant to this Article 8, shall not
be terminated by the dissolution of such party, whether by operation of law,
agreement or otherwise.
1.91 Acquisition Debt. Buyer is using funds obtained through the incurrence
of debt to complete the acquisition of the Purchased Assets. None of such
acquisition debt shall be secured by the Assets of the Center. Further, no
principal or interest required to be paid on such debt shall be the obligation
of the Center. Except as may be approved by the limited partners of Newco in
accordance with the provisions of the Newco LP Agreement, the Assets of the
Center shall not be utilized to secure any debt except for (i) working capital
debt or line of credit for the Center in the expected amount of approximately
85% of the accounts receivable of the Center, and (ii) debt incurred for the
purchase of equipment acquired directly by the Center (which debt, as of the
date of this Agreement, is in the amount of approximately $1,700,000).
NONCOMPETITION
1.92 Prohibited Activities. Except with respect to their ownership in and
the performance of any duties they may have as directors, officers, employees or
consultants to Buyer or its Affiliates, or as limited partners of Newco, each of
(i) the general Partner, (ii) Arthur F. Minguez and Ronald McMahan, and (iii)
the Limited Partners (collectively, the "Restricted Parties"), will not, for a
period of three (3) years following the Closing Date, for any reason whatsoever,
directly or indirectly, for himself or on behalf of or in conjunction with any
other Person build or assist in building, plan or assist in planning, finance or
lend money to or assist in obtaining a loan or loans for (as a loan broker,
guarantor or otherwise), acquire, own, operate, lease, manage, have any
financial interest in or otherwise participate in the operation, management,
financing or ownership of any ambulatory surgery center (other than as a member
of its medical staff) situated within six and one-half (6 1/2) miles of the
Center (the "Territory").
Notwithstanding the above, (a) the foregoing covenant shall not be deemed
to prohibit any Restricted Party from acquiring as an investment not more than
five (5) percent of the capital stock of a competing business whose stock is
publicly traded, and (b) the foregoing covenant shall not apply to ownership
interests in other surgery centers acquired by a Restricted Party prior to the
date hereof.
1.93 Damages. Because of the difficulty of measuring economic losses to
Buyer as a result of a breach of the foregoing covenants, and because of the
immediate and irreparable damage that could be caused to Buyer for which it
would have no other adequate remedy, each Restricted Party agrees that the
foregoing covenants may be enforced by Buyer in the event of breach by such
Restricted Party, by injunction and restraining order.
1.94 Reasonable Restraint. It is agreed by the parties hereto that the
foregoing covenants in this Article 9 impose a reasonable restraint on the
Restricted Parties in light of the activities and Business of Buyer and Newco
(including the subsidiaries thereof) on the date of the execution of this
Agreement and the reasonably foreseeable plans of Buyer.
1.95 Severability, Reformation. The covenants in this Article 9 are
severable and separate, and the unenforceability of any specific covenant shall
not affect the provisions of any other covenant. Moreover, in the event any
court of competent jurisdiction shall determine that the scope, time or
territorial restrictions set forth are unreasonable, then it is the intention of
the parties that such restrictions be enforced to the fullest extent the court
deems reasonable, and the Agreement shall thereupon be automatically reformed.
1.96 Independent Covenant. All of the covenants in this Article 9 shall be
construed as an agreement independent of any other provision in this Agreement,
and the existence of any claim or cause of action of any Partner against Buyer
(including the Affiliates or subsidiaries thereof), whether predicated on this
Agreement or otherwise, shall not constitute a defense to the enforcement by
Buyer of such covenants. The covenants contained in Article 9 shall not be
affected by any breach of any other provision hereof by any party hereto and
shall become nugatory if the transactions contemplated by this Agreement are not
consummated.
1.97 Materiality. The Restricted Parties hereby agree that the covenants
set forth in this Article 9 are a material and substantial part of the
transactions contemplated by this Agreement.
INDEMNIFICATION
1.98 Agreement by the Partnership to Indemnify. The Partnership agrees that
it will indemnify and hold Buyer and Sub harmless in respect of all
"Indemnifiable Damages" (as hereinafter defined). For this purpose,
Indemnifiable Damages shall mean any and all expenses, losses, costs,
deficiencies, liabilities and damages (including related attorneys' fees and
expenses) incurred or suffered by Buyer or Sub (a) resulting from any breach of
any representation or warranty made by the Partnership or the Partners in this
Agreement, (b) resulting from any breach or default in the performance of any of
the covenants or agreements made by the Partnership or the Partners in this
Agreement or (c) arising from any liability or obligation of the Partnership or
the Partners that is not an Assumed Liability, including, without limitation,
the Excluded Liabilities. Without limiting the generality of the foregoing, with
respect to the measurement of Indemnifiable Damages, Buyer shall have the right
to be put in the same financial position as it would have been in had each of
the representations and warranties of the Partnership and the Partners been true
and correct and had each of the covenants of the Partnership and the Partners
been performed in full. The foregoing obligation to indemnify Buyer and Sub
shall be subject to each of the following limitations, principles and
qualifications:
1.98.1 Each of the representations and warranties made by the Partnership
and the Partners in this Agreement or pursuant hereto shall survive for a period
of two years after the Closing Date, notwithstanding any investigation at any
time made by or on behalf of Buyer or Sub, and thereafter all such
representations and warranties shall be extinguished; provided, however, that
the representations and warranties made by the Partnership and the General
Partner in Sections 2.1 (Organization, Power and Authority), 2.2 (Binding
Obligation), 2.3 (Ownership), 2.20 (Environmental), 2.22 (Pension, etc.) and
2.26 (Certain Payments), and the representations and warranties made by the
Limited Partners in Section 3.1(Authority) shall in each case survive
indefinitely and those made in Section 2.6 (Tax) shall survive until 30 days
after the date on which the applicable period of limitation on assessment or
refund of tax has expired. No claim for the recovery of Indemnifiable Damages
based upon a breach of any such representations and warranties may be asserted
by Buyer or Sub after such representations and warranties shall be thus
extinguished; provided, however, that claims first asserted in writing within
the applicable period (whether or not the amount of any such claim has become
ascertainable within such period) shall not thereafter be barred. This Section
10.1.1 shall not apply to the indemnity obligations of the Partnership under
Section 10.1(c).
1.98.2 Buyer agrees to use its best efforts to give prompt written notice
to the Partnership of each claim for Indemnifiable Damages which it believes it
has suffered; provided, however, that no delay in the giving of such notice
shall affect the rights of Buyer to recover Indemnifiable Damages hereunder,
except to the extent that such delay causes any Indemnifiable Damages. Upon
receipt of such notice, the Partnership shall have the right to assume the
defense of any such claim through counsel selected by the indemnifying party and
approved by Buyer (which approval shall not be unreasonably withheld), and the
assertion of such right shall constitute an acknowledgment by the indemnifying
party that such claim is an indemnifiable claim for which such indemnifying
party is responsible under this Section 10.1. If the Partnership does not assume
any such defense, the Partnership shall be liable for all costs and expenses of
defending such claim (if it is a valid claim for Indemnifiable Damages),
including reasonable fees and disbursements of counsel. If, after having first
provided the Partnership an opportunity to fulfill its obligations to Buyer
hereunder, Buyer then brings an action against the Partnership upon any claim
under this Section, the Partnership shall be liable to Buyer for Buyer's
reasonable fees and disbursements of counsel in connection therewith if Buyer
prevails in the action.
1.98.3 Notwithstanding anything to the contrary in the foregoing provisions
of this Section 10.1, (a) Buyer shall have no claim for Indemnifiable Damages
under Section 10.1 (a) until the aggregate amount of such Indemnifiable Damages
equals or exceeds $25,000, in which event the claim for such Indemnifiable
Damages shall be for the full amount thereof (including the initial $25,000) and
(b) the maximum aggregate liability of the Partnership for Indemnifiable Damages
shall be an amount equal to the Escrowed GP Shares.
1.99 Agreement by Buyer and Sub to Indemnify. Buyer and Sub jointly and
severally agree that they will indemnify and hold the Partnership harmless in
respect of all Indemnifiable Damages (as hereinafter defined). For this purpose,
Indemnifiable Damages shall mean any and all expenses, losses, costs,
deficiencies, liabilities and damages (including related attorneys' fees and
expenses) incurred or suffered by the Partnership (a) resulting from any breach
of any representation or warranty made by Buyer or Sub in this Agreement, or
(b) resulting from any breach or default in the performance of any of the
covenants or agreements made by Buyer or Sub in this Agreement, or (c) arising
from any liability or obligation of the Partnership that is an Assumed
Liability. Without limiting the generality of the foregoing, with respect to the
measurement of Indemnifiable Damages, the Partnership shall have the right to be
put in the same financial position as they would have been in had each of the
representations and warranties of Buyer or Sub been true and correct and had
each of the covenants of Buyer or Sub been performed in full. The foregoing
obligation to indemnify the Partnership shall be subject to each of the
following limitations, principles and qualifications:
1.99.1 Each of the representations and warranties made by Buyer in this
Agreement or pursuant hereto shall survive for a period of two years after the
Closing Date, notwithstanding any investigation at any time made by or on behalf
of the Partnership or the Partners, and thereafter all such representations and
warranties shall be extinguished; provided, however, that the representations
and warranties made by Buyer in Sections 4.1 (Organization), 4.2 (Binding
Obligation), 4.6 (Capitalization) and 4.7 (Buyer's Common Stock) shall in each
case survive forever. No claim for the recovery of Indemnifiable Damages based
upon a breach of any such representations and warranties may be asserted by the
Partnership after such representations and warranties shall be thus
extinguished; provided, however, that claims first asserted in writing within
the applicable period (whether or not the amount of any such claim has become
ascertainable within such period) shall not thereafter be barred. This Section
10.2.1 shall not apply to the indemnity obligations of Buyer under Section
10.2(c).
1.99.2 The Partnership agrees to use its best efforts to give prompt
written notice to Buyer of each claim for Indemnifiable Damages which it believe
it has suffered; provided, however, that no delay in the giving of such notice
shall affect the rights of the Partnership to recover Indemnifiable Damages
hereunder except to the extent such delay causes any Indemnifiable Damages. Upon
receipt of such notice, Buyer shall have the right to assume the defense of any
such claim through counsel selected by Buyer and approved by the Partnership
(which approval shall not be unreasonably withheld), and the assertion of such
right shall constitute an acknowledgment by Buyer that such claim is an
indemnifiable claim for which Buyer is responsible under this Section 10.2. If
Buyer does not assume any such defense, it shall be liable for all costs and
expenses of defending such claim (if it is a valid claim for Indemnifiable
Damages), including reasonable fees and disbursements of counsel. In the event,
after having first provided Buyer an opportunity to fulfill its obligations to
the Partnership hereunder, the Partnership then brings an action against Buyer
upon any claim under this Section, Buyer shall be liable to the Partnership for
its reasonable fees and disbursements of counsel in connection therewith if the
Partnership prevails in the action.
1.99.3 Notwithstanding anything to the contrary in the foregoing provisions
of this Section 10.2, (a) neither the Partnership nor any Partner shall have any
claim for Indemnifiable Damages under Section 10.2 (a) until the aggregate
amount of such Indemnifiable Damages equals or exceeds $25,000, in which event
the claim for such Indemnifiable Damages shall be for the full amount thereof
(including the initial $25,000), and (b) the maximum aggregate liability of
Buyer and Sub for Indemnifiable Damages shall be $300,000.
1.99.4 In the absence of intentional fraud with respect to the specific
person, there shall be no personal liability of the Limited Partners or the
shareholders of the General Partner hereunder.
MISCELLANEOUS
1.100 Amendment and Modification. The parties hereto may amend, modify and
supplement this Agreement in such manner as may be agreed upon by them in
writing.
1.101 Assignment. Except as expressly provided herein, the rights and
obligations of the parties hereunder, may not be assigned to any other person or
entity without the prior written consent of the other parties hereto.
Notwithstanding the foregoing, the Partners and the Partnership acknowledge and
agree that Buyer shall have the right to assign and delegate any of its rights
and obligations under this Agreement to Sub without their prior consent. No such
assignment or delegation by Buyer to Sub shall limit or release Buyer with
respect to its obligations under this Agreement, which shall remain in full
force and effect notwithstanding such assignment or delegation.
1.102 Intentionally Omitted.
1.103 Binding Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors, assigns, heirs
and legal representatives. All of the terms, provisions, covenants,
representations, warranties and conditions of this Agreement shall, subject to
the terms of this Agreement, survive the Closing and shall be binding upon and
inure to the benefit of and be enforceable by the parties hereto and their
respective successors and assigns. The failure of any party at any time or times
to require performance of any provision hereof shall in no manner affect the
right to enforce the same. No waiver by any party of any condition, or of the
breach of any term, provision, covenant, representation or warranty contained in
this Agreement, whether by conduct or otherwise, in any one or more instances,
shall be deemed to be or construed as a further or continuing waiver of any such
condition or breach or a waiver of any other condition or of the breach of any
other term, provision, covenant, representation or warranty. This Agreement is
for the sole benefit of the undersigned parties hereto and is not for the
benefit of any third party.
1.104 Entire Agreement. This Agreement and the Exhibits and Schedules
attached hereto contain the entire agreement of the parties hereto with respect
to the purchase of the Assets and the other transactions contemplated herein and
supersede all prior verbal or written understandings and agreements of the
parties with respect to the subject matter hereof, including without limitation
the letter of intent dated July 26, 2000 between Buyer, the Partnership and the
Partners. Any reference herein to this Agreement shall be deemed to include the
Schedules and Exhibits attached hereto.
1.105 Headings. The descriptive headings in this Agreement are inserted for
convenience only and do not constitute a part of this Agreement.
1.106 Execution in Counterpart. Separate copies of this Agreement may be
signed by the parties hereto, with the same effect as though all of the parties
had signed one copy of this Agreement. Signatures received by facsimile shall be
accepted as original signatures.
1.107 Notices. Any notice, request, information or other document to be
given hereunder shall be in writing and shall be deemed duly given three
business days after it is sent by registered or certified mail, postage prepaid,
to the intended recipient, addressed as follows:
If to the Partnership:
HealthFirst Surgery Center-Memorial, Ltd.
12727 Kimberly Lane, Suite 100
Houston, Texas 77024
Attn: Ron McMahan
Fax: 281-537-7993
with copies (which shall not constitute notice) to:
Ross & Hardies
150 North Michigan Avenue
Suite 2500
Chicago, Illinois 60601
Attn: Scott Becker
Fax: 312-750-8600
DiCecco, Fant & Burman, L.L.P.
1900 West Loop South
Suite 1100
Houston, Texas 77027
Attn: Joseph W. DiCecco
Fax: 713-961-3938
If to the General Partner:
HFMV, Inc.
C/o Ron McMahan
1464 Lakeside Drive West
Canyon Lake, TX 78133
With a copy (which shall not constitute notice) to:
Chamberlain, Hrdlicka, White, Williams & Martin
1200 Smith Street, Suite 1400
Houston, Texas 77002-4310
Attn: John H. Glover
Fax: 713-658-2553
If to Buyer:
SurgiCare, Inc.
6699 Chimney Rock, Suite 105
Houston, Texas 77081
Attn: Chief Financial Officer
Fax: 713-655-8262
with a copy (which shall not constitute notice) to:
Andrews & Kurth, L.L.P.
600 Travis Street, Suite 4200
Houston, Texas 77002
Attn: Sherwood O. Jones
Fax: 713-220-4285
Any party may send any notice, request, information or other document to be
given hereunder using any other means (including personal delivery, courier,
messenger service, facsimile transmission (to the facsimile numbers set forth
above), telex or ordinary mail), but no such notice, request, information or
other document shall be deemed duly given unless and until it is actually
received by the party for whom it is intended. Any party may change the address
or facsimile number to which notices hereunder are to be sent to it by giving
written notice of such change of address in the manner herein provided for
giving notice.
1.108 Dispute Resolution; Jurisdiction and Forum; Jury Waiver.
(a) If any dispute among the parties shall arise out of or relate to this
Agreement, the parties to such dispute shall first attempt in good faith to
mediate such dispute in Houston, Texas. If the parties are unable to agree
upon a mediator or resolve the dispute within 30 days following notice from
any party to the others of the existence of a dispute, then any party may
bring any appropriate action with respect to such dispute before any Texas
state court or any federal court sitting in Harris County, Texas having
jurisdiction thereof.
(b) Each party hereto irrevocably submits to the jurisdiction of any Texas
state court or any federal court sitting in Harris County, Texas in any
action arising out of or relating to this Agreement, and hereby irrevocably
agrees that all claims in respect of such action may be heard and
determined in such Texas state or federal court. Each party hereto hereby
irrevocably waives, to the fullest extent it may effectively do so, the
defense of an inconvenient forum to the maintenance of such action or
proceeding. The parties hereto further agree, to the extent permitted by
law, that final and unappealable judgment against any of them in any action
or proceeding contemplated above shall be conclusive and may be enforced in
any other jurisdiction within or outside the United States by suit on the
judgment, a certified copy of which shall be conclusive evidence of the
fact and amount of such judgment.
(c) To the extent that any party hereto has or hereafter may acquire any
immunity from jurisdiction of any court or from any legal process (whether
through service or notice, attachment prior to judgment, attachment in aid
of execution, execution or otherwise) with respect to itself or its
property, each party hereto hereby irrevocably waives such immunity in
respect of its obligations with respect to this Agreement.
(d) Each party hereto waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of any action,
suit or proceeding arising out of or relating to this Agreement. Each party
hereto certifies that it has been induced to enter into this Agreement by,
among other things, the mutual waivers and certifications set forth in this
Section 11.9.
1.109 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas applicable to contracts made and
to be performed therein.
1.110 Interpretation of Agreement. (a) As used in this Agreement, the term
"Affiliate" means, with respect to a specified person, such person's spouse and
minor children (and any trust that benefits any such person and any entity in
which such person has a financial interest) and, with respect to an entity, any
other entity or person which directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under common control with,
the entity specified.
(b) The parties hereto acknowledge and agree that this Agreement has been
negotiated at arm's length and between parties equally sophisticated and
knowledgeable in the matters dealt with in this Agreement. Accordingly, any
rule of law or legal decision that would require interpretation of any
ambiguities in this Agreement against the party that has drafted it is not
applicable and is waived. The provisions of this Agreement shall be
interpreted in a reasonable manner to effect the intent of the parties as
set forth in this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Asset Purchase
Agreement to be duly executed as of the day and year first above written.
BUYER:
SURGICARE, INC.
By:
Name:
Title:
SUB:
By:
Name:
Title:
THE PARTNERSHIP:
HEALTHFIRST SURGERY CENTER-MEMORIAL VILLAGE, LTD.
By: HFMV, Inc., its general partner
By:
Name:
Title:
The General Partner joins herein for the limited purpose of
agreement to be bound by the provisions of Articles 1, 3 and 9
hereof.
HFMV, INC.
By:
Name:
Title:
Arthur Minguez and Ronald McMahan join herein individually for
the limited purpose of agreement to be bound by the provisions
of Article 9 hereof.
/s/ Arthur Minguez
---------------------------------------------
Arthur Minguez
/s/ Ronald McMahan
---------------------------------------------
Ronald McMahan
Limited Partners Signature Page to Acquisition Agreement dated as of
October ___, 2000
LIMITED PARTNERS:
The Limited Partners join herein for the limited purpose of
agreement to be bound by the provisions of Articles 1, 3 and 9
hereof.
