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SETTLEMENT AGREEMENT
This Settlement Agreement ("Agreement") is entered into as of
September 21, 2000 by and among Eye Care Centers of America, Inc., a Texas
corporation ("ECCA"), Visionworks, Inc., a Florida corporation and
wholly-owned subsidiary of ECCA ("Visionworks"), Enclave Advancement Group,
Inc., a Delaware corporation and wholly-owned subsidiary of ECCA ("Enclave"),
Vision Twenty-One, Inc., a Florida corporation ("Vision 21"), Block Vision,
Inc., a New Jersey corporation and a direct wholly-owned subsidiary of Vision
21 ("Block Vision"), MEC Healthcare, Inc., a Maryland corporation and
wholly-owned subsidiary of Vision 21 ("MEC"), Vision Twenty-One Managed Eye
Care of Tampa Bay, Inc., a Florida corporation ("Vision 21-Tampa Bay"), The
Complete Optical Laboratory, Ltd., Corp., a New Jersey corporation and a
direct wholly-owned subsidiary of Vision 21 ("TCOL"), Vision Twenty-One of
Wisconsin, Inc., a Wisconsin corporation ("Vision 21-Wisconsin"), Theodore N.
Gillette, O.D. ("Gillette"), Paul O. Smith, O.D. ("Smith"), Optometric
Consultants of Florida, P.A., a Florida professional association wholly-owned
by Gillette and Smith (the "Joint Practice"), Optometric Associates of
Florida, P.A, a Florida professional association majority-owned by Gillette
("OAF" and together with the Joint Practice, the "Gillette Practice"), Drs.
Smith, Porter & Associates, P.A., a Florida professional association
wholly-owned by Smith ("DSPA"), Dr. Smith & Associates, #6966, P.A., a
Florida professional association wholly-owned by Smith ("#6966"), Dr. Smith &
Associates, #6958, P.A., a Florida professional association wholly-owned by
Smith ("#6958"), and Dr. Smith & Associates, #6952, P.A., a Florida
professional association wholly-owned by Smith ("#6952" and collectively with
the Joint Practice, DSPA, #6966 and #6958, the "Smith Practice"). ECCA,
Visionworks, Enclave and their respective subsidiaries are hereinafter
referred to collectively as the "ECCA Companies" or individually as an "ECCA
Company." Vision 21, Block Vision, MEC, Vision 21-Tampa Bay, Vision
21-Wisconsin and their respective subsidiaries and Affiliates (as hereinafter
defined) are hereinafter referred to collectively as the "Vision 21
Companies" or individually as a "Vision 21 Company."
W I T N E S S E T H:
WHEREAS, the Vision 21 Companies and the ECCA Companies have numerous
business relationships with each other relating to providing optometric
services, selling optical goods, managed vision care contracts and other
related services and desire to settle certain outstanding matters related
thereto;
WHEREAS, Vision 21 entered into, or assumed the rights and obligations
as sublessee under, (i) certain Sublease Agreements (the "Sublease
Agreements") with ECCA or Visionworks, as the case may be, for premises
within or adjacent to certain retail optical store locations of the ECCA
Companies in Florida, Texas and Arizona as set forth on EXHIBIT A attached
hereto, (ii) certain Promissory Notes (the "Promissory Notes") for the
benefit of ECCA or Visionworks, as the case may be, for the purchase of
optometric equipment (the "Promissory Notes") and (iii) Trademark License
Agreements (the "Trademark License Agreements") with Enclave;
WHEREAS, the ECCA Companies and Vision 21 have terminated the Sublease
Agreements and Vision 21 has vacated the premises in Arizona, Texas and
Florida (or with respect to certain premises in Florida agreed to vacate the
premises with an effective date prior to the date hereof) which were the
subject of the Sublease Agreements (the premises in Florida being
collectively referred to herein as the "G&S Optometric Premises" and together
with the Arizona and Texas premises, the "Optometric Premises") on the dates
as set forth on EXHIBIT A attached hereto (the "Transition Dates" and each a
"Transition Date");
WHEREAS, ECCA has been using certain optometric equipment owned or
leased by Vision 21 located at the premises in Arizona and Texas (the
"Subleased Optometric Equipment");
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WHEREAS, Vision 21 has announced that it is discontinuing the business
of managing optometric practices and, in connection therewith and with the
proper termination of the Sublease Agreements, ECCA and Vision 21 desire to
coordinate an orderly transition of the optometric practices managed by
Vision 21 (and related businesses) at the Optometric Premises (the "Vision 21
Practices"), the names of such Vision 21 Practices being set forth on EXHIBIT
A opposite the description of the Optometric Premises;
WHEREAS, concurrent with this Agreement, Gillette, Smith, the Gillette
Practice, Smith Practice and Vision 21 will enter into agreements regarding
the sale of certain practice assets, including all of the optometric
equipment located at the G&S Optometric Premises in Florida, by Vision 21
back to the Gillette Practice and/or the Smith Practice (or such other
professional corporation or association owned by Smith and/or Gillette), the
termination or assignment of the business management agreements, the
termination of Gillette and Smith's employment with Vision 21 and certain
other business issues (the "Unwind Agreements");
WHEREAS, in connection with the orderly transition of the Gillette
Practice and the Smith Practice and with the Unwind Agreement, Visionworks
would enter into sublease agreements with each of the Gillette Practice and
the Smith Practice (or such other professional corporation or association
owned by Smith and/or Gillette) in connection with the G&S Optometric
Premises identified on EXHIBIT A, such sublease agreement to have a term of
two (2) years or one (1) year, as the case may be, and be in substantially
the form attached hereto as EXHIBIT B (the "New Sublease Agreements") (the
professional corporation(s) or association(s) entering into the New Sublease
Agreements are hereinafter collectively referred to as the "Designated
Optometrists" and individually as the "Designated Optometrist"). The
Designated Optometrist at each of the G&S Optometric Locations is set forth
opposite the address of such location on EXHIBIT C attached hereto;
WHEREAS, certain of the ECCA Companies and the optometrists with
practices located adjacent to or within the retail optical stores owned or
operated by any ECCA Company are on the managed care panels with respect to
managed vision care contracts secured or administered by the Vision 21
Companies;
WHEREAS, pursuant to that certain Asset Purchase Agreement, dated July
7, 1999 (the "Asset Purchase Agreement") by and among ECCA, Vision 21 and
TCOL, ECCA (through its subsidiaries) acquired certain of the assets and
operations of Vision 21 and TCOL with respect to its optical retail stores
located primarily in Minnesota, Wisconsin and New Jersey;
WHEREAS, ECCA and Vision 21 are parties to an Agreement Regarding
Strategic Alliance dated September 30, 1999 (the "Strategic Alliance
Agreement");
WHEREAS, ECCA and Vision 21 are parties to a letter agreement, dated
February 23, 1999 whereby ECCA has agreed to reimburse Vision 21 for the
optical technicians engaged by Vision 21 in connection with the Vision 21
Practices (the "Optical Technician Letter Agreement");
WHEREAS, the Parties hereto desire to reach an agreement regarding the
settlement of the amounts owed by the parties and the transition of the
Vision 21 Practices to the Designated Optometrists;
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WHEREAS, Gillette, Smith, the Gillette Practice and the Smith Practice
acknowledge that they will directly and indirectly benefit from the
termination of the business management agreements with Vision 21 and the
orderly transition of their respective optometric practices at certain of the
Optometric Premises to a Designated Optometrist in accordance with the terms
hereof and therefore desire to facilitate the transition to minimize the
impact on their respective patients and optometrists; and
WHEREAS, the transactions contemplated by this Agreement will affect
Gillette, Smith, the Gillette Practice and the Smith Practice by inter-alia
settling debts for which the Gillette Practice or the Smith Practice may be
liable (e.g., certain rent payments owed to ECCA or Visionworks with respect
to the occupancy of the Optometric Premises, obligations owed to Vision 21
under their respective Business Management Agreements and by virtue of
Gillette's and Smith's economic interest in Vision 21);
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements of the Parties hereinafter contained and other good and
valuable consideration the receipt of which is hereby acknowledged by each
Party, the Parties hereby agree as follows:
ARTICLE I
TRANSITION OF VISION 21 PRACTICES
1.01 ACKNOWLEDGEMENTS. Vision 21, Gillette, Smith, the Gillette
Practice, the Smith Practice, ECCA, Visionworks and Enclave acknowledge and
agree that:
(a) The parties acknowledge and agree that the Sublease
Agreements, including without limitation, the Sublease Agreements related to
the G&S Optometric Premises at which the Vision 21 Practices were or are
presently operated, are terminated and neither Vision 21, on one hand, nor
any of the ECCA Companies, on the other hand, have any liability to the other
party under the Sublease Agreements except as set forth in this Agreement.
Effective as of the respective Transition Dates, Vision 21 is not entitled to
occupy the Optometric Premises and has, or will immediately following the
execution hereof, vacate such premises. To the extent that Vision 21 has any
contractual liability under the Sublease Agreements, the ECCA Companies will
use their reasonable best efforts to obtain, within a reasonable period of
time, the release of Vision 21 from contractual liability or obligation under
the underlying leases, if any.
(b) As of the date hereof, Vision 21 owes to the ECCA
Companies rent payments (past due and current) plus accrued interest plus
amount trademark license fees in the approximate aggregate amount of $866,468
($670,670 for the Visionworks locations in Florida through the applicable
Transition Dates and $195,798 for the EyeMasters locations in Texas and
Arizona through the applicable Transition Dates) relating to the Trademark
License Agreements and the Sublease Agreements and the rents owed through the
date of Vision 21's vacating of the subject premises.
(c) As of the date hereof, Vision 21 owes to ECCA the amount
of approximately $23,195 under the Promissory Notes.
(d) As of the date hereof, the ECCA Companies owe to Vision
21 the aggregate amount of $881,803 relating to the Optical Technician Letter
Agreement.
(e) As of the date hereof, the ECCA Companies owe to Vision
21 the aggregate amount of $12,498 for its use of the Subleased Optometric
Equipment.
(f) ECCA has agreed to pay Vision 21 an amount equal to
$115,818 for purchase of the Owned Optometric Equipment (as hereinafter
defined).
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(g) ECCA has agreed to pay to Vision 21 an amount equal to
$190,000 for the purchase of the Leased Optometric Equipment (as hereinafter
defined), which Vision 21 has, or will, acquire good and marketable title
from Banc One Leasing Corporation, immediately prior to or concurrent with
the execution hereof.
(h) Such payments shall be made in accordance with SECTION
1.02(a) below.
1.02 TRANSITION OF THE VISION 21 PRACTICES.
(a) Concurrent with the execution hereof, (i) Vision 21
shall pay to ECCA, as representative of the ECCA Companies, the amount, if
any, by which the Vision 21 Debt (as hereinafter defined) exceeds the ECCA
Debt (as hereinafter defined) or (ii) ECCA shall pay to Vision 21 the amount,
if any, by which the ECCA Debt exceeds the Vision 21 Debt, as the case may
be. The ECCA Debt shall be the amount of $1,200,120, which represents the
full satisfaction of the amounts owed by the ECCA Companies to Vision 21 with
respect to the services provided, or to be provided prior to vacating the
Optometric Premises, under the Optical Technician Letter Agreement and any
amounts owed with respect to the Owned Optometric Equipment, the Subleased
Optometric Equipment and the Leased Optometric Equipment. The parties
acknowledge that all or a portion of the amount to be paid by ECCA to Vision
21 hereunder may be paid to Banc One Leasing Corporation (on behalf of Vision
21) as pay-off of the Leased Optometric Equipment in accordance with SECTION
1.02(d) below and upon delivery of such funds, Banc One Leasing Corporation
would transfer title to such Leased Optometric Equipment directly to ECCA or
its subsidiary. Further, Vision 21 hereby consents to and directs ECCA to
deliver any of the funds owed to Vision 21 pursuant to clause (ii) above,
less any of the amounts paid directly to Banc One Leasing Corporation
pursuant to the preceding sentence, directly to the Bank of Montreal as
provided in the consent from the Bank of Montreal and the other banks that
are parties to Vision 21's credit agreement. The Vision 21 Debt shall be
equal to $889,663, which is comprised of the following:
(i) $866,468 ($670,670 for the Visionworks locations in Florida
through the applicable Transition Dates and $195,798 for the EyeMasters
locations in Texas and Arizona through the applicable Transition Dates),
which shall be in full satisfaction of (A) the rental payments and
accrued interest due and owing by Vision 21 in connection with the
Sublease Agreements and any and all other obligations under the Sublease
Agreements, (B) the rental payments for Vision 21's continued occupancy
of the Optometric Premises through the applicable Transition Dates with
respect the Optometric Premises, and (C) the license fees and accrued
interest owed by Vision 21 under the Trademark License Agreements;
(ii) $23,195 which shall be in full satisfaction of the amounts
due and owing under the Promissory Notes plus the remaining principal
amount due thereunder.
(b) Vision 21 shall, and shall use its reasonable best
efforts to cause each of the Vision 21 Practices to terminate the business
management agreements between Vison 21 and the Vision 21 Practices (except
with respect to the business management agreements with OAF which will be
assigned to third party management company owned by Gillette) and assist and
cooperate in the transition at the G&S Optometric Premises from practices
managed by Vision 21 to independent optometric practices owned and operated
by the Designated Optometrists.
(c) Concurrent with the execution hereof, Vision 21 shall
sell, transfer and convey to ECCA or its designee, free and clear of all
liens and encumbrances, (i) all optometric equipment owned by Vision 21 and
used at the Optometric Premises in Texas, Arizona and in the Lake Wales,
Orlando and Tallahasee, Florida locations, a list of which is set forth on
EXHIBIT D attached hereto (the "Owned Optometric Equipment") and (ii) the
optometric equipment formerly leased by Vision 21 from
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Banc One Leasing Corporation and listed on EXHIBIT E attached hereto which
will be acquired by Vision 21 immediately prior to, or concurrent with, the
execution hereof (the "Leased Optometric Equipment"). The purchase price for
the Owned Optometric Equipment and the Leased Optometric Equipment shall be
equal to the fair market value of such equipment as set forth on EXHIBIT D
and EXHIBIT E, respectively attached hereto and paid in accordance with
SECTION 1.02(a) above. Vision 21 hereby agrees that it will execute and
deliver to ECCA or its designee, a Bill of Sale in a form reasonably
acceptable to ECCA, and such other bills of sale, endorsements, assignments,
releases, and other good and sufficient instruments of transfer, assignment
and conveyance in form satisfactory to ECCA and its counsel, as shall be
effective to convey to ECCA or its designee good and marketable title in and
to the Owned Optometric Equipment and Leased Optometric Equipment, free and
clear of any Encumbrances.
(e) Concurrent with or immediately following the execution
hereof, Visionworks and each Designated Optometrist shall enter into a New
Sublease Agreement with a term of two (2) years with respect to each of the
G&S Optometric Premises, except with respect to the premises in Port
Charlotte and Fort Myers, Florida which will be for a term of one (1) year.
The name of the Designated Optometrist who will enter into each New Sublease
Agreement is set forth opposite the G&S Optometric Practice on EXHIBIT C
attached hereto. The effective date of each New Sublease Agreement shall be
the applicable Transition Date for the respective location, or such other
date as may be agreed upon by the Parties. In addition, Visionworks and each
of the Designated Optometrists owned or controlled by Gillette (as identified
on EXHIBIT A) shall enter into an agreement whereby the Designated
Optometrists will be reimbursed by Visionworks for the optical technicians
engaged by the Designated Optometrists at the G&S Optometric Premises, the
terms of such agreement to be substantially similar to the current agreement
between ECCA and Vision 21 relating to the optical technicians at the G&S
Optometric Premises. The Designated Optometrists owned or controlled by Smith
will not enter into agreements regarding optical technicians.
1.03 NON-SOLICITATION.
(a) For the period commencing on the date hereof and ending
on the second anniversary of the date hereof, none of the Vision 21 Companies
(collectively the "Restricted Parties" and individually as a "Restricted
Party") shall, directly or indirectly, either for itself or any other Person,
(A) induce or solicit, or attempt to induce or solicit, any of the Vision 21
Optometrists or any of the ECCA Optometrists to leave the employ of its
employer or to terminate their sublease or other relationship with an ECCA
Company, as the case may be, (B) in any way, directly or indirectly,
interfere with the relationship between the ECCA Companies and any of the
ECCA Optometrists, or otherwise take any action, or refrain from taking any
action, the effect of which action or inaction would reasonably be expected
to adversely affect the relationship between an ECCA Company and an ECCA
Optometrist, (C) employ, or otherwise engage as an employee or independent
contractor, or enter into any other relationship (or solicit such
relationship) relating to the provision of optometric services with, any of
the then ECCA Optometrists or Vision 21 Optometrists. The Parties acknowledge
that the foregoing provisions shall also restrict any company to which a
Restricted Party provides management services, and the Restricted Party shall
disclose this restriction to any company to which it provides management
services and obtain their agreement to be bound to this Non-Solicitation
clause. Notwithstanding the foregoing, the Parties acknowledge that the
foregoing restrictions in clause (A) above shall not apply to general
advertisements in newspapers, magazines or other periodicals that are widely
distributed, but the Restricted Parties shall continue to be bound by the
restrictions and prohibitions set forth in clauses (B) and (C) with respect
to any optometrist responding to such advertisements. Further, with respect
to clause (C) the term "other relationship" shall not include a relationship
with an optometrist which consists SOLELY of the inclusion of such
optometrist on the managed vision care plan panels or selling optical goods
to, or purchasing optical goods on behalf of, such optometrists.
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(b) DEFINITIONS.
"ECCA Optometrists" shall mean all of the optometrists (and
their respective professional entities through whom they perform optometric
services) (i) who are then employed by any of the ECCA Companies, or have
been so employed in the preceding twelve (12) months, (ii) to whom an ECCA
Company then provides management services or has provided management services
in the preceding twelve (12) months, (iii) who are then employed by any other
optometrists (or professionally entity owned by an optometrist), or have been
so employed in the preceding twelve (12) months, to whom an ECCA Company then
provides management services; or (iv) who have practices then located, or
located within the preceding twelve (12) months, adjacent to or within (or
near if such space is sublet by an ECCA Company) the stores owned or operated
by any ECCA Company.
"Vision 21 Optometrists" shall mean all of the optometrists who
are employed by the Vision 21 Practices, or were employed during the six (6)
months preceding the date hereof, to provide service at any of the Optometric
Premises that were subject to the Sublease Agreements.
(c) REMEDIES. If a Vision 21 Company breaches any of the
covenants set forth in this SECTION 1.03, the ECCA Companies will be entitled
to the following remedies, in addition to any others, each of which shall be
independent of the other and severally enforceable:
(i) The Parties stipulate and agree that it will be
difficult to quantify the severe harm to the ECCA Companies if an ECCA
Optometrist ceases to be an ECCA Optometrist as a result, directly or
indirectly, of a Restricted Party's breach of this SECTION 1.03. However, if
a Restricted Party breaches this SECTION 1.03, the parties agree and
stipulate that the damages to ECCA would be significant. Accordingly, if a
Restricted Party breaches this SECTION 1.03, such Restricted Party shall pay
to the ECCA Companies the amount of $150,000.00 for each ECCA Optometrist who
then becomes employed by or otherwise enters into a prohibited relationship
with the Restricted Party or, as a proximate cause of such breach, ceases to
be an ECCA Optometrist. It is further stipulated and agreed that such amount
of damages is a reasonable estimate of the damages that would be incurred by
the ECCA Companies and the payment of such damages is not intended to be
punitive. In the event that the liquidated damages provision in the foregoing
sentence is determined to be unenforceable, the court shall strike the
unenforceable portion of this Agreement and the remainder of this Agreement
shall remain in full force and effect, and the ECCA Companies shall be
entitled to pursue all remedies available under applicable law for the breach
of this SECTION 1.03. For purposes of determining whether an ECCA Optometrist
ceases to be an ECCA Optometrist under this SUBSECTION 1.03(c)(i), an ECCA
Optometrist will cease being an ECCA Optometrist upon termination of the
relationship which resulted in him or her being classified as such, and will
not be deemed an ECCA Optometrist for the 12 months following such cessation.
(ii) The right to have the provisions of this
Agreement specifically enforced by injunction by any court having equity
jurisdiction, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the ECCA Companies and/or
one or more of their respective subsidiaries and Affiliates and that money
damages will not provide an adequate remedy to them. Such injunction shall be
available without the posting of any bond or other security, and each of the
Restricted Parties hereby consents to the issuance of such injunction.
1.04. ASSISTANCE IN PRACTICE TRANSITION. Gillette, Smith, the
Gillette Practice and the Smith Practice hereby consent to the transactions
contemplated herein. Gillette, Smith, the Gillette Practice and the Smith
Practice shall provide assistance and cooperation as requested by the ECCA
Companies in transitioning the optometric practices at the G&S Optometric
Premises to a Designated Optometrist. Further, with respect to any of the
Optometric Premises in Arizona or Texas, Vision 21 shall, and shall use its
reasonable best efforts to cause the Vision 21 Practices to, provide
assistance and cooperation as
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requested by the subleasing optometrists at such practice locations in
transitioning the optometric practice previously managed by Vision 21 at such
location to the subtenant thereof.
1.05 RELEASE FROM NON-COMPETITION AGREEMENTS. In the event that the
Designated Optometrists fail to commence operating at any of the G&S
Optometric Premises on the Transition Date as contemplated herein (other than
as a result of the default of any of the ECCA Companies under this
Agreement), then:
(a) Gillette, Smith, the Gillette Practice and the Smith
Practice shall be deemed to have released any and all Vision 21 Optometrists
(all of such optometrists are hereinafter collectively referred to as the
"Restricted Optometrists"), from any restrictions from, or prohibitions
against, entering into employment agreements, sublease agreements, management
agreements or other arrangements or agreements with an ECCA Company or an
ECCA Optometrist.
(b) Gillette, Smith, the Gillette Practice and the Smith
Practice will be deemed to have expressly consented to the ECCA Companies
and/or the ECCA Optometrists (i) soliciting employment or other arrangements
with the Restricted Optometrists, and (ii) entering into employment
agreements, sublease agreements, management agreements or other arrangements
or agreements upon such terms as may be desirable for the ECCA Companies or
the ECCA Optometrists, as the case may be.
(c) Vision 21, Gillette, Smith, the Gillette Practice and
the Smith Practice will be deemed to have expressly consented to the ECCA
Companies and/or the ECCA Optometrists employing or entering into employment
agreements, sublease agreements, management agreements or other arrangements
or agreements upon such terms as may be desirable for the ECCA Companies or
the ECCA Optometrists, with any optometrists that have previously been
employed by such party and thereby waive any claim for a breach of a
non-competition agreement that may have otherwise resulted from such
engagement.
ARTICLE II
MANAGED VISION CARE PANELS
2.01 PARTICIPATION ON PANELS. With respect to managed vision care
and the relationship of ECCA and Vision 21 with respect thereto, Vision 21
agrees (and agrees to cause Block Vision, MEC, Vision 21-Wisconsin, Vision
21-Tampa Bay and its other subsidiaries to agree) as follows:
(a) For the period commencing on the date hereof and ending
on the fifth anniversary of the date hereof, unless otherwise specified by
the associated employer group or managed care entity, to the extent permitted
by applicable law and subject to the credentialing and other participatory
requirements of each managed vision care plan, and continued compliance by
the ECCA Participants (as defined below) with the terms and conditions of the
applicable provider agreements, including all managed care entity-specific
provisions included therein (subject to the restrictions set forth below),
the Vision 21 Companies shall include all of the optical retail stores of the
ECCA Companies and all of the ECCA Optometrists, including new store
locations and optometrists (and their respective professional entities) that
may hereinafter become ECCA Optometrists (collectively, the "ECCA
Participants"), on each of the provider panels of managed vision care plans
secured or administered by a Vision 21 Company covering markets in which such
ECCA Participant is located. The Vision 21 Companies shall take such actions
as reasonably necessary to insure that the ECCA Participants are not
discriminated against with respect to participation on such provider panels
and receive the same benefits and treatment as the other members of the
panels, except for the compensation or reimbursement to be paid by the Vision
21 Companies to the ECCA Participants on existing contracts which has been
and shall continue to be at the same rates set forth under presently existing
managed vision care contracts. The ECCA Participants will be included on the
panels of such managed vision care plans immediately
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following the execution of this Agreement, subject to the credentialing and
other participatory requirements.
With respect to new managed vision care contracts after the date
hereof, the Vision 21 Companies and ECCA agree that (i) any decrease in
historical reimbursement rates shall be as mutually agreed upon, (ii) Vision
21 shall negotiate reimbursement rates in good faith and not arbitrarily or
capriciously offer lower rates to discourage ECCA from accepting new
contracts and (iii) reimbursement rates will be proportionate to rates
currently in effect and relative to reimbursement levels offered to non-ECCA
panel members taking into account the size and scope of the ECCA panel
members. The Vision 21 Companies shall use their reasonable best efforts to
assist the ECCA Participants in the application process for obtaining the
requisite credentialing to participate on such provider panels. If the
credentialing is denied for any reason or if any ECCA Participant is removed
from a panel for non-compliance with the participation requirements, the
Vision 21 Companies shall provide, or cause to be provided, to the ECCA
Participants, within 30 days of such denial or removal, the basis for denying
the credentialing or removing the ECCA Participant from the panel and an
opportunity to cure the deficiency of the ECCA Participant in order to secure
or maintain, as the case may be, a position on such provider panels. If,
after the date hereof, an ECCA Company bids on a managed vision care contract
that is then awarded to a Vision 21 Company, then the Vision 21 Companies
will not be obligated to include the ECCA Participants on the provider panel
solely as it relates to such managed vision care contract; provided, however
the foregoing shall not affect right of the ECCA Participants to participate
on the provider panels as they relate to all other managed vision care
contracts.
(b) For the period commencing on the date hereof and ending
on December 31, 2005, unless otherwise specified by the associated employer
group or managed care entity, to the extent permitted by applicable law and
subject to the credentialing requirements of each managed vision care plan,
the ECCA Companies shall use their respective reasonable best efforts to
cause the optometrists managed by the Vision 21 Companies in the state of
Arizona under the name "Talbert Optical" to be included on the provider panel
of the "Intergroup" managed vision care plan covering the Arizona market in
which such optometrist is located. Notwithstanding the foregoing, none of the
ECCA Companies will have any obligations under this SECTION 2.01(b) unless
and until the ECCA Participants are included on the panels for the managed
vision care plan relating to PacifiCare.
(c) The Parties acknowledge that the Strategic Alliance
Agreement contained provisions relating to the participation of ECCA
Participants on Vision 21's managed vision care provider panels and,
accordingly, upon execution hereof and the execution by Block Vision, MEC,
Vision 21-Tampa Bay and Vision 21-Wisconsin of the agreements contemplated in
SECTION 2.01(d) below, the Strategic Alliance Agreement will be terminated
and of no further force or effect, and none of ECCA, Vision 21 or the
respective Affiliates shall have any further rights or obligations thereunder.
(d) Concurrent with the execution hereof, Block Vision, MEC,
Vision 21-Tampa Bay and Vision 21-Wisconsin will each execute a separate
agreement with ECCA, in substantially the forms of EXHIBITS F, G, H and K
attached hereto, agreeing to the matters set forth in clauses (a) and (b) of
this SECTION 2.01. In the event that any other subsidiary of Vision 21
engages in the managed vision care business, such subsidiary shall also
execute a separate agreement with ECCA in substantially the form of EXHIBIT
F, G, H and K attached hereto.
(e) If after the date hereof, Vision 21, any of its
subsidiaries, or their any of their respective businesses, is acquired,
directly or indirectly (whether through sale of stock, merger, sale of
assets, consolidation or other similar transaction), by OptiCare Health
Systems, Inc. or any affiliate thereof ("Opticare"), concurrent with such
acquisition, Opticare (or such other acquiring entity) shall execute an
agreement agreeing to be bound (and causing its subsidiaries and affiliates
to be bound) by the provisions of clauses (a) and (b) of this SECTION 2.01.
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ARTICLE III
ASSET PURCHASE AGREEMENT
3.01 PURCHASE PRICE ADJUSTMENT PAYMENT. Vision 21, TCOL and ECCA
acknowledge and agree that (i) Vision 21 and TCOL owe to ECCA the amount of
Four Million Thirty-One Thousand Eight Hundred Seventy-Three Dollars
($4,031,873.00) plus accrued interest (the "Purchase Price Adjustment
Amount") in connection with the purchase price adjustment under Section 2.03
of the Asset Purchase Agreement and (ii) Vision 21 has certain obligations
with respect to certain payments owed to certain optometrists under the
Partnership Agreements (as defined in the Asset Purchase Agreement"). With
respect to the Asset Purchase Agreement, the Parties agree as follows:
(a) Subject to the satisfaction, in all material respects,
of the covenants of the Vision 21 Companies contained in this Agreement and
the transition of the G&S Optometric Practices as contemplated herein, ECCA
and Vision 21 hereby agree that the aggregate debt due from Vision 21
relating to the Purchase Price Adjustment Amount shall be reduced to
$1,531,873 (a reduction in the principal amount of $2,500,000), and shall
then be due and payable, accruing interest at a rate of 7% per annum (such
indebtedness being referred to as the "Adjusted Indebtedness").
Notwithstanding the foregoing, upon and subject to the consummation of Vision
21's restructuring of its bank credit facility on terms that do not
materially adversely affect the rights of ECCA in a way that is materially
different from the restructuring term sheet attached to the Agreement as
EXHIBIT L, the parties agree to restructure the Adjusted Indebtedness to be
payable upon the terms set forth in the attached EXHIBIT K and that
concurrent with the consummation of the restructuring of the bank credit
facility as contemplated herein, Vision 21 shall deliver to ECCA a
convertible note, in a form reasonably satisfactory to ECCA, in accordance
with the terms set forth on EXHIBIT L attached hereto.
(b) Vision 21 and ECCA each hereby affirms its obligations
with respect to the Partnership Agreements (as defined in the Asset Purchase
Agreement) as set forth in the Asset Purchase Agreement.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.01 CONSENTS. The Bank of Montreal shall have consented, in writing
and in a form reasonably acceptable to ECCA, to the terms of this Agreement
including, without limitation, the reduction of the debt related to the
Purchase Price Adjustment Amount, a copy of which consent has been provided
to ECCA.
4.02 COOPERATION. Subject to the terms and conditions herein
provided, each Party will use such Party's reasonable best efforts to take,
or cause to be taken, such actions, to execute and deliver, or cause to be
executed and delivered, such additional documents and instruments and to do,
or cause to be done, all things necessary, proper or advisable under the
provisions of this Agreement and applicable law to consummate and make
effective all of the transactions contemplated herein.
4.03 CONFIDENTIALITY. Vision 21, Block Vision, TCOL, MEC, Vision
21-Wisconsin, Vision 21-Tampa Bay, Gillette, Smith, the Gillette Practice and
the Smith Practice shall, and Vision 21 shall cause each of the Vision 21
Companies and the Vision 21 Practices and their respective Representatives
and Affiliates to, hold in strict confidence and not use or disclose to any
other Person without the prior written consent of ECCA, all confidential
information related to the Optometric Premises and the Vision 21 Practices
which relate to the continued operations of the ECCA Companies or the
Designated Optometrists at the Optometric Premises from and after the date
such premises are vacated including, without limitation the business records
and the patient records to be provided to the Designated
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Optometrists; PROVIDED, HOWEVER, that such information may be used or
disclosed (i) when required by any regulatory authorities or governmental
agencies, (ii) if required by court order or decree or applicable law, (iii)
if it is publicly available other than as a result of a breach of this
Agreement, (iv) if it is otherwise contemplated herein or, with respect to
the Vision 21 Practices which are Designated Optometrists or (v) by the
Designated Optometrist in connection with the operation of their practices at
the Optometric Premises after the applicable Transition Dates.
4.04 REPRESENTATIONS AND WARRANTIES OF VISION 21, BLOCK VISION, MEC,
VISION 21-TAMPA BAY AND VISION 21-WISCONSIN. Vision 21, Block Vision, MEC,
Vision 21-Tampa Bay, Vision 21-Wisconsin and TCOL, jointly and severally,
hereby represent and warrant to ECCA, Visionworks and Enclave as follows:
(a) EXISTENCE, GOOD STANDING AND AUTHORITY. Each of Vision
21, Block Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin and TCOL is a
corporation duly organized, validly existing and in good standing under the
laws of its respective state of incorporation. Each of Vision 21, Block
Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin and TCOL has the power
to own its respective properties and to carry on its respective businesses as
now being conducted. Each of Vision 21, Block Vision, MEC, Vision 21-Tampa
Bay, Vision 21-Wisconsin and TCOL is duly qualified to do business in all
jurisdiction(s) in which the character or location of the properties owned or
leased by it or the nature of the businesses conducted by it makes such
qualification necessary, except where the failure to be so qualified would
not have a material adverse effect on such company. Each of Vision 21, Block
Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin and TCOL has full legal
right, power and authority to execute and deliver this Agreement, to perform
its obligations hereunder, and to sell, assign, transfer, convey and deliver
the Owned Optometric Equipment pursuant hereto.
(b) AUTHORIZATION, ETC. The Board of Directors and
shareholders of each of Vision 21, Block Vision, MEC, Vision 21-Tampa Bay,
Vision 21-Wisconsin and TCOL have taken all actions required by law, its
respective Organizational Documents or otherwise to authorize the execution
and delivery by such Party, of this Agreement and any other agreement
contemplated hereunder to which it is a party, and the performance of such
Party's obligations hereunder and thereunder. This Agreement has been duly
executed and delivered by each of Vision 21, Block Vision, MEC, Vision
21-Tampa Bay, Vision 21-Wisconsin and TCOL and is the legal, valid and
binding obligations of such Party enforceable against it according to its
terms. Block Vision, MEC, Vision 21-Tampa Bay and Vision 21-Wisconsin are
presently the only subsidiaries or Affiliates of Vision 21 engaged in the
business of managed vision care.
(c) NO CONFLICT. Neither the execution and delivery of this
Agreement nor the consummation or performance of any of the transactions
contemplated herein, will, directly or indirectly (with or without notice or
lapse of time):
(i) contravene, conflict with, or result in a violation of
(A) any provision of the Organizational Documents of any of Vision 21,
Block Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin or TCOL, or
(B) any resolution adopted by the Board of Directors or shareholders of
any of Vision 21, Block Vision, MEC, Vision 21-Tampa Bay, Vision
21-Wisconsin or TCOL;
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(ii) contravene, conflict with, or result in a violation
of, or give any Governmental Body or other Person the right to challenge
any of the transactions contemplated hereby or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which any
of Vision 21, Block Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin
or TCOL or any of the Optometric Equipment, may be subject;
(iii) contravene, conflict with, or result in a violation
or breach of any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any contract or
commitment; or
(iv) result in the imposition or creation of any
Encumbrance upon or with respect to any of the Owned Optometric
Equipment.
Except for consents and notices received or given, none of
Vision 21, Block Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin or
TCOL is, or will it be, required to give any notice to or obtain any consent
from any Person in connection with the execution and delivery of this
Agreement or the consummation or performance of the transactions contemplated
hereby. The Bank of Montreal has reviewed this Agreement and consented, in
writing, to the execution and delivery of this Agreement and the consummation
or performance of the transactions contemplated hereby. Vision 21 has
delivered copies of all of such consents and notices to ECCA.
(d) LITIGATION. Except as set forth on EXHIBIT J hereto,
there is no Proceeding by any Person, or by or before (or any investigation
by) any Governmental Body, pending, or to the knowledge of Vision 21, Block
Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin or TCOL threatened,
against or affecting (i) any of Vision 21, Block Vision, MEC, Vision 21-Tampa
Bay, Vision 21-Wisconsin or TCOL or the Optometric Premises which could
materially and adversely affect the right or ability of Vision 21, Block
Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin or TCOL to perform its
obligations hereunder or the ability of the ECCA Companies to transition the
Optometric Premises as contemplated hereunder, or (ii) the transactions
contemplated hereby; and none of Vision 21, Block Vision, MEC, Vision
21-Tampa Bay, Vision 21-Wisconsin or TCOL has any knowledge of any valid
basis for any such Proceeding. None of the Vision 21, Block Vision, MEC,
Vision 21-Tampa Bay, Vision 21-Wisconsin or TCOL is subject to, or in default
under, any Order entered in any Proceeding which may have an adverse effect
on any of the ECCA Companies or the ability of Vision 21, Block Vision, MEC,
Vision 21-Tampa Bay, Vision 21-Wisconsin or TCOL to perform its respective
obligations hereunder.
(e) SUBLEASES. Vision 21 was the sublessor under the
Sublease Agreements and no other parties, including the Vision 21 Practices,
have any rights under the Sublease Agreements. None of the Vision 21
Companies, the Vision 21 Practices, or any of the optometrists (or their
professional entities) who occupy or occupied any of the premises which were
the subject of the Sublease Agreements, have any claims or rights against any
of the ECCA Companies with respect to the termination of the Sublease
Agreements or such parties occupancy of such premises, except as otherwise
expressly set forth herein. Any claims that such parties may have had are
waived by the execution of this Agreement.
(f) VISION 21 PRACTICES. The professional corporations which
comprise the Vision 21 Practices and are or were managed by Vision 21, and,
to the best knowledge of Vision 21, all of the owners of each such
professional corporation, are set forth on EXHIBIT A attached hereto and
incorporated herein by reference. Vision 21 has disclosed to ECCA all of the
optometrists that are, or have been in the preceding 6 months, employed by
any of the Vision 21 Practices.
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(g) STATUS OF BANK FINANCING. Attached hereto as EXHIBIT L
is a proposed term sheet setting forth the terms of the proposed
restructuring of Vision 21's bank credit facility. Vision 21 has no reason to
believe that the bank credit facility will not be restructured in accordance
with the terms set forth on EXHIBIT L.
(h) DISCLOSURE. To the knowledge of Vision 21, Block Vision,
MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin and TCOL, none of this
Agreement, or any schedule, exhibit or certificate delivered in accordance
with the terms hereof or any document or statement in writing which has been
supplied by or on behalf of Vision 21, Block Vision, MEC, Vision 21-Tampa
Bay, Vision 21-Wisconsin or TCOL in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits
any statement of a material fact necessary in order to make the statements
contained herein or therein, in light of the circumstances under which they
were made, not misleading.
4.05 REPRESENTATIONS AND WARRANTIES OF GILLETTE AND THE GILLETTE
PRACTICE. Gillette and the Gillette Practice, jointly and severally, hereby
represent and warrant to ECCA, Visionworks and Enclave as follows:
(a) OAF is owned 93.3% by Gillette, 3.4% by Dr. Mark Beiler
and 3.3% by Dr. Mark Sarno. The Joint Practice is wholly-owned by Smith and
Gillette. Gillette and the Gillette Practice acknowledge that they have
received adequate consideration for the execution hereof and the performance
of their obligations hereunder. Further, Gillette and the Gillette Practice
acknowledge that the ECCA Companies have relied upon the covenants,
representations and warranties contained herein in connection with their
agreement to enter into this Agreement.
(b) Gillette and the Gillette Practice have had the
opportunity to discuss the terms of this Agreement with their legal counsel.
To the knowledge of Gillette and the Gillette Practice, all of the
representations and warranties of Vision 21, Block Vision, MEC, Vision
21-Tampa Bay, Vision 21-Wisconsin herein are true and correct.
(c) To the knowledge of Gillette and the Gillette Practice,
neither the execution and delivery of this Agreement nor the consummation or
performance of any of the transactions contemplated herein, will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation
of (A) any provision of the Organizational Documents of the Gillette
Practice, or (B) any resolution adopted by the Board of Directors or
Shareholders of the Gillette Practice;
(ii) contravene, conflict with, or result in a violation
of or give any Governmental Body or other Person the right to challenge
any of the transactions contemplated hereby or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which
Gillette or the Gillette Practice, may be subject; or
(iii) contravene, conflict with, or result in a violation
or breach of any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any contract or
commitment.
4.06 REPRESENTATIONS AND WARRANTIES OF SMITH AND THE SMITH PRACTICE.
Smith and the Smith Practice, jointly and severally, hereby represent and
warrant to ECCA, Visionworks and Enclave as follows:
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(a) Smith is the sole owner of the Smith Practice (other
than the Joint Practice). The Joint Practice is wholly-owned by Smith and
Gillette. Smith and the Smith Practice acknowledge that they have received
adequate consideration for the execution hereof and the performance of their
obligations hereunder. Further, Smith and the Smith Practice acknowledge that
the ECCA Companies have relied upon the covenants, representations and
warranties contained herein in connection with their agreement to enter into
this Agreement.
(b) Smith and the Smith Practice have had the opportunity to
discuss the terms of this Agreement with their legal counsel. To the
knowledge of Smith and the Smith Practice, all of the representations and
warranties of Vision 21, Block Vision, Vision 21-Tampa Bay, Vision
21-Wisconsin and MEC herein are true and correct.
(c) To the knowledge of Smith and the Smith Practice,
neither the execution and delivery of this Agreement nor the consummation or
performance of any of the transactions contemplated herein, will, directly or
indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a violation
of (A) any provision of the Organizational Documents of the Smith
Practice, or (B) any resolution adopted by the Board of Directors or
shareholders of the Smith Practice;
(ii) contravene, conflict with, or result in a violation
of, or give any Governmental Body or other Person the right to challenge
any of the transactions contemplated hereby or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which
Smith or the Smith Practice, may be subject; or
(iii) contravene, conflict with, or result in a violation
or breach of any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any contract or
commitment.
4.07 REPRESENTATIONS AND WARRANTIES OF ECCA, ENCLAVE AND VISIONWORKS.
ECCA, Visionworks and Enclave, jointly and severally, hereby represent and
warrant to Vision 21, Block Vision, MEC, Vision 21-Tampa Bay, Vision
21-Wisconsin or TCOL as follows:
(a) EXISTENCE, GOOD STANDING AND AUTHORITY. Each of ECCA,
Visionworks and Enclave is a corporation duly organized, validly existing and
in good standing under the laws of its respective state of incorporation.
Each of ECCA, Visionworks and Enclave has the power to own its respective
properties and to carry on its respective businesses as now being conducted.
Each of ECCA, Visionworks and Enclave is duly qualified to do business in all
jurisdiction(s) in which the character or location of the properties owned or
leased by it or the nature of the businesses conducted by it makes such
qualification necessary, except where the failure to be so qualified would
not have a material adverse effect on such company. Each of ECCA, Visionworks
and Enclave has full legal right, power and authority to execute and deliver
this Agreement, to perform its obligations hereunder.
(b) AUTHORIZATION, ETC. The Board of Directors and
shareholders of each of ECCA, Visionworks and Enclave have taken all actions
required by law, its respective Organizational Documents or otherwise to
authorize the execution and delivery by such Party, of this Agreement and the
other agreements contemplated hereunder to which it is a party, and the
performance of such Party's obligations hereunder and thereunder. This
Agreement has been duly executed and delivered by each of ECCA, Visionworks
and Enclave and is the legal, valid and binding obligations of such Party
enforceable against it according to its terms.
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(c) NO CONFLICT. Neither the execution and delivery of this
Agreement nor the consummation or performance of any of the transactions
contemplated herein, will, directly or indirectly(with or without notice or
lapse of time):
(i) contravene, conflict with, or result in a violation
of (A) any provision of the Organizational Documents of any of ECCA,
Visionworks or Enclave, or (B) any resolution adopted by the Board of
Directors or shareholders of any of ECCA, Visionworks and Enclave;
(ii) contravene, conflict with, or result in a violation
of, or give any Governmental Body or other Person the right to challenge
any of the transactions contemplated hereby or to exercise any remedy or
obtain any relief under, any Legal Requirement or any Order to which any
of ECCA, Visionworks or Enclave may be subject; or
(iii) contravene, conflict with, or result in a violation
or breach of any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate, or modify, any contract or
commitment.
Except for consents and notices received or given, none of
ECCA, Visionworks or Enclave is, or will it be, required to give any notice
to or obtain any consent from any Person in connection with the execution and
delivery of this Agreement or the consummation or performance of the
transactions contemplated hereby.
(d) DISCLOSURE. To the knowledge of ECCA, Visionworks and
Enclave, none of this Agreement, or any schedule, exhibit or certificate
delivered in accordance with the terms hereof or any document or statement in
writing which has been supplied by or on behalf of Vision 21, Block Vision,
MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin or TCOL in connection with the
transactions contemplated hereby contains any untrue statement of a material
fact or omits any statement of a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE V
INDEMNIFICATION
5.01 INDEMNIFICATION AND PAYMENT OF DAMAGES BY VISION 21, BLOCK
VISION, MEC, VISION 21-TAMPA BAY, VISION 21-WISCONSIN AND TCOL. Vision 21,
Block Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin or TCOL, jointly
and severally, will indemnify and hold harmless the ECCA Companies and their
respective representatives, shareholders, directors, officers, controlling
persons and Affiliates (collectively, the "ECCA Indemnified Persons") for,
and will pay to the ECCA Indemnified Persons the amount of any actual loss,
liability, claim or damage or expense (including costs of investigation and
defense and reasonable attorneys' fees), whether or not involving a
third-party claim (collectively, "Damages"), arising, directly or indirectly,
from or in connection with any breach of (i) any representation or warranty
made by Vision 21, Block Vision, MEC, Vision 21-Tampa Bay, Vision
21-Wisconsin or TCOL in this Agreement or any schedule attached hereto, or
any other certificate or document delivered by Vision 21, Block Vision, MEC,
Vision 21-Tampa Bay, Vision 21-Wisconsin or TCOL pursuant to this Agreement,
(ii) any covenant or obligation of Vision 21, Block Vision, MEC, Vision
21-Tampa Bay, Vision 21-Wisconsin or TCOL in this Agreement or any document
executed pursuant to this Agreement, or (iii) any claim by any third party
against any of the ECCA Indemnified
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Persons arising out of the termination of the Sublease Agreements and the
vacating of the premises hereunder.
5.02 INDEMNIFICATION AND PAYMENT OF DAMAGES BY VISION 21, BLOCK
VISION, MEC, VISION 21-TAMPA BAY, VISION 21-WISCONSIN AND TCOL OF GILLETTE
INDEMNIFIED PERSONS. Vision 21, Block Vision, MEC, Vision 21-Tampa Bay,
Vision 21-Wisconsin or TCOL, jointly and severally, will indemnify and hold
harmless Gillette and the Gillette Practice and their respective
representatives, shareholders, directors, officers, controlling persons and
Affiliates (collectively, the "Gillette Indemnified Persons") for, and will
pay to the Gillette Indemnified Persons the amount of any Damages arising,
directly or indirectly, from or in connection with any breach of (i) any
representation or warranty made by Vision 21, Block Vision, MEC, Vision
21-Tampa Bay, Vision 21-Wisconsin or TCOL in this Agreement or any schedule
attached hereto, or any other certificate or document delivered by Vision 21,
Block Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin or TCOL pursuant
to this Agreement, or (iii) any claim by any third party against any of the
Gillette Indemnified Persons arising out of the termination of the Sublease
Agreements and the vacating of the premises hereunder.
5.03 INDEMNIFICATION AND PAYMENT OF DAMAGES BY VISION 21, BLOCK
VISION, MEC, VISION 21-TAMPA BAY, VISION 21-WISCONSIN AND TCOL OF SMITH
INDEMNIFIED PERSONS. Vision 21, Block Vision, MEC, Vision 21-Tampa Bay,
Vision 21-Wisconsin or TCOL, jointly and severally, will indemnify and hold
harmless Smith and the Smith Practice and their respective representatives,
shareholders, directors, officers, controlling persons and Affiliates
(collectively, the "Smith Indemnified Persons") for, and will pay to the
Smith Indemnified Persons the amount of any Damages arising, directly or
indirectly, from, or in connection with, any breach of (i) any representation
or warranty made by Vision 21, Block Vision, MEC, Vision 21-Tampa Bay, Vision
21-Wisconsin or TCOL in this Agreement or any schedule attached hereto, or
any other certificate or document delivered by Vision 21, Block Vision, MEC,
Vision 21-Tampa Bay, Vision 21-Wisconsin or TCOL pursuant to this Agreement,
(ii) any covenant or obligation of Vision 21, Block Vision, MEC, Vision
21-Tampa Bay, Vision 21-Wisconsin or TCOL in this Agreement or any document
executed pursuant to this Agreement, or (iii) any claim by any third party
against any of the Smith Indemnified Persons arising out of the termination
of the Sublease Agreements and the vacating of the premises hereunder.
5.04 INDEMNIFICATION AND PAYMENT OF DAMAGES BY ECCA, ENCLAVE AND
VISIONWORKS. ECCA, Enclave and Visionworks, jointly and severally, will
indemnify and hold harmless Vision 21, Block Vision, MEC, Vision 21-Tampa
Bay, Vision 21-Wisconsin and TCOL and their respective representatives,
shareholders, directors, officers, controlling persons and Affiliates
(collectively, the "Vision 21 Indemnified Persons") for, and will pay to the
Vision 21 Indemnified Persons the amount of any Damages, arising, directly or
indirectly, from or in connection with any breach of (i) any representation
or warranty made by ECCA, Enclave or Visionworks in this Agreement or any
schedule attached hereto, or any other certificate or document delivered by
ECCA, Enclave or Visionworks pursuant to this Agreement or (ii) any covenant
or obligation of ECCA, Enclave and Visionworks in this Agreement or any
document executed pursuant to this Agreement.
5.05 INDEMNIFICATION AND PAYMENT OF DAMAGES BY ECCA, ENCLAVE AND
VISIONWORKS OF GILLETTE INDEMNIFIED PERSONS. ECCA, Enclave and Visionworks,
jointly and severally, will indemnify and hold harmless Gillette and the
Gillette Practice and their respective representatives, shareholders,
directors, officers, controlling persons and Affiliates (collectively, the
"Gillette Indemnified Persons") for, and will pay to the Gillette Indemnified
Persons the amount of any Damages, arising, directly or indirectly, from, or
in connection with, any breach of (i) any representation or warranty made by
ECCA, Enclave or Visionworks in this Agreement, or any schedule attached
hereto, or any other certificate or document delivered by ECCA, Enclave or
Visionworks pursuant to this Agreement or (ii) any covenant or obligation of
ECCA, Enclave and Visionworks in this Agreement or any document executed
pursuant to this Agreement.
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5.06 INDEMNIFICATION AND PAYMENT OF DAMAGES BY ECCA, ENCLAVE AND
VISIONWORKS OF SMITH INDEMNIFIED PERSONS. ECCA, Enclave and Visionworks,
jointly and severally, will indemnify and hold harmless Smith and the Smith
Practice and their respective representatives, shareholders, directors,
officers, controlling persons and Affiliates (collectively, the "Smith
Indemnified Persons") for, and will pay to the Smith Indemnified Persons the
amount of any Damages, arising, directly or indirectly, from, or in
connection with, any breach of (i) any representation or warranty made by
ECCA, Enclave or Visionworks in this Agreement or any schedule attached
hereto, or any other certificate or document delivered by ECCA, Enclave or
Visionworks pursuant to this Agreement or (ii) any covenant or obligation of
ECCA, Enclave and Visionworks in this Agreement or any document executed
pursuant to this Agreement.
5.07 INDEMNIFICATION AND PAYMENT OF DAMAGES BY GILLETTE AND THE
GILLETTE PRACTICE. Gillette and the Gillette Practice, jointly and severally,
will indemnify and hold harmless the ECCA Indemnified Persons and the Vision
21 Indemnified Persons for, and will pay to the ECCA Indemnified Persons and
the Vision 21 Indemnified Persons the amount of any Damages, arising,
directly or indirectly, from or in connection with any breach of (i) any
representation or warranty made by Gillette or the Gillette Practice in this
Agreement or any schedule attached hereto, or any other certificate or
document delivered by Gillette or the Gillette Practice pursuant to this
Agreement or (ii) any covenant or obligation of Gillette or the Gillette
Practice in this Agreement or any document executed pursuant to this
Agreement.
5.08 INDEMNIFICATION AND PAYMENT OF DAMAGES BY SMITH AND THE SMITH
PRACTICE. Smith and the Smith Practice, jointly and severally, will indemnify
and hold harmless the ECCA Indemnified Persons and the Vision 21 Indemnified
Persons for, and will pay to the ECCA Indemnified Persons and the Vision 21
Indemnified Persons the amount of any Damages, arising, directly or
indirectly, from or in connection with any breach of (i) any representation
or warranty made by Smith or the Smith Practice in this Agreement or any
schedule attached hereto, or any other certificate or document delivered by
Smith or the Smith Practice pursuant to this Agreement or (ii) any covenant
or obligation of Smith or the Smith Practice in this Agreement or any
document executed pursuant to this Agreement.
5.09 RELEASE BY VISION 21, BLOCK VISION, MEC, VISION 21-TAMPA BAY,
VISION 21-WISCONSIN AND TCOL. Vision 21, BlockVision, MEC, Vision
21-Wisconsin and TCOL and their respective successors and assigns do hereby
release and forever discharge each of ECCA Companies and their respective
officers, directors, shareholders, partners, agents, employees, affiliated
entities, affiliated professionals, successors and assigns, of and from any
and all claims, demands, liabilities, costs, expenses, actions and causes of
action of whatsoever kind or nature, whether in law or equity, from the
beginning of time to the date of this Agreement, which Vision 21, Block
Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin and TCOL may have or
claim to have, whether known to them or not, against any of the ECCA
Companies with respect to (i) the rental amounts due and other obligations
under the Sublease Agreements, the termination of the Sublease Agreements and
the continued occupancy of the Optometric Premises through the applicable
Transition Dates, (ii) the amounts due with respect to the Promissory Notes
or the Trademark License Agreement, (iii) the Strategic Alliance Agreement,
and (iv) the liabilities and obligations owed by ECCA to any of the Vision 21
Companies under the Optical Technician Letter Agreement. Notwithstanding the
foregoing, the Parties acknowledge that the foregoing release is a specific
release and in no event shall such release apply to (i) the obligations and
duties under this Agreement, (ii) any claims that Vision 21, Block Vision,
MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin or TCOL may have against an
ECCA Company, or obligations of any of the ECCA Companies, arising out of a
claim or action by a Person who is not a party to this Agreement, (iii) the
obligations and duties under the Asset Purchase Agreement (other than with
respect to the reduction of the amount of the purchase price adjustment
pursuant to SECTION 3.02 hereof), (iv) any other agreement or obligation
among the Parties other than the matters specifically referred to in the
preceding sentence or (v) any claim arising from and after date hereof.
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5.10 RELEASE BY GILLETTE, SMITH, GILLETTE PRACTICE AND THE SMITH
PRACTICE. Gillette, Smith, Gillette Practice and the Smith Practice and their
respective successors and assigns do hereby release and forever discharge
each of the ECCA Companies, and their respective officers, directors,
shareholders, partners, agents, employees, affiliated entities, affiliated
professionals, successors and assigns, of and from any and all claims,
demands, liabilities, costs, expenses, actions and causes of action of
whatsoever kind or nature, whether in law or equity, from the beginning of
time to the date of this Agreement, which Gillette, Smith, Gillette Practice
and the Smith Practice may have or claim to have, whether known to them or
not, against any of the ECCA Companies with respect to (i) the rental amounts
due and other obligations under the Sublease Agreements, the termination of
the Sublease Agreements and the continued occupancy of the Optometric
Premises to the applicable Transition Dates, (ii) the amounts due with
respect to the Promissory Notes or the Trademark License Agreement and (iii)
the amounts due and other obligations under that certain letter agreement
between ECCA and Vision 21 relating to the reimbursement for optical
technicians in connection with the Vision 21 Practices. Notwithstanding the
foregoing, the Parties acknowledge that the foregoing release is a specific
release and in no event shall such release apply to (i) the obligations and
duties under this Agreement, (ii) any claims that Gillette, Smith, Gillette
Practice or the Smith Practice may have against an ECCA Company, or
obligations of any of the ECCA Companies, arising out of a claim or action by
a Person who is not a party to this Agreement, (iii) any other agreement or
obligation among the Parties other than the matters specifically referred to
in the preceding sentence or (iv) any claim arising from and after date
hereof.
5.11 RELEASE BY ECCA, ENCLAVE AND VISION WORKS. ECCA, Enclave and
Visionworks and their respective successors and assigns do hereby release and
forever discharge each of Vision 21, Block Vision, MEC, Vision 21-Tampa Bay,
Vision 21-Wisconsin, TCOL, Gillette, Smith, the Gillette Practice and the
Smith Practice, and their respective officers, directors, shareholders,
partners, agents, employees, affiliated entities, affiliated professionals,
successors and assigns, of and from any and all claims, demands, liabilities,
costs, expenses, actions and causes of action of whatsoever kind or nature,
whether in law or equity, from the beginning of time to the date of this
Agreement, which ECCA, Enclave and Visionworks may have or claim to have,
whether known to them or not, against Vision 21, Block Vision, MEC, Vision
21-Tampa Bay, Vision 21-Wisconsin and TCOL with respect to (i) the rental
amounts due and other obligations under the Sublease Agreements, the
termination of the Sublease Agreements and the continued occupancy of the
Optometric Premises to the applicable Transition Dates, (ii) the amounts due
with respect to the Promissory Notes or the Trademark License Agreement,
(iii) the Strategic Alliance Agreement and (iv) the obligation of Vision 21
to the ECCA Companies to provide services under the Optical Technician Letter
Agreement. Notwithstanding the foregoing, the Parties acknowledge that the
foregoing release is a specific release and in no event shall such release
apply to (i) the obligations and duties under this Agreement, (ii) any claims
that the ECCA Companies may have against any of the Vision 21 Companies,
Gillette, Smith, the Gillette Practice or the Smith Practice, or obligations
of any of the Vision 21 Companies, Gillette, Smith, the Gillette Practice or
the Smith Practice, arising out of a claim or action by a Person who is not a
party to this Agreement, (iii) the obligations and duties under the Asset
Purchase Agreement (other than with respect to the reduction of the amount of
the purchase price adjustment pursuant to SECTION 3.02 hereof), (iv) any
other agreement or obligation among the Parties other than the matters
specifically referred to in the preceding sentence or (v) any claim arising
from and after date hereof.
5.12 RELEASE OF GILLETTE, SMITH, GILLETTE PRACTICE AND SMITH
PRACTICE BY VISION 21, BLOCK VISION, MEC, VISION 21-TAMPA BAY,VISION
21-WISCONSIN AND TCOL. Vision 21, Block Vision, MEC, Vision 21-Tampa Bay,
Vision 21-Wisconsin and TCOL and their respective successors and assigns do
hereby release and forever discharge each of Gillette, Smith, the Gillette
Practice and the Smith Practice and their respective officers, directors,
shareholders, partners, agents, employees, affiliated entities, affiliated
professionals, successors and assigns, of and from any and all claims,
demands, liabilities, costs, expenses, actions and causes of action of
whatsoever kind or nature, whether in law or in equity, from the beginning of
time to the date of this Agreement, which Vision 21, Block Vision, MEC,
Vision
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<PAGE>
21-Tampa Bay, Vision 21-Wisconsin and TCOL may have or claim to have, whether
known to them or not, against Gillette, Smith, the Gillette Practice and the
Smith Practice with respect to any of the business management agreements and
related agreements, except for the obligations under this Agreement.
5.13 RELEASE OF THE VISION 21 COMPANIES BY GILLETTE, SMITH, THE
GILLETTE PRACTICE AND THE SMITH PRACTICE. Gillette, Smith, the Gillette
Practice and the Smith Practice and their respective successors and assigns
do hereby release and forever discharge each of the Vision 21 Companies and
their respective officers, directors, shareholders, partners, agents,
employees, affiliated entities, affiliated professionals, successors and
assigns, of and from any and all claims, demands, liabilities, costs,
expenses, actions and causes of action of whatsoever kind or nature, whether
in law or equity, from the beginning of time to the date of this Agreement,
which Gillette, Smith, the Gillette Practice and the Smith Practice may have
or claim to have, whether known to them or not, against the Vision 21
Companies with respect to any of the business management agreements and
related agreements, except for the obligations under this Agreement.
5.14. RELEASE OF BANK OF MONTREAL BY ECCA, ENCLAVE AND VISIONWORKS.
Effective upon the consummation of Vision 21's restructuring of its bank
credit facility on terms that do not materially adversely affect the rights
of ECCA in a way that is materially different from the restructuring term
sheet attached to the Agreement as EXHIBIT L, ECCA, Enclave and Visionworks
and their respective successors and assigns do hereby release and forever
discharge each of Bank of Montreal, Bank One Texas, N.A., Pacifica Partners
I, L.P., Pilgrim Prime Rate Trust, Pilgrim America High Income Investments
Ltd. and Merrill Lynch Business Financial Services, Inc., and their
respective officers, directors, shareholders, partners, agents, employees,
affiliated entities, affiliated professionals, successors and assigns
(collectively, the "Banks"), of and from any and all claims, demands,
liabilities, costs, expenses, actions and causes of action of whatsoever kind
or nature, whether in law or equity, from the beginning of time to the date
of this Agreement, which ECCA, Enclave and Visionworks may have or claim to
have, whether known to them or not, against the Banks, individually or
collectively, to the extent such claim, demand, liability, costs, expense,
action and cause of action relates to or arises out of any transaction or
relationship between any of the Vision 21 Companies and any of the ECCA
Companies and the foregoing release shall not be a release of any of the
Banks obligations under the consent letter executed by the Banks consenting
to the transactions contemplated herein . The Parties acknowledge that the
foregoing is intended to be a general release.
ARTICLE VI
MISCELLANEOUS
6.01 PAYMENTS; TIME IS OF THE ESSENCE. All payments hereunder shall
be by wire transfer of immediately available funds to a bank account
designated by the recipient of such payment. Time is of the essence in the
performance of this Agreement.
6.02 ARBITRATION; WAIVER OF TRIAL BY JURY (a) Any and every dispute
of any nature whatsoever that may arise between any of the Parties, whether
founded in contract, statute, tort, fraud, misrepresentation, discrimination
or any other legal theory, including, but not limited to, disputes relating
to or involving the construction, performance or breach of this Agreement, or
any schedule, certificate or other document delivered by any Party hereto, or
any other agreement between the Parties, whether entered into prior to, on,
or subsequent to the date of this Agreement, or those arising under any
federal, state or local law, regulation or ordinance, shall be determined by
binding arbitration in accordance with the then current commercial
arbitration rules of the American Arbitration Association, to the extent such
rules do not conflict with the provisions of this paragraph. If the amount in
controversy in the arbitration exceeds Two Hundred Fifty Thousand Dollars
($250,000), exclusive of interest, attorneys' fees and costs, the arbitration
shall be conducted by a panel of three (3) neutral arbitrators. Otherwise,
the
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<PAGE>
arbitration shall be conducted by a single neutral arbitrator. The Parties
shall endeavor to select neutral arbitrators by mutual agreement. If such
agreement cannot be reached within thirty (30) calendar days after a dispute
has arisen which is to be decided by arbitration, any Party or the Parties
jointly shall request the American Arbitration Association to submit to each
Party an identical panel of fifteen (15) persons. Alternate strikes shall be
made to the panel, commencing with the Party bringing the claim, until the
names of three (3) persons remain, or one (1) person if the case is to be
heard by a single arbitrator. The Parties may, however, by mutual agreement,
request the American Arbitration Association to submit additional panels of
possible arbitrators. The person(s) thus remaining shall be the arbitrator(s)
for such arbitration. If three (3) arbitrators are selected, the arbitrators
shall elect a chairperson to preside at all meetings and hearings. The
arbitrator(s), or a majority of them, shall have the power to determine all
matters incident to the conduct of the arbitration, including without
limitation all procedural and evidentiary matters and the scheduling of any
hearing. The award made by a majority of the arbitrators shall be final and
binding upon the Parties thereto and the subject matter. The arbitration
shall be governed by the United States Arbitration Act, 9 U.S.C. Sections
1-16, and judgment upon the award rendered by the arbitrator(s) may be
entered by any court having jurisdiction thereof. The arbitrators shall have
authority to award damages, arbitration costs, attorneys' fees, declaratory
relief and permanent injunctive relief, if applicable, in accordance with the
terms of this Agreement. Unless otherwise agreed by the Parties, the
arbitration shall be held in San Antonio, Texas. This SECTION 6.02 shall not
prevent any of the Parties from seeking a temporary restraining order or
temporary or preliminary injunctive relief from a court of competent
jurisdiction in order to protect its rights under this Agreement. In the
event a Party seeks such injunctive relief pursuant to this Agreement, such
action shall not constitute a waiver of the provisions of this SECTION 6.02,
which shall continue to govern any and every dispute between the Parties,
including without limitation the right to damages, permanent injunctive
relief and any other remedy, at law or in equity.
(b) EACH OF THE PARTIES TO THIS AGREEMENT WAIVES ANY RIGHT
TO TRIAL BY JURY OF ANY DISPUTE OF ANY NATURE WHATSOEVER THAT MAY ARISE
BETWEEN THEM, INCLUDING, BUT NOT LIMITED TO, THOSE DISPUTES RELATING TO OR
INVOLVING, IN ANY WAY THE CONSTRUCTION, PERFORMANCE OR BREACH OF THIS
AGREEMENT OR ANY OTHER AGREEMENT BETWEEN THE PARTIES, THE PROVISIONS OF ANY
FEDERAL, STATE OR LOCAL LAW, REGULATION OR ORDINANCE NOTWITHSTANDING. By
execution of this agreement, each of the parties hereto acknowledges and
agrees that it has had an opportunity to consult with legal counsel and that
it knowingly and voluntarily waives any right to a trial by jury of any
dispute pertaining to or relating in any way to the transactions contemplated
by this Agreement, the provisions of any federal, state or local law,
regulation or ordinance notwithstanding.
6.03 EXPENSES. Each Party shall pay its own expenses relating to
this Agreement including, without limitation, the fees and expenses of their
respective counsel and financial advisors.
6.04 GOVERNING LAW. The interpretation and construction of this
Agreement and all matters relating hereto, shall be governed by the internal
laws of the State of Texas without regard to conflict of laws principles.
6.05 ENFORCEMENT; VENUE; SERVICE OF PROCESS. In the event any Party
shall seek enforcement of any covenant, warranty or other term or provision
of this Agreement or seek to recover damages for the breach thereof, the
Party which prevails in such proceedings shall be entitled to recover
reasonable attorneys' fees and expenses actually incurred by it in connection
therewith. Subject to SECTION 6.02 and without waiving the same, the Parties
agree that this Agreement is performable in Bexar County, Texas and that the
sole and exclusive venue for any proceeding involving any claim arising under
or relating to this Agreement shall be in Bexar County, Texas. The Parties
agree that the service of process or any
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<PAGE>
other papers upon any of them by any of the methods specified in and in
accordance with SECTION 6.07 (other than by facsimile) shall be deemed good,
proper, and effective service upon them.
6.06 CAPTIONS; REFERENCES. The Article and Section captions used
herein are for reference purposes only, and shall not in any way affect the
meaning or interpretation of this Agreement. References to an "Article" or
"Section" when used without further attribution shall refer to the particular
article or section of this Agreement.
6.07 NOTICES. Any notice or other communications required or
permitted hereunder shall be in writing and, unless otherwise provided
herein, shall be deemed to have been duly given upon delivery in person, by
facsimile, by overnight courier or by certified or registered mail, return
receipt requested, as follows:
If to any of the
Vision 21 Companies: Vision Twenty-One, Inc.
7360 Bryan Dairy Road
Largo, Florida 33777
Attention: Bruce S. Maller
Facsimile: (727) 547-4371
With a copy to: Shumaker, Loop & Kendrick, LLP
101 E. Kennedy Boulevard
Suite 2800
Tampa, Florida 33602
Attention: Darrell C. Smith, Esquire
Facsimile: (813) 229-1660
If to any of the
ECCA Companies: Eye Care Centers of America, Inc.
11103 West Avenue
San Antonio, Texas 78213-1392
Attention: Bernard W. Andrews, CEO
Facsimile: (210) 524-6996
With a copy to: Cox & Smith Incorporated
112 E. Pecan, Suite 1800
San Antonio, Texas 78205
Attention: J. Daniel Harkins or
Steven A. Elder
Facsimile: (210)226-8395
If to Gillette or the
Gillette Practices: Theodore N. Gillette
10809 Indian Hills Court
Largo, Florida 33777
If to Smith or the
Smith Practices: Paul O. Smith, O.D.
541 64th Avenue
St. Pete Beach, Florida 33706
or at such other address or telecopy number as shall have been furnished in
writing by any such Party, except that such notice of such change shall be
effective only upon receipt. Each such notice or other communication shall be
effective when received or, if given by mail, when delivered at the address
specified in this SECTION 6.07 or on the fifth business day following the date
on which such
20
<PAGE>
communication is posted, whichever occurs first. Notwithstanding any
provision in this Agreement to the contrary, any notice properly delivered to
ECCA shall be deemed properly delivered to all of the ECCA Companies.
Notwithstanding any provision in this Agreement to the contrary, any notice
properly delivered to Vision 21 shall be deemed properly delivered to all of
the Vision 21 Companies.
6.08 PARTIES IN INTEREST. This Agreement shall be binding upon and
shall inure to the benefit of the Parties and their respective successors and
permitted assigns. This Agreement may not be transferred, assigned, pledged
or hypothecated by Vision 21, Block Vision, MEC, Vision 21-Tampa Bay, Vision
21-Wisconsin, TCOL, Gillette, Smith, the Gillette Practice or the Smith
Practice without the consent of ECCA. Each of Vision 21, Block Vision, MEC,
Vision 21-Tampa Bay, Vision 21-Wisconsin and TCOL agrees that in the event of
any transfer by any such company of all or substantially all of its assets
(or all or substantially all of the assets of a operating division), the
acquirer of such assets shall be required to assume the Company's obligations
hereunder.
6.09 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
6.10 ENTIRE AGREEMENT. This Agreement, including the other documents
referred to herein which form a part hereof or any other written agreements
that the Parties enter into pursuant to or relating to the transactions
contemplated herein, contains the entire understanding of the Parties with
respect to the subject matter contained herein and therein. This Agreement
supersedes all prior agreements and understandings between the Parties with
respect to such subject matter. All exhibits and schedules referred to herein
and attached hereto are incorporated herein by reference. The Parties
acknowledge that except as expressly provided herein, the Asset Purchase
Agreement and all rights and obligations thereunder shall not be amended or
modified by the terms of this Agreement and shall remain in full force and
effect.
6.11 AMENDMENTS. This Agreement may not be changed orally, but only
by an agreement in writing signed by the Parties.
6.12 SEVERABILITY. Whenever possible each provision and term of this
Agreement will be interpreted in a manner to be effective and valid but if
any provision or term of this Agreement is held to be prohibited by law or
invalid, then such provision or term will be ineffective only to the extent
of such prohibition or invalidity, without invalidating or affecting in any
manner whatsoever the remainder of such provision or term or the remaining
provisions or terms of this Agreement. If any covenants or any portion
thereof set forth in this Agreement is held by a court of competent
jurisdiction to contain limitations as to duration, geographical area or
scope of activity to be restrained that are not reasonable and impose a
greater restraint than is necessary to protect the goodwill or other business
interests of the affected party, the same shall not affect the remainder of
the covenant or covenants contained therein, which shall be given full
effect, without regard to the invalid portions, and any court having
jurisdiction shall reform the covenants to the extent necessary to cause the
limitations contained therein as to duration, geographical area and scope of
activity to be restrained to be reasonable and to impose a restraint that is
not greater than necessary to protect the goodwill or other business
interests of the affected party and enforce the covenants as reformed.
6.13 JOINT PREPARATION. This Agreement has been prepared by the
joint efforts of the respective attorneys to each of the Parties. No
provision of this Agreement shall be construed on the basis that such Party
was the author of such provision.
6.14 WAIVER. The rights and remedies of the Parties are cumulative
and not alternative. Neither the failure nor any delay by any Party in
exercising any right, power,
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or privilege under this Agreement or the documents referred to in this
Agreement will operate as a waiver of such right, power, or privilege, and no
single or partial exercise of any such right, power, or privilege will
preclude any other or further exercise of such right, power, or privilege or
the exercise of any other right, power, or privilege. To the maximum extent
permitted by applicable law, (a) no claim or right arising out of this
Agreement or the documents referred to in this Agreement can be discharged by
one Party, in whole or in part, by a waiver or renunciation of the claim or
right unless provided in writing signed by the other parties; (b) no waiver
that may be given by a Party will be applicable except in the specific
instance for which it is given; and (c) no notice to or demand on one Party
will be deemed to be a waiver of any obligation of such Party or of the right
of the Party giving such notice or demand to take further action without
notice or demand as provided in this Agreement or the documents referred to
in this Agreement.
6.15 DEFINITIONS. The following terms shall have the meanings
ascribed to them:
(a) "AFFILIATE" as to any person or entity shall mean any
entity or person that directly or indirectly through one or more
intermediaries controls, is controlled by or is under common control with,
the specified person or entity. The term "control" for this purpose shall
mean the ability, whether by the ownership of shares or other equity
interest, by contract or otherwise, to elect a majority of the directors of a
corporation, to independently select the general partner of a partnership, or
otherwise to have the power independently to remove and then select a
majority of those persons exercising governing authority over an entity.
"Control" shall be conclusively presumed in the case of direct or indirect
ownership of 50% or more of the equity interest by such person or entity.
Notwithstanding the foregoing, in no event shall the term "Affiliate" with
respect to ECCA include Thomas H. Lee Company or any of its Affiliates (other
than ECCA and its subsidiaries).
(b) "ENCUMBRANCE" means any charge, claim, community
property interest, condition, covenant, equitable interest including any
equitable servitude, lien, option, pledge, security interest, right of first
refusal, or restriction of any kind, including any restriction on use,
voting, transfer, receipt of income, or exercise of any other attribute of
ownership.
(c) "GOVERNMENTAL BODY" means any:
(i) nation, state, county, city, town, village,
district, or other jurisdiction of any nature;
(ii) federal, state, local, municipal, foreign, or other
government;
(iii) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official,
or entity and any court or other tribunal);
(iv) multi-national organization or body; or
(v) body exercising, or entitled to exercise, any
administrative, executive, judicial, legislative, police, regulatory, or
taxing authority or power of any nature.
(d) "LEGAL REQUIREMENT" means any federal, state, local, municipal,
foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute, or
treaty.
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<PAGE>
(e) "ORGANIZATIONAL DOCUMENTS" means (a) the articles or
certificate of incorporation and the bylaws of a corporation; (b) the
partnership agreement and any statement of partnership of a general
partnership; (c) the limited partnership agreement and the certificate of
limited partnership of a limited partnership; (d) the articles of
organization and organizational agreement of a limited liability company, (e)
any charter or similar document adopted or filed in connection with the
creation, formation, or organization of a Person; and (f) any amendment to
any of the foregoing.
(f) "ORDER" means any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any court,
administrative agency, or other Governmental Body or by any arbitrator.
(g) "PARTIES" means ECCA, Enclave, Visionworks, Vision 21, Block
Vision, MEC, Vision 21-Tampa Bay, Vision 21-Wisconsin, TCOL, Gillette, Smith,
the Gillette Practice and the Smith Practice.
(h) "PERSON" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor
union, or other entity or Governmental Body.
(i) "PROCEEDING" means any action, arbitration, audit, charge,
complaint, hearing, inquiry, investigation, litigation, or suit (whether
civil or criminal, judicial, administrative or regulatory, formal or
informal, at law or in equity) commenced, brought, conducted, or heard by or
before, or otherwise involving, any Governmental Body or arbitrator.
6.16 DISCLAIMER OF WARRANTIES. THE PARTIES ACKNOWLEDGE AND AGREE
THAT THE OWNED OPTOMETRIC EQUIPMENT AND LEASED OPTOMETRIC EQUIPMENT ARE BEING
TRANSFERRED "AS IS, WHERE IS" WITH NO WARRANTIES AND REPRESENTATIONS OTHER
THAN AS SET FORTH IN SECTION 4.04. THE VISION 21 COMPANIES DISCLAIM ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, IN CONNECTION WITH THE OWNED OPTOMETRIC
EQUIPMENT OR LEASED OPTOMETRIC EQUIPMENT, INCLUDING, BUT NOT LIMITED TO, THE
IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
6.17 ACKNOWLEDGMENT. The Vision 21 Companies, Gillette, the Gillette
Practice, Smith and the Smith Practice each acknowledge their consent to the
legal representation of the Vision 21 Companies by Shumaker, Loop & Kendrick,
LLP in connection with this Agreement and hereby waive any conflict of
interest that may result from such representation. Gillette, the Gillette
Practice, Smith and the Smith Practice each further acknowledge that they
have retained their own independent legal counsel to represent them in
connection with this Agreement.
[SIGNATURES ON NEXT PAGE]
23
<PAGE>
IN WITNESS WHEREOF, each of the Parties have executed this Agreement to
be effective as of the day and year first above written.
EYE CARE CENTERS OF AMERICA, INC.
By:
--------------------------------------
Title:
--------------------------------------
ENCLAVE ADVANCEMENT GROUP, INC.
By:
--------------------------------------
Title:
--------------------------------------
VISIONWORKS, INC.
By:
--------------------------------------
Title:
--------------------------------------
VISION TWENTY-ONE, INC.
By:
--------------------------------------
Title:
--------------------------------------
THE COMPLETE OPTICAL LABORATORY, LTD., CORP.
By:
--------------------------------------
Title:
--------------------------------------
BLOCK VISION, INC.
By:
--------------------------------------
Title:
--------------------------------------
MEC HEALTHCARE, INC.
By:
--------------------------------------
Title:
--------------------------------------
24
<PAGE>
SETTLEMENT AGREEMENT
Signature page (continued)
VISION TWENTY-ONE OF WISCONSIN, INC.
By:
--------------------------------------
Title:
--------------------------------------
VISION TWENTY-ONE MANAGED EYECARE OF
TAMPA BAY, INC.
By:
--------------------------------------
Title:
--------------------------------------
DRS. SMITH, PORTER & ASSOCIATES, P.A.
By:
--------------------------------------
Title:
--------------------------------------
OPTOMETRIC CONSULTANTS OF FLORIDA, P.A.
By:
--------------------------------------
Title:
--------------------------------------
OPTOMETRIC ASSOCIATES OF FLORIDA, P.A.
By:
--------------------------------------
Title:
--------------------------------------
DR. SMITH & ASSOCIATES, #6966, P.A.
By:
--------------------------------------
Title:
--------------------------------------
DR. SMITH & ASSOCIATES, #6958, P.A.
By:
--------------------------------------
Title:
--------------------------------------
DR. SMITH & ASSOCIATES, #6952, P.A.
By:
--------------------------------------
Title:
--------------------------------------
SETTLEMENT AGREEMENT
25
<PAGE>
Signature page (continued)
THEODORE N. GILLETTE, O.D.
------------------------------------
Theodore N. Gillette, O.D.
PAUL R. SMITH
------------------------------------
Paul R. Smith, O.D.
26
<PAGE>
EXHIBIT A
OPTOMETRIC PRACTICE LOCATIONS
<TABLE>
<CAPTION>
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
STORE NO. VISION 21 PRACTICES AND LESSOR LOCATION OF PREMISES TRANSITION DATES
OWNERS OF SUCH PRACTICES
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
<S> <C> <C> <C> <C>
70 Optometric Associates of ECCA 1660 South Alma School Road, Suite 101, March 1, 2000
Arizona, P.C. - Garrett Mesa, Maricopa County, Arizona
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
95 Optometric Associates of ECCA 9658 Metro Parkway East, Space #173, March 1, 2000
Arizona, P.C. - Garrett Phoenix, Maricopa County, Arizona
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
101 Optometric Associates of ECCA Dobson Shores Shopping Center, 1938-1 March 1, 2000
Arizona, P.C. - Garrett South Dobson Road, Mesa, Maricopa
County, Arizona
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
122 Optometric Associates of ECCA Desert Sky Mall, 7611 West Thomas Road, March 1, 2000
Arizona, P.C. - Garrett Phoenix, Maricopa County, Arizona
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
123 Optometric Associates of ECCA Christown Mall, 1645 West Bethany Home March 1, 2000
Arizona, P.C. - Garrett Road, Phoenix, Maricopa County, Arizona
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
129 Optometric Associates of ECCA Barton Creek Square Mall, 2901 South March 1, 2000
Texas P.C. - Lacey Capitol of Texas Highway, Austin,
Travis County, Texas
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
134 Optometric Associates of ECCA Scottsdale Pavillion, 9039 East Indian March 1, 2000
Arizona, P.C. - Garrett Bend Road, Scottsdale, Maricopa County,
Arizona
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
135 Optometric Associates of ECCA Highland Mall, 6001 Airport Blvd., June 6, 2000
Texas, P.C. - Lacey Suite 2417, Austin, Travis County,
Texas
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
219 Optometric Associates of ECCA Arrowhead Towne Center, 7700 Arrowhead March 1, 2000
Arizona, P.C. - Garrett Towne Center, Glendale, Maricopa
County, Arizona
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
244 Optometric Associates of ECCA Scottsdale Fashion Square, 7000 E. July 2, 2000
Arizona, P.C. - Garrett Camelback Road, Space #2001,
Scottsdale, Maricopa County, Arizona
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
<PAGE>
<CAPTION>
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
STORE NO. VISION 21 PRACTICES AND LESSOR LOCATION OF PREMISES TRANSITION DATES
OWNERS OF SUCH PRACTICES
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
<S> <C> <C> <C> <C>
248 Optometric Associates of ECCA Lakeline Mall, 11200 Lakeline Drive, March 1, 2000
Texas, P.C. - Lacey Cedar Park, Williamson County, Texas
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
254 Optometric Associates of ECCA Ahwatukee Foothills Towne Center, 4933 March 1, 2000
Arizona, P.C. - Garrett E. Ray Road, Suite 9B, Phoenix,
Maricopa County, Arizona
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
258 Optometric Associates of ECCA Braker Village Shopping Center, 10900 July 2, 2000
Texas, P.C. - Lacey Research Blvd., Bldg. B, Austin, Travis
County, Texas
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
262 Optometric Associates of ECCA Boardwalk Shopping Center, 2601 S. IH July 2, 2000
Texas, P.C.- Lacey 35, Bldg. C, Suite 100, Round Rock,
Williamson County, Texas
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
307 Optometric Associates of Visionworks *810 South Missouri Avenue, Clearwater, August 26, 2000
Florida, P.A. - Gillette Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
308 Optometric Associates of Visionworks *2001 East Fowler Avenue, Tampa, Florida August 26, 2000
Florida, P.A. - Gillette
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
309 Optometric Associates of Visionworks *2143 Tyrone Blvd., St. Petersburg, August 26, 2000
Florida, P.A. - Gillette Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
310 Optometric Associates of Visionworks *1075 U.S. Highway 19 South, Palm August 26, 2000
Florida, P.A. - Gillette Harbor, Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
311 Dr. Smith & Associates, Visionworks *11850 Sheri Lane, Kendall, Florida September 9, 2000
#6952, P.A. - Smith
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
312 Optometric Associates of Visionworks *891 South Tamiami Trail, Sarasota, August 26, 2000
Florida, P.A. - Gillette Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
313 Optometric Consultants of Visionworks *701 N. Congress Avenue, Boynton Beach, September 9, 2000
Florida, P.A. - Gillette Florida
and Smith
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
314 Optometric Associates of Visionworks *3301 4th Street North, St. Petersburg, August 26, 2000
Florida, P.A. - Gillette Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
317 Optometric Associates of Visionworks *700 South Dale Mabry Highway, Tampa, August 26, 2000
Florida, P.A. - Gillette Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
318 Dr.Smith & Associates, Visionworks *Colonial Palms Plaza, 13601 S. Dixie September 9, 2000
#6958, P.A. - Smith Highway, Miami, Dade County, Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
2
<PAGE>
<CAPTION>
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
STORE NO. VISION 21 PRACTICES AND LESSOR LOCATION OF PREMISES TRANSITION DATES
OWNERS OF SUCH PRACTICES
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
<S> <C> <C> <C> <C>
325 Optometric Associates of Visionworks *9644 Scenic Drive, New Port Richey, August 26, 2000
Florida, P.A. - Gillette Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
326 Dr. Smith & Associates, Visionworks *1610 N.E. 163rd Street, North Miami September 9, 2000
#6966, P.A. - Smith Beach, Dade County, Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
332 Optometric Associates of Visionworks *12320 S. Cleveland Avenue, Fort Myers, August 26, 2000
Florida, P.A. - Gillette Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
337 Optometric Associates of Visionworks *11212 Park Blvd., Seminole, Florida August 26, 2000
Florida, P.A. - Gillette
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
339 Optometric Associates of Visionworks *14901 North Dale Mabry Highway, Tampa, August 26, 2000
Florida, P.A. - Gillette Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
342 Drs. Smith, Porter & Visionworks *13191 W. Sunrise Blvd., Sunrise, September 9, 2000
Associates, P.A. - Smith Florida
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
343 Optometric Consultants of Visionworks *Palm Springs Mile Shopping Centers, September 9, 2000
Florida, P.A. - Gillette Hialeah, Pinellas County, Florida
and Smith
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
9370 Optometric Associates of Visionworks *18500 Veterans Blvd. #4, Port August 26, 2000
Florida, P.A. - Gillette Charlotte, Florida 33954
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
9374 Optometric Associates of Visionworks *8150 Citrus Park Town Center, Tampa, August 26, 2000
Florida, P.A. - Gillette Florida 33625
--------- ----------------------------- ----------------- ----------------------------------------- ----------------------
</TABLE>
Drs. Smith, Porter & Associates, P.A., Dr. Smith & Associates, #6966, P.A., Dr.
Smith & Associates, #6958, P.A., Dr. Smith & Associates, #6952, P.A. *Indicates
the G&S Optometric Premises
3
<PAGE>
EXHIBIT B
FORM OF NEW SUBLEASE AGREEMENT
<PAGE>
EXHIBIT C
DESIGNATED OPTOMETRISTS
<TABLE>
<CAPTION>
STORE # DESIGNATED OPTOMETRIST ADDRESS OF G&S OPTOMETRIC LEASE TERMS*
PREMISES
------- ---------------------------- ------------------------------------------- ------------------------------
<S> <C> <C> <C>
307 Optometric Associates of 810 South Missouri Avenue, Clearwater, Year 1 - $29,510
Florida, PA Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------- ------------------------------
308 Optometric Associates of 2001 East Fowler Avenue, Tampa, Florida Year 1 - $39,220
Florida, PA
Year 2 - $48,000
------- ---------------------------- ------------------------------------------- ------------------------------
309 Optometric Associates of 2143 Tyrone Blvd., St. Petersburg, Year 1 - $39,220
Florida, PA Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------- ------------------------------
310 Optometric Associates of 1075 U.S. Highway 19 South, Palm Harbor, Year 1 - $39,220
Florida, PA Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------- ------------------------------
311 Dr. Smith & Associates, 11850 Sheri Lane, Kendall, Florida Year 1 - $48,000
#6952, PA
Year 2 - $48,000
------- ---------------------------- ------------------------------------------- ------------------------------
312 Optometric Associates of 891 South Tamiami Trail, Sarasota, Year 1 - $39,220
Florida, PA Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------- ------------------------------
313 Drs. Smith, Porter & 701 N. Congress Avenue, Boynton Beach, Year 1 - $36,000
Associates, PA Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------ ------------------------------
314 Optometric Associates of 3301 4th Street North, St. Petersburg, Year 1 - $39,220
Florida, PA Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------ ------------------------------
317 Optometric Associates of 700 South Dale Mabry Highway, Tampa, Year 1 - $39,220
Florida, PA Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------ ------------------------------
318 Dr. Smith & Associates, Colonial Palms Plaza, 13601 S. Dixie Year 1 - $48,000
#6958, PA Highway, Miami, Dade County, Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------ ------------------------------
325 Optometric Associates of 9644 Scenic Drive, New Port Richey, Year 1 - $39,220
Florida, PA Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------ ------------------------------
<PAGE>
<CAPTION>
STORE # DESIGNATED OPTOMETRIST ADDRESS OF G&S OPTOMETRIC LEASE TERMS*
PREMISES
------- ---------------------------- ------------------------------------------- ------------------------------
<S> <C> <C> <C>
326 Dr. Smith & Associates, 1610 N.E. 163rd Street, North Miami Year 1 - $48,000
#6966, PA Beach, Dade County, Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------ ------------------------------
332 Optometric Associates of 12320 S. Cleveland Avenue, Fort Myers, Year 1 - $12,000
Florida, PA Florida
------- ---------------------------- ------------------------------------------ ------------------------------
337 Optometric Associates of 11212 Park Blvd., Seminole, Florida Year 1 - $39,220
Florida, PA
Year 2 - $48,000
------- ---------------------------- ------------------------------------------ ------------------------------
339 Optometric Associates of 14901 North Dale Mabry Highway, Tampa, Year 1 - $39,220
Florida, PA Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------ ------------------------------
342 Drs. Smith, Porter & 13191 W. Sunrise Blvd., Sunrise, Florida Year 1 - $48,000
Associates, PA
Year 2 - $48,000
------- ---------------------------- ------------------------------------------ ------------------------------
343 Drs. Smith, Porter & Palm Springs Mile Shopping Centers, Year 1 - $48,000
Associates, PA Hialeah, Pinellas County, Florida
Year 2 - $48,000
------- ---------------------------- ------------------------------------------ ------------------------------
9370 Optometric Associates of 18500 Veterans Blvd. #4, Port Charlotte, Year 1 - $12,000
Florida, PA Florida 33954
------- ---------------------------- ------------------------------------------ ------------------------------
9374 Optometric Associates of 8150 Citrus Park Town Center, Tampa, Year 1 - $29,510
Florida, PA Florida 33625
Year 2 - $48,000
------- ---------------------------- ------------------------------------------ ------------------------------
</TABLE>
* The annual rent for the first year will be prorated in 10 equal monthly
payments, with the first rent payment due on the first day of the third month
after the commencement of the sublease.
2
<PAGE>
EXHIBIT D
OWNED OPTOMETRIC EQUIPMENT
<PAGE>
EXHIBIT E
LEASED OPTOMETRIC EQUIPMENT
<PAGE>
EXHIBIT F
FORM OF MANAGED VISION CARE AGREEMENT
[Block Vision, Inc.]
This Managed Vision Care Agreement is executed this ____ day of
______, 2000 by Block Vision, Inc., a New Jersey corporation (the "Company")
for the benefit of Eye Care Centers of America, Inc., a Texas corporation
("ECCA"), Visionworks, Inc., a Florida corporation and wholly-owned
subsidiary of ECCA ("Visionworks"), Enclave Advancement Group, Inc., a
Delaware corporation and wholly-owned subsidiary of ECCA ("Enclave") and
their respective subsidiaries and Affiliates. ECCA, Visionworks, Enclave and
their respective subsidiaries and Affiliates (as hereinafter defined) are
hereinafter referred to collectively as the "ECCA Companies" or individually
as an "ECCA Company."
W I T N E S S E T H
WHEREAS, concurrent with the execution hereof, the parties hereto,
Vision Twenty-One, Inc., a Florida corporation ("Vision 21"), and certain
other parties, are entering into that certain Settlement Agreement (the
"Settlement Agreement") pursuant to which certain outstanding matters between
the parties thereto are being resolved;
WHEREAS, certain of the ECCA Companies and the optometrists with
practices located adjacent to or within the retail optical stores owned or
operated by any ECCA Company are currently on the managed care panels with
respect to managed vision care contracts secured or administered by the
Company;
WHEREAS, the Company is receiving benefits from the Settlement
Agreement and, in connection therewith, has agreed to execute this Agreement
providing the ECCA Companies and certain optometrists will have the continued
right to participate on the managed care panels with respect to managed
vision care contracts secured or administered by the Company;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements of the parties hereinafter contained and other good and
valuable consideration the receipt of which is hereby acknowledged by each
party, the parties hereby agree as follows:
Section 1. PARTICIPATION ON PANELS. For the period commencing on the
date hereof and ending on the fifth anniversary of the date hereof, unless
otherwise specified by the associated employer group or managed care entity,
to the extent permitted by applicable law and subject to the credentialing
and other participatory requirements of each managed vision care plan, and
continued compliance by the ECCA Participants (as defined below) with the
terms and conditions of the applicable provider agreements, including all
managed care entity-specific provisions included therein (subject to the
non-discriminatory restrictions below), the Company shall include all of the
optical retail stores of the ECCA Companies and all of the ECCA Optometrists,
including new store locations and optometrists (and their respective
professional entities) that may hereinafter become ECCA Optometrists
(collectively, the "ECCA Participants"), on each of the provider panels of
managed vision care plans secured or administered by the Company covering
markets in which such ECCA Participant is located. The Company shall take
such actions as reasonably necessary to insure that the ECCA Participants are
not discriminated against with respect to participation on such provider
panels and receive the same benefits and treatment as the other members of
the panels, except for the compensation and reimbursement to be paid by the
Company to the ECCA Participants on existing contracts which has been and
shall continue to be at the same rates set forth under presently existing
managed vision care contracts. The ECCA Participants will be included on the
panels of such managed vision care plans immediately following the execution
of this Agreement, subject to the credentialing and other participatory
requirements.
<PAGE>
With respect to new managed vision care contracts after the date hereof, the
Company and ECCA agree that (i) any decrease in historical reimbursement
rates shall be as mutually agreed upon, (ii) the Company shall negotiate
reimbursement rates in good faith and not arbitrarily or capriciously offer
lower rates to discourage ECCA from accepting new contracts and (iii)
reimbursement rates will be proportionate to rates currently in effect and
relative to reimbursement levels offered to non-ECCA panel members taking
into account the size and scope of the ECCA panel members. The Company shall
use its reasonable best efforts to assist the ECCA Participants in the
application process for obtaining the requisite credentialing to participate
on such provider panels. If the credentialing is denied for any reason or if
any ECCA Participant is removed from a panel for non-compliance with the
participation requirements, the Vision 21 Companies shall provide, or cause
to be provided, to the ECCA Participants, within 30 days of such denial or
removal, the basis for denying the credentialing or removing the ECCA
Participant from the panel and an opportunity to cure the deficiency of the
ECCA Participant in order to secure or maintain, as the case may be, a
position on such provider panels. If, after the date hereof, an ECCA Company
bids on a managed vision care contract that is then awarded to the Company,
then the Vision 21 Company will not be obligated to include the ECCA
Participants on the provider panel solely as it relates to such managed
vision care contract; provided, however the foregoing shall not affect right
of the ECCA Participants to participate on the provider panels as they relate
to all other managed vision care contracts.
Section 2. DEFINITIONS.
(a) "AFFILIATE" as to any person or entity shall mean any entity or
person that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with, the specified
person or entity. The term "control" for this purpose shall mean the ability,
whether by the ownership of shares or other equity interest, by contract or
otherwise, to elect a majority of the directors of a corporation, to
independently select the general partner of a partnership, or otherwise to
have the power independently to remove and then select a majority of those
persons exercising governing authority over an entity. "Control" shall be
conclusively presumed in the case of direct or indirect ownership of 50% or
more of the equity interest by such person or entity. Notwithstanding the
foregoing, in no event shall the term "Affiliate" with respect to ECCA
include Thomas H. Lee Company or any of its Affiliates (other than ECCA and
its subsidiaries).
"ECCA OPTOMETRISTS" shall mean all of the optometrists (and their
respective professional entities through whom they perform optometric
services) (i) who are then employed by any of the ECCA Companies, or have
been so employed in the preceding twelve (12) months, (ii) to whom an ECCA
Company then provides management services or has provided management services
in the preceding twelve (12) months, (iii) who are then employed by any other
optometrists (or professionally entity owned by an optometrist), or have been
so employed in the preceding twelve (12) months, to whom an ECCA Company then
provides management services; or (iv) who have practices then located, or
located within the preceding twelve (12) months, adjacent to or within (or
near if such space is sublet by an ECCA Company) the stores owned or operated
by any ECCA Company including, without limitation, optometrist employed by
the Vision 21 Practices.
"Parties" means the Company, ECCA, Enclave and Visionworks.
2
<PAGE>
Section 3. MISCELLANEOUS.
(a) TIME IS OF THE ESSENCE. Time is of the essence in the
performance of this Agreement.
(b) ARBITRATION; WAIVER OF TRIAL BY JURY Any and every dispute of
any nature whatsoever that may arise between any of the Parties, whether
founded in contract, statute, tort, fraud, misrepresentation, discrimination
or any other legal theory, including, but not limited to, disputes relating
to or involving the construction, performance or breach of this Agreement, or
any schedule, certificate or other document delivered by any Party hereto, or
any other agreement between the Parties, whether entered into prior to, on,
or subsequent to the date of this Agreement, or those arising under any
federal, state or local law, regulation or ordinance, shall be determined by
binding arbitration in accordance with the then current commercial
arbitration rules of the American Arbitration Association, to the extent such
rules do not conflict with the provisions of this paragraph. If the amount in
controversy in the arbitration exceeds Two Hundred Fifty Thousand Dollars
($250,000), exclusive of interest, attorneys' fees and costs, the arbitration
shall be conducted by a panel of three (3) neutral arbitrators. Otherwise,
the arbitration shall be conducted by a single neutral arbitrator. The
Parties shall endeavor to select neutral arbitrators by mutual agreement. If
such agreement cannot be reached within thirty (30) calendar days after a
dispute has arisen which is to be decided by arbitration, any Party or the
Parties jointly shall request the American Arbitration Association to submit
to each Party an identical panel of fifteen (15) persons. Alternate strikes
shall be made to the panel, commencing with the Party bringing the claim,
until the names of three (3) persons remain, or one (1) person if the case is
to be heard by a single arbitrator. The Parties may, however, by mutual
agreement, request the American Arbitration Association to submit additional
panels of possible arbitrators. The person(s) thus remaining shall be the
arbitrator(s) for such arbitration. If three (3) arbitrators are selected,
the arbitrators shall elect a chairperson to preside at all meetings and
hearings. The arbitrator(s), or a majority of them, shall have the power to
determine all matters incident to the conduct of the arbitration, including
without limitation all procedural and evidentiary matters and the scheduling
of any hearing. The award made by a majority of the arbitrators shall be
final and binding upon the Parties thereto and the subject matter. The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
Sections 1-16, and judgment upon the award rendered by the arbitrator(s) may
be entered by any court having jurisdiction thereof. The arbitrators shall
have authority to award damages, arbitration costs, attorneys' fees,
declaratory relief and permanent injunctive relief, if applicable, in
accordance with the terms of this Agreement. Unless otherwise agreed by the
Parties, the arbitration shall be held in San Antonio, Texas. This SECTION
3(B) shall not prevent any of the Parties from seeking a temporary
restraining order or temporary or preliminary injunctive relief from a court
of competent jurisdiction in order to protect its rights under this
Agreement. In the event a Party seeks such injunctive relief pursuant to this
Agreement, such action shall not constitute a waiver of the provisions of
this SECTION 3(b), which shall continue to govern any and every dispute
between the Parties, including without limitation the right to damages,
permanent injunctive relief and any other remedy, at law or in equity.
EACH OF THE PARTIES TO THIS AGREEMENT WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY DISPUTE OF ANY NATURE WHATSOEVER THAT MAY ARISE BETWEEN THEM,
INCLUDING, BUT NOT LIMITED TO, THOSE DISPUTES RELATING TO OR INVOLVING, IN
ANY WAY THE CONSTRUCTION, PERFORMANCE OR BREACH OF THIS AGREEMENT OR ANY
OTHER AGREEMENT BETWEEN THE PARTIES, THE PROVISIONS OF ANY FEDERAL, STATE OR
LOCAL LAW, REGULATION OR ORDINANCE NOTWITHSTANDING. By execution of this
agreement, each of the parties hereto acknowledges and agrees that it has had
an opportunity to consult with legal counsel and that it knowingly and
voluntarily waives any right to a trial by jury of any dispute pertaining to
or relating in any way to the transactions contemplated by this Agreement,
the provisions of any federal, state or local law, regulation or ordinance
notwithstanding.
3
<PAGE>
(c) EXPENSES. Each Party shall pay its own expenses relating to
this Agreement including, without limitation, the fees and expenses of their
respective counsel and financial advisors.
(d) GOVERNING LAW. The interpretation and construction of this
Agreement and all matters relating hereto, shall be governed by the internal
laws of the State of Texas without regard to conflict of laws principles.
(e) ENFORCEMENT; VENUE; SERVICE OF PROCESS. In the event any Party
shall seek enforcement of any covenant, warranty or other term or provision
of this Agreement or seek to recover damages for the breach thereof, the
Party which prevails in such proceedings shall be entitled to recover
reasonable attorneys' fees and expenses actually incurred by it in connection
therewith. Subject to SECTION 3(b) and without waiving the same, the Parties
agree that this Agreement is performable in Bexar County, Texas and that the
sole and exclusive venue for any proceeding involving any claim arising under
or relating to this Agreement shall be in Bexar County, Texas. The Parties
agree that the service of process or any other papers upon any of them by any
of the methods specified in and in accordance with SECTION 3(g) (other than
by facsimile) shall be deemed good, proper, and effective service upon them.
(f) CAPTIONS; REFERENCES. The Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement. References to a "Section" when used without
further attribution shall refer to the particular section of this Agreement.
(g) NOTICES. Any notice or other communications required or permitted
hereunder shall be in writing and, unless otherwise provided herein, shall be
deemed to have been duly given upon delivery in person, by facsimile, by
overnight courier or by certified or registered mail, return receipt requested,
as follows:
If to the Company: Block Vision
621 N. W. 53rd Street, Suite 600
Boca Raton, Florida 33487
Attention: Andrew Alcorn, President
Facsimile: (561) 241-5126-4371
With a copy to: Shumaker, Loop & Kendrick, LLP
101 E. Kennedy Boulevard
Suite 2800
Tampa, Florida 33602
Attention: Darrell C. Smith, Esquire
Facsimile: (813) 229-1660
If to any of the ECCA Companies: Eye Care Centers of America, Inc.
11103 West Avenue
San Antonio, Texas 78213-1392
Attention: Bernard W. Andrews, CEO
Facsimile: (210) 524-6996
With a copy to: Cox & Smith Incorporated
112 E. Pecan, Suite 1800
San Antonio, Texas 78205
Attention: J. Daniel Harkins or
Steven A. Elder
Facsimile: (210) 226-8395
4
<PAGE>
or at such other address or telecopy number as shall have been furnished in
writing by any such Party, except that such notice of such change shall be
effective only upon receipt. Each such notice or other communication shall be
effective when received or, if given by mail, when delivered at the address
specified in this SECTION 3(g) or on the fifth business day following the
date on which such communication is posted, whichever occurs first.
Notwithstanding any provision in this Agreement to the contrary, any notice
properly delivered to ECCA shall be deemed properly delivered to all of the
ECCA Companies.
(h) PARTIES IN INTEREST. This Agreement shall be binding upon and
shall inure to the benefit of the Parties and their respective successors and
permitted assigns. This Agreement may not be transferred, assigned, pledged
or hypothecated by the Company without the consent of ECCA. The Company
agrees that in the event of any transfer by any such company of all or
substantially all of its assets (or all or substantially all of the assets of
a operating division), the acquirer of such assets shall be required to
assume the Company's obligations hereunder.
(i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
(j) ENTIRE AGREEMENT. This Agreement, including the other documents
referred to herein which form a part hereof or any other written agreements
that the Parties enter into pursuant to or relating to the transactions
contemplated herein, contains the entire understanding of the Parties with
respect to the subject matter contained herein and therein. This Agreement
supersedes all prior agreements and understandings between the Parties with
respect to such subject matter. All exhibits and schedules referred to herein
and attached hereto are incorporated herein by reference. The Parties
acknowledge that except as expressly provided herein, the Asset Purchase
Agreement and all rights and obligations thereunder shall not be amended or
modified by the terms of this Agreement and shall remain in full force and
effect.
(k) AMENDMENTS. This Agreement may not be changed orally, but only
by an agreement in writing signed by the Parties.
(l) SEVERABILITY. Whenever possible each provision and term of this
Agreement will be interpreted in a manner to be effective and valid but if
any provision or term of this Agreement is held to be prohibited by law or
invalid, then such provision or term will be ineffective only to the extent
of such prohibition or invalidity, without invalidating or affecting in any
manner whatsoever the remainder of such provision or term or the remaining
provisions or terms of this Agreement. If any covenants or any portion
thereof set forth in this Agreement is held by a court of competent
jurisdiction to contain limitations as to duration, geographical area or
scope of activity to be restrained that are not reasonable and impose a
greater restraint than is necessary to protect the goodwill or other business
interests of the affected party, the same shall not affect the remainder of
the covenant or covenants contained therein, which shall be given full
effect, without regard to the invalid portions, and any court having
jurisdiction shall reform the covenants to the extent necessary to cause the
limitations contained therein as to duration, geographical area and scope of
activity to be restrained to be reasonable and to impose a restraint that is
not greater than necessary to protect the goodwill or other business
interests of the affected party and enforce the covenants as reformed.
(m) JOINT PREPARATION. This Agreement has been prepared by the
joint efforts of the respective attorneys to each of the Parties. No
provision of this Agreement shall be construed on the basis that such Party
was the author of such provision.
(n) WAIVER. The rights and remedies of the Parties are cumulative
and not alternative. Neither the failure nor any delay by any Party in
exercising any right, power, or privilege under this
5
<PAGE>
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise
of any such right, power, or privilege will preclude any other or further
exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one Party, in whole or in
part, by a waiver or renunciation of the claim or right unless provided in
writing signed by the other parties; (b) no waiver that may be given by a
Party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of such Party or of the right of the Party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
IN WITNESS WHEREOF, each of the Parties have executed this Agreement to
be effective as of the day and year first above written.
EYE CARE CENTERS OF AMERICA, INC.
By:
--------------------------------------
Title:
--------------------------------------
ENCLAVE ADVANCEMENT GROUP, INC.
By:
--------------------------------------
Title:
--------------------------------------
VISIONWORKS, INC.
By:
--------------------------------------
Title:
--------------------------------------
BLOCK VISION, INC.
By:
--------------------------------------
Title:
--------------------------------------
6
<PAGE>
EXHIBIT G
FORM OF MANAGED VISION CARE AGREEMENT
[Maryland Eye Care, Inc.]
This Managed Vision Care Agreement is executed this ____ day of
______, 2000 by MEC Healthcare, Inc. (the "Company") for the benefit of Eye
Care Centers of America, Inc., a Texas corporation ("ECCA") Visionworks,
Inc., a Florida corporation and wholly-owned subsidiary of ECCA
("Visionworks"), Enclave Advancement Group, Inc., a Delaware corporation and
wholly-owned subsidiary of ECCA ("Enclave"). ECCA, Visionworks, Enclave and
their respective subsidiaries and Affiliates (as hereinafter defined) are
hereinafter referred to collectively as the "ECCA Companies" or individually
as an "ECCA Company."
W I T N E S S E T H
WHEREAS, concurrent with the execution hereof, the parties hereto,
Vision Twenty-One, Inc., a Florida corporation ("Vision 21"), and certain
other parties, are entering into that certain Settlement Agreement (the
"Settlement Agreement") pursuant to which certain outstanding matters between
the parties thereto are being resolved;
WHEREAS, certain of the ECCA Companies and the optometrists with
practices located adjacent to or within the retail optical stores owned or
operated by any ECCA Company are currently on the managed care panels with
respect to managed vision care contracts secured or administered by the
Company;
WHEREAS, the Company is receiving benefits from the Settlement
Agreement and, in connection therewith, has agreed to execute this Agreement
providing the ECCA Companies and certain optometrists will have the continued
right to participate on the managed care panels with respect to managed
vision care contracts secured or administered by the Company;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements of the parties hereinafter contained and other good and
valuable consideration the receipt of which is hereby acknowledged by each
party, the parties hereby agree as follows:
Section 1. PARTICIPATION ON PANELS. For the period commencing on the
date hereof and ending on the fifth anniversary of the date hereof, unless
otherwise specified by the associated employer group or managed care entity,
to the extent permitted by applicable law and subject to the credentialing
and other participatory requirements of each managed vision care plan, and
continued compliance by the ECCA Participants (as defined below) with the
terms and conditions of the applicable provider agreements, including all
managed care entity-specific provisions included therein (subject to the
non-discriminatory restrictions below), the Company shall include all of the
optical retail stores of the ECCA Companies and all of the ECCA Optometrists,
including new store locations and optometrists (and their respective
professional entities) that may hereinafter become ECCA Optometrists
(collectively, the "ECCA Participants"), on each of the provider panels of
managed vision care plans secured or administered by the Company covering
markets in which such ECCA Participant is located. The Company shall take
such actions as reasonably necessary to insure that the ECCA Participants are
not discriminated against with respect to participation on such provider
panels and receive the same benefits and treatment as the other members of
the panels, except for the compensation and reimbursement to be paid by the
Company to the ECCA Participants on existing contracts which has been and
shall continue to be at the same rates set forth under presently existing
managed vision care contracts. The ECCA Participants will be included on the
panels of such managed vision care plans immediately following the execution
of this Agreement, subject to the credentialing and other participatory
requirements.
<PAGE>
With respect to new managed vision care contracts after the date hereof, the
Company and ECCA agree that (i) any decrease in historical reimbursement
rates shall be as mutually agreed upon, (ii) the Company shall negotiate
reimbursement rates in good faith and not arbitrarily or capriciously offer
lower rates to discourage ECCA from accepting new contracts and (iii)
reimbursement rates will be proportionate to rates currently in effect and
relative to reimbursement levels offered to non-ECCA panel members taking
into account the size and scope of the ECCA panel members. The Company shall
use its reasonable best efforts to assist the ECCA Participants in the
application process for obtaining the requisite credentialing to participate
on such provider panels. The Company shall use its best efforts to assist the
ECCA Participants in obtaining the requisite credentialing to participate on
such provider panels. If the credentialing is denied for any reason or if any
ECCA Participant is removed from a panel for non-compliance with the
participation requirements, the Vision 21 Companies shall provide, or cause
to be provided, to the ECCA Participants, within 30 days of such denial or
removal, the basis for denying the credentialing or removing the ECCA
Participant from the panel and an opportunity to cure the deficiency of the
ECCA Participant in order to secure or maintain, as the case may be, a
position on such provider panels. If, after the date hereof, an ECCA Company
bids on a managed vision care contract that is then awarded to the Company,
then the Vision 21 Company will not be obligated to include the ECCA
Participants on the provider panel solely as it relates to such managed
vision care contract; provided, however the foregoing shall not affect right
of the ECCA Participants to participate on the provider panels as they relate
to all other managed vision care contracts.
Section 2. DEFINITIONS.
(a) "AFFILIATE" as to any person or entity shall mean any entity or
person that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with, the specified
person or entity. The term "control" for this purpose shall mean the ability,
whether by the ownership of shares or other equity interest, by contract or
otherwise, to elect a majority of the directors of a corporation, to
independently select the general partner of a partnership, or otherwise to
have the power independently to remove and then select a majority of those
persons exercising governing authority over an entity. "Control" shall be
conclusively presumed in the case of direct or indirect ownership of 50% or
more of the equity interest by such person or entity. Notwithstanding the
foregoing, in no event shall the term "Affiliate" with respect to ECCA
include Thomas H. Lee Company or any of its Affiliates (other than ECCA and
its subsidiaries).
"ECCA OPTOMETRISTS" shall mean all of the optometrists (and their
respective professional entities through whom they perform optometric
services) (i) who are then employed by any of the ECCA Companies, or have
been so employed in the preceding twelve (12) months, (ii) to whom an ECCA
Company then provides management services or has provided management services
in the preceding twelve (12) months, (iii) who are then employed by any other
optometrists (or professionally entity owned by an optometrist), or have been
so employed in the preceding twelve (12) months, to whom an ECCA Company then
provides management services; or (iv) who have practices then located, or
located within the preceding twelve (12) months, adjacent to or within (or
near if such space is sublet by an ECCA Company) the stores owned or operated
by any ECCA Company including, without limitation, optometrist employed by
the Vision 21 Practices.
"Parties" means the Company, ECCA, Enclave and Visionworks.
2
<PAGE>
Section 3. MISCELLANEOUS.
(a) TIME IS OF THE ESSENCE. Time is of the essence in the
performance of this Agreement.
(b) ARBITRATION; WAIVER OF TRIAL BY JURY Any and every dispute of
any nature whatsoever that may arise between any of the Parties, whether
founded in contract, statute, tort, fraud, misrepresentation, discrimination
or any other legal theory, including, but not limited to, disputes relating
to or involving the construction, performance or breach of this Agreement, or
any schedule, certificate or other document delivered by any Party hereto, or
any other agreement between the Parties, whether entered into prior to, on,
or subsequent to the date of this Agreement, or those arising under any
federal, state or local law, regulation or ordinance, shall be determined by
binding arbitration in accordance with the then current commercial
arbitration rules of the American Arbitration Association, to the extent such
rules do not conflict with the provisions of this paragraph. If the amount in
controversy in the arbitration exceeds Two Hundred Fifty Thousand Dollars
($250,000), exclusive of interest, attorneys' fees and costs, the arbitration
shall be conducted by a panel of three (3) neutral arbitrators. Otherwise,
the arbitration shall be conducted by a single neutral arbitrator. The
Parties shall endeavor to select neutral arbitrators by mutual agreement. If
such agreement cannot be reached within thirty (30) calendar days after a
dispute has arisen which is to be decided by arbitration, any Party or the
Parties jointly shall request the American Arbitration Association to submit
to each Party an identical panel of fifteen (15) persons. Alternate strikes
shall be made to the panel, commencing with the Party bringing the claim,
until the names of three (3) persons remain, or one (1) person if the case is
to be heard by a single arbitrator. The Parties may, however, by mutual
agreement, request the American Arbitration Association to submit additional
panels of possible arbitrators. The person(s) thus remaining shall be the
arbitrator(s) for such arbitration. If three (3) arbitrators are selected,
the arbitrators shall elect a chairperson to preside at all meetings and
hearings. The arbitrator(s), or a majority of them, shall have the power to
determine all matters incident to the conduct of the arbitration, including
without limitation all procedural and evidentiary matters and the scheduling
of any hearing. The award made by a majority of the arbitrators shall be
final and binding upon the Parties thereto and the subject matter. The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
Sections 1-16, and judgment upon the award rendered by the arbitrator(s) may
be entered by any court having jurisdiction thereof. The arbitrators shall
have authority to award damages, arbitration costs, attorneys' fees,
declaratory relief and permanent injunctive relief, if applicable, in
accordance with the terms of this Agreement. Unless otherwise agreed by the
Parties, the arbitration shall be held in San Antonio, Texas. This SECTION
3(b) shall not prevent any of the Parties from seeking a temporary
restraining order or temporary or preliminary injunctive relief from a court
of competent jurisdiction in order to protect its rights under this
Agreement. In the event a Party seeks such injunctive relief pursuant to this
Agreement, such action shall not constitute a waiver of the provisions of
this SECTION 3(B), which shall continue to govern any and every dispute
between the Parties, including without limitation the right to damages,
permanent injunctive relief and any other remedy, at law or in equity.
EACH OF THE PARTIES TO THIS AGREEMENT WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY DISPUTE OF ANY NATURE WHATSOEVER THAT MAY ARISE BETWEEN THEM,
INCLUDING, BUT NOT LIMITED TO, THOSE DISPUTES RELATING TO OR INVOLVING, IN
ANY WAY THE CONSTRUCTION, PERFORMANCE OR BREACH OF THIS AGREEMENT OR ANY
OTHER AGREEMENT BETWEEN THE PARTIES, THE PROVISIONS OF ANY FEDERAL, STATE OR
LOCAL LAW, REGULATION OR ORDINANCE NOTWITHSTANDING. By execution of this
agreement, each of the parties hereto acknowledges and agrees that it has had
an opportunity to consult with legal counsel and that it knowingly and
voluntarily waives any right to a trial by jury of any dispute pertaining to
or relating in any way to the transactions contemplated by this Agreement,
the provisions of any federal, state or local law, regulation or ordinance
notwithstanding.
3
<PAGE>
(c) EXPENSES. Each Party shall pay its own expenses relating to this
Agreement including, without limitation, the fees and expenses of their
respective counsel and financial advisors.
(d) GOVERNING LAW. The interpretation and construction of this
Agreement and all matters relating hereto, shall be governed by the internal
laws of the State of Texas without regard to conflict of laws principles.
(e) ENFORCEMENT; VENUE; SERVICE OF PROCESS. In the event any Party
shall seek enforcement of any covenant, warranty or other term or provision
of this Agreement or seek to recover damages for the breach thereof, the
Party which prevails in such proceedings shall be entitled to recover
reasonable attorneys' fees and expenses actually incurred by it in connection
therewith. Subject to SECTION 3(b) and without waiving the same, the Parties
agree that this Agreement is performable in Bexar County, Texas and that the
sole and exclusive venue for any proceeding involving any claim arising under
or relating to this Agreement shall be in Bexar County, Texas. The Parties
agree that the service of process or any other papers upon any of them by any
of the methods specified in and in accordance with SECTION 3(g) (other than
by facsimile) shall be deemed good, proper, and effective service upon them.
(f) CAPTIONS; REFERENCES. The Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement. References to a "Section" when used without
further attribution shall refer to the particular section of this Agreement.
(g) NOTICES. Any notice or other communications required or
permitted hereunder shall be in writing and, unless otherwise provided
herein, shall be deemed to have been duly given upon delivery in person, by
facsimile, by overnight courier or by certified or registered mail, return
receipt requested, as follows:
If to the Company: MEC Healthcare, Inc.
621 N. W. 53rd Street, Suite 600
Boca Raton, Florida 33487
Attention: Andrew Alcorn, President
Facsimile: (561) 241-5126-4371
With a copy to: Shumaker, Loop & Kendrick, LLP
101 E. Kennedy Boulevard
Suite 2800
Tampa, Florida 33602
Attention: Darrell C. Smith, Esquire
Facsimile: (813) 229-1660
If to any of the ECCA Companies: Eye Care Centers of America, Inc.
11103 West Avenue
San Antonio, Texas 78213-1392
Attention: Bernard W. Andrews, CEO
Facsimile: (210) 524-6996
With a copy to: Cox & Smith Incorporated
12 E. Pecan, Suite 1800
San Antonio, Texas 78205
Attention: J. Daniel Harkins or
Steven A. Elder
Facsimile: (210) 226-8395
4
<PAGE>
or at such other address or telecopy number as shall have been furnished in
writing by any such Party, except that such notice of such change shall be
effective only upon receipt. Each such notice or other communication shall be
effective when received or, if given by mail, when delivered at the address
specified in this SECTION 3(g) or on the fifth business day following the
date on which such communication is posted, whichever occurs first.
Notwithstanding any provision in this Agreement to the contrary, any notice
properly delivered to ECCA shall be deemed properly delivered to all of the
ECCA Companies.
(h) PARTIES IN INTEREST. This Agreement shall be binding upon and
shall inure to the benefit of the Parties and their respective successors and
permitted assigns. This Agreement may not be transferred, assigned, pledged
or hypothecated by the Company without the consent of ECCA. The Company
agrees that in the event of any transfer by any such company of all or
substantially all of its assets (or all or substantially all of the assets of
a operating division), the acquirer of such assets shall be required to
assume the Company's obligations hereunder.
(i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
(j) ENTIRE AGREEMENT. This Agreement, including the other documents
referred to herein which form a part hereof or any other written agreements
that the Parties enter into pursuant to or relating to the transactions
contemplated herein, contains the entire understanding of the Parties with
respect to the subject matter contained herein and therein. This Agreement
supersedes all prior agreements and understandings between the Parties with
respect to such subject matter. All exhibits and schedules referred to herein
and attached hereto are incorporated herein by reference. The Parties
acknowledge that except as expressly provided herein, the Asset Purchase
Agreement and all rights and obligations thereunder shall not be amended or
modified by the terms of this Agreement and shall remain in full force and
effect.
(k) AMENDMENTS. This Agreement may not be changed orally, but only
by an agreement in writing signed by the Parties.
(l) SEVERABILITY. Whenever possible each provision and term of this
Agreement will be interpreted in a manner to be effective and valid but if
any provision or term of this Agreement is held to be prohibited by law or
invalid, then such provision or term will be ineffective only to the extent
of such prohibition or invalidity, without invalidating or affecting in any
manner whatsoever the remainder of such provision or term or the remaining
provisions or terms of this Agreement. If any covenants or any portion
thereof set forth in this Agreement is held by a court of competent
jurisdiction to contain limitations as to duration, geographical area or
scope of activity to be restrained that are not reasonable and impose a
greater restraint than is necessary to protect the goodwill or other business
interests of the affected party, the same shall not affect the remainder of
the covenant or covenants contained therein, which shall be given full
effect, without regard to the invalid portions, and any court having
jurisdiction shall reform the covenants to the extent necessary to cause the
limitations contained therein as to duration, geographical area and scope of
activity to be restrained to be reasonable and to impose a restraint that is
not greater than necessary to protect the goodwill or other business
interests of the affected party and enforce the covenants as reformed.
(m) JOINT PREPARATION. This Agreement has been prepared by the
joint efforts of the respective attorneys to each of the Parties. No
provision of this Agreement shall be construed on the basis that such Party
was the author of such provision.
(n) WAIVER. The rights and remedies of the Parties are cumulative
and not alternative. Neither the failure nor any delay by any Party in
exercising any right, power, or privilege under this
5
<PAGE>
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise
of any such right, power, or privilege will preclude any other or further
exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one Party, in whole or in
part, by a waiver or renunciation of the claim or right unless provided in
writing signed by the other parties; (b) no waiver that may be given by a
Party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of such Party or of the right of the Party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
IN WITNESS WHEREOF, each of the Parties have executed this Agreement
to be effective as of the day and year first above written.
EYE CARE CENTERS OF AMERICA, INC.
By:
--------------------------------------
Title:
--------------------------------------
ENCLAVE ADVANCEMENT GROUP, INC.
By:
--------------------------------------
Title:
--------------------------------------
VISIONWORKS, INC.
By:
--------------------------------------
Title:
--------------------------------------
MEC HEALTHCARE, INC.
By:
--------------------------------------
Title:
--------------------------------------
6
<PAGE>
EXHIBIT H
FORM OF MANAGED VISION CARE AGREEMENT
[Vision Twenty-One of Wisconsin, Inc.]
This Managed Vision Care Agreement is executed this ____ day of
______, 2000 by Vision Twenty-One of Wisconsin, Inc., a Wisconsin corporation
(the "Company") for the benefit of Eye Care Centers of America, Inc., a Texas
corporation ("ECCA"), Visionworks, Inc., a Florida corporation and
wholly-owned subsidiary of ECCA ("Visionworks"), Enclave Advancement Group,
Inc., a Delaware corporation and wholly-owned subsidiary of ECCA ("Enclave")
and their respective subsidiaries and Affiliates. ECCA, Visionworks, Enclave
and their respective subsidiaries and Affiliates (as hereinafter defined) are
hereinafter referred to collectively as the "ECCA Companies" or individually
as an "ECCA Company."
W I T N E S S E T H
WHEREAS, concurrent with the execution hereof, the parties hereto,
Vision Twenty-One, Inc., a Florida corporation ("Vision 21"), and certain
other parties, are entering into that certain Settlement Agreement (the
"Settlement Agreement") pursuant to which certain outstanding matters between
the parties thereto are being resolved;
WHEREAS, certain of the ECCA Companies and the optometrists with
practices located adjacent to or within the retail optical stores owned or
operated by any ECCA Company are currently on the managed care panels with
respect to managed vision care contracts secured or administered by the
Company;
WHEREAS, the Company is receiving benefits from the Settlement
Agreement and, in connection therewith, has agreed to execute this Agreement
providing the ECCA Companies and certain optometrists will have the continued
right to participate on the managed care panels with respect to managed
vision care contracts secured or administered by the Company;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements of the parties hereinafter contained and other good and
valuable consideration the receipt of which is hereby acknowledged by each
party, the parties hereby agree as follows:
Section 1. PARTICIPATION ON PANELS. For the period commencing on the
date hereof and ending on the fifth anniversary of the date hereof, unless
otherwise specified by the associated employer group or managed care entity,
to the extent permitted by applicable law and subject to the credentialing
and other participatory requirements of each managed vision care plan, and
continued compliance by the ECCA Participants (as defined below) with the
terms and conditions of the applicable provider agreements, including all
managed care entity-specific provisions included therein (subject to the
non-discriminatory restrictions below), the Company shall include all of the
optical retail stores of the ECCA Companies and all of the ECCA Optometrists,
including new store locations and optometrists (and their respective
professional entities) that may hereinafter become ECCA Optometrists
(collectively, the "ECCA Participants"), on each of the provider panels of
managed vision care plans secured or administered by the Company covering
markets in which such ECCA Participant is located. The Company shall take
such actions as reasonably necessary to insure that the ECCA Participants are
not discriminated against with respect to participation on such provider
panels and receive the same benefits and treatment as the other members of
the panels, except for the compensation and reimbursement to be paid by the
Company to the ECCA Participants on existing contracts which has been and
shall continue to be at the same rates set forth under presently existing
managed vision care contracts. The ECCA Participants will be included on the
panels of such managed vision care plans immediately following the execution
of this Agreement, subject to the credentialing and other participatory
requirements.
<PAGE>
With respect to new managed vision care contracts after the date hereof, the
Company and ECCA agree that (i) any decrease in historical reimbursement
rates shall be as mutually agreed upon, (ii) the Company shall negotiate
reimbursement rates in good faith and not arbitrarily or capriciously offer
lower rates to discourage ECCA from accepting new contracts and (iii)
reimbursement rates will be proportionate to rates currently in effect and
relative to reimbursement levels offered to non-ECCA panel members taking
into account the size and scope of the ECCA panel members. The Company shall
use its reasonable best efforts to assist the ECCA Participants in the
application process for obtaining the requisite credentialing to participate
on such provider panels. If the credentialing is denied for any reason or if
any ECCA Participant is removed from a panel for non-compliance with the
participation requirements, the Vision 21 Companies shall provide, or cause
to be provided, to the ECCA Participants, within 30 days of such denial or
removal, the basis for denying the credentialing or removing the ECCA
Participant from the panel and an opportunity to cure the deficiency of the
ECCA Participant in order to secure or maintain, as the case may be, a
position on such provider panels. If, after the date hereof, an ECCA Company
bids on a managed vision care contract that is then awarded to the Company,
then the Vision 21 Company will not be obligated to include the ECCA
Participants on the provider panel solely as it relates to such managed
vision care contract; provided, however the foregoing shall not affect right
of the ECCA Participants to participate on the provider panels as they relate
to all other managed vision care contracts.
Section 2. DEFINITIONS.
(a) "AFFILIATE" as to any person or entity shall mean any entity or
person that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with, the specified
person or entity. The term "control" for this purpose shall mean the ability,
whether by the ownership of shares or other equity interest, by contract or
otherwise, to elect a majority of the directors of a corporation, to
independently select the general partner of a partnership, or otherwise to
have the power independently to remove and then select a majority of those
persons exercising governing authority over an entity. "Control" shall be
conclusively presumed in the case of direct or indirect ownership of 50% or
more of the equity interest by such person or entity. Notwithstanding the
foregoing, in no event shall the term "Affiliate" with respect to ECCA
include Thomas H. Lee Company or any of its Affiliates (other than ECCA and
its subsidiaries).
"ECCA OPTOMETRISTS" shall mean all of the optometrists (and their
respective professional entities through whom they perform optometric
services) (i) who are then employed by any of the ECCA Companies, or have
been so employed in the preceding twelve (12) months, (ii) to whom an ECCA
Company then provides management services or has provided management services
in the preceding twelve (12) months, (iii) who are then employed by any other
optometrists (or professionally entity owned by an optometrist), or have been
so employed in the preceding twelve (12) months, to whom an ECCA Company then
provides management services; or (iv) who have practices then located, or
located within the preceding twelve (12) months, adjacent to or within (or
near if such space is sublet by an ECCA Company) the stores owned or operated
by any ECCA Company including, without limitation, optometrist employed by
the Vision 21 Practices.
"Parties" means the Company, ECCA, Enclave and Visionworks.
2
<PAGE>
Section 3. MISCELLANEOUS.
(a) TIME IS OF THE ESSENCE. Time is of the essence in the
performance of this Agreement.
(b) ARBITRATION; WAIVER OF TRIAL BY JURY Any and every dispute of
any nature whatsoever that may arise between any of the Parties, whether
founded in contract, statute, tort, fraud, misrepresentation, discrimination
or any other legal theory, including, but not limited to, disputes relating
to or involving the construction, performance or breach of this Agreement, or
any schedule, certificate or other document delivered by any Party hereto, or
any other agreement between the Parties, whether entered into prior to, on,
or subsequent to the date of this Agreement, or those arising under any
federal, state or local law, regulation or ordinance, shall be determined by
binding arbitration in accordance with the then current commercial
arbitration rules of the American Arbitration Association, to the extent such
rules do not conflict with the provisions of this paragraph. If the amount in
controversy in the arbitration exceeds Two Hundred Fifty Thousand Dollars
($250,000), exclusive of interest, attorneys' fees and costs, the arbitration
shall be conducted by a panel of three (3) neutral arbitrators. Otherwise,
the arbitration shall be conducted by a single neutral arbitrator. The
Parties shall endeavor to select neutral arbitrators by mutual agreement. If
such agreement cannot be reached within thirty (30) calendar days after a
dispute has arisen which is to be decided by arbitration, any Party or the
Parties jointly shall request the American Arbitration Association to submit
to each Party an identical panel of fifteen (15) persons. Alternate strikes
shall be made to the panel, commencing with the Party bringing the claim,
until the names of three (3) persons remain, or one (1) person if the case is
to be heard by a single arbitrator. The Parties may, however, by mutual
agreement, request the American Arbitration Association to submit additional
panels of possible arbitrators. The person(s) thus remaining shall be the
arbitrator(s) for such arbitration. If three (3) arbitrators are selected,
the arbitrators shall elect a chairperson to preside at all meetings and
hearings. The arbitrator(s), or a majority of them, shall have the power to
determine all matters incident to the conduct of the arbitration, including
without limitation all procedural and evidentiary matters and the scheduling
of any hearing. The award made by a majority of the arbitrators shall be
final and binding upon the Parties thereto and the subject matter. The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
Sections 1-16, and judgment upon the award rendered by the arbitrator(s) may
be entered by any court having jurisdiction thereof. The arbitrators shall
have authority to award damages, arbitration costs, attorneys' fees,
declaratory relief and permanent injunctive relief, if applicable, in
accordance with the terms of this Agreement. Unless otherwise agreed by the
Parties, the arbitration shall be held in San Antonio, Texas. This SECTION
3(b) shall not prevent any of the Parties from seeking a temporary
restraining order or temporary or preliminary injunctive relief from a court
of competent jurisdiction in order to protect its rights under this
Agreement. In the event a Party seeks such injunctive relief pursuant to this
Agreement, such action shall not constitute a waiver of the provisions of
this SECTION 3(b), which shall continue to govern any and every dispute
between the Parties, including without limitation the right to damages,
permanent injunctive relief and any other remedy, at law or in equity.
EACH OF THE PARTIES TO THIS AGREEMENT WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY DISPUTE OF ANY NATURE WHATSOEVER THAT MAY ARISE BETWEEN THEM,
INCLUDING, BUT NOT LIMITED TO, THOSE DISPUTES RELATING TO OR INVOLVING, IN
ANY WAY THE CONSTRUCTION, PERFORMANCE OR BREACH OF THIS AGREEMENT OR ANY
OTHER AGREEMENT BETWEEN THE PARTIES, THE PROVISIONS OF ANY FEDERAL, STATE OR
LOCAL LAW, REGULATION OR ORDINANCE NOTWITHSTANDING. By execution of this
agreement, each of the parties hereto acknowledges and agrees that it has had
an opportunity to consult with legal counsel and that it knowingly and
voluntarily waives any right to a trial by jury of any dispute pertaining to
or relating in any way to the transactions contemplated by this Agreement,
the provisions of any federal, state or local law, regulation or ordinance
notwithstanding.
3
<PAGE>
(c) EXPENSES. Each Party shall pay its own expenses relating to
this Agreement including, without limitation, the fees and expenses of their
respective counsel and financial advisors.
(d) GOVERNING LAW. The interpretation and construction of this
Agreement and all matters relating hereto, shall be governed by the internal
laws of the State of Texas without regard to conflict of laws principles.
(e) ENFORCEMENT; VENUE; SERVICE OF PROCESS. In the event any Party
shall seek enforcement of any covenant, warranty or other term or provision
of this Agreement or seek to recover damages for the breach thereof, the
Party which prevails in such proceedings shall be entitled to recover
reasonable attorneys' fees and expenses actually incurred by it in connection
therewith. Subject to SECTION 3(b) and without waiving the same, the Parties
agree that this Agreement is performable in Bexar County, Texas and that the
sole and exclusive venue for any proceeding involving any claim arising under
or relating to this Agreement shall be in Bexar County, Texas. The Parties
agree that the service of process or any other papers upon any of them by any
of the methods specified in and in accordance with SECTION 3(g) (other than
by facsimile) shall be deemed good, proper, and effective service upon them.
(f) CAPTIONS; REFERENCES. The Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement. References to a "Section" when used without
further attribution shall refer to the particular section of this Agreement.
(g) NOTICES. Any notice or other communications required or
permitted hereunder shall be in writing and, unless otherwise provided
herein, shall be deemed to have been duly given upon delivery in person, by
facsimile, by overnight courier or by certified or registered mail, return
receipt requested, as follows:
If to the Company: Vision Twenty-One of Wisconsin, Inc.
621 N. W. 53rd Street, Suite 600
Boca Raton, Florida 33487
Attention: Andrew Alcorn, President
(561) 241-5126-4371
With a copy to: Shumaker, Loop & Kendrick, LLP
101 E. Kennedy Boulevard
Suite 2800
Tampa, Florida 33602
Attention: Darrell C. Smith, Esquire
Facsimile: (813) 229-1660
If to any of the ECCA Companies: Eye Care Centers of America, Inc.
11103 West Avenue
San Antonio, Texas 78213-1392
Attention: Bernard W. Andrews, CEO
Facsimile: (210) 524-6996
With a copy to: Cox & Smith Incorporated
112 E. Pecan, Suite 1800
San Antonio, Texas 78205
Attention: J. Daniel Harkins or
Steven A. Elder
Facsimile: (210) 226-8395
4
<PAGE>
or at such other address or telecopy number as shall have been furnished in
writing by any such Party, except that such notice of such change shall be
effective only upon receipt. Each such notice or other communication shall be
effective when received or, if given by mail, when delivered at the address
specified in this SECTION 3(g) or on the fifth business day following the
date on which such communication is posted, whichever occurs first.
Notwithstanding any provision in this Agreement to the contrary, any notice
properly delivered to ECCA shall be deemed properly delivered to all of the
ECCA Companies.
(h) PARTIES IN INTEREST. This Agreement shall be binding upon and
shall inure to the benefit of the Parties and their respective successors and
permitted assigns. This Agreement may not be transferred, assigned, pledged
or hypothecated by the Company without the consent of ECCA. The Company
agrees that in the event of any transfer by any such company of all or
substantially all of its assets (or all or substantially all of the assets of
a operating division), the acquirer of such assets shall be required to
assume the Company's obligations hereunder.
(i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
(j) ENTIRE AGREEMENT. This Agreement, including the other documents
referred to herein which form a part hereof or any other written agreements
that the Parties enter into pursuant to or relating to the transactions
contemplated herein, contains the entire understanding of the Parties with
respect to the subject matter contained herein and therein. This Agreement
supersedes all prior agreements and understandings between the Parties with
respect to such subject matter. All exhibits and schedules referred to herein
and attached hereto are incorporated herein by reference. The Parties
acknowledge that except as expressly provided herein, the Asset Purchase
Agreement and all rights and obligations thereunder shall not be amended or
modified by the terms of this Agreement and shall remain in full force and
effect.
(k) AMENDMENTS. This Agreement may not be changed orally, but only
by an agreement in writing signed by the Parties.
(l) SEVERABILITY. Whenever possible each provision and term of this
Agreement will be interpreted in a manner to be effective and valid but if
any provision or term of this Agreement is held to be prohibited by law or
invalid, then such provision or term will be ineffective only to the extent
of such prohibition or invalidity, without invalidating or affecting in any
manner whatsoever the remainder of such provision or term or the remaining
provisions or terms of this Agreement. If any covenants or any portion
thereof set forth in this Agreement is held by a court of competent
jurisdiction to contain limitations as to duration, geographical area or
scope of activity to be restrained that are not reasonable and impose a
greater restraint than is necessary to protect the goodwill or other business
interests of the affected party, the same shall not affect the remainder of
the covenant or covenants contained therein, which shall be given full
effect, without regard to the invalid portions, and any court having
jurisdiction shall reform the covenants to the extent necessary to cause the
limitations contained therein as to duration, geographical area and scope of
activity to be restrained to be reasonable and to impose a restraint that is
not greater than necessary to protect the goodwill or other business
interests of the affected party and enforce the covenants as reformed.
(m) JOINT PREPARATION. This Agreement has been prepared by the
joint efforts of the respective attorneys to each of the Parties. No
provision of this Agreement shall be construed on the basis that such Party
was the author of such provision.
(n) WAIVER. The rights and remedies of the Parties are cumulative
and not alternative. Neither the failure nor any delay by any Party in
exercising any right, power, or privilege under this
5
<PAGE>
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise
of any such right, power, or privilege will preclude any other or further
exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one Party, in whole or in
part, by a waiver or renunciation of the claim or right unless provided in
writing signed by the other parties; (b) no waiver that may be given by a
Party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of such Party or of the right of the Party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
IN WITNESS WHEREOF, each of the Parties have executed this Agreement
to be effective as of the day and year first above written.
EYE CARE CENTERS OF AMERICA, INC.
By:
--------------------------------------
Title:
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ENCLAVE ADVANCEMENT GROUP, INC.
By:
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Title:
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VISIONWORKS, INC.
By:
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Title:
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VISION TWENTY-ONE OF WISCONSIN, INC.
By:
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Title:
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6
<PAGE>
EXHIBIT I
FORM OF MANAGED VISION CARE AGREEMENT
[Vision Twenty-One Managed Eye Care of Tampa Bay, Inc.]
This Managed Vision Care Agreement is executed this ____ day of
______, 2000 by Vision Twenty-One Managed Eye Care of Tampa Bay, Inc., a
Wisconsin corporation (the "Company") for the benefit of Eye Care Centers of
America, Inc., a Texas corporation ("ECCA"), Visionworks, Inc., a Florida
corporation and wholly-owned subsidiary of ECCA ("Visionworks"), Enclave
Advancement Group, Inc., a Delaware corporation and wholly-owned subsidiary
of ECCA ("Enclave") and their respective subsidiaries and Affiliates. ECCA,
Visionworks, Enclave and their respective subsidiaries and Affiliates (as
hereinafter defined) are hereinafter referred to collectively as the "ECCA
Companies" or individually as an "ECCA Company."
W I T N E S S E T H
WHEREAS, concurrent with the execution hereof, the parties hereto,
Vision Twenty-One, Inc., a Florida corporation ("Vision 21"), and certain
other parties, are entering into that certain Settlement Agreement (the
"Settlement Agreement") pursuant to which certain outstanding matters between
the parties thereto are being resolved;
WHEREAS, certain of the ECCA Companies and the optometrists with
practices located adjacent to or within the retail optical stores owned or
operated by any ECCA Company are currently on the managed care panels with
respect to managed vision care contracts secured or administered by the
Company;
WHEREAS, the Company is receiving benefits from the Settlement
Agreement and, in connection therewith, has agreed to execute this Agreement
providing the ECCA Companies and certain optometrists will have the continued
right to participate on the managed care panels with respect to managed
vision care contracts secured or administered by the Company;
NOW, THEREFORE, in consideration of the premises and mutual covenants
and agreements of the parties hereinafter contained and other good and
valuable consideration the receipt of which is hereby acknowledged by each
party, the parties hereby agree as follows:
Section 1. PARTICIPATION ON PANELS. For the period commencing on the
date hereof and ending on the fifth anniversary of the date hereof, unless
otherwise specified by the associated employer group or managed care entity,
to the extent permitted by applicable law and subject to the credentialing
and other participatory requirements of each managed vision care plan, and
continued compliance by the ECCA Participants (as defined below) with the
terms and conditions of the applicable provider agreements, including all
managed care entity-specific provisions included therein (subject to the
non-discriminatory restrictions below), the Company shall include all of the
optical retail stores of the ECCA Companies and all of the ECCA Optometrists,
including new store locations and optometrists (and their respective
professional entities) that may hereinafter become ECCA Optometrists
(collectively, the "ECCA Participants"), on each of the provider panels of
managed vision care plans secured or administered by the Company covering
markets in which such ECCA Participant is located. The Company shall take
such actions as reasonably necessary to insure that the ECCA Participants are
not discriminated against with respect to participation on such provider
panels and receive the same benefits and treatment as the other members of
the panels, except for the compensation and reimbursement to be paid by the
Company to the ECCA Participants on existing contracts which has been and
shall continue to be at the same rates set forth under presently existing
managed vision care contracts. The ECCA Participants will be included on the
panels of such managed vision care plans immediately following the execution
of this Agreement, subject to the credentialing and other participatory
requirements.
<PAGE>
With respect to new managed vision care contracts after the date hereof, the
Company and ECCA agree that (i) any decrease in historical reimbursement
rates shall be as mutually agreed upon, (ii) the Company shall negotiate
reimbursement rates in good faith and not arbitrarily or capriciously offer
lower rates to discourage ECCA from accepting new contracts and (iii)
reimbursement rates will be proportionate to rates currently in effect and
relative to reimbursement levels offered to non-ECCA panel members taking
into account the size and scope of the ECCA panel members. The Company shall
use its reasonable best efforts to assist the ECCA Participants in the
application process for obtaining the requisite credentialing to participate
on such provider panels. If the credentialing is denied for any reason or if
any ECCA Participant is removed from a panel for non-compliance with the
participation requirements, the Vision 21 Companies shall provide, or cause
to be provided, to the ECCA Participants, within 30 days of such denial or
removal, the basis for denying the credentialing or removing the ECCA
Participant from the panel and an opportunity to cure the deficiency of the
ECCA Participant in order to secure or maintain, as the case may be, a
position on such provider panels. If, after the date hereof, an ECCA Company
bids on a managed vision care contract that is then awarded to the Company,
then the Vision 21 Company will not be obligated to include the ECCA
Participants on the provider panel solely as it relates to such managed
vision care contract; provided, however the foregoing shall not affect right
of the ECCA Participants to participate on the provider panels as they relate
to all other managed vision care contracts.
Section 2. DEFINITIONS.
(a) "AFFILIATE" as to any person or entity shall mean any entity or
person that directly or indirectly through one or more intermediaries
controls, is controlled by or is under common control with, the specified
person or entity. The term "control" for this purpose shall mean the ability,
whether by the ownership of shares or other equity interest, by contract or
otherwise, to elect a majority of the directors of a corporation, to
independently select the general partner of a partnership, or otherwise to
have the power independently to remove and then select a majority of those
persons exercising governing authority over an entity. "Control" shall be
conclusively presumed in the case of direct or indirect ownership of 50% or
more of the equity interest by such person or entity. Notwithstanding the
foregoing, in no event shall the term "Affiliate" with respect to ECCA
include Thomas H. Lee Company or any of its Affiliates (other than ECCA and
its subsidiaries).
"ECCA OPTOMETRISTS" shall mean all of the optometrists (and their
respective professional entities through whom they perform optometric
services) (i) who are then employed by any of the ECCA Companies, or have
been so employed in the preceding twelve (12) months, (ii) to whom an ECCA
Company then provides management services or has provided management services
in the preceding twelve (12) months, (iii) who are then employed by any other
optometrists (or professionally entity owned by an optometrist), or have been
so employed in the preceding twelve (12) months, to whom an ECCA Company then
provides management services; or (iv) who have practices then located, or
located within the preceding twelve (12) months, adjacent to or within (or
near if such space is sublet by an ECCA Company) the stores owned or operated
by any ECCA Company including, without limitation, optometrist employed by
the Vision 21 Practices.
"Parties" means the Company, ECCA, Enclave and Visionworks.
2
<PAGE>
Section 3. MISCELLANEOUS.
(a) TIME IS OF THE ESSENCE. Time is of the essence in the
performance of this Agreement.
(b) ARBITRATION; WAIVER OF TRIAL BY JURY Any and every dispute of
any nature whatsoever that may arise between any of the Parties, whether
founded in contract, statute, tort, fraud, misrepresentation, discrimination
or any other legal theory, including, but not limited to, disputes relating
to or involving the construction, performance or breach of this Agreement, or
any schedule, certificate or other document delivered by any Party hereto, or
any other agreement between the Parties, whether entered into prior to, on,
or subsequent to the date of this Agreement, or those arising under any
federal, state or local law, regulation or ordinance, shall be determined by
binding arbitration in accordance with the then current commercial
arbitration rules of the American Arbitration Association, to the extent such
rules do not conflict with the provisions of this paragraph. If the amount in
controversy in the arbitration exceeds Two Hundred Fifty Thousand Dollars
($250,000), exclusive of interest, attorneys' fees and costs, the arbitration
shall be conducted by a panel of three (3) neutral arbitrators. Otherwise,
the arbitration shall be conducted by a single neutral arbitrator. The
Parties shall endeavor to select neutral arbitrators by mutual agreement. If
such agreement cannot be reached within thirty (30) calendar days after a
dispute has arisen which is to be decided by arbitration, any Party or the
Parties jointly shall request the American Arbitration Association to submit
to each Party an identical panel of fifteen (15) persons. Alternate strikes
shall be made to the panel, commencing with the Party bringing the claim,
until the names of three (3) persons remain, or one (1) person if the case is
to be heard by a single arbitrator. The Parties may, however, by mutual
agreement, request the American Arbitration Association to submit additional
panels of possible arbitrators. The person(s) thus remaining shall be the
arbitrator(s) for such arbitration. If three (3) arbitrators are selected,
the arbitrators shall elect a chairperson to preside at all meetings and
hearings. The arbitrator(s), or a majority of them, shall have the power to
determine all matters incident to the conduct of the arbitration, including
without limitation all procedural and evidentiary matters and the scheduling
of any hearing. The award made by a majority of the arbitrators shall be
final and binding upon the Parties thereto and the subject matter. The
arbitration shall be governed by the United States Arbitration Act, 9 U.S.C.
Sections 1-16, and judgment upon the award rendered by the arbitrator(s) may
be entered by any court having jurisdiction thereof. The arbitrators shall
have authority to award damages, arbitration costs, attorneys' fees,
declaratory relief and permanent injunctive relief, if applicable, in
accordance with the terms of this Agreement. Unless otherwise agreed by the
Parties, the arbitration shall be held in San Antonio, Texas. This SECTION
3(b) shall not prevent any of the Parties from seeking a temporary
restraining order or temporary or preliminary injunctive relief from a court
of competent jurisdiction in order to protect its rights under this
Agreement. In the event a Party seeks such injunctive relief pursuant to this
Agreement, such action shall not constitute a waiver of the provisions of
this SECTION 3(b), which shall continue to govern any and every dispute
between the Parties, including without limitation the right to damages,
permanent injunctive relief and any other remedy, at law or in equity.
EACH OF THE PARTIES TO THIS AGREEMENT WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY DISPUTE OF ANY NATURE WHATSOEVER THAT MAY ARISE BETWEEN THEM,
INCLUDING, BUT NOT LIMITED TO, THOSE DISPUTES RELATING TO OR INVOLVING, IN
ANY WAY THE CONSTRUCTION, PERFORMANCE OR BREACH OF THIS AGREEMENT OR ANY
OTHER AGREEMENT BETWEEN THE PARTIES, THE PROVISIONS OF ANY FEDERAL, STATE OR
LOCAL LAW, REGULATION OR ORDINANCE NOTWITHSTANDING. By execution of this
agreement, each of the parties hereto acknowledges and agrees that it has had
an opportunity to consult with legal counsel and that it knowingly and
voluntarily waives any right to a trial by jury of any dispute pertaining to
or relating in any way to the transactions contemplated by this Agreement,
the provisions of any federal, state or local law, regulation or ordinance
notwithstanding.
3
<PAGE>
(c) EXPENSES. Each Party shall pay its own expenses relating to
this Agreement including, without limitation, the fees and expenses of their
respective counsel and financial advisors.
(d) GOVERNING LAW. The interpretation and construction of this
Agreement and all matters relating hereto, shall be governed by the internal
laws of the State of Texas without regard to conflict of laws principles.
(e) ENFORCEMENT; VENUE; SERVICE OF PROCESS. In the event any Party
shall seek enforcement of any covenant, warranty or other term or provision
of this Agreement or seek to recover damages for the breach thereof, the
Party which prevails in such proceedings shall be entitled to recover
reasonable attorneys' fees and expenses actually incurred by it in connection
therewith. Subject to SECTION 3(b) and without waiving the same, the Parties
agree that this Agreement is performable in Bexar County, Texas and that the
sole and exclusive venue for any proceeding involving any claim arising under
or relating to this Agreement shall be in Bexar County, Texas. The Parties
agree that the service of process or any other papers upon any of them by any
of the methods specified in and in accordance with SECTION 3(g) (other than
by facsimile) shall be deemed good, proper, and effective service upon them.
(f) CAPTIONS; REFERENCES. The Section captions used herein are for
reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement. References to a "Section" when used without
further attribution shall refer to the particular section of this Agreement.
(g) NOTICES. Any notice or other communications required or
permitted hereunder shall be in writing and, unless otherwise provided
herein, shall be deemed to have been duly given upon delivery in person, by
facsimile, by overnight courier or by certified or registered mail, return
receipt requested, as follows:
If to the Company: Vision Twenty-One Managed Eye Care of
Tampa Bay, Inc.
621 N. W. 53rd Street, Suite 600
Boca Raton, Florida 33487
Attention: Andrew Alcorn, President
Facsimile: (561) 241-5126-4371
With a copy to: Shumaker, Loop & Kendrick, LLP
101 E. Kennedy Boulevard
Suite 2800
Tampa, Florida 33602
Attention: Darrell C. Smith, Esquire
Facsimile: (813) 229-1660
If to any of the ECCA Companies: Eye Care Centers of America, Inc.
11103 West Avenue
San Antonio, Texas 78213-1392
Attention: Bernard W. Andrews, CEO
Facsimile: (210) 524-6996
With a copy to: Cox & Smith Incorporated
112 E. Pecan, Suite 1800
San Antonio, Texas 78205
Attention: J. Daniel Harkins or
Steven A. Elder
Facsimile: (210) 226-8395
4
<PAGE>
or at such other address or telecopy number as shall have been furnished in
writing by any such Party, except that such notice of such change shall be
effective only upon receipt. Each such notice or other communication shall be
effective when received or, if given by mail, when delivered at the address
specified in this SECTION 3(g) or on the fifth business day following the
date on which such communication is posted, whichever occurs first.
Notwithstanding any provision in this Agreement to the contrary, any notice
properly delivered to ECCA shall be deemed properly delivered to all of the
ECCA Companies.
(h) PARTIES IN INTEREST. This Agreement shall be binding upon and
shall inure to the benefit of the Parties and their respective successors and
permitted assigns. This Agreement may not be transferred, assigned, pledged
or hypothecated by the Company without the consent of ECCA. The Company
agrees that in the event of any transfer by any such company of all or
substantially all of its assets (or all or substantially all of the assets of
a operating division), the acquirer of such assets shall be required to
assume the Company's obligations hereunder.
(i) COUNTERPARTS. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one instrument.
(j) ENTIRE AGREEMENT. This Agreement, including the other documents
referred to herein which form a part hereof or any other written agreements
that the Parties enter into pursuant to or relating to the transactions
contemplated herein, contains the entire understanding of the Parties with
respect to the subject matter contained herein and therein. This Agreement
supersedes all prior agreements and understandings between the Parties with
respect to such subject matter. All exhibits and schedules referred to herein
and attached hereto are incorporated herein by reference. The Parties
acknowledge that except as expressly provided herein, the Asset Purchase
Agreement and all rights and obligations thereunder shall not be amended or
modified by the terms of this Agreement and shall remain in full force and
effect.
(k) AMENDMENTS. This Agreement may not be changed orally, but only
by an agreement in writing signed by the Parties.
(l) SEVERABILITY. Whenever possible each provision and term of this
Agreement will be interpreted in a manner to be effective and valid but if
any provision or term of this Agreement is held to be prohibited by law or
invalid, then such provision or term will be ineffective only to the extent
of such prohibition or invalidity, without invalidating or affecting in any
manner whatsoever the remainder of such provision or term or the remaining
provisions or terms of this Agreement. If any covenants or any portion
thereof set forth in this Agreement is held by a court of competent
jurisdiction to contain limitations as to duration, geographical area or
scope of activity to be restrained that are not reasonable and impose a
greater restraint than is necessary to protect the goodwill or other business
interests of the affected party, the same shall not affect the remainder of
the covenant or covenants contained therein, which shall be given full
effect, without regard to the invalid portions, and any court having
jurisdiction shall reform the covenants to the extent necessary to cause the
limitations contained therein as to duration, geographical area and scope of
activity to be restrained to be reasonable and to impose a restraint that is
not greater than necessary to protect the goodwill or other business
interests of the affected party and enforce the covenants as reformed.
(m) JOINT PREPARATION. This Agreement has been prepared by the
joint efforts of the respective attorneys to each of the Parties. No
provision of this Agreement shall be construed on the basis that such Party
was the author of such provision.
(n) WAIVER. The rights and remedies of the Parties are cumulative
and not alternative. Neither the failure nor any delay by any Party in
exercising any right, power, or privilege under this
5
<PAGE>
Agreement or the documents referred to in this Agreement will operate as a
waiver of such right, power, or privilege, and no single or partial exercise
of any such right, power, or privilege will preclude any other or further
exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable
law, (a) no claim or right arising out of this Agreement or the documents
referred to in this Agreement can be discharged by one Party, in whole or in
part, by a waiver or renunciation of the claim or right unless provided in
writing signed by the other parties; (b) no waiver that may be given by a
Party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one Party will be deemed to be a
waiver of any obligation of such Party or of the right of the Party giving
such notice or demand to take further action without notice or demand as
provided in this Agreement or the documents referred to in this Agreement.
IN WITNESS WHEREOF, each of the Parties have executed this Agreement
to be effective as of the day and year first above written.
EYE CARE CENTERS OF AMERICA, INC.
By:
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Title:
--------------------------------------
ENCLAVE ADVANCEMENT GROUP, INC.
By:
--------------------------------------
Title:
--------------------------------------
VISIONWORKS, INC.
By:
--------------------------------------
Title:
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VISION TWENTY-ONE MANAGED EYE CARE
OF TAMPA BAY, INC.
By:
--------------------------------------
Title:
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6
<PAGE>
EXHIBIT J
LITIGATION
Vision Insurance Plan of America, Inc. ("VIPA"), a Subsidiary of Vision
21 of Wisconsin, Inc., is currently in discussions with the Office of the
Commissioner of Insurance of the State of Wisconsin concerning a proposed
Stipulation and Order that would require VIPA to notify the State of Wisconsin
and receive approval of certain transactions. Vision 21 has no reason to believe
this would affect its ability to perform its obligations under the Settlement
Agreement, but there can be no assurance that this will be the case.
<PAGE>
EXHIBIT K
PAYMENT TERMS
Amount: $1,531,873 plus accrued interest
Facility: Convertible Note. Conversion feature will be priced at the
greater of $0.18 per share or the market price on the Closing Date of the new
bank credit agreement and will not contain a lock-up period other than as set
forth below
The Conversion Note will establish reasonable notice requirements and
"piggyback" registration rights regarding conversion to equity. The form of the
Conversion Note shall be in a form reasonably acceptable to ECCA and will be
substantially in the form of the conversion note issued to the lenders in
connection with the new bank credit agreement as described on Exhibit L to the
Settlement Agreement. If the convertible debt issued to the lenders in
connection with the new bank credit facility are changed to terms more favorable
to the lenders (as compared to the terms on Exhibit L), unless otherwise agreed
to by ECCA the Conversion Note issued to ECCA shall reflect the more favorable
terms offered to the lenders.
Collateral: Unsecured
Maturity Date: September 30, 2003
Pricing: Interest will accrue at 7% per annum and will be payable on
the Maturity Date.
Conversion Limitation: Conversion of the note into common shares will be
prohibited until April 1, 2001. 5% of note amount will become
convertible on April 1, 2001 and on July 1, 2001. 10% of the
note amount will become convertible on October 1, 2001,
January 1, 2002, April 1, 2002 and on July 1, 2002. Commencing
on October 1, 2002 there will be no restrictions on
convertibility of the remaining note balance.
<PAGE>
EXHIBIT L
RESTRUCTURING TERMS
