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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 10, 1997
CONTINUCARE CORPORATION
--------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
FLORIDA
(State or Other Jurisdiction of Incorporation)
0-21910 59-2716023
(Commission File Number) (IRS Employer Identification No.)
CONTINUCARE CORPORATION
100 SOUTHEAST 2ND STREET, 36TH FLOOR
MIAMI, FLORIDA 33131
(Address of principal executive office) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (305) 350-7515
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 10, 1997, Continucare Corporation (the "Company") acquired
certain arthritis rehabilitation centers and affiliated physician practices from
Sheridan Healthcorp., Inc. The acqusition included the purchase of AARDS, INC.,
a Florida corporation formerly known as Norman B. Gaylis, M.D., Inc., Rosenbaum,
Weitz & Ritter, Inc. and Arthritis & Rheumatic Disease Specialties, Inc. Such
entities are located in Dade and Broward counties in South Florida. The
aggregate purchase was approximately $3.3 million.
The combined practices purchased by the Company generated approximately
$4,000,000 of revenues in 1996 and employ approximately 33 full time staff with
24,000 patient visits per year.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) & (b) It is currently impractical to provide financial statements,
pro forma or otherwise, required pursuant to Regulation S-K in connection with
the acquisition identified in Item 2 above. This Report will be amended within
60 days from the date this Report is filed to include such financial statement
information.
(c) Exhibits
10.1 Stock Purchase Agreement dated April 10, 1997 by and among
Continucare Corporation, Continucare Physician Practice Management, Inc., AARDS,
Inc. and Sheridan Healthcorp, Inc.
10.2 Stock Purchase Agreement dated April 10, 1997 by and among
Continucare Corporation, Continucare Physician Practice Management, Inc.,
Rosenbaum, Weitz & Ritter, Inc. and Sheridan Healthcorp, Inc.
10.3 Stock Purchase Agreement dated April 10, 1997 by and among
Continucare Corporation, Continucare Medical Management Inc., Arthritis &
Rheumatic Disease Specialties, Inc. and Sheridan Healthcare Inc.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONTINUCARE CORPORATION
Date: April 25, 1997 By: /s/Charles M. Fernandez
-----------------------
Charles M. Fernandez
Chairman, Chief Executive Officer
and President
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Exhibit 10.1
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, entered into as of April 10, 1997
(the "Execution Date"), is by and among CONTINUCARE CORPORATION ("CONTINUCARE"),
a Florida corporation; and CONTINUCARE PHYSICIAN PRACTICE MANAGEMENT INC., a
Florida corporation ("SUBSIDIARY") (Continucare and Subsidiary are collectively
referred to as the "Buyer"); AARDS, INC., a Florida corporation formerly known
as Norman B. Gaylis, M.D., Inc. (the "Company"); and SHERIDAN HEALTHCORP INC.
("SHERIDAN").
PRELIMINARY STATEMENTS
1. Sheridan owns of record and beneficially all of the issued and
outstanding capital stock of the Company, consisting of One Thousand (1,000)
shares of the Company's Common Stock, One Dollar ($1.00) par value per share
(the shares are referred to in this Agreement as the "Company Shares").
2. Sheridan desires to sell all of the Company Shares to Buyer, and
Buyer desires to acquire all of the Company Shares.
3. Subsidiary is a wholly owned subsidiary of Continucare.
NOW, THEREFORE, in order to consummate the purchase and sale of the
Company Shares and in consideration of the mutual agreements contained in this
Agreement, the parties agree as follows:
AGREEMENT
SECTION 1
SALE OF SHARES AND PURCHASE PRICE
1.1 Transfer of Company Shares. At the Closing, Sheridan shall
deliver or cause to be delivered to Subsidiary certificates representing all of
the Company Shares owned by Sheridan, as listed on Exhibit A. Those stock
certificates shall be duly endorsed in blank for transfer or shall be presented
with stock powers duly executed in blank, with signature guarantees and other
documents which may be reasonably required by Subsidiary to effect a valid
transfer of the Company Shares by Sheridan, free and clear of any and all liens,
encumbrances, charges or claims. Sheridan, by execution of this Agreement,
appoints Subsidiary as their attorney-in-fact to effectuate transfer of the
Company Shares at the Closing (as defined below).
1.2 Purchase Price and Payment. In consideration of the sale by
Sheridan to Subsidiary of the Company Shares, in reliance upon the
representations and warranties of Sheridan and the Company contained in this
Agreement and made at the Closing and subject to the satisfaction of all of the
conditions contained in this Agreement, Subsidiary agrees that simultaneously
with the execution and delivery of this Agreement, it will deliver to Sheridan
the
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amount specified in Exhibit A-1 by bank cashier check or by wire transfer of
immediately available funds (the "Closing Funds").
1.3 Time and Place of Closing. The closing of the purchase and sale
provided for in this Agreement (the "Closing") shall be held at the offices of
Buyer at 100 SE Second Street, 36th Floor, Miami, Florida on April 10, 1997 or
at another place or an earlier or later date or time as may be mutually agreed
upon by the parties.
1.4 Further Assurances. Sheridan and Buyer agree that from time to
time after the Closing and without further consideration, Sheridan and Buyer
shall execute and deliver further instruments of transfer and assignment and
take all other action as may be reasonably required to more effectively transfer
and assign to, and vest in Subsidiary the Company Shares and all rights to the
Company Shares, and to fully implement the provisions of this Agreement.
SECTION 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND SHERIDAN
2.1 Making of Representations and Warranties. As a material
inducement to Buyer to enter into this Agreement and consummate the contemplated
transactions, Sheridan and the Company make to Buyer the representations and
warranties contained in this Section 2. Notwithstanding the above, Sheridan and
the Buyer agree that the representations and warranties made by Sheridan and
contained in this Section 2 are made with respect to only the time period from
January 4, 1996 through the Closing Date, the time period which Sheridan owned
the Company (the "Relevant Period").
2.2 Organization and Qualifications of the Company. The Company is a
for profit corporation duly organized, validly existing and in good standing
under the laws of Florida with full corporate power and authority to own or
lease its properties and to conduct its business in the manner and in the places
where those properties are owned or leased or that business is currently
conducted or proposed to be conducted. The copies of the Company's Articles of
Incorporation as amended to date and of the Company's by-laws, as amended to
date, certified by the Company's Secretary, and delivered to Buyer's counsel,
are complete and correct, and no amendments to them are pending. The Company is
not in violation of any term of its Articles of Incorporation or By-laws.
Sheridan shall deliver to Subsidiary a certified copy of the Company's Articles
of Incorporation within five (5) business days after the Closing Date.
2.3 Capital Stock of the Company; Beneficial Ownership.
(a) The authorized capital stock of the Company consists of
Ten Thousand (10,000) shares of Common Stock, One Dollar ($1.00) par value per
share, of which One Thousand (1,000) shares are duly and validly issued,
outstanding, fully paid and non-assessable and of which Nine Thousand (9,000)
shares are authorized but unissued. There are no
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outstanding options, warrants, rights, commitments, preemptive rights or
agreements of any kind for the issuance or sale of, or outstanding securities
convertible into, any additional shares of capital stock of any class of the
Company. None of the Company's capital stock issued to Buyer has been issued in
violation of any federal or state law. Except as described in Schedule 2.3(a),
there are no voting trusts, voting agreements, proxies or other agreements,
instruments or undertakings with respect to the voting of the Company Shares to
which the Company or any of the Stockholders is a party.
(b) Sheridan owns beneficially and of record the Company
Shares listed opposite its name on Exhibit A free and clear of any liens,
restrictions or encumbrances.
2.4 Authority of Sheridan and the Company. Sheridan and the Company
have the full right, authority and power to enter into this Agreement and each
agreement, document and instrument to be executed and delivered by Sheridan and
the Company pursuant to this Agreement and to carry out the contemplated
transactions. The execution, delivery and performance by Sheridan and the
Company of this Agreement and each other agreement, document and instrument have
been duly authorized by all necessary action of Sheridan and the Company and no
other action on the part of Sheridan or the Company is required. This Agreement
and each agreement, document and instrument executed and delivered by Sheridan
and the Company pursuant to this Agreement constitutes, or when executed and
delivered will constitute, valid and binding obligations of Sheridan and the
Company enforceable in accordance with their terms. The execution, delivery and
performance by Sheridan and the Company of this Agreement and each agreement,
document and instrument:
(a) does not and will not violate any provision of the
Articles of Incorporation or by-laws of Sheridan or the Company;
(b) does not and will not violate any laws of the United
States, or any state or other jurisdiction applicable to Sheridan or the Company
or require Sheridan or the Company to obtain any approval, consent or waiver of,
or make any filing with, any person or entity (governmental or otherwise) that
has not been obtained or made, except for the Consents (as defined below); and
(c) does not and will not result in a breach of, constitute
a default under, accelerate any obligation under, or give rise to a right of
termination of any indenture or loan or credit agreement or any other agreement,
contract, instrument, mortgage, lien, lease, permit, authorization, order, writ,
judgment, injunction, decree, determination or arbitration award to which
Sheridan or the Company is a party or by which the property of Sheridan or the
Company is bound or affected, or result in the creation or imposition of any
mortgage, pledge, lien, security interest or other charge or encumbrance on any
of the Company's assets or the Company Shares, except as specifically identified
on Schedule 2.4(iii)(c).
2.5 Real and Personal Property.
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(a) Leased Real Property. All of the real property leased by
the Company is identified on Schedule 2.5(a) (referred to as the "Leased Real
Property").
(i) Status of Leases. All leases of Leased Real
Property are identified on Schedule 2.5(a), and true and complete copies of
those leases have been delivered to Buyer. Sheridan executed an assignment and
assumption agreement whereby Sheridan assumed all of the Company's right, title
and interest in the leased premises. Sheridan or the Company is not in default
under any of those leases, nor has any event occurred which, with notice or the
passage of time, or both, would give rise to a default. To Sheridan and the
Company's knowledge, the other party to each of the leases is not in default
under any of the leases and there is no event which, with notice or the passage
of time, or both, would give rise to a default.
(ii) Consents. Except as described in Schedule
2.5(a)(ii), no consent or approval is required with respect to the transactions
contemplated by this Agreement from the other parties to any lease of Leased
Real Property, or from any regulatory authority, no filing with any regulatory
authority is required in connection therewith, and to the extent that any
consents, approvals or filings are required, Sheridan or the Company will
utilize their best efforts to assist Buyer in obtaining or completing them
before the Closing.
(iii) Condition of Leased Real Property. Except as
described in Schedule 2.5(a)(iii), there are no material defects in the physical
condition of any land, buildings or improvements constituting part of the Leased
Real Property, including without limitation, structural elements, mechanical
systems, parking and loading areas, and all those buildings and improvements are
in good operating condition and repair, have been well maintained and are free
from infestation by rodents or insects. Access to the Leased Real Property is by
a public way or public street. To the best of Sheridan and the Company's
knowledge, all water, sewer, gas, electric, telephone, drainage and other
utilities required by law or necessary for the current or planned operation of
the Leased Real Property have been connected under valid permits and pursuant to
valid easements where required, and are sufficient to service the Leased Real
Property and are in good operating condition.
(iv) Compliance with the Law. Sheridan and the Company
have not received any notice from any governmental authority of any violation of
any law, ordinance, regulation, license, permit or authorization issued with
respect to any Leased Real Property that has not been corrected and no violation
exists which could have an adverse affect on the operation or value of any
Leased Real Property. All improvements located on or constituting part of the
Leased Real Property and their use and operation by Sheridan or the Company were
and are now in compliance in all respects with all applicable laws, ordinances,
regulations, licenses, permits and authorizations except as described in
Schedule 2.5(a)(iv). No approval or consent to the transactions contemplated by
this Agreement is required of any governmental authority with jurisdiction over
any aspect of the Leased Real Property or its use or operations.
(b) Personal Property. A complete description of the
machinery, furniture, personalty and equipment of the Company is contained in
Schedule 2.5(b). Except as specifically
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disclosed in that Schedule, the Company has good title to all of its personal
property. None of the Company's personal property or assets is subject to any
mortgage, pledge, lien, conditional sale agreement, security title, encumbrance
or other charge except as specifically disclosed in that Schedule. Schedule
2.5(b) reflects all personal property of the Company. Except as otherwise
specified in Schedule 2.5(b), all leasehold improvements, furnishings,
machinery, personalty and equipment of the Company are in good repair, have been
well maintained, and substantially comply with all applicable laws, ordinances
and regulations, and those furnishings, personalty, machinery and equipment are
in good working order.
2.6 Financial Statements.
(a) The Company has delivered to Buyer the following financial
statements, copies of which are attached as Schedule 2.6: balance sheet of the
Company dated as of December 31, 1996 (the "Base Balance Sheet") and statements
of income, retained earnings and cash flows for the period then ended, which
have been prepared by the Chief Financial Officer of Sheridan in accordance with
Generally Accepted Accounting Principles ("GAAP"), are complete and correct in
all material respects and present fairly in all material respects the financial
condition of the Company at the dates of those statements and the results of its
operations for the periods covered thereby. Notwithstanding anything in this
Agreement, the Company makes no representation whatsoever regarding the Base
Balance Sheet regarding any matter occurring, arising out of or relating to any
matter prior to January 1, 1996 (this sentence is the "Caveat").
(b) Taking the Caveat into consideration, as of the date of the
Base Balance Sheet and for the relevant period, the Company had no liabilities
(which liabilities, when taken individually or in the aggregate, were material)
of any nature, whether accrued, absolute, contingent or otherwise, asserted or
unasserted, known or unknown (including without limitation, liabilities as
guarantor or otherwise with respect to obligations of others, liabilities for
taxes due or then accrued or to become due, or contingent or potential
liabilities relating to activities of the Company or the conduct of its
business, regardless of whether claims had been asserted as of that date),
except liabilities stated or adequately reserved against on the Base Balance
Sheet, or reflected in Schedules furnished to Buyer pursuant to this Agreement
as of the Execution Date.
(c) Taking the Caveat into consideration, as of the Closing Date
and for the Relevant Period, the Company has not had and will not have any
liabilities of any nature, whether accrued, absolute, contingent or otherwise,
asserted or unasserted, known or unknown (including without limitation,
liabilities as guarantor or otherwise with respect to obligations of others, or
liabilities for taxes due or then accrued or to become due or contingent or
potential liabilities relating to activities of the Company or the conduct of
its business, as the case may be, regardless of whether claims had been asserted
as of those dates), except liabilities: (i) stated or adequately reserved
against on the Base Balance Sheet or the notes to it; (ii) reflected in
Schedules furnished to Buyer under this Agreement on the Closing Date; or, (iii)
incurred after the date of the Base Balance Sheet in the ordinary course of
business of the Company consistent with the terms of this Agreement.
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2.7 Taxes.
(a) Except for any matter whatsoever occurring, arising out of or
relating to (collectively a "Matter") the time period prior to January 1, 1996
(the "Prior Period") the Company has paid or caused to be paid all federal,
state, local, foreign, and other taxes, including without limitation, income
taxes, estimated taxes, alternative minimum taxes, excise taxes, sales taxes,
use taxes, value-added taxes, gross receipts taxes, franchise taxes, capital
stock taxes, employment and payroll-related taxes, withholding taxes, stamp
taxes, transfer taxes, windfall profit taxes, environmental taxes and property
taxes, whether or not measured in whole or in part by net income, and all
deficiencies, or other addition to tax, interest, fines and penalties owed by it
(collectively, "Taxes"), required to be paid by it, arising out of, or incurred
for the Relevant Period, whether disputed or not. Sheridan agrees to satisfy any
pay any all tax obligations arising from the operation of the Company for the
Relevant Period.
(b) Except for any Matter from the Prior Period, the Company has,
in accordance with applicable law filed all federal, state, local and foreign
tax returns required to be filed by it for the Relevant Period, and all these
returns correctly and accurately contain the amount of any Taxes relating to the
applicable period. A list of all federal, state, local and foreign income tax
returns filed with respect to the Company for taxable periods beginning January
4, 1996 and ended on or after December 31, 1996 is provided in Schedule 2.7(b),
and that Schedule indicates those returns that have been audited or currently
are the subject of an audit. For each taxable period of the Company from January
4, 1996 and ended on or after December 31, 1996 the Company has delivered to
Buyer correct and complete copies of all federal, state, local and foreign
income tax returns, examination reports and statements of deficiencies assessed
against or agreed to by the Company. Sheridan acknowledges and agrees to provide
Buyer with copies of all tax returns filed on behalf of the Company upon the
filing of such returns.
(c) For the Relevant Period, neither the Internal Revenue Service
nor any other governmental authority is now asserting or, to the knowledge of
Sheridan or the Company, threatening to assert against the Company any
deficiency or claim for additional Taxes. Except for any Matter for the Prior
Period, no claim has ever been made by an authority in a jurisdiction where the
Company does not file reports and returns that the Company is or may be subject
to taxation by that jurisdiction for the period. There are no security interests
on any of the assets of the Company that arose in connection with any failure
(or alleged failure) to pay any Taxes for the Relevant Period. The Company has
never entered into a closing agreement pursuant to Section 7121 of the Internal
Revenue Code of 1986, as amended (the "Code").
(d) Except for any Matter from the Prior Period, except as
described in Schedule 2.7(d), for the Relevant Period: (i) no extension of time
with respect to any date on which a tax return is to be filed by the Company is
in force; (ii) no waiver or agreement by the Company is in force for the
extension of time for the assessment or payment of any Taxes; and, (iii) no
agreement with any taxing authority is in force for an extension of the statute
of limitations for an audit.
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2.8 Collectability of Accounts Receivable. Taking into consideration
the Caveat, all of the accounts receivable of the Company shown or reflected on
the Base Balance Sheet or existing at the Execution Date (less the reserve for
bad debts set forth on the Base Balance Sheet) are or will be at the Closing
valid and enforceable claims. The Company has no accounts or loans receivable
from any person, firm or corporation which is affiliated with the Company or
from any director, officer or employee of the Company, except as disclosed on
Schedule 2.8, and all accounts and loans receivable from any of these persons,
firms or corporations shall be paid in cash prior to the Closing.
2.9 Absence of Certain Changes. Taking into consideration the Caveat,
except as disclosed in Schedule 2.9, since the date of the Base Balance Sheet
there has not been:
(a) Any change in the financial condition, properties, assets,
liabilities, business or operations of the Company, which change by itself or in
conjunction with all other changes, whether or not arising in the ordinary
course of business, has been materially adverse with respect to the Company;
(b) Any contingent liability incurred by the Company as
guarantor or otherwise with respect to the obligations of others or any
cancellation of any material debt or claim owing to, or waiver of any material
right of the Company;
(c) Any mortgage, encumbrance or lien placed on any of the
properties of the Company which remains in existence on the Closing Date;
(d) Any obligation or liability of any nature, whether
accrued, absolute, contingent or otherwise, asserted or unasserted, known or
unknown (including without limitation liabilities for Taxes due or to become due
or contingent or potential liabilities relating to services provided by the
Company or the conduct of the business of the Company since the date of the Base
Balance Sheet regardless of whether claims have been asserted), incurred by the
Company;
(e) Other than in the ordinary course, any purchase, sale or
other disposition, or any agreement or other arrangement for the purchase, sale
or other disposition, of any of the properties or assets of the Company or the
Company's business;
(f) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of the Company;
(g) Any declaration, setting aside or payment of any dividend
by the Company, or the making of any other distribution in respect of the
capital stock of the Company, or any direct or indirect redemption, purchase or
other acquisition by the Company of its own capital stock;
(h) Any labor trouble or claim of unfair labor practices
involving the Company; any change in the compensation payable or to become
payable by the Company to any of its
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officers, employees, agents or independent contractors other than normal merit
increases in accordance with its usual practices; or any bonus payment or
arrangement made to or with any of its officers, employees, agents or
independent contractors;
(i) Any change with respect to the officers or management of
the Company;
(j) Any payment or discharge of a material lien or liability
of the Company which was not shown on the Base Balance Sheet or incurred in the
ordinary course of business thereafter;
(k) Any obligation or liability incurred by the Company to any
of its officers, directors, stockholders or employees, or any loans or advances
made by the Company to any of its officers, directors, stockholders or
employees, except normal compensation and expense allowances payable to officers
or employees;
(1) Any change in accounting methods or practices, credit
practices or collection policies used by the Company;
(m) Any other transaction entered into by the Company other
than transactions in the ordinary course of business; or
(n) Any agreement or understanding whether in writing or
otherwise, for the Company to take any of the actions specified in paragraphs
(a) through (m) above.
2.10 Ordinary Course. Since the date of the Base Balance Sheet, the
Company has conducted its business only in the ordinary course and consistently
with its prior practices.
2.11 Banking Relations. NOT USED IN THIS AGREEMENT
2.12 Intellectual Property.
(a) Except for any Matter from the Prior Period, except as
described in Schedule 2.12(a), the Company has exclusive ownership of, or
exclusive license to use, all patent, copyright, trade secret, trademark, or
other proprietary rights (collectively, "Intellectual Property") used or to be
used in the business of the Company as presently conducted or contemplated.
Except for any Matter from the Prior Period, all of the rights of the Company in
the Intellectual Property are freely transferable. Except for any Matter from
the Prior Period, there are no claims or demands of any other person pertaining
to any of the Intellectual Property and no proceedings have been instituted, or
are pending or threatened, which challenge the rights of the Company. Except for
any Matter from the Prior Period, the Company has the right to use, free and
clear of claims or rights of other persons, all patient lists, processes,
computer software, systems, data compilations, research results and other
information required for or incident to its services or its business as
presently conducted or contemplated.
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(b) Except for any Matter from the Prior Period, the present
and contemplated business, activities and products of the Company do not
infringe any Intellectual Property of any other person. Except for any Matter
from the Prior Period, no proceeding charging the Company with infringement of
any adversely held Intellectual Property has been filed or is threatened to be
filed. Except for any Matter from the Prior Period, the Company is not making
unauthorized use of any confidential information or trade secrets of any person,
including without limitation, any former employer of any past or present
employee of Company.
2.13 Contracts. Except for any Matter for the Prior Period, except for
contracts, commitments, plans, agreements and licenses described in Schedule
2.13 (true and complete copies of which have been delivered to Buyer), the
Company is not a party to or subject to:
(a) any plan or contract providing for bonuses, pensions,
options, stock purchases, deferred compensation, retirement payments, profit
sharing, collective bargaining or the like, or any contract or agreement with
any labor union;
(b) any employment contract or contract for services which
requires the payment of more than One Thousand Dollars ($1,000.00) annually or
which is not terminable within thirty (30) days by the Company without liability
for any penalty or severance payment;
(c) any contract or agreement for the purchase of any service,
commodity, material or equipment, except as otherwise disclosed in another
schedule to this Agreement;
(d) any other contracts or agreements creating any obligations
of the Company not specifically disclosed elsewhere under this Agreement;
(e) any contract or agreement which by its terms does not
terminate or is not terminable without penalty by the Company or its successors
within one year after the Execution Date;
(f) any contract containing covenants limiting the freedom of
the Company to compete in any line of business or with any person or entity;
(g) any contract or agreement for the purchase of any fixed
asset whether or not that purchase is in the ordinary course of business;
(h) any license agreement (as licensor or licensee);
(i) any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money which
directly or indirectly may affect the Company;
(j) any contract or agreement with any officer, employee,
director or stockholder of the Company or with any persons or organizations
controlled by or affiliated with any of them;
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or
(k) any contracts, agreements and understandings
(collectively, the "Provider Agreements") with any party regarding the provision
of medical services to patients, including without limitation, any Provider
Agreements with HMOs, PPOs, third party payors, IPAs, PHOs, MSOs, employers,
labor unions, hospitals, clinics, ambulatory surgery centers, Medicare
intermediaries and Medicaid intermediaries.
The Company is not in default under any contracts,
commitments, plans, agreements or licenses described in that Schedule nor has
any knowledge of conditions or facts which with notice or passage of time, or
both, would constitute a default.
2.14 Litigation, Investigations, Orders and Decrees. Except for any
Matter for the Prior Period, except as listed on Schedule 2.14 or Schedule 2.15,
for the Relevant Period there are no actions, suits, claims, governmental
investigations or arbitration proceedings pending or, to the best of Sheridan
and the Company's knowledge, threatened against or affecting the Company, the
Company's employed or engaged physicians, nurses, technicians and allied health
care professional (individually, a "Health Care Provider" and collectively, the
"Health Care Providers") , the Company or the business, assets, prospects or
financial condition of the Company, and to the best of Sheridan and the
Company's knowledge, there are no facts or circumstances which are reasonably
likely to create a basis for any of the foregoing. Except as listed on Schedule
2.14, for the Relevant Period there are no outstanding orders, decrees or
stipulations issued by any local, state or federal judicial authority in any
proceeding to which the Company are or were a party which may have an adverse
effect on any of them.
2.15 Medical Malpractice. Except for any Matter from the Prior Period,
except as set forth on Schedule 2.15, for the Relevant Period there are no
pending, and to the best of Sheridan and the Company's knowledge and belief,
there are no threatened litigation, arbitration, claim or governmental,
administrative or other proceedings (formal or informal), including, without
limitation, any malpractice claims, Health Care Financing Administration, Agency
for Health Care Administration, Office of the Inspector General, Department of
Insurance, Department of Professional Regulation or Board of Medicine
investigations, suits, notices of intent to institute, arbitration or
proceedings, either administrative or judicial, involving the Company, Dr.
Gaylis or Dr. Jaffee.
2.16 Insurance. The physical properties and assets of the Company are
insured to the extent disclosed in Schedule 2.16 (including all professional
liability insurance policies) and all those insurance policies and arrangements
are disclosed in that Schedule. Those insurance policies and arrangements are in
full force and effect, all premiums with respect to those policies and
arrangements are currently paid, and the Company is in compliance in all
material respects with their terms. That insurance is adequate and customary for
the business engaged in by the Company and is sufficient for compliance by the
Company with all requirements of law and all agreements and leases to which the
Company is a party. Buyer agrees that this insurance will no longer be in effect
after the Closing Date and the Buyer and Company shall be responsible for
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providing all legally and contractually required insurance at Closing and
throughout the time periods legally and contractually required and will provide
Sheridan evidence of such insurance from time to time.
2.17 Equity Investments. Not used in this Agreement.
2.18 Powers of Attorney. The Company does not have any outstanding
powers of attorney.
2.19 Finder's Fee. Except as provided in Schedule 2.19, neither
Sheridan nor the Company has incurred or become liable for any broker's
commission or finder's fee relating to or in connection with the transactions
contemplated by this Agreement.
2.20 Licenses; Permits; Compliance. Sheridan, the Company, Dr. Gaylis
and Dr. Jaffee possess all licenses and other required governmental or official
approvals, permits, consents and authorizations (as listed on Schedule 2.20
attached to this Agreement), the failure of which to possess would, individually
or in the aggregate, have a material adverse effect on the business, financial
condition, operations, prospects or results of operations of the Company. Except
for any Matter from the Prior Period, for the Relevant Period, the Company is in
compliance with: (i) the terms of all contractual obligations which directly or
indirectly affect the Company; (ii) all laws, ordinances, statutes and
regulations where noncompliance could have an adverse effect on the Company or
its businesses, prospects or assets; and, (iii) all judgments, orders, rulings
or other decisions of any governmental or other regulatory authority, court or
arbitrator having jurisdiction over the Company. Except for any Matter from the
Prior Period, Sheridan and the Company have furnished to Buyer true and correct
copies of all correspondence from all governmental authorities asserting that
the Company is not, was not or may not have been in compliance with all
applicable laws, rules, regulations, judgments, orders or decrees.
2.21 Corporate Records; Copies of Documents. Except for any Matter from
the Prior Period, for the Relevant Period, the corporate record books of the
Company accurately record all corporate action taken by the stockholders and
board of directors and committees. Except for any Matter from the Prior Period,
the copies of the corporate records of the Company, as made available to Buyer
for review, are true and complete copies of the originals of those documents.
The Company has made available for inspection and copying by Buyer and its
counsel true and correct copies of all documents referred to in this Section or
in the Schedules delivered to Buyer pursuant to this Agreement.
2.22 Transactions with Interested Persons. Except for any Matter from
the Prior Period, except as disclosed on Schedule 2.22, neither the Company nor
any of its "Affiliates"(such term shall hereinafter have the meaning set forth
in Rule 405 promulgated by the SEC under the Securities Act of 1933, as
amended), have any direct or indirect material interest or familial or business
relationship or the Company's customers, patients, suppliers, vendors, payors or
landlords.
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2.23 Employee Benefit Programs. Except for any Matter from the Prior
Period, Schedule 2.23 to this Agreement sets forth a list of every employee
program that has been maintained during the Relevant Period.
2.24 Environmental Matters. Except for any Matter from the Prior
Period, except as provided in Schedule 2.24 and except for biohazardous
materials which have been disposed of in compliance with all applicable laws and
regulations, for the Relevant Period, the Company has not ever generated,
transported, used, stored, treated, disposed of, or managed any Hazardous Waste
(as defined below); and (i) no Hazardous Material (as defined below) has ever
been or is threatened to be spilled, released, or disposed of at any site
presently or formerly owned, operated, leased, or used by the Company, or has
come to be located in the soil or groundwater at any such site for which the
Company may have liability; (ii) no Hazardous Material has ever been transported
from any site presently or formerly owned, operated, leased, or used by the
Company for treatment, storage, or disposal at any-other place for which the
Company may have liability; (iii) the Company does not presently own, operate,
lease, or use, any site on which underground storage tanks are or were located
for which the Company may have liability; and, (iv) for the Relevant Period, no
lien has been imposed by any governmental agency or any property, facility,
machinery, or equipment owned, operated, leased, or used by the Company in
connection with the presence of any Hazardous Material.
Except for any Matter from the Prior Period, the Company does not
have any liability under, nor has the Company ever violated in any material
respect, any Environmental Law (as defined below); and: (i) the Company and any
property owned, operated, leased, or used by the Company and any facilities and
operations on that property, are presently in compliance in all respects with
all applicable Environmental Laws for which the Company may have liability; (ii)
the Company has never entered into or been subject to any judgment, consent,
decree, compliance order, or administrative order with respect to any
environmental or health and safety matter or received any request for
information, notice, demand letter, administrative inquiry, or formal or
informal compliant or claim with respect to any environmental or health and
safety matter or the enforcement of any Environmental Law for which the Company
may have liability; and, (iii) the Company has no reason to believe that any of
the items enumerated in clause (ii) of this paragraph will be forthcoming.
No site owned, operated, leased, or used by the Company contains any
asbestos or asbestos-containing material, any polychlorinated biphenyls (PCB) or
equipment containing PCB, or any urea formaldehyde foam insulation for which the
Company could be held liable.
Except for any Matter from the Prior Period, Sheridan and the Company
have provided to Buyer copies of all documents, records, and information
available to Sheridan or the Company concerning any environmental or health or
safety matter relevant to the Company, whether generated by others or by the
Company, including, without limitation, environmental audits, environmental risk
assessments, site assessments, documentation regarding off-site disposal of
Hazardous Materials, spill control is plans, and reports, correspondence,
permits, licenses, approvals, consents, and other authorizations related to
environmental or health or safety matters
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issued by any governmental agency.
For purposes of this Section 2.24: (i) "Hazardous Material" shall mean
and include any hazardous material, hazardous substance, petroleum product, oil,
toxic substance, pollutant, or contaminant, as defined or regulated under any
Environmental Law, or any other substance which may pose a threat to the
environmental or to human health or safety, including without limitation,
bio-hazardous materials; (ii) "Hazardous Waste" shall mean and include any
hazardous waste as defined or regulated under any Environmental Law; (iii)
"Environmental Law" shall mean any environmental or health and safety-related
law, regulation, rule, ordinance, or by-law at the foreign, federal, state, or
local level, whether existing as of the date of this Agreement, previously
enforced, or subsequently enacted for which the Company could be held liable.
2.25 List of Directors and Officers. Schedule 2.25 contains a true and
complete list of all current directors and officers of the Company. In addition,
Schedule 2.25 contains a list of all managers, employees and consultants of the
Company who, individually, have received or are scheduled to receive
compensation from the Company for the period ending December 31, 1996. In each
case that Schedule shall include the current job title and aggregate annual
compensation of each individual.
2.26 Disclosure; Accuracy of Documents and Exhibits. Taking the Caveat
into consideration and the fact that neither Sheridan nor the Company has made
or is making any representation, warranty or statement whatsoever regarding the
Prior Period, the representations, warranties and statements contained in this
Agreement and in the certificates, exhibits and schedules delivered by Sheridan
and the Company pursuant to this Agreement to Buyer do not contain any untrue
statement of a material fact, and, when taken together, do not omit to state a
material fact required to be stated therein or necessary in order to make those
representations, warranties or statements not misleading in light of the
circumstances under which they were made. Taking the Caveat into consideration
and the fact that neither Sheridan nor the Company has made or is making any
representation, warranty or statement whatsoever regarding the Prior Period,
there are no facts known to Sheridan or the Company which presently or may in
the future have a material adverse affect on the business, properties,
prospects, operations or condition of the Company which have not been
specifically disclosed in this Agreement or in a Schedule furnished with this
Agreement, other than general economic conditions affecting the health care
industry.
Taking the Caveat into consideration and the fact that neither Sheridan
nor the Company has made or is making any representation, warranty or statement
whatsoever regarding the Prior Period, all contracts, instruments, agreements
and other documents delivered by Sheridan or the Company to Buyer or its agents
for Buyer's or its agents, review in connection with this Agreement and the
contemplated transactions, including articles of incorporation, by-laws,
corporate minutes, stock record books and tax returns, are true, correct and
complete copies of all those contracts, instruments, agreements and other
documents. Taking the Caveat into consideration and the fact that neither
Sheridan nor the Company has made or is making any representation, warranty or
statement whatsoever regarding the Prior Period, all Exhibits and
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Schedules to this Agreement are true, correct and complete as of the Closing.
2.27 Non-Foreign Status. The Company is not a "foreign person" within
the meaning of Section 1445 of the Code and Treasury Regulations Section
1.1445-2.
2.28 Employees; Labor Matters; Regulatory Compliance. The Company
employs a total of twelve (12) full-time employees and one (1) part-time
employee and-generally enjoys good employer-employee relationships. Except for
any Matter for the Prior Period, during the Relevant Period, the Company is not
delinquent in payments to any of its employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed for
it through the Closing Date or amounts required to be reimbursed to those
employees. Upon termination of the employment of any of those employees, neither
the Company, nor Buyer will by reason of the transactions contemplated under
this Agreement or anything done prior to the Closing be liable to any of those
employees for so-called "severance pay" or any other payments, except as
described in Schedule 2.28. Except for any Matter for the Prior Period, the
Company has no policy, practice, plan or program of paying severance pay or any
form of severance compensation in connection with the termination of employment,
except as described in that Schedule. Except for any Matter for the Prior
Period, the Company is in compliance with all applicable laws and regulations
including, without limitation, labor laws, employment laws, fair employment
practice laws, occupational health and safety laws, disabilities laws, sexual
harassment laws, work place safety and health laws, terms and conditions of
employment and wage and hours laws and environmental laws. Except for any Matter
for the Prior Period, there are no charges of employment discrimination or
unfair labor practices, nor are there any strikes, slowdowns, stoppages of work,
or any other concerted interference with normal operations which are existing,
pending or threatened against or involving the Company. Except for any Matter
for the Prior Period, no question concerning labor representation exists
respecting any employees of the Company. Except for any Matter for the Prior
Period, there are no grievances, complaints or charges that have been filed
against the Company under any dispute resolution procedure (including, but not
limited to, any proceedings under any dispute resolution procedure under any
collective bargaining agreement) that might have an adverse effect on the
Company or the conduct of its business, and there is no arbitration or similar
proceeding pending and no claim therefor has been asserted. Except for any
Matter for the Prior Period, no collective bargaining agreement is in effect or
is currently being or is about to be negotiated by the Company. Except for any
Matter for the Prior Period, the Company has not received any information
indicating that any of its employment policies or practices is currently being
audited or investigated by any federal, state or local government agency. For
the Relevant Period, the Company is, and at all times since, been in compliance
with the requirements of the Immigration Reform Control Act of 1986.
2.29 Provider Agreements; Suppliers; Changes. Schedule 2.29 sets forth
any third party payor arrangement or agreement or Provider Agreement which
accounts for more than five percent (5%) of the collections of the Company for
the twelve months ended December 31, 1996, ("TPAs"). The relationships of the
Company with its TPAs are good commercial working relationships. None of the
TPAs has canceled, materially modified, or otherwise terminated its
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relationship with the Company, or has during the last twelve months decreased
materially its use of the services of the Company, nor to the knowledge of
Company, do any TPAs have any plan or intention to do any of the foregoing.
Further, the Company has not received notice that any health plan, insurance
company, employer or any other TPA which has done business with the Company
since January 1, 1996 intends to terminate, limit or restrict its relationship
with the Company.
2.30 Authorization from Others. Prior to the Closing Date, Sheridan and
the Company will cooperate with Buyer in Buyer's efforts to obtain all
authorizations, consents and permits of others required to permit the
consummation by Sheridan and the Company of the transactions contemplated by
this Agreement and neither Sheridan nor the Company shall have any duty other
than reasonable cooperation to obtain the consent of any landlord, lessor, third
party payor or managed care company; all of whom shall be the responsibility of
Buyer or any other party with the Company requiring consent to the contemplated
transaction (collectively the "Consents").
2.31 Notice of Default. Promptly upon the occurrence of, or promptly
upon the Company becoming aware of the impending or threatened occurrence of,
any event which would cause or constitute a breach or default, or would have
caused or constituted a breach or default had that event occurred or been known
to Sheridan or the Company prior to the Execution Date, of any of the
representations, warranties of Sheridan and the Company contained in or referred
to in this Agreement or in any Schedule or Exhibit referred to in this
Agreement, Sheridan or the Company shall give detailed written notice to Buyer
and Sheridan and the Company shall use their best efforts to prevent or promptly
remedy the same.
2.32 Consummation of Agreement. Sheridan and the Company shall use
their best efforts to perform and fulfill all conditions and obligations on its
part to be performed and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement shall be fully carried out. To this
end, Sheridan and the Company will obtain prior to the Closing all necessary
authorizations or approvals of its Board of Directors.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF CONTINUCARE AND SUBSIDIARY
3.1 Making of Representations and Warranties. As a material inducement
to the Company and Sheridan to enter into this Agreement and consummate the
contemplated transactions, ContinuCare and Subsidiary each jointly and severally
hereby make the representations and warranties to Sheridan and the Company
contained in this Section 3.
3.2 Organization of ContinuCare and Subsidiary. ContinuCare and
Subsidiary are each corporations duly organized, validly existing and in good
standing under the laws of Florida with full corporate power to own or lease
their respective properties and to conduct their respective
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businesses in the manner and in the places where those properties are owned or
leased or that business is conducted by each of them.
3.3 Authority of ContinuCare and Subsidiary. ContinuCare and Subsidiary
each has the full right, authority and power to enter into this Agreement, and
each agreement, document and instrument to be executed and delivered by them
pursuant to this Agreement and to carry out the contemplated transactions. The
execution, delivery and performance by both ContinuCare and Subsidiary of this
Agreement, and each other agreement, document and instrument have been duly
authorized by all necessary corporate action of both ContinuCare and Subsidiary
and no other action on the part of either ContinuCare and Subsidiary is required
in connection therewith. This Agreement, and each other agreement, document and
instrument executed and delivered by both ContinuCare and Subsidiary pursuant to
this Agreement constitute, or when executed and delivered will constitute, valid
and binding obligations of both ContinuCare and Subsidiary enforceable in
accordance with their terms. The execution, delivery and performance by both
ContinuCare and Subsidiary of this Agreement, and each agreement, document and
instrument:
(a) does not and will not violate any provision of the Articles of
incorporation or by-laws of either of them;
(b) does not and will not violate any laws of the United States or
of any state or any other jurisdiction applicable to either of them or require
either of them to obtain any approval, consent or waiver of, or make any filing
with, any person or entity (governmental or otherwise) which has not been
obtained or made; and,
(c) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, or give rise to a right of
termination of any indenture, loan or credit agreement, or other agreement
mortgage, lease, permit, order, judgment or decree to which either of them is a
party and which is material to the business and financial condition of either
ContinuCare or Subsidiary and their parent and affiliated organizations on a
consolidated basis.
3.4 Litigation. There is no litigation pending or, to its
knowledge, threatened against either ContinuCare or Subsidiary which would
prevent or hinder the consummation of the transactions contemplated by this
Agreement.
3.5 Finder's Fee. Buyer has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
SECTION 4
COVENANTS OF BUYER
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4.1 Making of Covenants and Agreement. Buyer hereby makes the covenants
and agreements in this Section 4.
4.2 Confidentiality. Buyer jointly and severally agrees that, unless
and until the Closing has been consummated, Buyer and its officers, directors,
agents and representatives will hold in strict confidence, and will not use any
confidential or proprietary data or information obtained from the Sheridan or
the Company with respect to the business or financial condition of the Sheridan
or the Company except for the purpose of evaluating, negotiating and completing
the transaction contemplated hereby. Information generally known in the
industries of Sheridan or the Company or which has been disclosed to Buyer by
third parties which have a right to do so shall not be deemed confidential or
proprietary information for purposes of this agreement. If the transaction
contemplated by this Agreement is not consummated, Buyer and their officers,
directors, agents and representatives will return to Sheridan or the Company (or
certify that it has destroyed) all copies of data and information, including but
not limited to financial information, Customer lists, business and corporate
records, worksheets, test reports, tax returns, lists, memoranda, and other
documents prepared by or made available to Buyer in connection with the
transaction.
4.3 Consummation of Agreement. Buyer shall use its best efforts to
perform and fulfill all conditions and obligations on its part to be performed
and fulfilled under this agreement, to the end that the transactions
contemplated by this agreement shall be fully carried out. To this end, Buyer
will obtain prior to the Closing all necessary authorizations or approvals of
its Board of Directors lessors, landlords, managed care plans and third party
payors.
SECTION 5
CONDITIONS FOR CLOSING AND
PROCEDURE FOR CLOSING
5.1 Conditions to the obligations of Buyer. The obligation of Buyer to
consummate this Agreement and the contemplated transactions are subject to the
fulfillment, prior to or at the Closing, of the following conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of Sheridan and the Company contained in this
Agreement shall be true and correct as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing; and Sheridan and the
Company shall, on or before the Closing, have performed all of their obligations
under this Agreement which by the terms are to be performed on or before the
Closing.
(b) No Material Change. There shall have been no material adverse
change in the financial condition, prospects, properties, assets, liabilities,
business or operations of the Company since the date of the Base Balance Sheet,
whether or not in the ordinary course of business.
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(c) Approval of Buyer's Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement and the
contemplated transactions and all related legal matters contemplated this
Agreement shall have been approved by counsel for Buyer that counsel shall have
received on behalf of Buyer all other certificates, opinions, and documents in
form satisfactory to counsel, as Buyer may reasonably require from Sheridan or
the Company to evidence compliance with the terms and conditions of this
Agreement as of the Closing and the correctness as of the Closing of the
representations and warranties of Sheridan and the Company and the fulfillment
of their respective covenants.
(d) No Litigation. There shall have been no determination by Buyer,
acting in good faith, that the consummation of the transactions contemplated by
this Agreement has become inadvisable or impracticable by reason of the
institution or threat by any person or any federal, state or other governmental
authority of litigation, proceedings or other action against Buyer, Sheridan or
the Company or any material adverse change in the laws or regulations applicable
to the Company.
(e) Consents. Sheridan and the Company shall have made all filings
with and notifications of governmental authorities, regulatory agencies and
other entities required to be made by the Company in connection with the
execution and delivery of this Agreement, the performance of the contemplated
transactions and the continued operation of the business of the Company by Buyer
subsequent to the Closing; and the Company and Buyer shall have received all
authorizations, waivers, consents and permits, in form and substance reasonably
satisfactory to Buyer, from all third parties, including, without limitation,
applicable governmental authorities, regulatory agencies, lessors, lenders and
contract parties, required to permit the continuation of the business of the
Company and the consummation of the transactions contemplated by this Agreement,
and to avoid a breach, default, termination, acceleration or modification of any
material indenture, loan or credit agreement or any other material agreement,
contract, instrument, mortgage, lien, lease, permit, authorization, order, writ,
judgment, injunction, decree, determination or arbitration award as a result of,
or in connection with, the execution and performance of this Agreement.
(f) Acquisition Audits. Not used in this Agreement.
(g) Employee Programs. The Company shall have taken all steps necessary
under the relevant documents and applicable law to maintain the qualification of
each Employee Program identified on Schedule 2.23 notwithstanding the purchase
of the Company Shares by Buyer.
(h) Resignations. The Company shall have delivered to Buyer the
resignations of all of the Directors of the Company and of all officers of the
Company as may be requested by Buyer at least five days prior to the Closing,
those resignations to be effective at the Closing.
(i) Satisfaction of Obligations. Sheridan shall pay in full all of the
Company's outstanding debts and obligations which were incurred during the
Relevant Period and prior to the Closing Date and which were due and payable on
or before the Closing Date including those
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payable, including without limitation, all pension plan contribution,
professional fees (accounting and legal fees), taxes and accounts payable and
the Company shall provide the Buyer with evidence of those satisfactions. In
addition, a pro-ration shall be done for all accrued, but unpaid expenses such
as payroll, rent and vacation as of the Closing Date.
5.2 Conditions to Obligations of the Company and Sheridan. The
obligation of Sheridan and the Company to consummate this Agreement and the
contemplated transactions is subject to the fulfillment, prior to or at the
Closing, of the following conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of Buyer contained in Section 3 shall be true and
correct in all material respects as though made on and as of the Closing and
Buyer shall, on or before the Closing, have performed all of its obligations
under this Agreement which by the terms are to be performed on or before the
Closing.
(b) Approval of the Company's Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement and the
contemplated transactions and all related legal matters contemplated by this
agreement shall have been approved by Jay Martus, Esq., in his capacity as
General Counsel for Sheridan and the Company, and that counsel shall have
received on behalf of Sheridan and the Company all other certificates, opinions
and documents in form satisfactory to that counsel as Sheridan may reasonably
require from Buyer to evidence compliance with the terms and conditions of this
Agreement as of the Closing and the correctness as of the Closing of the
representations and warranties of Buyer and the fulfillment of its covenants.
(c) No Litigation. There shall have been no determination by the
Company or Sheridan, acting in good faith, that the consummation of the
transactions contemplated by this Agreement has become inadvisable or
impracticable by reason of the institution or threat by any person or any
federal, state or other governmental authority of material litigation,
proceedings or other action against Buyer, Sheridan or the Company.
Section 5.3 Procedure at the Closing. At the Closing, the parties agree
to take the following steps in the order listed below (provided, however, that
upon their completion all of these steps shall be deemed to have occurred
simultaneously):
(a) legal counsel for Sheridan and the Company shall deliver a
legal opinion to the Buyer in substantially the form of Exhibit C attached to
this Agreement;
(b) legal counsel for the Buyer shall deliver a legal opinion to
Sheridan in substantially the form of Exhibit D attached to this Agreement;
(c) Sheridan and the Company shall execute and deliver resolutions
adopted by the board of directors of Sheridan and the Company approving the
transactions contemplated by this Agreement, certified by the corporate
secretary of Sheridan and the Company;
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(d) the Buyer shall execute and deliver resolutions adopted by the
board of directors of the Buyer approving the transactions contemplated by this
Agreement, certified by the corporate secretary of the Buyer;
(e) the Company shall deliver to the Buyer a Certificate of
Sheridan and the Company's President dated as of the Closing to the effect that
the statements contained in Sections 5.1(a) and (b) are true and correct;
(f) the Buyer shall deliver to the Company a Certificate of the
Buyer's President dated as of the Closing Date to the effect that the statements
contained in Section 5.2(a) are true and correct;
(g) the Buyer shall deliver the Closing Funds to Sheridan;
(h) Sheridan and Norman B. Gaylis, M.D. shall exchange mutually
acceptable General Releases;
(i) NOT USED IN THIS AGREEMENT;
(j) Sheridan shall deliver stock certificates to the Buyer and
shall execute and deliver stock powers of attorney and any other documentation
necessary to effectuate a transfer of the Company Stock to the Buyer;
(k) the Buyer shall deliver to the Company a Certificate of Good
Standing issued by the Secretary of State of Florida; and,
(l) the Company shall deliver to the Buyer a Certificate of Good
Standing issued by the Secretary of State of Florida.
(m) an assignment by Sheridan to Buyer of its indemnification
rights pursuant to Section 10 of the Stock Purchase Agreement dated December 4,
1996 by and between Sheridan and the Company.
(n) termination of the Management Agreement dated __________, 1996
between Sheridan and ARDS, P.A.
(o) the transfer of Sheridan's Post Office Box where it receives
payment of accounts receivable for the Company.
SECTION 6
RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING
6.1 Survival of Warranties. Each of the representations, warranties,
agreements, covenants and obligations in this Agreement or in any schedule,
exhibit, certificate or
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financial statement delivered by any party to the other party incident to the
contemplated transactions are material, shall be deemed to have been relied upon
by the other party and shall survive the Closing regardless of any investigation
and shall not merge in the performance of any obligation by either party to this
Agreement for a time period ending on April 10, 1999.
6.2 Access to Sheridan's Computer System. Sheridan shall provide a
representative of Buyer with access to its computer system, patient billing and
collection records, during normal business hours for a period not to exceed 180
days in order for Buyer to collect any and all accounts receivable existing as
of the Closing Date. In addition, Sheridan agrees to train Buyer's
representative on the use of Sheridan's billing systems.
SECTION 7
INDEMNIFICATION
7.1 Indemnification by the Stockholders. Sheridan agrees
subsequent to the Closing to indemnify and hold the Company, Buyer and its
subsidiaries and affiliates and persons serving as officers, directors,
partners or employees of the Company or Buyer (individually a "Buyer
Indemnified Party" and collectively the "Buyer Indemnified Parties") harmless
from and against any damages, liabilities, losses, taxes, fines, penalties,
costs, and expenses (including, without limitation, reasonable fees of counsel)
of any kind or nature whatsoever (whether or not arising out of third-party
claims and including all amounts paid in investigation, defense or settlement
of the foregoing) which may be sustained or suffered by any of them arising
out of or based upon any of the following matters:
(a) fraud, intentional misrepresentation or a deliberate or wilful
breach by Sheridan or the Company of any of their representations, warranties or
covenants under this Agreement or in any certificate, schedule or exhibit
delivered pursuant to this Agreement;
(b) any other breach of any representation, warranty or covenant of
Sheridan or the Company under this Agreement or in any certificate, schedule or
exhibit delivered pursuant to this Agreement, or by reason of any claim, action
or proceeding asserted or instituted growing out of any matter or thing
constituting a breach of those representations, warranties or covenants; and
(c) except for any Matter from the Prior Period any liability of
the Company for Taxes arising from an event or transaction from January 4, 1996
to the Closing or as a result of the Closing which have not been paid or
provided for by the Company, including without limitation, any increase in Taxes
due to the unavailability of any loss or deduction claimed by the Company during
such period. Notwithstanding the provisions of Section 7.1, Sheridan has no
obligation whatsoever to indemnify any party for any Matter whatsoever from the
Prior Period or pertaining in any part to the caveat.
7.2 Limitations on Indemnification by the Buyer. No indemnification
shall be payable pursuant to Subsection 7.1(b) above to any Buyer Indemnified
Party, unless the total of
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all claims for indemnification pursuant to Section 7.1 shall exceed Fifty
Thousand Dollars ($50,000.00) in the aggregate, whereupon the full amount of
claims in excess of $50,000.00 shall be recoverable in accordance with the terms
of this Agreement. Furthermore, notwithstanding anything in this agreement no
claim for indemnification may be made after April 10, 1999.
7.3 Indemnification by Buyer. Buyer agrees to indemnify and hold
Sheridan harmless from and against any damages, liabilities, losses and expenses
(including, without limitation, reasonable fees of counsel) of any kind or
nature whatsoever (whether or not arising out of third-party claims and
including all amounts paid in investigation, defense or settlement of the
foregoing) which may be sustained or suffered by Sheridan out of or based upon
any breach of any representation, warranty or covenant made by Buyer in this
Agreement or in any certificate delivered by Buyer under this Agreement, or by
reason of any claim, action or proceeding asserted or instituted growing out of
any matter or thing constituting that breach.
7.4 Limitation on Indemnification by Buyer. No indemnification pursuant
to Section 7.3 shall be payable to Sheridan, unless the total of all claims for
indemnification pursuant to Section 7.3 shall exceed Fifty Thousand Dollars
($50,000.00) in the aggregate, whereupon the full amount of all claims shall be
recoverable in accordance with the terms of this Agreement. Furthermore,
notwithstanding anything in this agreement no claim for indemnification may be
made after April 10, 1999.
7.5 Notice; Defense of Claims. An indemnified party may make claims for
indemnification under this Agreement by giving written notice of the claim to
the indemnifying party within the period in which indemnification claims can be
made under this Agreement. If indemnification is sought for a claim or liability
asserted by a third party, the indemnified party shall also give written notice
of the claim to the indemnifying party promptly after it receives notice of the
claim or liability being asserted, but the failure to do so shall not relieve
the indemnifying party from any liability except to the extent that it is
prejudiced by the failure or delay in giving that notice. The notice shall
summarize the bases for the claim for indemnification and any claim or liability
being asserted by a third party. Within twenty (20) days after receiving any
notice, the indemnifying party shall give written notice to the indemnified
party stating whether it disputes the claim for indemnification and whether it
will defend against any third party claim or liability at its own cost and
expense. If the indemnifying party fails to give notice that it disputes an
indemnification claim within twenty (20) days after receipt of notice of the
claim, it shall be deemed to have accepted and agreed to the claim, which shall
become immediately due and payable. The indemnifying party shall be entitled to
direct the defense against a third party claim or liability with counsel
selected by it (subject to the consent of the indemnified party, which consent
shall not be unreasonably withheld) as long as the indemnifying party is
conducting a good faith and diligent defense. The indemnified party shall at all
times have the right to fully participate in the defense of a third party claim
or liability at its own expense directly or through counsel; provided, however,
that if the named parties to the action or proceeding include both the
indemnifying party and the indemnified party and the indemnified party is
advised that representation of both parties by the same counsel would be
inappropriate under applicable standards of professional conduct, the
indemnified party may engage separate counsel at the
22
<PAGE> 23
expense of the indemnifying party. If no notice of intent to dispute and defend
a third party claim or liability is given by the indemnifying party, or if that
good faith and diligent defense is not being or ceases to be conducted by the
indemnifying party, the indemnified party shall have the right, at the expense
of the indemnifying party, to undertake the defense of that claim or liability
(with counsel selected by the indemnified party), and to compromise or settle
it, exercising reasonable business judgment. If the third party claim or
liability is one that by its nature cannot be defended solely by the
indemnifying party, then the indemnified party shall make available all
information and assistance as the indemnifying party may reasonably request and
shall cooperate with the indemnifying party in that defense, at the expense of
the indemnifying party.
SECTION 8
MISCELLANEOUS
8.1 Fees and Expenses.
(a) Except as contained herein, each of the parties will bear its
own expenses in connection with the negotiation and the consummation of the
transactions contemplated by this Agreement, and no expenses of Sheridan or the
Company relating in any way to the purchase and sale of the Company Shares under
this Agreement and the contemplated transactions, including without limitation
legal, accounting or other professional expenses of Sheridan or the Company
shall be charged to or paid by the Company or Buyer.
(b) Sheridan will pay all costs incurred, whether at or subsequent
to the Closing, in connection with the transfer of the Company Shares to Buyer
as contemplated by this Agreement, including without limitation, all transfer
taxes and charges applicable to that transfer, and all costs of obtaining
permits, waivers, registrations or consents with respect to any assets, rights
or contracts of the Company.
8.2 Governing Law. This Agreement shall be construed under and governed
by the internal laws of the State of Florida without regard to its conflict of
laws provisions.
8.3 Notices. Any notice, request, demand or other communication
required or permitted under this Agreement shall be in writing and shall be
deemed to have been given if delivered or sent by facsimile transmission, upon
receipt, or if sent by registered or certified mail, upon the sooner of the date
on which receipt is acknowledged or the expiration of three days after deposit
in United States post office facilities properly addressed with postage prepaid.
All notices to a party will be sent to the addresses listed below or to any
other address or person as a party may designate by notice to each other party
under this Agreement:
if to Sheridan: Sheridan Healthcorp, Inc.
4651 Sheridan Street, Suite 400
Hollywood, Florida 33021
Attention: Jay A. Martus, Esq. Vice President
and General Counsel
23
<PAGE> 24
if to the Company: AARDS, Inc.
4651 Sheridan Street, Suite 400
Hollywood, FL 33021
Attention: Jay A. Martus, Esq. Vice President
and General Counsel
if to the Buyer: Continucare Corporation
100 SE Second Street, 36th Floor
Miami, Florida 33131
Attention: Susan Tarbe, Esq. Executive V.P.
and General Counsel
with a copy to: Jay A. Ziskind, Esq.
Ziskind & Arvin, P.A.
444 Brickell Avenue
Suite 905
Miami, Florida 33131
Any notice given under this Agreement may be given on behalf of any party by his
counsel or other authorized representatives.
8.4 Entire Agreement. This Agreement, including the Schedules and
Exhibits referred to in this Agreement and the other writings specifically
identified in this Agreement or contemplated by this Agreement, is complete,
reflects the entire agreement of the parties with respect to its subject matter,
and supersedes all previous written or oral negotiations, commitments and
writings. No promises, representations, understandings, warranties and
agreements have been made by any of the parties to this Agreement except as
referred to in this Agreement or in its Schedules and Exhibits or in other
writings; and all inducements to the making of this Agreement relied upon by
either party to this Agreement have been expressed in this Agreement or in the
Schedules or Exhibits or in other writings.
8.5 Assignability; Binding Effect. This Agreement shall only be
assignable by Buyer to a corporation or partnership controlling, controlled by
or under common control with Buyer upon written notice to Sheridan and the
Company. This Agreement may not be assigned by Sheridan or the Company without
the prior written consent of Buyer. This Agreement shall be binding upon and
enforceable by, and shall inure to the benefit of, the parties to this Agreement
and their respective successors and permitted assigns.
8.6 Captions and Gender. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision of this Agreement. The use in this Agreement of the masculine
pronoun in reference to a party to this Agreement shall be deemed to include the
feminine or neuter, as the context may require.
8.7 Execution in Counterparts. For the convenience of the parties and
to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
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<PAGE> 25
8.8 Amendments. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant contained in this Agreement be waived,
except by a writing duly and validly executed by each party to this Agreement,
or in the case of a waiver, the party waiving compliance.
8.9 Severability. The invalidity or unenforceability of any one or more
of the words, phrases, sentences, clauses, or sections contained in this
Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement or any part of any provision, all of which are
inserted conditionally on their being valid in law, and in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid or unenforceable, this Agreement shall
be construed as if the invalid or unenforceable word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted or shall be enforced as nearly as possible according to their
original terms and intent to eliminate any invalidity or unenforceability. If
any invalidity or . unenforceability is caused by the length of any period of
time or the size of any area contained in any part of this Agreement, the period
of time or area, or both, shall be considered to be reduced to a period or area
which would cure the invalidity or unenforceability.
8.10 Litigation; Prevailing Party. Except as otherwise required by
applicable law or as expressly provided in this Agreement, in the event of any
litigation, including appeals, with regard to this Agreement, the prevailing
party shall be entitled to recover from the non-prevailing party all reasonable
fees, costs, and expenses of counsel (at pre-trial, trial and appellate levels).
8.11 Publicity. Subject to applicable law, all press releases and other
publicity, except as required by applicable law, concerning the transactions
contemplated by this Agreement will be subject to the prior review and approval
of Sheridan, the Company and the Buyer, provided that the approval shall not be
unreasonably withheld or delayed.
8.12 No Breach. The parties agree that the execution of this Agreement
shall not be deemed to be an assignment of any contract where consent to that
assignment is required by the terms of that contract provided, however the Buyer
shall obtain the Consents, and assume and discharge all obligations relating to
those consents.
8.13 Construction. This Agreement shall be construed without regard to
any presumption or other rule requiring construction against the party causing
this Agreement to be drafted, including any presumption of superior knowledge or
responsibility based upon a party's business or profession or any professional
training, experience, education or degrees of any member, agent, officer of
employee of any party. If any words in this Agreement have been stricken out or
otherwise eliminated (whether or not any other words or phrases have been added)
and the stricken words initialed by the party against whom the words are
construed, then this Agreement shall be construed as if the words so stricken
out or otherwise eliminated were never included in this Agreement and no
implication or inference shall be drawn from the fact that those words were
stricken out or otherwise eliminated.
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<PAGE> 26
8.14 Jurisdiction; Venue; Inconvenient Forum; Jury Trial. ANY SUIT,
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY
ANY COURT IN RESPECT TO THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS OF THE
STATE OF FLORIDA OR IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
FLORIDA IN BROWARD COUNTY, AND THE PARTIES ACCEPT THE EXCLUSIVE PERSONAL
JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING.
IN ADDITION, THE PARTIES KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR LATER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY ANY COURT BROUGHT IN THE
STATE OF FLORIDA, AND FURTHER, KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE
ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF FLORIDA
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY WAIVES ALL RIGHTS TO ANY
TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS AGREEMENT.
[THE REST OF THIS PAGE INTENTIONALLY LEFT BLANK]
26
<PAGE> 27
IN WITNESS WHEREOF, the parties to this Agreement have caused
this Agreement to be duly executed as of the Execution Date.
BUYER:
CONTINUCARE CORPORATION,
a Florida corporation
By:
----------------------------
Its:
---------------------------
SUBSIDIARY:
CONTINUCARE PHYSICIAN PRACTICE
MANAGEMENT, INC.,
a Florida corporation
By:
----------------------------
Its:
---------------------------
SHERIDAN:
SHERIDAN HEALTHCORP, INC.,
a Florida corporation
By:
----------------------------
Its:
---------------------------
COMPANY:
AARDS, INC.
a Florida corporation
By:
----------------------------
Its:
---------------------------
27
<PAGE> 1
Exhibit 10.2
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, entered into as of April 10, 1997
(the "Closing Date"), is by and among CONTINUCARE CORPORATION ("CONTINUCARE"), a
Florida corporation; and CONTINUCARE PHYSICIAN PRACTICE MANAGEMENT, INC., a
Florida corporation ("SUBSIDIARY") (Continucare and Subsidiary are collectively
referred to as the "Buyer"); ROSENBAUM, WEITZ & RITTER, INC., a Florida
corporation (the "Company"); and SHERIDAN HEALTHCORP, INC., a Florida
corporation ("SHERIDAN").
PRELIMINARY STATEMENTS
1. Sheridan owns of record and beneficially all of the issued and
outstanding capital stock of the Company, consisting of One Thousand (1,000)
shares of the Company's Common Stock, One Dollar ($1.00) par value per share
(the shares are referred to in this Agreement as the "Company Shares").
2. Sheridan desires to sell all of the Company Shares to Buyer, and
Buyer desires to acquire all of the Company Shares.
3. Subsidiary is a wholly owned subsidiary of Continucare.
NOW, THEREFORE, in order to consummate the purchase and sale of the
Company Shares and in consideration of the mutual agreements contained in this
Agreement, the parties agree as follows:
AGREEMENT
SECTION 1
SALE OF SHARES AND PURCHASE PRICE
1.1 Transfer of Company Shares. At the Closing, Sheridan shall
deliver or cause to be delivered to Subsidiary certificates representing all of
the Company Shares owned by Sheridan, as listed on Exhibit A. Those stock
certificates shall be duly endorsed in blank for transfer or shall be presented
with stock powers duly executed in blank, with signature guarantees and other
documents which may be reasonably required by Subsidiary to effect a valid
transfer of the Company Shares by Sheridan, free and clear of any and all liens,
encumbrances, charges or claims. Sheridan, by execution of this Agreement,
appoints Subsidiary as their attorney-in-fact to effectuate transfer of the
Company Shares at the Closing (as defined below).
1.2 Purchase Price and Payment. In consideration of the sale by
Sheridan to Subsidiary of the Company Shares, in reliance upon the
representations and warranties of Sheridan and the Company contained in this
Agreement and made at the Closing and subject to the satisfaction of all of the
conditions contained in this Agreement, Subsidiary agrees that simultaneously
with the execution and delivery of this Agreement, it will deliver to Sheridan
the
<PAGE> 2
amount specified in Exhibit A-1 by bank cashier check or by wire transfer of
immediately available funds (the "Closing Funds").
1.3 Time and Place of Closing. The closing of the purchase and sale
provided for in this Agreement (the "Closing") shall be held at the offices of
Buyer at 100 SE Second Street, 36th Floor, Miami, Florida on April 10, 1997 or
at another place or an earlier or later date or time as may be mutually agreed
upon by the parties.
1.4 Further Assurances. Sheridan and Buyer agree that from time to
time after the Closing and without further consideration, Sheridan and Buyer
shall execute and deliver further instruments of transfer and assignment and
take all other actions as may be reasonably required to more effectively
transfer and assign to, and vest in Subsidiary the Company Shares and all rights
to the Company Shares, and to fully implement the provisions of this Agreement.
SECTION 2
REPRESENTATIONS AND WARRANTIES
OF THE COMPANY AND SHERIDAN
2.1 Making of Representations and Warranties. As a material
inducement to Buyer to enter into this Agreement and consummate the contemplated
transactions, Sheridan and the Company make to Buyer the representations and
warranties contained in this Section 2. Notwithstanding the above, Sheridan and
the Buyer agree that the representations and warranties made by Sheridan and
contained in this Section 2 are made with respect to only the time period from
February 8, 1996 through the Closing Date, the time period which Sheridan owned
the Company (the "Relevant Period").
2.2 Organization and Qualifications of the Company. The Company is a
for profit corporation duly organized, validly existing and in good standing
under the laws of Florida with full corporate power and authority to own or
lease its properties and to conduct its business in the manner and in the places
where those properties are owned or leased or that business is currently
conducted or proposed to be conducted. The copies of the Company's Articles of
Incorporation as amended to date and of the Company's by-laws, as amended to
date and delivered to Buyer's counsel, are complete and correct, and no
amendments to them are pending. The Company is not in violation of any term of
its Articles of Incorporation or By-laws. Sheridan shall deliver to Subsidiary a
certified copy of the Company's Articles of Incorporation within five (5)
business days after the Closing.
2.3 Capital Stock of the Company; Beneficial Ownership.
(a) The authorized capital stock of the Company consists of
Ten Thousand (1,000) shares of Common Stock, One Dollar ($1.00) par value per
share, of which One Thousand (1,000) shares are duly and validly issued,
outstanding, fully paid and non-assessable. There are no outstanding options,
warrants, rights, commitments, preemptive rights
2
<PAGE> 3
or agreements of any kind for the issuance or sale of, or outstanding securities
convertible into, any additional shares of capital stock of any class of the
Company. None of the Company's capital stock issued to Buyer has been issued in
violation of any federal or state law. Except as described in Schedule 2.3(a),
there are no voting trusts, voting agreements, proxies or other agreements,
instruments or undertakings with respect to the voting of the Company Shares to
which the Company or any of the Stockholders is a party.
(b) Sheridan owns beneficially and of record the Company
Shares listed opposite its name on Exhibit A free and clear of any liens,
restrictions or encumbrances.
2.4 Authority of Sheridan and the Company. Sheridan and the Company
have the full right, authority and power to enter into this Agreement and each
agreement, document and instrument to be executed and delivered by Sheridan and
the Company pursuant to this Agreement and to carry out the contemplated
transactions. The execution, delivery and performance by Sheridan and the
Company of this Agreement and each other agreement, document and instrument have
been duly authorized by all necessary action of Sheridan and the Company and no
other action on the part of Sheridan or the Company is required. This Agreement
and each agreement, document and instrument executed and delivered by Sheridan
and the Company pursuant to this Agreement constitutes, or when executed and
delivered will constitute, valid and binding obligations of Sheridan and the
Company enforceable in accordance with their terms. The execution, delivery and
performance by Sheridan and the Company of this Agreement and each agreement,
document and instrument:
(a) does not and will not violate any provision of the
Articles of Incorporation or by-laws of Sheridan or the Company;
(b) does not and will not violate any laws of the United
States, or any state or other jurisdiction applicable to Sheridan or the Company
or require Sheridan or the Company to obtain any approval, consent or waiver of,
or make any filing with, any person or entity (governmental or otherwise) that
has not been obtained or made except for the Consents (as defined below); and
(c) does not and will not result in a breach of, constitute
a default under, accelerate any obligation under, or give rise to a right of
termination of any indenture or loan or credit agreement or any other agreement,
contract, instrument, mortgage, lien, lease, permit, authorization, order, writ,
judgment, injunction, decree, determination or arbitration award to which
Sheridan or the Company is a party or by which the property of Sheridan or the
Company is bound or affected, or result in the creation or imposition of any
mortgage, pledge, lien, security interest or other charge or encumbrance on any
of the Company's assets or the Company Shares, except as specifically identified
on Schedule 2.4(iii)(c).
2.5 Real and Personal Property.
(a) Leased Real Property. All of the real property leased by
the Company
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<PAGE> 4
is identified on Schedule 2.5(a) (referred to as the "Leased Real Property").
(i) Status of Leases. All leases of Leased Real
Property are identified on Schedule 2.5(a), and true and complete copies of
those leases have been delivered to Buyer. Each of those leases has been duly
authorized and executed by the parties and is in full force and effect.
Sheridan or the Company is not in default under any of those leases, nor has
any event occurred which, with notice or the passage of time, or both, would
give rise to a default. To Sheridan and the Company's knowledge, the other
party to each of the leases is not in default under any of the leases and there
is no event which, with notice or the passage of time, or both, would give rise
to a default.
(ii) Consents. Except as described in Schedule
2.5(a)(ii), no consent or approval is required with respect to the transactions
contemplated by this Agreement from the other parties to any lease of Leased
Real Property, or from any regulatory authority, no filing with any regulatory
authority is required in connection therewith, and to the extent that any
consents, approvals or filings are required, Sheridan or the Company will
utilize their best efforts to assist Buyer in obtaining or completing them
before the Closing.
(iii) Condition of Leased Real Property. Except as
described in Schedule 2.5(a)(iii), there are no material defects in the physical
condition of any land, buildings or improvements constituting part of the Leased
Real Property, including without limitation, structural elements, mechanical
systems, parking and loading areas, and all those buildings and improvements are
in good operating condition and repair, have been well maintained and are free
from infestation by rodents or insects. Access to the Leased Real Property is by
a public way or public street. To the best of Sheridan and the Company's
knowledge, all water, sewer, gas, electric, telephone, drainage and other
utilities required by law or necessary for the current or planned operation of
the Leased Real Property have been connected under valid permits and pursuant to
valid easements where required, and are sufficient to service the Leased Real
Property and are in good operating condition.
(iv) Compliance with the Law. Sheridan and the Company
have not received any notice from any governmental authority of any violation of
any law, ordinance, regulation, license, permit or authorization issued with
respect to any Leased Real Property that has not been corrected and no violation
exists which could have an adverse affect on the operation or value of any
Leased Real Property. All improvements located on or constituting part of the
Leased Real Property and their use and operation by Sheridan or the Company were
and are now in compliance in all respects with all applicable laws, ordinances,
regulations, licenses, permits and authorizations except as described in
Schedule 2.5(a)(iv). No approval or consent to the transactions contemplated by
this Agreement is required of any governmental authority with jurisdiction over
any aspect of the Leased Real Property or its use or operations.
(b) Personal Property. A complete description of the machinery,
furniture, personalty and equipment of the Company is contained in Schedule
2.5(b). Except as specifically disclosed in that Schedule, the Company has good
title to all of its personal property. None of the
4
<PAGE> 5
Company's personal property or assets is subject to any mortgage, pledge, lien,
conditional sale agreement, security title, encumbrance or other charge except
as specifically disclosed in that Schedule. Schedule 2.5(b) reflects all
personal property of the Company. Except as otherwise specified in Schedule
2.5(b), all leasehold improvements, furnishings, machinery, personalty and
equipment of the Company are in good repair, have been well maintained, and
substantially comply with all applicable laws, ordinances and regulations, and
those furnishings, personalty, machinery and equipment are in good working
order.
2.6 Financial Statements.
(a) The Company has delivered to Buyer the following financial
statements, copies of which are attached as Schedule 2.6: balance sheet of the
Company dated as of December 31, 1996 (the "Base Balance Sheet") and statements
of income, retained earnings and cash flows for the period then ended, which
have been prepared by the Chief Financial Officer of Sheridan in accordance with
Generally Accepted Accounting Principles ("GAAP"), are complete and correct in
all material respects and present fairly in all material respects the financial
condition of the Company at the dates of those statements and the results of its
operations for the periods covered thereby. It is acknowledged that Sheridan has
prepared the Base Balance Sheet based upon audited financial statements prepared
by Arthur Andersen & Company, LLP for the period ended September 30, 1994 and
that Sheridan does not make any representations or warranties with respect to
any matter whatsoever not disclosed on such audited financial statements.
Notwithstanding the Company makes no representation, warranty or statement
whatsoever regarding the Base Balance Sheet regarding any matter occurring out
of or relating to any matter prior to January 1, 1996. (this sentence is the
"Caveat")
(b) Taking the Caveat into consideration, as of the date of the
Base Balance Sheet and for the relevant period, the Company had no liabilities
(which liabilities, when taken individually or in the aggregate, were material)
of any nature, whether accrued, absolute, contingent or otherwise, asserted or
unasserted, known or unknown (including without limitation, liabilities as
guarantor or otherwise with respect to obligations of others, liabilities for
taxes due or then accrued or to become due, or contingent or potential
liabilities relating to activities of the Company or the conduct of its
business, regardless of whether claims had been asserted as of that date),
except liabilities stated or adequately reserved against on the Base Balance
Sheet, or reflected in Schedules furnished to Buyer pursuant to this Agreement
as of the Closing Date.
(c) Taking the Caveat into consideration, as of the Closing Date
and for the Relevant Period, the Company has not had and will not have any
liabilities of any nature, whether accrued, absolute, contingent or otherwise,
asserted or unasserted, known or unknown (including without limitation,
liabilities as guarantor or otherwise with respect to obligations of others, or
liabilities for taxes due or then accrued or to become due or contingent or
potential liabilities relating to activities of the Company or the conduct of
its business, as the case may be, regardless of whether claims had been asserted
as of those dates), except liabilities: (i) stated or adequately reserved
against on the Base Balance Sheet or the notes to it; (ii) reflected in
Schedules furnished to Buyer under this Agreement on the Closing Date; or, (iii)
incurred after the date of the Base
5
<PAGE> 6
Balance Sheet in the ordinary course of business of the Company consistent with
the terms of this Agreement.
2.7 Taxes.
(a) Except for any matter whatsoever occurring, arising out of or
relating to (collectively a "Matter") the time period prior to January 1, 1996
(the "Prior Period"). The Company has paid or caused to be paid all federal,
state, local, foreign, and other taxes, including without limitation, income
taxes, estimated taxes, alternative minimum taxes, excise taxes, sales taxes,
use taxes, value-added taxes, gross receipts taxes, franchise taxes, capital
stock taxes, employment and payroll-related taxes, withholding taxes, stamp
taxes, transfer taxes, windfall profit taxes, environmental taxes and property
taxes, whether or not measured in whole or in part by net income, and all
deficiencies, or other addition to tax, interest, fines and penalties owed by it
due and payable through the Closing Date (collectively, "Taxes"), required to be
paid by it, arising out of, or incurred for the Relevant Period, whether
disputed or not. Sheridan agrees to satisfy any pay any all tax obligations
arising from the operation of the Company for the Relevant Period.
(b) Except for any Matter from the Prior Period, the Company has,
in accordance with applicable law filed all federal, state, local and foreign
tax returns required to be filed by it for the Relevant Period, and all these
returns correctly and accurately contain the amount of any Taxes relating to the
applicable period. A list of all federal, state, local and foreign income tax
returns filed with respect to the Company for taxable periods beginning February
8, 1996 and ended on or after December 31, 1996 is provided in Schedule 2.7(b),
and that Schedule indicates those returns that have been audited or currently
are the subject of an audit. For each taxable period of the Company from
February 8, 1996 and ended on or after December 31, 1996 the Company has
delivered to Buyer correct and complete copies of all federal, state, local and
foreign income tax returns, examination reports and statements of deficiencies
assessed against or agreed to by the Company. Sheridan acknowledges and agrees
to provide Buyer with copies of all tax returns filed on behalf of the Company
upon the filing of such returns.
(c) For the Relevant Period, neither the Internal Revenue Service
nor any other governmental authority is now asserting or, to the knowledge of
Sheridan or the Company, threatening to assert against the Company any
deficiency or claim for additional Taxes. Except for any Matter from the Prior
Period, no claim has ever been made by an authority in a jurisdiction where the
Company does not file reports and returns that the Company is or may be subject
to taxation by that jurisdiction for the Relevant Period. Except for any Matter
from the Prior Period, there are no security interests on any of the assets of
the Company that arose in connection with any failure (or alleged failure) to
pay any Taxes for the period. The Company has never entered into a closing
agreement pursuant to Section 7121 of the Internal Revenue Code of 1986, as
amended (the "Code").
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<PAGE> 7
(d) Except for any Matter from the Prior Period, except as
described in Schedule 2.7(d), for the Relevant Period: (i) no extension of time
with respect to any date on which a tax return is to be filed by the Company is
in force; (ii) no waiver or agreement by the Company is in force for the
extension of time for the assessment or payment of any Taxes; and, (iii) no
agreement with any taxing authority is in force for an extension of the statute
of limitations for an audit.
2.8 Collectability of Accounts Receivable. Taking into consideration
the Caveat, all of the accounts receivable of the Company shown or reflected on
the Base Balance Sheet or existing at the Execution Date (less the reserve for
bad debts set forth on the Base Balance Sheet) are or will be at the Closing
valid and enforceable claims. Except for any Matter from the Prior Period, the
Company has no accounts or loans receivable from any person, firm or corporation
which is affiliated with the Company or from any director, officer or employee
of the Company, except as disclosed on Schedule 2.8, and all accounts and loans
receivable from any of these persons, firms or corporations shall be paid in
cash prior to the Closing.
2.9 Absence of Certain Changes. Taking into consideration the Caveat,
except as disclosed in Schedule 2.9, since the date of the Base Balance Sheet
there has not been:
(a) Any change in the financial condition, properties, assets,
liabilities, business or operations of the Company, which change by itself or in
conjunction with all other changes, whether or not arising in the ordinary
course of business, has been materially adverse with respect to the Company;
(b) Any contingent liability incurred by the Company as
guarantor or otherwise with respect to the obligations of others or any
cancellation of any material debt or claim owing to, or waiver of any material
right of the Company;
(c) Any mortgage, encumbrance or lien placed on any of the
properties of the Company which remains in existence on the Closing Date;
(d) Any obligation or liability of any nature, whether
accrued, absolute, contingent or otherwise, asserted or unasserted, known or
unknown (including without limitation liabilities for Taxes due or to become due
or contingent or potential liabilities relating to services provided by the
Company or the conduct of the business of the Company since the date of the Base
Balance Sheet regardless of whether claims have been asserted), incurred by the
Company;
(e) Other than in the ordinary course, any purchase, sale or
other disposition, or any agreement or other arrangement for the purchase, sale
or other disposition, of any of the properties or assets of the Company or the
Company's business;
(f) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of the Company;
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(g) Any declaration, setting aside or payment of any dividend
by the Company, or the making of any other distribution in respect of the
capital stock of the Company, or any direct or indirect redemption, purchase or
other acquisition by the Company of its own capital stock;
(h) Any labor trouble or claim of unfair labor practices
involving the Company; any change in the compensation payable or to become
payable by the Company to any of its officers, employees, agents or independent
contractors other than normal merit increases in accordance with its usual
practices; or any bonus payment or arrangement made to or with any of its
officers, employees, agents or independent contractors;
(i) Any change with respect to the officers or management of
the Company;
(j) Any payment or discharge of a material lien or liability
of the Company which was not shown on the Base Balance Sheet or incurred in the
ordinary course of business thereafter;
(k) Any obligation or liability incurred by the Company to any
of its officers, directors, stockholders or employees, or any loans or advances
made by the Company to any of its officers, directors, stockholders or
employees, except normal compensation and expense allowances payable to officers
or employees;
(1) Any change in accounting methods or practices, credit
practices or collection policies used by the Company;
(m) Any other transaction entered into by the Company other
than transactions in the ordinary course of business; or
(n) Any agreement or understanding whether in writing or
otherwise, for the Company to take any of the actions specified in paragraphs
(a) through (m) above.
2.10 Ordinary Course. Since the date of the Base Balance Sheet, the
Company has conducted its business only in the ordinary course and consistently
with its prior practices.
2.11 Banking Relations. Not used in this agreement.
2.12 Intellectual Property.
(a) Except for any Matter from the Prior Time Period, except
as described in Schedule 2.12(a), the Company has exclusive ownership of, or
exclusive license to use, all patent, copyright, trade secret, trademark, or
other proprietary rights (collectively, "Intellectual Property") used or to be
used in the business of the Company as presently conducted or contemplated.
Except for any Matter from the Prior Time Period, all of the rights of the
Company in the Intellectual Property are freely transferable. Except for any
Matter from the Prior Period, there are no claims or demands of any other person
pertaining to any of the Intellectual
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Property and no proceedings have been instituted, or are pending or threatened,
which challenge the rights of the Company. Except for any Matter from the Prior
Period, the Company has the right to use, free and clear of claims or rights of
other persons, all patient lists, processes, computer software, systems, data
compilations, research results and other information required for or incident to
its services or its business as presently conducted or contemplated.
(b) Except for any Matter from the Prior Period, the present
and contemplated business, activities and products of the Company do not
infringe any Intellectual Property of any other person. Except for any Matter
from the Prior Period, no proceeding charging the Company with infringement of
any adversely held Intellectual Property has been filed or is threatened to be
filed. Except for any Matter from the Prior Period, the Company is not making
unauthorized use of any confidential information or trade secrets of any person,
including without limitation, any former employer of any past or present
employee of Company.
2.13 Contracts. Except for any Matter from the Prior Period, except for
contracts, commitments, plans, agreements and licenses described in Schedule
2.13 (true and complete copies of which have been delivered to Buyer), the
Company is not a party to or subject to:
(a) any plan or contract providing for bonuses, pensions,
options, stock purchases, deferred compensation, retirement payments, profit
sharing, collective bargaining or the like, or any contract or agreement with
any labor union;
(b) any employment contract or contract for services which
requires the payment of more than One Thousand Dollars ($1,000.00) annually or
which is not terminable within thirty (30) days by the Company without liability
for any penalty or severance payment;
(c) any contract or agreement for the purchase of any service,
commodity, material or equipment, except as otherwise disclosed in another
schedule to this Agreement;
(d) any other contracts or agreements creating any obligations
of the Company not specifically disclosed elsewhere under this Agreement;
(e) any contract or agreement which by its terms does not
terminate or is not terminable without penalty by the Company or its successors
within one year after the Execution Date;
(f) any contract containing covenants limiting the freedom of
the Company to compete in any line of business or with any person or entity;
(g) any contract or agreement for the purchase of any fixed
asset whether or not that purchase is in the ordinary course of business;
(h) any license agreement (as licensor or licensee);
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(i) any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money which
directly or indirectly may affect the Company;
(j) any contract or agreement with any officer, employee,
director or stockholder of the Company or with any persons or organizations
controlled by or affiliated with any of them; or
(k) any contracts, agreements and understandings
(collectively, the "Provider Agreements") with any party regarding the provision
of medical services to patients, including without limitation, any Provider
Agreements with HMOs, PPOS, third party payors, IPAS, PHOS, MSOS, employers,
labor unions, hospitals, clinics, ambulatory surgery centers, Medicare
intermediaries and Medicaid intermediaries.
The Company is not in default under any contracts,
commitments, plans, agreements or licenses described in that Schedule nor has
any knowledge of conditions or facts which with notice or passage of time, or
both, would constitute a default.
2.14 Litigation, Investigations, Orders and Decrees. Except for any
Matter from the Prior Period and except as listed on Schedule 2.14 or Schedule
2.15, for the Relevant Period there are no actions, suits, claims, governmental
investigations or arbitration proceedings pending or, to the best of Sheridan
and the Company's knowledge, threatened against or affecting the Company, the
Company's employed or engaged physicians, nurses, technicians and allied health
care professional (individually, a "Health Care Provider" and collectively, the
"Health Care Providers") , the Company or the business, assets, prospects or
financial condition of the Company, and to the best of Sheridan and the
Company's knowledge, there are no facts or circumstances which are reasonably
likely to create a basis for any of the foregoing. Except as listed on Schedule
2.14, for the Relevant Period there are no outstanding orders, decrees or
stipulations issued by any local, state or federal judicial authority in any
proceeding to which the Company are or were a party which may have an adverse
effect on any of them.
2.15 Medical Malpractice. Except for any Matter from the Prior Period
and except as set forth on Schedule 2.15, for the Relevant Period there are no
pending, and to the best of Sheridan and the Company's knowledge and belief,
there are no threatened litigation, arbitration, claim or governmental,
administrative or other proceedings (formal or informal), including, without
limitation, any malpractice claims, Health Care Financing Administration, Agency
for Health Care Administration, Office of the Inspector General, Department of
Insurance, Department of Professional Regulation or Board of Medicine
investigations, suits, notices of intent to institute, arbitration or
proceedings, either administrative or judicial, involving the Company, Drs.
Rosenbaum, Weitz, Ritter and DeSolo.
2.16 Insurance. The physical properties and assets of the Company are
insured to the extent disclosed in Schedule 2.16 (including all professional
liability insurance policies) and all those insurance policies and arrangements
are disclosed in that Schedule. Those insurance
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policies and arrangements are in full force and effect, all premiums with
respect to those policies and arrangements are currently paid, and the Company
is in compliance in all material respects with their terms. That insurance is
adequate and customary for the business engaged in by the Company and is
sufficient for compliance by the Company with all requirements of law and all
agreements and leases to which the Company is a party. Buyer agrees that this
insurance will no longer be in effect after the Closing Date and the Company
shall be responsible for providing all legally and contractually required
insurances at Closing and throughout the time periods legally and contractually
required; and will provide Sheridan evidence of that insurance from time to
time.
2.17 Equity Investments. Not used in this Agreement.
2.18 Powers of Attorney. The Company does not have any outstanding
powers of attorney.
2.19 Finder's Fee. Except as provided in Schedule 2.19, neither
Sheridan nor the Company has incurred or become liable for any broker's
commission or finder's fee relating to or in connection with the transactions
contemplated by this Agreement.
2.20 Licenses; Permits; Compliance. Sheridan, the Company, Drs. Weitz,
Ritter and DeSolo possess all licenses and other required governmental or
official approvals, permits, consents and authorizations (as listed on Schedule
2.20 attached to this Agreement), the failure of which to possess would,
individually or in the aggregate, have a material adverse effect on the
business, financial condition, operations, prospects or results of operations of
the Company. Except for any Matter from the Prior Period, for the Relevant
Period, the Company is in compliance with: (i) the terms of all contractual
obligations which directly or indirectly affect the Company; (ii) all laws,
ordinances, statutes and regulations where noncompliance could have an adverse
effect on the Company or its businesses, prospects or assets; and, (iii) all
judgments, orders, rulings or other decisions of any governmental or other
regulatory authority, court or arbitrator having jurisdiction over the Company.
Except for any Matter from the Prior Period, Sheridan and the Company have
furnished to Buyer true and correct copies of all correspondence from all
governmental authorities asserting that the Company is not, was not or may not
have been in compliance with all applicable laws, rules, regulations, judgments,
orders or decrees.
2.21 Corporate Records; Copies of Documents. Except for any Matter from
the Prior Period, for the Relevant Period, the corporate record books of the
Company accurately record all corporate action taken by the stockholders and
board of directors and committees. Except for any Matter from the Prior Period,
the copies of the corporate records of the Company, as made available to Buyer
for review, are true and complete copies of the originals of those documents.
Except for any Matter from the Prior Period, the Company has made available for
inspection and copying by Buyer and its counsel true and correct copies of all
documents referred to in this Section or in the Schedules delivered to Buyer
pursuant to this Agreement.
2.22 Transactions with Interested Persons. Except for any Matter from
the Prior Period,
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except as disclosed on Schedule 2.22, neither the Company nor any of its
"Affiliates"(such term shall hereinafter have the meaning set forth in Rule 405
promulgated by the SEC under the Securities Act of 1933, as amended), have any
direct or indirect material interest or familial or business relationship or the
Company's customers, patients, suppliers, vendors, payors or landlords.
2.23 Employee Benefit Programs. Except for any Matter from the Prior
Period, Schedule 2.23 to this Agreement sets forth a list of every employee
program that has been maintained by the Company during the Relevant Period.
2.24 Environmental Matters. Except for any Matter from the Prior
Period, except as provided in Schedule 2.24 and except for biohazardous
materials which have been disposed of in compliance with all applicable laws and
regulations, for the Relevant Period, the Company has not ever generated,
transported, used, stored, treated, disposed of, or managed any Hazardous Waste
(as defined below); and (i) no Hazardous Material (as defined below) has ever
been or is threatened to be spilled, released, or disposed of at any site
presently or formerly owned, operated, leased, or used by the Company, or has
come to be located in the soil or groundwater at any such site for which the
Company may have liability; (ii) no Hazardous Material has ever been transported
from any site presently or formerly owned, operated, leased, or used by the
Company for treatment, storage, or disposal at any-other place for which the
Company may have liability; (iii) the Company does not presently own, operate,
lease, or use, any site on which underground storage tanks are or were located
for which the Company may have liability; and, (iv) for the Relevant Period, no
lien has been imposed by any governmental agency or any property, facility,
machinery, or equipment owned, operated, leased, or used by the Company in
connection with the presence of any Hazardous Material.
Except for any Matter from the Prior Period, the Company does not have
any liability under, nor has the Company ever violated in any material respect,
any Environmental Law (as defined below); and: (i) the Company and any property
owned, operated, leased, or used by the Company and any facilities and
operations on that property, are presently in compliance in all respects with
all applicable Environmental Laws for which the Company may have liability; (ii)
the Company has never entered into or been subject to any judgment, consent,
decree, compliance order, or administrative order with respect to any
environmental or health and safety matter or received any request for
information, notice, demand letter, administrative inquiry, or formal or
informal compliant or claim with respect to any environmental or health and
safety matter or the enforcement of any Environmental Law for which the Company
may have liability; and, (iii) the Company has no reason to believe that any of
the items enumerated in clause (ii) of this paragraph will be forthcoming.
No site owned, operated, leased, or used by the Company contains any
asbestos or asbestos-containing material, any polychlorinated biphenyls (PCB) or
equipment containing PCB, or any urea formaldehyde foam insulation for which the
Company could be held liable.
Except for any Matter from the Prior Period, Sheridan and the Company
have provided to
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Buyer copies of all documents, records, and information available to Sheridan or
the Company concerning any environmental or health or safety matter relevant to
the Company, whether generated by others or by the Company, including, without
limitation, environmental audits, environmental risk assessments, site
assessments, documentation regarding off-site disposal of Hazardous Materials,
spill control is plans, and reports, correspondence, permits, licenses,
approvals, consents, and other authorizations related to environmental or health
or safety matters issued by any governmental agency.
For purposes of this Section 2.24: (i) "Hazardous Material" shall mean
and include any hazardous material, hazardous substance, petroleum product, oil,
toxic substance, pollutant, or contaminant, as defined or regulated under any
Environmental Law, or any other substance which may pose a threat to the
environmental or to human health or safety, including without limitation,
bio-hazardous materials; (ii) "Hazardous Waste" shall mean and include any
hazardous waste as defined or regulated under any Environmental Law; (iii)
"Environmental Law" shall mean any environmental or health and safety-related
law, regulation, rule, ordinance, or by-law at the foreign, federal, state, or
local level, whether existing as of the date of this Agreement, previously
enforced, or subsequently enacted for which the Company could be held liable.
2.25 List of Directors and Officers. Schedule 2.25 contains a true and
complete list of all current directors and officers of the Company. In addition,
Schedule 2.25 contains a list of all managers, employees and consultants of the
Company who, individually, have received or are scheduled to receive
compensation from the Company for the period ending December 31, 1996. In each
case that Schedule shall include the current job title and aggregate annual
compensation of each individual.
2.26 Disclosure; Accuracy of Documents and Exhibits. Taking the Caveat
into consideration and the fact that neither Sheridan nor the Company has made
or is making any representations, warranty or statement whatsoever regarding the
Prior Period, the representations, warranties and statements contained in this
Agreement and in the certificates, exhibits and schedules delivered by Sheridan
and the Company pursuant to this Agreement to Buyer do not contain any untrue
statement of a material fact, and, when taken together, do not omit to state a
material fact required to be stated therein or necessary in order to make those
representations, warranties or statements not misleading in light of the
circumstances under which they were made. Taking the Caveat into consideration
and the fact that neither Sheridan nor the Company has made or is making any
representations, warranty or statement whatsoever regarding the Prior Period,
there are no facts known to Sheridan or the Company which presently or may in
the future have a material adverse affect on the business, properties,
prospects, operations or condition of the Company which have not been
specifically disclosed in this Agreement or in a Schedule furnished with this
Agreement, other than general economic conditions affecting the health care
industry.
Taking the Caveat into consideration and the fact that neither Sheridan
nor the Company has made or is making any representations, warranty or statement
whatsoever regarding the Prior Period, all contracts, instruments, agreements
and other documents delivered by Sheridan or the
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Company to Buyer or its agents for Buyer's or its agents, review in connection
with this Agreement and the contemplated transactions, including articles of
incorporation, by-laws, corporate minutes, stock record books and tax returns,
are true, correct and complete copies of all those contracts, instruments,
agreements and other documents. Taking the Caveat into consideration and the
fact that neither Sheridan nor the Company has made or is making any
representations, warranty or statement whatsoever regarding the Prior Period,
all Exhibits and Schedules to this Agreement are true, correct and complete as
of the Closing.
2.27 Non-Foreign Status. The Company is not a "foreign person" within
the meaning of Section 1445 of the Code and Treasury Regulations Section
1.1445-2.
2.28 Employees; Labor Matters; Regulatory Compliance. The Company
employs a total of twenty four (24) full-time employees and one (1) part-time
employee and-generally enjoys good employer-employee relationships. Except for
any Matter from the Prior Period, during the Relevant Period, the Company is not
delinquent in payments to any of its employees for any wages, salaries,
commissions, bonuses or other direct compensation for any services performed for
it through the Closing Date or amounts required to be reimbursed to those
employees. Except for any Matter from the Prior Period, upon termination of the
employment of any of those employees, neither the Company, nor Buyer will by
reason of the transactions contemplated under this Agreement or anything done
prior to the Closing be liable to any of those employees for so-called
"severance pay" or any other payments, except as described in Schedule 2.28.
Except for any Matter from the Prior Period, the Company has no policy,
practice, plan or program of paying severance pay or any form of severance
compensation in connection with the termination of employment, except as
described in that Schedule. The Company is in compliance with all applicable
laws and regulations including, without limitation, labor laws, employment laws,
fair employment practice laws, occupational health and safety laws, disabilities
laws, sexual harassment laws, work place safety and health laws, terms and
conditions of employment and wage and hours laws and environmental laws. Except
for any Matter from the Prior Period, there are no charges of employment
discrimination or unfair labor practices, nor are there any strikes, slowdowns,
stoppages of work, or any other concerted interference with normal operations
which are existing, pending or threatened against or involving the Company.
Except for any Matter from the Prior Period, no question concerning labor
representation exists respecting any employees of the Company. Except for any
Matter from the Prior Period, there are no grievances, complaints or charges
that have been filed against the Company under any dispute resolution procedure
(including, but not limited to, any proceedings under any dispute resolution
procedure under any collective bargaining agreement) that might have an adverse
effect on the Company or the conduct of its business, and there is no
arbitration or similar proceeding pending and no claim therefor has been
asserted. Except for any Matter from the Prior Period, no collective bargaining
agreement is in effect or is currently being or is about to be negotiated by the
Company. Except for any Matter from the Prior Period, the Company has not
received any information indicating that any of its employment policies or
practices is currently being audited or investigated by any federal, state or
local government agency. For the Relevant Period, the Company is, and at all
times since, been in compliance with the requirements of the Immigration Reform
Control Act of 1986.
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2.29 Provider Agreements; Suppliers; Changes. Schedule 2.29 sets forth
any third party payor arrangement or agreement or Provider Agreement which
accounts for more than five percent (5%) of the collections of the Company for
the twelve months ended December 31, 1996, ("TPAs"). The relationships of the
Company with its TPAs are good commercial working relationships. None of the
TPAs has canceled, materially modified, or otherwise terminated its relationship
with the Company, or has during the last twelve months decreased materially its
use of the services of the Company, nor to the knowledge of Company, do any TPAs
have any plan or intention to do any of the foregoing. Further, the Company has
not received notice that any health plan, insurance company, employer or any
other TPA which has done business with the Company since January 1, 1996 intends
to terminate, limit or restrict its relationship with the Company.
2.30 Authorization from Others. Prior to the Closing Date, Sheridan and
the Company will cooperate in Buyer's obtaining all authorizations, consents and
permits of others required to permit the consummation by Sheridan and the
Company of the transactions contemplated by this Agreement and neither Sheridan
not the PA shall have any duty other than reasonable cooperation, to obtain the
consent of any landlord, lessor, third party payor, managed care company or any
other party with the Company requiring consent to the contemplated transaction
(collectively the "Consent"), all of whom shall be the responsibility of Buyer
to obtain.
2.31 Notice of Default. Promptly upon the occurrence of, or promptly
upon the Company becoming aware of the impending or threatened occurrence of,
any event which would cause or constitute a breach or default, or would have
caused or constituted a breach or default had that event occurred or been known
to Sheridan or the Company prior to the Execution Date, of any of the
representations, warranties of Sheridan and the Company contained in or referred
to in this Agreement or in any Schedule or Exhibit referred to in this
Agreement, Sheridan or the Company shall give detailed written notice to Buyer
and Sheridan and the Company shall use their best efforts to prevent or promptly
remedy the same.
2.32 Consummation of Agreement. Sheridan and the Company shall use
their best efforts to perform and fulfill all conditions and obligations on its
part to be performed and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement shall be fully carried out. To this
end, Sheridan and the Company will obtain prior to the Closing all necessary
authorizations or approvals of its Board of Directors.
2.33 Settlement of Rosenbaum Litigation. Sheridan represents and
warrants that it shall not enter into a Settlement Agreement with Dr. Jerry
Rosenbaum and Barbara Rosenbaum without such Settlement Agreement containing a
restrictive covenant restricting Dr. Rosenbaum from practicing rheumatology, as
that term is defined in the Section 4(a) of the Employment Agreement dated
February 8, 1996 by and between ARDS, P.A. and Jerry Rosenbaum, M.D., for a
minimum of two (2) years from the date of the Settlement Agreement and anywhere
within twenty-five (25) miles from any location where Dr. Rosenbaum provided
Physician Services as that term is defined in the Employment Agreement.
Moreover, the Settlement Agreement shall also restrict Dr. Rosenbaum from
providing Longevity anywhere for a period of one (1) year
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within fifteen (15) miles and two (2) years with ten (10) miles from any
location where Dr. Rosenbaum provided Physician Services as that term is defined
in the Employment Agreement. Longevity is defined as nutrition, exercise, sale
of hormones and cosmetics, sale of DHEA and the prescription and ale of
testosterone and estrogen.
In the event that Sheridan determines that it is necessary to reduce
the distance of the restrictive area in order to finalize a Settlement Agreement
between Sheridan and Jerry Rosenbaum, M.D., Buyer shall not unreasonably
withhold its consent to a minimum reduction of the distance of the restriction
so long as the reduction of the distance does not create an unreasonable
diminution of the value of the Company.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF CONTINUCARE AND SUBSIDIARY
3.1 Making of Representations and Warranties. As a material inducement
to the Company and the Stockholders to enter into this Agreement and consummate
the contemplated transactions, ContinuCare and Subsidiary each jointly and
severally, hereby make the representations and warranties to Sheridan and the
Company contained in this Section 3.
3.2 Organization of ContinuCare and Subsidiary. ContinuCare and
Subsidiary are each corporations duly organized, validly existing and in good
standing under the laws of Florida with full corporate power to own or lease
their respective properties and to conduct their respective businesses in the
manner and in the places where those properties are owned or leased or that
business is conducted by each of them.
3.3 Authority of ContinuCare and Subsidiary. ContinuCare and Subsidiary
each has the full right, authority and power to enter into this Agreement, and
each agreement, document and instrument to be executed and delivered by them
pursuant to this Agreement and to carry out the contemplated transactions. The
execution, delivery and performance by both ContinuCare and Subsidiary of this
Agreement, and each other agreement, document and instrument have been duly
authorized by all necessary corporate action of both ContinuCare and Subsidiary
and no other action on the part of either ContinuCare or Subsidiary is required
in connection therewith. This Agreement, and each other agreement, document and
instrument executed and delivered by both ContinuCare and Subsidiary pursuant to
this Agreement constitute, or when executed and delivered will constitute, valid
and binding obligations of both ContinuCare and Subsidiary enforceable in
accordance with their terms. The execution, delivery and performance by both
ContinuCare and Subsidiary of this Agreement, and each agreement, document and
instrument:
(a) does not and will not violate any provision of the
Articles of Incorporation or by-laws of either of them;
(b) does not and will not violate any laws of the United
States or of any state or any other jurisdiction applicable to either of them or
require either of them to obtain any approval, consent or waiver of, or make any
filing with, any person or entity (governmental or otherwise)
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which has not been obtained or made; and,
(c) does not and will not result in a breach of, constitute a default
under, accelerate any obligation under, or give rise to a right of termination
of any indenture, loan or credit agreement, or other agreement mortgage, lease,
permit, order, judgment or decree to which either of them is a party and which
is material to the business and financial condition of either ContinuCare or
Subsidiary and their parent and affiliated organizations on a consolidated
basis.
3.4 Litigation. There is no litigation pending or, to its knowledge,
threatened against either ContinuCare or Subsidiary which would prevent or
hinder the consummation of the transactions contemplated by this Agreement.
3.5 Finder's Fee. Buyer has not incurred or become liable for any
broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
SECTION 4
COVENANTS OF BUYER
4.1 Making of Covenants and Agreement. Buyer hereby makes the covenants
and agreements in this Section 4.
4.2 Confidentiality. Buyer jointly and severally agrees that, unless
and until the Closing has been consummated, Buyer and its officers, directors,
agents and representatives will hold in strict confidence, and will not use any
confidential or proprietary data or information obtained from Sheridan or the
Company with respect to the business or financial condition of the Sheridan or
the Company except for the purpose of evaluating, negotiating and completing the
transaction contemplated hereby. Information generally known in the industries
of Sheridan or the Company or which has been disclosed to Buyer by third parties
which have a right to do so shall not be deemed confidential or proprietary
information for purposes of this agreement. If the transaction contemplated by
this Agreement is not consummated, Buyer and their officers, directors, agents
and representatives will return to Sheridan or the Company (or certify that it
has destroyed) all copies of data and information, including but not limited to
financial information, Customer lists, business and corporate records,
worksheets, test reports, tax returns, lists, memoranda, and other documents
prepared by or made available to Buyer in connection with the transaction.
4.3 Consummation of Agreement. Buyer shall use its best efforts to
perform and fulfill all conditions and obligations on its part to be performed
and fulfilled under this agreement, to the end that the transactions
contemplated by this agreement shall be fully carried out. To this end, Buyer
will obtain prior to the Closing all necessary authorizations or approvals of
its Board of Directors lessors, landlords, managed care plans and third party
payors.
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SECTION 5
CONDITIONS FOR CLOSING AND
PROCEDURE FOR CLOSING
5.1 Conditions to the obligations of Buyer. The obligation of Buyer to
consummate this Agreement and the contemplated transactions are subject to the
fulfillment, prior to or at the Closing, of the following conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of Sheridan and the Company contained in this
Agreement shall be true and correct as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing; and Sheridan and the
Company shall, on or before the Closing, have performed all of their obligations
under this Agreement which by the terms are to be performed on or before the
Closing.
(b) No Material Change. There shall have been no material adverse
change in the financial condition, prospects, properties, assets, liabilities,
business or operations of the Company since the date of the Base Balance Sheet,
whether or not in the ordinary course of business.
(c) Approval of Buyer's Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement and the
contemplated transactions and all related legal matters contemplated this
Agreement shall have been approved by counsel for Buyer that counsel shall have
received on behalf of Buyer all other certificates, opinions, and documents in
form satisfactory to counsel, as Buyer may reasonably require from Sheridan or
the Company to evidence compliance with the terms and conditions of this
Agreement as of the Closing and the correctness as of the Closing of the
representations and warranties of Sheridan and the Company and the fulfillment
of their respective covenants.
(d) No Litigation. There shall have been no determination by Buyer,
acting in good faith, that the consummation of the transactions contemplated by
this Agreement has become inadvisable or impracticable by reason of the
institution or threat by any person or any federal, state or other governmental
authority of litigation, proceedings or other action against Buyer, Sheridan or
the Company or any material adverse change in the laws or regulations applicable
to the Company.
(e) Consents. Sheridan and the Company shall have made all filings
with and notifications of governmental authorities, regulatory agencies and
other entities required to be made by the Company in connection with the
execution and delivery of this Agreement, the performance of the contemplated
transactions and the continued operation of the business of the Company by Buyer
subsequent to the Closing; and the Company and Buyer shall have received all
authorizations, waivers, consents and permits, in form and substance reasonably
satisfactory to Buyer, from all third parties, including, without limitation,
applicable governmental authorities,
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regulatory agencies, lessors, lenders and contract parties, required to permit
the continuation of the business of the Company and the consummation of the
transactions contemplated by this Agreement, and to avoid a breach, default,
termination, acceleration or modification of any material indenture, loan or
credit agreement or any other material agreement, contract, instrument,
mortgage, lien, lease, permit, authorization, order, writ, judgment, injunction,
decree, determination or arbitration award as a result of, or in connection
with, the execution and performance of this Agreement.
(f) Acquisition Audits. Not used in this Agreement.
(g) Employee Programs. The Company shall have taken all steps necessary
under the relevant documents and applicable law to maintain the qualification of
each Employee Program identified on Schedule 2.23 notwithstanding the purchase
of the Company Shares by Buyer.
(h) Resignations. The Company shall have delivered to Buyer the
resignations of all of the Directors of the Company and of all officers of the
Company as may be requested by Buyer at least five days prior to the Closing,
those resignations to be effective at the Closing.
(i) Satisfaction of Obligations. Sheridan shall pay in full the
Company's outstanding debts and obligations which were incurred during the
Relevant Period and prior to the Closing Date and which were then due or payable
on or before the Closing Date, including without limitation, all pension plan
contribution, professional fees (accounting and legal fees), taxes and accounts
payable and the Company shall provide the Buyer with evidence of those
satisfactions. In addition, a proration shall be done for all accrued, but
unpaid expenses such as payroll, rent and vacation as of the Closing Date.
5.2 Conditions to Obligations of the Company and Sheridan. The
obligation of Sheridan and the Company to consummate this Agreement and the
contemplated transactions is subject to the fulfillment, prior to or at the
Closing, of the following conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of Buyer contained in Section 3 shall be true and
correct in all material respects as though made on and as of the Closing and
Buyer shall, on or before the Closing, have performed all of its obligations
under this Agreement which by the terms are to be performed on or before the
Closing.
(b) Approval of the Company's Counsel. All actions,
proceedings, instruments and documents required to carry out this Agreement and
the contemplated transactions and all related legal matters contemplated by this
agreement shall have been approved by Jay Martus, Esq., in his capacity as
General Counsel for Sheridan and the Company, and that counsel shall have
received on behalf of Sheridan and the Company all other certificates, opinions
and documents in form satisfactory to that counsel as Sheridan may reasonably
require from Buyer to evidence compliance with the terms and conditions of this
Agreement as of the Closing and the correctness as of the Closing of the
representations and warranties of Buyer and the
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fulfillment of its covenants.
(c) No Litigation. There shall have been no determination by
the Company or Sheridan, acting in good faith, that the consummation of the
transactions contemplated by this Agreement has become inadvisable or
impracticable by reason of the institution or threat by any person or any
federal, state or other governmental authority of material litigation,
proceedings or other action against Buyer, Sheridan or the Company.
Section 5.3 Procedure at the Closing. At the Closing, the parties agree
to take the following steps in the order listed below (provided, however, that
upon their completion all of these steps shall be deemed to have occurred
simultaneously):
(a) legal counsel for Sheridan and the Company shall deliver a
legal opinion to the Buyer in substantially the form of Exhibit C attached to
this Agreement;
(b) legal counsel for the Buyer shall deliver a legal opinion
to Sheridan in substantially the form of Exhibit D attached to this Agreement;
(c) Sheridan and the Company shall execute and deliver
resolutions adopted by the board of directors of Sheridan and the Company
approving the transactions contemplated by this Agreement, certified by the
corporate secretary of Sheridan and the Company;
(d) the Buyer shall execute and deliver resolutions adopted by
the board of directors of the Buyer approving the transactions contemplated by
this Agreement, certified by the corporate secretary of the Buyer;
(e) the Company shall deliver to the Buyer a Certificate of
Sheridan and the Company's President dated as of the Closing to the effect that
the statements contained in Sections 5.1(a) and (b) are true and correct;
(f) the Buyer shall deliver to the Company a Certificate of
the Buyer's President dated as of the Closing Date to the effect that the
statements contained in Section 5.2(a) are true and correct;
(g) the Buyer shall deliver the Closing Funds to Sheridan;
(h) Sheridan, Michael Weitz, M.D. and Jeffery Ritter, M.D.
shall exchange mutually acceptable General Releases;
(i) NOT USED IN THIS AGREEMENT
(j) Sheridan shall deliver stock certificates to the Buyer and
shall execute and deliver stock powers of attorney and any other documentation
necessary to effectuate a transfer of the Company Stock to the Buyer;
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<PAGE> 21
(k) the Buyer shall deliver to the Company a Certificate of
Good Standing issued by the Secretary of State of Florida;
(l) the Company shall deliver to the Buyer a Certificate of
Good Standing issued by the Secretary of State of Florida.
(m) an assignment by Sheridan to Buyer of its indemnification
rights pursuant to Section 10 of the Stock Purchase Agreement dated February 8,
1996 by and between Sheridan and the Company.
(n) the transfer of Sheridan's Post Office Box where it
receives payment of accounts receivable for the Company.
SECTION 6
RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING
6.1 Survival of Warranties. Each of the representations, warranties,
agreements, covenants and obligations in this Agreement or in any schedule,
exhibit, certificate or financial statement delivered by any party to the other
party incident to the contemplated transactions are material, shall be deemed to
have been relied upon by the other party and shall survive the Closing
regardless of any investigation and shall not merge in the performance of any
obligation by either party to this Agreement for a time period ending on April
10, 1999.
6.2 Access to Sheridan's Computer System. Sheridan shall provide a
representative of Buyer with access to its computer system, patient billing and
collection records, during normal business hours for a period not to exceed 180
days in order for Buyer to collect any and all accounts receivable existing as
of the Closing Date. In addition, Sheridan agrees to train Buyer's
representative on the use of Sheridan's billing systems.
SECTION 7
INDEMNIFICATION
7.1 Indemnification by the Stockholders. Sheridan agrees subsequent to
the Closing to indemnify and hold the Company, Buyer and its subsidiaries and
affiliates and persons serving as officers, directors, partners or employees of
the Company or Buyer (individually a "Buyer Indemnified Party" and collectively
the "Buyer Indemnified Parties") harmless from and against any damages,
liabilities, losses, taxes, fines, penalties, costs, and expenses (including,
without limitation, reasonable fees of counsel) of any kind or nature whatsoever
(whether or not arising out of third-party claims and including all amounts paid
in investigation, defense or settlement of the foregoing) which may be sustained
or suffered by any of them arising out of or based upon any of the following
matters:
(a) fraud, intentional misrepresentation or a deliberate or
wilful breach by
21
<PAGE> 22
Sheridan or the Company of any of their representations, warranties or covenants
under this Agreement or in any certificate, schedule or exhibit delivered
pursuant to this Agreement;
(b) any other breach of any representation, warranty or
covenant of Sheridan or the Company under this Agreement or in any certificate,
schedule or exhibit delivered pursuant to this Agreement, or by reason of any
claim, action or proceeding asserted or instituted growing out of any matter or
thing constituting a breach of those representations, warranties or covenants;
and
(c) except for any Matter form the Prior Period any liability
of the Company for Taxes arising from an event or transaction from February 8,
1996 to the Closing or as a result of the Closing which have not been paid or
provided for by the Company, including without limitation, any increase in Taxes
due to the unavailability of any loss or deduction claimed by the Company during
such period. Notwithstanding the provisions of Section 7.1, Sheridan has no
obligation whatsoever to indemnify any party for any Matter whatsoever from the
Prior Period or pertaining in any part to the Caveat.
7.2 Limitations on Indemnification by the Buyer. No
indemnification shall be payable pursuant to Subsection 7.1(b) above to any
Buyer Indemnified Party, unless the total of all claims for indemnification
pursuant to Section 7.1 shall exceed Fifty Thousand Dollars ($50,000.00) in the
aggregate, whereupon the full amount of claims in excess of $50,000.00 shall be
recoverable in accordance with the terms of this Agreement. Furthermore,
notwithstanding anything in this agreement no claim for indemnification.
7.3 Indemnification by Buyer. Buyer agrees to indemnify and hold
Sheridan harmless from and against any damages, liabilities, losses and expenses
(including, without limitation, reasonable fees of counsel) of any kind or
nature whatsoever (whether or not arising out of third-party claims and
including all amounts paid in investigation, defense or settlement of the
foregoing) which may be sustained or suffered by Sheridan out of or based upon
any breach of any representation, warranty or covenant made by Buyer in this
Agreement or in any certificate delivered by Buyer under this Agreement, or by
reason of any claim, action or proceeding asserted or instituted growing out of
any matter or thing constituting that breach.
7.4 Limitation on Indemnification by Buyer. No indemnification
pursuant to Section 7.3 shall be payable to Sheridan, unless the total of all
claims for indemnification pursuant to Section 7.3 shall exceed Fifty Thousand
Dollars ($50,000.00) in the aggregate, whereupon the full amount of all claims
shall be recoverable in accordance with the terms of this Agreement.
Furthermore, notwithstanding anything in this agreement no claim for
indemnification may be made after April 10, 1999.
7.5 Notice; Defense of Claims. An indemnified party may make
claims for indemnification under this Agreement by giving written notice of the
claim to the indemnifying party within the period in which indemnification
claims can be made under this Agreement. If indemnification is sought for a
claim or liability asserted by a third party, the indemnified party
22
<PAGE> 23
shall also give written notice of the claim to the indemnifying party promptly
after it receives notice of the claim or liability being asserted, but the
failure to do so shall not relieve the indemnifying party from any liability
except to the extent that it is prejudiced by the failure or delay in giving
that notice. The notice shall summarize the bases for the claim for
indemnification and any claim or liability being asserted by a third party.
Within twenty (20) days after receiving any notice, the indemnifying party shall
give written notice to the indemnified party stating whether it disputes the
claim for indemnification and whether it will defend against any third party
claim or liability at its own cost and expense. If the indemnifying party fails
to give notice that it disputes an indemnification claim within twenty (20) days
after receipt of notice of the claim, it shall be deemed to have accepted and
agreed to the claim, which shall become immediately due and payable. The
indemnifying party shall be entitled to direct the defense against a third party
claim or liability with counsel selected by it (subject to the consent of the
indemnified party, which consent shall not be unreasonably withheld) as long as
the indemnifying party is conducting a good faith and diligent defense. The
indemnified party shall at all times have the right to fully participate in the
defense of a third party claim or liability at its own expense directly or
through counsel; provided, however, that if the named parties to the action or
proceeding include both the indemnifying party and the indemnified party and the
indemnified party is advised that representation of both parties by the same
counsel would be inappropriate under applicable standards of professional
conduct, the indemnified party may engage separate counsel at the expense of the
indemnifying party. If no notice of intent to dispute and defend a third party
claim or liability is given by the indemnifying party, or if that good faith and
diligent defense is not being or ceases to be conducted by the indemnifying
party, the indemnified party shall have the right, at the expense of the
indemnifying party, to undertake the defense of that claim or liability (with
counsel selected by the indemnified party), and to compromise or settle it,
exercising reasonable business judgment. If the third party claim or liability
is one that by its nature cannot be defended solely by the indemnifying party,
then the indemnified party shall make available all information and assistance
as the indemnifying party may reasonably request and shall cooperate with the
indemnifying party in that defense, at the expense of the indemnifying party.
SECTION 8
MISCELLANEOUS
8.1 Fees and Expenses.
(a) Except as contained herein, each of the parties will bear
its own expenses in connection with the negotiation and the consummation of the
transactions contemplated by this Agreement, and no expenses of Sheridan or the
Company relating in any way to the purchase and sale of the Company Shares under
this Agreement and the contemplated transactions, including without limitation
legal, accounting or other professional expenses of Sheridan or the Company
shall be charged to or paid by the Company or Buyer.
(b) Sheridan will pay all costs incurred, whether at or
subsequent to the Closing, in connection with the transfer of the Company Shares
to Buyer as contemplated by this Agreement, including without limitation, all
transfer taxes and charges applicable to that transfer,
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<PAGE> 24
and all costs of obtaining permits, waivers, registrations or consents with
respect to any assets, rights or contracts of the Company.
8.2 Governing Law. This Agreement shall be construed under and governed
by the internal laws of the State of Florida without regard to its conflict of
laws provisions.
8.3 Notices. Any notice, request, demand or other communication
required or permitted under this Agreement shall be in writing and shall be
deemed to have been given if delivered or sent by facsimile transmission, upon
receipt, or if sent by registered or certified mail, upon the sooner of the date
on which receipt is acknowledged or the expiration of three days after deposit
in United States post office facilities properly addressed with postage prepaid.
All notices to a party will be sent to the addresses listed below or to any
other address or person as a party may designate by notice to each other party
under this Agreement:
if to Sheridan: Sheridan Healthcare, Inc.
4651 Sheridan Street, Suite 400
Hollywood, Florida 33021
Attention: Jay A. Martus, Esq. Vice President
and General Counsel
if to the Company: Rosenbaum, Weitz & Ritter, Inc.
4651 Sheridan Street, Suite 400
Hollywood, FL 33021
Attention: Jay A. Martus, Esq. Vice President
and General Counsel
if to the Buyer: ContinuCare Corporation
100 SE Second Street, 36th Floor
Miami, Florida 33131
Attention: Susan Tarbe, Esq. Executive V.P.
and General Counsel
with a copy to: Jay A. Ziskind, Esq.
Ziskind & Arvin, P.A.
444 Brickell Avenue
Suite 905
Miami, Florida 33131
Any notice given under this Agreement may be given on behalf of any party by his
counsel or other authorized representatives.
8.4 Entire Agreement. This Agreement, including the Schedules and
Exhibits referred to in this Agreement and the other writings specifically
identified in this Agreement or contemplated by this Agreement, is complete,
reflects the entire agreement of the parties with respect to its subject matter,
and supersedes all previous written or oral negotiations, commitments and
writings. No promises, representations, understandings, warranties and
24
<PAGE> 25
agreements have been made by any of the parties to this Agreement except as
referred to in this Agreement or in its Schedules and Exhibits or in other
writings; and all inducements to the making of this Agreement relied upon by
either party to this Agreement have been expressed in this Agreement or in the
Schedules or Exhibits or in other writings.
8.5 Assignability; Binding Effect. This Agreement shall only be
assignable by Buyer to a corporation or partnership controlling, controlled by
or under common control with Buyer upon written notice to Sheridan and the
Company. This Agreement may not be assigned by Sheridan or the Company without
the prior written consent of Buyer. This Agreement shall be binding upon and
enforceable by, and shall inure to the benefit of, the parties to this Agreement
and their respective successors and permitted assigns.
8.6 Captions and Gender. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision of this Agreement. The use in this Agreement of the masculine
pronoun in reference to a party to this Agreement shall be deemed to include the
feminine or neuter, as the context may require.
8.7 Execution in Counterparts. For the convenience of the parties and
to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
8.8 Amendments. This Agreement may not be amended or modified, nor may
compliance with any condition or covenant contained in this Agreement be waived,
except by a writing duly and validly executed by each party to this Agreement,
or in the case of a waiver, the party waiving compliance.
8.9 Severability. The invalidity or unenforceability of any one or more
of the words, phrases, sentences, clauses, or sections contained in this
Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement or any part of any provision, all of which are
inserted conditionally on their being valid in law, and in the event that any
one or more of the words, phrases, sentences, clauses or sections contained in
this Agreement shall be declared invalid or unenforceable, this Agreement shall
be construed as if the invalid or unenforceable word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted or shall be enforced as nearly as possible according to their
original terms and intent to eliminate any invalidity or unenforceability. If
any invalidity or . unenforceability is caused by the length of any period of
time or the size of any area contained in any part of this Agreement, the period
of time or area, or both, shall be considered to be reduced to a period or area
which would cure the invalidity or unenforceability.
8.10 Litigation; Prevailing Party. Except as otherwise required by
applicable law or as expressly provided in this Agreement, in the event of any
litigation, including appeals, with regard to this Agreement, the prevailing
party shall be entitled to recover from the non-prevailing party all reasonable
fees, costs, and expenses of counsel (at pre-trial, trial and appellate levels).
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8.11 Publicity. Subject to applicable law, all press releases and other
publicity, except as required by applicable law, concerning the transactions
contemplated by this Agreement will be subject to the prior review and approval
of Sheridan, the Company and the Buyer, provided that the approval shall not be
unreasonably withheld or delayed.
8.12 No Breach. The parties agree that the execution of this Agreement
shall not be deemed to be an assignment of any contract where consent to that
assignment is required by the terms of that contract provided, however the Buyer
shall obtain the Consents, and assume and discharge all obligations relating to
those consents.
8.13 Construction. This Agreement shall be construed without regard to
any presumption or other rule requiring construction against the party causing
this Agreement to be drafted, including any presumption of superior knowledge or
responsibility based upon a party's business or profession or any professional
training, experience, education or degrees of any member, agent, officer of
employee of any party. If any words in this Agreement have been stricken out or
otherwise eliminated (whether or not any other words or phrases have been added)
and the stricken words initialed by the party against whom the words are
construed, then this Agreement shall be construed as if the words so stricken
out or otherwise eliminated were never included in this Agreement and no
implication or inference shall be drawn from the fact that those words were
stricken out or otherwise eliminated.
8.14 Jurisdiction; Venue; Inconvenient Forum; Jury Trial. ANY SUIT,
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY
ANY COURT IN RESPECT TO THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS OF THE
STATE OF FLORIDA OR IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
FLORIDA IN BROWARD COUNTY, AND THE PARTIES ACCEPT THE EXCLUSIVE PERSONAL
JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING.
IN ADDITION, THE PARTIES KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR LATER HAVE
TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY ANY COURT BROUGHT IN THE
STATE OF FLORIDA, AND FURTHER, KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVE
ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF FLORIDA
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH PARTY WAIVES ALL RIGHTS TO ANY
TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS AGREEMENT.
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<PAGE> 27
IN WITNESS WHEREOF, the parties to this Agreement have caused
this Agreement to be duly executed as of the Closing Date.
BUYER:
CONTINUCARE CORPORATION,
a Florida corporation
By:
----------------------------
Its:
---------------------------
SUBSIDIARY:
CONTINUCARE PHYSICIAN
PRACTICE MANAGEMENT, INC.,
a Florida corporation
By:
----------------------------
Its:
---------------------------
SHERIDAN:
SHERIDAN HEALTHCARE, INC.,
a Florida corporation
By:
----------------------------
Its:
---------------------------
COMPANY:
ROSENBAUM, WEITZ & RITTER, INC.
a Florida corporation
By:
----------------------------
Its:
---------------------------
27
<PAGE> 1
Exhibit 10.3
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, entered into as of April 10, 1997
(the "Closing Date"), is by and among CONTINUCARE CORPORATION ("CONTINUCARE"), a
Florida corporation; and CONTINUCARE MEDICAL MANAGEMENT INC., a Florida
corporation ("SUBSIDIARY") (Continucare and Subsidiary are collectively referred
to as the "Buyer"); ARTHRITIS & RHEUMATIC DISEASE SPECIALTIES, INC., a Florida
corporation (the "Company"); and SHERIDAN HEALTHCARE INC. ("SHERIDAN"), a
Delaware corporation.
PRELIMINARY STATEMENTS
1. Sheridan owns of record and beneficially all of the issued and
outstanding capital stock of the Company, consisting of one hundred (100) shares
of the Company's Common Stock, $0.01 Company value per share (the shares are
referred to in this Agreement as the "Company Shares").
2. Sheridan desires to sell all of the Company Shares to Buyer, and
Buyer desires to acquire all of the Company Shares.
3. Subsidiary is a wholly owned subsidiary of Continucare.
NOW, THEREFORE, in order to consummate the purchase and sale of
the Company Shares and in consideration of the mutual agreements contained in
this Agreement, the Company agree as follows:
AGREEMENT
SECTION 1
SALE OF SHARES AND PURCHASE PRICE
1.1 Transfer of Company Shares. At the Closing, Sheridan shall
deliver or cause to be delivered to Subsidiary certificates representing all of
the Company Shares owned by Sheridan, as listed on Exhibit A. Those stock
certificates shall be duly endorsed in blank for transfer or shall be presented
with stock powers duly executed in blank, with signature guarantees and other
documents which may be reasonably required by Subsidiary to effect a valid
transfer of the Company Shares by Sheridan, free and clear of any and all liens,
encumbrances, charges or claims. Sheridan, by execution of this Agreement,
appoints Subsidiary as their attorney-in-fact to effectuate transfer of the
Company Shares at the Closing (as defined below).
1.2 Purchase Price and Payment. In consideration of the sale by
Sheridan to Subsidiary of the Company Shares, in reliance upon the
representations and warranties of Sheridan and the Company contained in this
Agreement and made at the Closing and subject to the satisfaction of all of the
conditions contained in this Agreement, Subsidiary agrees that
<PAGE> 2
simultaneously with the execution and delivery of this Agreement, it will
deliver to Sheridan the amount specified in Exhibit A-1 by bank cashier check or
by wire transfer of immediately available funds (the "Closing Funds").
1.3 Time and Place of Closing. The closing of the purchase and
sale provided for in this Agreement (the "Closing") shall be held at the offices
of Buyer at 100 SE Second Street, 36th Floor, Miami, Florida on April 10, 1997
or at another place or an earlier or later date or time as may be mutually
agreed upon by the Company.
1.4 Further Assurances. Sheridan and Buyer from time to time
after the Closing, shall execute and deliver further instruments of transfer and
assignment and take all other actions as may be reasonably required to more
effectively transfer and assign to, and vest in Subsidiary the Company Shares
and all rights to the Company Shares, and to fully implement the provisions of
this Agreement.
SECTION 2
REPRESENTATIONS AND WARRANTIES
OF THE Company AND SHERIDAN
2.1 Making of Representations and Warranties. As a material
inducement to Buyer to enter into this Agreement and consummate the contemplated
transactions, Sheridan and the Company make to Buyer the representations and
warranties contained in this Section 2.
2.2 Organization and Qualifications of the Company. The Company
is a for profit corporation duly organized, validly existing and in good
standing under the laws of Florida with full corporate power and authority to
own or lease its properties and to conduct its business in the manner and in the
places where those properties are owned or leased or that business is currently
conducted or proposed to be conducted. The copies of the Company's Articles of
Incorporation as amended to date and of the Company's by-laws, as amended to
date delivered to Buyer's counsel, are complete and correct, and no amendments
to them are pending. The Company is not in violation of any term of its Articles
of Incorporation or By-laws. Sheridan shall deliver to Subsidiary a certified
copy of the Company's Articles of Incorporation within five (5) business days
after the Closing.
2.3 Capital Stock of the Company; Beneficial Ownership.
(a) The authorized capital stock of the Company
consists of _________ (_______) shares of Common Stock, _____ Dollar ($______)
Company value per share, of which ____________ (______) shares are duly and
validly issued, outstanding, fully paid and non-assessable. There are no
outstanding options, warrants, rights, commitments, preemptive rights or
agreements of any kind for the issuance or sale of, or outstanding securities
convertible into, any additional shares of capital stock of any class of the
Company. None of the Company's capital stock issued to Buyer has been issued in
violation of any federal or state law. Except as
2
<PAGE> 3
described in Schedule 2.3(a), there are no voting trusts, voting agreements,
proxies or other agreements, instruments or undertakings with respect to the
voting of the Company Shares to which the Company or any of the Stockholders is
a party.
(b) Sheridan owns beneficially and of record the Company
Shares listed opposite its name on Exhibit A free and clear of any liens,
restrictions or encumbrances.
2.4 Authority of Sheridan and the Company. Sheridan and the Company
have the full right, authority and power to enter into this Agreement and each
agreement, document and instrument to be executed and delivered by Sheridan and
the Company pursuant to this Agreement and to carry out the contemplated
transactions. The execution, delivery and performance by Sheridan and the
Company of this Agreement and each other agreement, document and instrument have
been duly authorized by all necessary action of Sheridan and the Company and no
other action on the part of Sheridan or the Company is required. This Agreement
and each agreement, document and instrument executed and delivered by Sheridan
and the Company pursuant to this Agreement constitutes, or when executed and
delivered will constitute, valid and binding obligations of Sheridan and the
Company enforceable in accordance with their terms. The execution, delivery and
performance by Sheridan and the Company of this Agreement and each agreement,
document and instrument:
(a) does not and will not violate any provision of the
Articles of Incorporation or by-laws of Sheridan or the Company;
(b) does not and will not violate any laws of the United
States, or any state or other jurisdiction applicable to Sheridan or the Company
or require Sheridan or the Company to obtain any approval, consent or waiver of,
or make any filing with, any person or entity (governmental or otherwise) that
has not been obtained or made except for the Consents (as defined below); and
(c) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, or give rise to a right of
termination of any indenture or loan or credit agreement or any other agreement,
contract, instrument, mortgage, lien, lease, permit, authorization, order, writ,
judgment, injunction, decree, determination or arbitration award to which
Sheridan or the Company is a Party or by which the property of Sheridan or the
Company is bound or affected, or result in the creation or imposition of any
mortgage, pledge, lien, security interest or other charge or encumbrance on any
of the Company's assets or the Company Shares, except as specifically identified
on Schedule 2.4(iii)(c).
2.5 Real and Personal Property.
(a) Leased Real Property. The Company has no leased real
property (referred to as the "Leased Real Property").
(b) Personal Property. A complete description of the
machinery,
3
<PAGE> 4
furniture, personalty and equipment of the Company is contained in Schedule
2.5(b). Except as specifically disclosed in that Schedule, the Company has good
title to all of its personal property. None of the Company's personal property
or assets is subject to any mortgage, pledge, lien, conditional sale agreement,
security title, encumbrance or other charge except as specifically disclosed in
that Schedule. Schedule 2.5(b) reflects all personal property of the Company.
Except as otherwise specified in Schedule 2.5(b), all leasehold improvements,
furnishings, machinery, personalty and equipment of the Company are in good
repair, have been well maintained, and substantially comply with all applicable
laws, ordinances and regulations, and those furnishings, personalty, machinery
and equipment are in good working order.
2.6 Financial Statements.
(a) The Company has delivered to Buyer the following financial
statements, copies of which are attached as Schedule 2.6: balance sheet of the
Company dated as of December 31, 1996 (the "Base Balance Sheet") and statements
of income, retained earnings and cash flows for the period then ended, which
have been prepared by the Chief Financial Officer of Sheridan in accordance with
Generally Accepted Accounting Principles ("GAAP"), are complete and correct in
all material respects and present fairly in all material respects the financial
condition of the Company at the dates of those statements and the results of its
operations for the periods covered thereby. Notwithstanding anything in this
agreement, the Company makes no representation, warranty or statement whatsoever
regarding the Base Balance Sheet regarding any matter occurring, arising out of
or relating to any matter prior to January 1, 1996. (this sentence is the
"Caveat")
(b) Taking the Caveat into consideration, as of the date of the
Base Balance Sheet, the Company had no liabilities (which liabilities, when
taken individually or in the aggregate, were material) of any nature, whether
accrued, absolute, contingent or otherwise, asserted or unasserted, known or
unknown (including without limitation, liabilities as guarantor or otherwise
with respect to obligations of others, liabilities for taxes due or then
accrued or to become due, or contingent or potential liabilities relating to
activities of the Company or the conduct of its business, regardless of
whether claims had been asserted as of that date), except liabilities stated
or adequately reserved against on the Base Balance Sheet, or reflected in
Schedules furnished to Buyer pursuant to this Agreement as of the Closing Date.
(c) Taking the Caveat into consideration, as of the Closing Date,
the Company has not had and will not have any liabilities of any nature, whether
accrued, absolute, contingent or otherwise, asserted or unasserted, known or
unknown (including without limitation, liabilities as guarantor or otherwise
with respect to obligations of others, or liabilities for taxes due or then
accrued or to become due or contingent or potential liabilities relating to
activities of the Company or the conduct of its business, as the case may be,
regardless of whether claims had been asserted as of those dates), except
liabilities: (i) stated or adequately reserved against on the Base Balance Sheet
or the notes to it; (ii) reflected in Schedules furnished to Buyer under this
Agreement on the Closing Date; or, (iii) incurred after the date of the Base
Balance Sheet in the ordinary course of business of the Company consistent with
the terms of this Agreement.
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2.7 Taxes.
(a) Except for any matter whatsoever occurring, arising out of or
relating to (collectively a "Matter") the time period prior to January 1, 1996
(the "Prior Period"). The Company has paid or caused to be paid all federal,
state, local, foreign, and other taxes, including without limitation, income
taxes, estimated taxes, alternative minimum taxes, excise taxes, sales taxes,
use taxes, value-added taxes, gross receipts taxes, franchise taxes, capital
stock taxes, employment and payroll-related taxes, withholding taxes, stamp
taxes, transfer taxes, windfall profit taxes, environmental taxes and property
taxes, whether or not measured in whole or in Part by net income, and all
deficiencies, or other addition to tax, interest, fines and penalties owed by it
through the Closing Date (collectively, "Taxes"), required to be Paid by it,
whether disputed or not. Sheridan agrees to satisfy and pay any and all tax
obligations arising from the operation of the Company or the Relevant Period
(b) Except for any Matter from the Prior Period, the Company has,
in accordance with applicable law filed all federal, state, local and foreign
tax returns required to be filed by it and all these returns correctly and
accurately contain the amount of any Taxes relating to the applicable period. A
list of all federal, state, local and foreign income tax returns filed with
respect to the Company for taxable periods beginning January 1, 1996 and ended
on or after December 31, 1996 is provided in Schedule 2.7(b), and that Schedule
indicates those returns that have been audited or currently are the subject of
an audit. Sheridan acknowledges and agrees to provide Buyer with copies of all
tax returns filed on behalf of the Company upon the filing of such returns
(c) Neither the Internal Revenue Service nor any other
governmental authority is now asserting or, to the knowledge of Sheridan or the
Company, threatening to assert against the Company any deficiency or claim for
additional Taxes. Except for any Matter from the Prior Period, no claim has ever
been made by an authority in a jurisdiction where the Company does not file
reports and returns that the Company is or may be subject to taxation by that
jurisdiction for the period. Except for any Matter from the Prior Period, there
are no security interests on any of the assets of the Company that arose in
connection with any failure (or alleged failure) to pay any Taxes for the
period. The Company has never entered into a closing agreement pursuant to
Section 7121 of the Internal Revenue Code of 1986, as amended (the "Code").
(d) Except for any Matter from the Prior Period, except as
described in Schedule 2.7(d), (i) no extension of time with respect to any date
on which a tax return is to be filed by the Company is in force; (ii) no waiver
or agreement by the Company is in force for the extension of time for the
assessment or Payment of any Taxes; and, (iii) no agreement with any taxing
authority is in force for an extension of the statute of limitations for an
audit.
2.8 Collectability of Accounts Receivable. Taking into consideration
the Caveat, all of the accounts receivable of the Company shown or reflected on
the Base Balance Sheet or existing at the Closing Date (less the reserve for bad
debts set forth on the Base Balance Sheet) are or will be at the Closing valid
and enforceable claims. Except for any Matter from the Prior Period, the
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Company has no accounts or loans receivable from any person, firm or corporation
which is affiliated with the Company or from any director, officer or employee
of the Company, except as disclosed on Schedule 2.8, and all accounts and loans
receivable from any of these persons, firms or corporations shall be paid in
cash prior to the Closing.
2.9 Absence of Certain Changes. Taking into consideration the Caveat,
except as disclosed in Schedule 2.9, since the date of the Base Balance Sheet
there has not been:
(a) Any change in the financial condition, properties, assets,
liabilities, business or operations of the Company, which change by itself or in
conjunction with all other changes, whether or not arising in the ordinary
course of business, has been materially adverse with respect to the Company;
(b) Any contingent liability incurred by the Company as
guarantor or otherwise with respect to the obligations of others or any
cancellation of any material debt or claim owing to, or waiver of any material
right of the Company;
(c) Any mortgage, encumbrance or lien placed on any of the
properties of the Company which remains in existence on the Closing Date;
(d) Any obligation or liability of any nature, whether
accrued, absolute, contingent or otherwise, asserted or unasserted, known or
unknown (including without limitation liabilities for Taxes due or to become due
or contingent or potential liabilities relating to services provided by the
Company or the conduct of the business of the Company since the date of the Base
Balance Sheet regardless of whether claims have been asserted), incurred by the
Company;
(e) Other than in the ordinary course, any purchase, sale or
other disposition, or any agreement or other arrangement for the purchase, sale
or other disposition, of any of the properties or assets of the Company or the
Company's business;
(f) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, assets or business
of the Company;
(g) Any declaration, setting aside or Payment of any dividend
by the Company, or the making of any other distribution in respect of the
capital stock of the Company, or any direct or indirect redemption, purchase or
other acquisition by the Company of its own capital stock;
(h) Any labor trouble or claim of unfair labor practices
involving the Company; any change in the compensation payable or to become
Payable by the Company to any of its officers, employees, agents or independent
contractors other than normal merit increases in accordance with its usual
practices; or any bonus Payment or arrangement made to or with any of its
officers, employees, agents or independent contractors;
(i) Any change with respect to the officers or management of
the Company;
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(j) Any Payment or discharge of a material lien or liability
of the Company which was not shown on the Base Balance Sheet or incurred in the
ordinary course of business thereafter;
(k) Any obligation or liability incurred by the Company to any
of its officers, directors, stockholders or employees, or any loans or advances
made by the Company to any of its officers, directors, stockholders or
employees, except normal compensation and expense allowances Payable to officers
or employees;
(1) Any change in accounting methods or practices, credit
practices or collection policies used by the Company;
(m) Any other transaction entered into by the Company other
than transactions in the ordinary course of business; or
(n) Any agreement or understanding whether in writing or
otherwise, for the Company to take any of the actions specified in paragraphs
(a) through (m) above.
2.10 Ordinary Course. Since the date of the Base Balance Sheet, the
Company has conducted its business only in the ordinary course and consistently
with its prior practices.
2.11 Banking Relations. Not used in this agreement.
2.12 Intellectual Property.
(a) Except for any Matter from the Prior Time Period except as
described in Schedule 2.12(a), the Company has exclusive ownership of, or
exclusive license to use, all patent, copyright, trade secret, trademark, or
other proprietary rights (collectively, "Intellectual Property") used or to be
used in the business of the Company as presently conducted or contemplated.
Except for any Matter from the Prior Time Period, all of the rights of the
Company in the Intellectual Property are freely transferable. Except for any
Matter from the Prior Time Period, there are no claims or demands of any other
person pertaining to any of the Intellectual Property and no proceedings have
been instituted, or are pending or threatened, which challenge the rights of the
Company. Except for any Matter from the Prior Time Period, the Company has the
right to use, free and clear of claims or rights of other persons, all patient
lists, processes, computer software, systems, data compilations, research
results and other information required for or incident to its services or its
business as presently conducted or contemplated.
(b) Except for any Matter from the Prior Time Period, the
present and contemplated business, activities and products of the Company do not
infringe any Intellectual Property of any other person. Except for any Matter
from the Prior Time Period, no proceeding charging the Company with infringement
of any adversely held Intellectual Property has been filed or is threatened to
be filed. Except for any Matter from the Prior Time Period, the Company is not
making unauthorized use of any confidential information or trade secrets of any
person,
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including without limitation, any former employer of any past or present
employee of Company.
2.13 Contracts. Except for any Matter from the Prior Period, except for
contracts, commitments, plans, agreements and licenses described in Schedule
2.13 (true and complete copies of which have been delivered to Buyer), the
Company is not a Party to or subject to:
(a) any plan or contract providing for bonuses, pensions,
options, stock purchases, deferred compensation, retirement payments, profit
sharing, collective bargaining or the like, or any contract or agreement with
any labor union;
(b) any employment contract or contract for services which
requires the Payment of more than One Thousand Dollars ($1,000.00) annually or
which is not terminable within thirty (30) days by the Company without liability
for any penalty or severance Payment;
(c) any contract or agreement for the purchase of any service,
commodity, material or equipment, except as otherwise disclosed in another
schedule to this Agreement;
(d) any other contracts or agreements creating any obligations
of the Company not specifically disclosed elsewhere under this Agreement;
(e) any contract or agreement which by its terms does not
terminate or is not terminable without penalty by the Company or its successors
within one year after the Closing Date;
(f) any contract containing covenants limiting the freedom of
the Company to compete in any line of business or with any person or entity;
(g) any contract or agreement for the purchase of any fixed
asset whether or not that purchase is in the ordinary course of business;
(h) any license agreement (as licensor or licensee);
(i) any indenture, mortgage, promissory note, loan agreement,
guaranty or other agreement or commitment for the borrowing of money which
directly or indirectly may affect the Company;
(j) any contract or agreement with any officer, employee,
director or stockholder of the Company or with any persons or organizations
controlled by or affiliated with any of them; or
(k) any contracts, agreements and understandings
(collectively, the "Provider Agreements") with any Party regarding the provision
of medical services to patients, including without limitation, any Provider
Agreements with HMOs, PPOs, third Party payors, IPAs, PHOs, MSOs, employers,
labor unions, hospitals, clinics, ambulatory surgery centers, Medicare
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intermediaries and Medicaid intermediaries.
The Company is not in default under any contracts, commitments,
plans, agreements or licenses described in that Schedule nor has any knowledge
of conditions or facts which with notice or passage of time, or both,
would constitute a default.
2.14 Litigation, Investigations, Orders and Decrees. Except for any
Matter from the Prior Period and except as listed on Schedule 2.14 or Schedule
2.15, there are no actions, suits, claims, governmental investigations or
arbitration proceedings pending or, to the best of Sheridan and the Company's
knowledge, threatened against or affecting the Company, the Company's employed
or engaged physicians, nurses, technicians and allied health care professionals
(individually, a "Health Care Provider" and collectively, the "Health Care
Providers") , the Company or the business, assets, prospects or financial
condition of the Company, and to the best of Sheridan and the Company's
knowledge, there are no facts or circumstances which are reasonably likely to
create a basis for any of the foregoing. Except as listed on Schedule 2.14, for
the Relevant Period there are no outstanding orders, decrees or stipulations
issued by any local, state or federal judicial authority in any proceeding to
which the Company is or was a Party which may have an adverse effect on any of
them.
2.15 Medical Malpractice. Except for any Matter from the Prior Period
and except as set forth on Schedule 2.15, there are no pending, and to the best
of Sheridan and the Company's knowledge and belief, there are no threatened
litigation, arbitration, claim or governmental, administrative or other
proceedings (formal or informal), including, without limitation, any malpractice
claims, Health Care Financing Administration, Agency for Health Care
Administration, Office of the Inspector General, Department of Insurance,
Department of Professional Regulation or Board of Medicine investigations,
suits, notices of intent to institute, arbitration or proceedings, either
administrative or judicial, involving the Company or any physician employed by
the Company.
2.16 Insurance. The physical properties and assets of the Company are
insured to the extent disclosed in Schedule 2.16 (including all professional
liability insurance policies) and all those insurance policies and arrangements
are disclosed in that Schedule. Those insurance policies and arrangements are in
full force and effect, all premiums with respect to those policies and
arrangements are currently Paid, and the Company is in compliance in all
material respects with their terms. That insurance is adequate and customary for
the business engaged in by the Company and is sufficient for compliance by the
Company with all requirements of law and all agreements and leases to which the
Company is a Party. Buyer agrees that this insurance will no longer be in effect
after the Closing Date and the Company shall be responsible for providing all
legally and contractually required insurances at Closing and throughout the time
periods legally and contractually required; and will provide Sheridan evidence
of that insurance from time to time.
2.17 Equity Investments. Not used in this Agreement.
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2.18 Powers of Attorney. The Company does not have any outstanding
powers of attorney.
2.19 Finder's Fee. Except as provided in Schedule 2.19, neither
Sheridan nor the Company has incurred or become liable for any broker's
commission or finder's fee relating to or in connection with the transactions
contemplated by this Agreement.
2.20 Licenses; Permits; Compliance. Sheridan, the Company and all
physician employees of the Company, possess all licenses and other required
governmental or official approvals, permits, consents and authorizations (as
listed on Schedule 2.20 attached to this Agreement), the failure of which to
possess would, individually or in the aggregate, have a material adverse effect
on the business, financial condition, operations, prospects or results of
operations of the Company. Except for any Matter from the Prior Period the
Company is in compliance with: (i) the terms of all contractual obligations
which directly or indirectly affect the Company; (ii) all laws, ordinances,
statutes and regulations where noncompliance could have an adverse effect on the
Company or its businesses, prospects or assets; and, (iii) all judgments,
orders, rulings or other decisions of any governmental or other regulatory
authority, court or arbitrator having jurisdiction over the Company. Except for
any Matter from the Prior Period Sheridan and the Company have furnished to
Buyer true and correct copies of all correspondence from all governmental
authorities asserting that the Company is not, was not or may not have been in
compliance with all applicable laws, rules, regulations, judgments, orders or
decrees.
2.21 Corporate Records; Copies of Documents. Except for any Matter from
the Prior Period, the corporate record books of the Company accurately record
all corporate action taken by the stockholders and board of directors and
committees. Except for any Matter from the Prior Period, the copies of the
corporate records of the Company, as made available to Buyer for review, are
true and complete copies of the originals of those documents. Except for any
Matter from the Prior Period, the Company has made available for inspection and
copying by Buyer and its counsel true and correct copies of all documents
referred to in this Section or in the Schedules delivered to Buyer pursuant to
this Agreement.
2.22 Transactions with Interested Persons. Except for any Matter from
the Prior Period, except as disclosed on Schedule 2.22, neither the Company nor
any of its "Affiliates"(such term shall hereinafter have the meaning set forth
in Rule 405 promulgated by the SEC under the Securities Act of 1933, as
amended), have any direct or indirect material interest or familial or business
relationship or the Company's customers, Patients, suppliers, vendors, Payors or
landlords.
2.23 Employee Benefit Programs. Except for any Matter from the Prior
Period, Schedule 2.23 to this Agreement sets forth a list of every employee
program that has been maintained by the Company.
2.24 Environmental Matters. Except for any Matter from the Prior
Period, except as provided in Schedule 2.24 and except for biohazardous
materials which have been disposed of in
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compliance with all applicable laws and regulations, the Company has not ever
generated, transported, used, stored, treated, disposed of, or managed any
Hazardous Waste (as defined below); and (i) no Hazardous Material (as defined
below) has ever been or is threatened to be spilled, released, or disposed of at
any site presently or formerly owned, operated, leased, or used by the Company,
or has come to be located in the soil or groundwater at any such site for which
the Company may have liability; (ii) no Hazardous Material has ever been
transported from any site presently or formerly owned, operated, leased, or used
by the Company for treatment, storage, or disposal at any other place for which
the Company may have liability; (iii) the Company does not presently own,
operate, lease, or use, any site on which underground storage tanks are or were
located for which the Company may have liability; and, (iv) no lien has been
imposed by any governmental agency or any property, facility, machinery, or
equipment owned, operated, leased, or used by the Company in connection with the
presence of any Hazardous Material.
Except for any Matter from the Prior Period, the Company does not have
any liability under, nor has the Company ever violated in any material respect,
any Environmental Law (as defined below); and: (i) the Company and any property
owned, operated, leased, or used by the Company and any facilities and
operations on that property, are presently in compliance in all respects with
all applicable Environmental Laws for which the Company may have liability; (ii)
the Company has never entered into or been subject to any judgment, consent,
decree, compliance order, or administrative order with respect to any
environmental or health and safety matter or received any request for
information, notice, demand letter, administrative inquiry, or formal or
informal complaint or claim with respect to any environmental or health and
safety matter or the enforcement of any Environmental Law for which the Company
may have liability; and, (iii) the Company has no reason to believe that any of
the items enumerated in clause (ii) of this paragraph will be forthcoming.
No site owned, operated, leased, or used by the Company contains any
asbestos or asbestos-containing material, any polychlorinated biphenyls (PCB) or
equipment containing PCB, or any urea formaldehyde foam insulation for which the
Company could be held liable.
Except for any Matter from the Prior Period, Sheridan and the Company
have provided to Buyer copies of all documents, records, and information
available to Sheridan or the Company concerning any environmental or health or
safety matter relevant to the Company, whether generated by others or by the
Company, including, without limitation, environmental audits, environmental risk
assessments, site assessments, documentation regarding off-site disposal of
Hazardous Materials, spill control in plans, and reports, correspondence,
permits, licenses, approvals, consents, and other authorizations related to
environmental or health or safety matters issued by any governmental agency.
For purposes of this Section 2.24: (i) "Hazardous Material, shall mean
and include any hazardous material, hazardous substance, petroleum product, oil,
toxic substance, pollutant, or contaminant, as defined or regulated under any
Environmental Law, or any other substance which may pose a threat to the
environment or to human health or safety, including without limitation,
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bio-hazardous materials; (ii) "Hazardous Waste" shall mean and include any
hazardous waste as defined or regulated under any Environmental Law; (iii)
"Environmental Law" shall mean any environmental or health and safety-related
law, regulation, rule, ordinance, or by-law at the foreign, federal, state, or
local level, whether existing as of the date of this Agreement, previously
enforced, or subsequently enacted for which the Company could be held liable.
2.25 List of Directors and Officers. Schedule 2.25 contains a true and
complete list of all current directors and officers of the Company. In addition,
Schedule 2.25 contains a list of all managers, employees and consultants of the
Company who, individually, have received or are scheduled to receive
compensation from the Company for the period ending December 31, 1996. In each
case that Schedule shall include the current job title and aggregate annual
compensation of each individual.
2.26 Disclosure; Accuracy of Documents and Exhibits. Taking the Caveat
into consideration and the fact that neither Sheridan nor the Company has made
or is making any representations, warranty or statement whatsoever regarding the
Prior Period, the representations, warranties and statements contained in this
Agreement and in the certificates, exhibits and schedules delivered by Sheridan
and the Company pursuant to this Agreement to Buyer do not contain any untrue
statement of a material fact, and, when taken together, do not omit to state a
material fact required to be stated therein or necessary in order to make those
representations, warranties or statements not misleading in light of the
circumstances under which they were made. Taking the Caveat into consideration
and the fact that neither Sheridan nor the Company has made or is making any
representations, warranty or statement whatsoever regarding the Prior Period,
there are no facts known to Sheridan or the Company which presently or may in
the future have a material adverse affect on the business, properties,
prospects, operations or condition of the Company which have not been
specifically disclosed in this Agreement or in a Schedule furnished with this
Agreement, other than general economic conditions affecting the health care
industry.
Taking the Caveat into consideration and the fact that neither Sheridan
nor the Company has made or is making any representations, warranty or statement
whatsoever regarding the Prior Period, all contracts, instruments, agreements
and other documents delivered by Sheridan or the Company to Buyer or its agents
for Buyer's or its agents' review in connection with this Agreement and the
contemplated transactions, including articles of incorporation, by-laws,
corporate minutes, stock record books and tax returns, are true, correct and
complete copies of all those contracts, instruments, agreements and other
documents. Taking the Caveat into consideration and the fact that neither
Sheridan nor the Company has made or is making any representations, warranty or
statement whatsoever regarding the Prior Period, all Exhibits and Schedules to
this Agreement are true, correct and complete as of the Closing.
2.27 Non-Foreign Status. The Company is not a "foreign person" within
the meaning of Section 1445 of the Code and Treasury Regulations Section
1.1445-2.
2.28 Employees; Labor Matters; Regulatory Compliance. The Company
employs a total
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of __________________ (_____) full-time employees and generally enjoys good
employer-employee relationships. Except for any Matter from the Prior Period,
the Company is not delinquent in Payments to any of its employees for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed for it through the Closing Date or amounts required to be reimbursed
to those employees. Upon termination of the employment of any of those
employees, neither the Company, nor Buyer will by reason of the transactions
contemplated under this Agreement or anything done prior to the Closing be
liable to any of those employees for so-called "severance Pay" or any other
Payments, except as described in Schedule 2.28. Except for any matter from the
Prior Period, the Company has no policy, practice, plan or program of paying
severance pay or any form of severance compensation in connection with the
termination of employment, except as described in that Schedule. Except for any
matter from the Prior Period, the Company is in compliance with all applicable
laws and regulations including, without limitation, labor laws, employment laws,
fair employment practice laws, occupational health and safety laws, disabilities
laws, sexual harassment laws, work place safety and health laws, terms and
conditions of employment and wage and hours laws and environmental laws. Except
for any matter from the Prior Period, there are no charges of employment
discrimination or unfair labor practices, nor are there any strikes, slowdowns,
stoppages of work, or any other concerted interference with normal operations
which are existing, pending or threatened against or involving the Company.
Except for any matter from the Prior Period, no question concerning labor
representation exists respecting any employees of the Company. Except for any
matter from the Prior Period, there are no grievances, complaints or charges
that have been filed against the Company under any dispute resolution procedure
(including, but not limited to, any proceedings under any dispute resolution
procedure under any collective bargaining agreement) that might have an adverse
effect on the Company or the conduct of its business, and there is no
arbitration or similar proceeding pending and no claim therefor has been
asserted. Except for any matter from the Prior Period, no collective bargaining
agreement is in effect or is currently being or is about to be negotiated by the
Company. Except for any matter from the Prior Period, the Company has not
received any information indicating that any of its employment policies or
practices is currently being audited or investigated by any federal, state or
local government agency. For the Relevant Period, the Company is, and at all
times since, has been in compliance with the requirements of the Immigration
Reform Control Act of 1986.
2.29 Provider Agreements; Suppliers; Changes. Schedule 2.29 sets forth
any third Party payor arrangement or agreement or Provider Agreement which
accounts for more than five percent (5%) of the collections of the Company for
the twelve months ended December 31, 1996, ("TPAs"). The relationships of the
Company with its TPAs are good commercial working relationships. None of the
TPAS has canceled, materially modified, or otherwise terminated its relationship
with the Company, or has during the last twelve months decreased materially its
use of the services of the Company, nor to the knowledge of Company, do any TPAS
have any plan or intention to do any of the foregoing. Further, the Company has
not received notice that any health plan, insurance plan, employer or any other
TPA which has done business with the Company since January 1, 1996 intends to
terminate, limit or restrict its relationship with the Company.
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2.30 Authorization from Others. Prior to the Closing Date, Sheridan and
the Company will cooperate in Buyer's obtaining all authorizations, consents and
permits of others required to permit the consummation by Sheridan and the
Company of the transactions contemplated by this Agreement. Neither Sheridan nor
the Company shall have any duty other than reasonable cooperation to obtain the
consent of any landlord, lessor, third Party Payor or managed care company or
any other Party with the Company requiring consent to the contemplated
transaction (collectively the "Consent"); all of whom shall be the
responsibility of Buyer to obtain.
2.31 Notice of Default. Promptly upon the occurrence of, or promptly
upon the Company becoming aware of the impending or threatened occurrence of,
any event which would cause or constitute a breach or default, or would have
caused or constituted a breach or default had that event occurred or been known
to Sheridan or the Company prior to the Closing Date, of any of the
representations, warranties of Sheridan and the Company contained in or referred
to in this Agreement or in any Schedule or Exhibit referred to in this
Agreement, Sheridan or the Company shall give detailed written notice to Buyer
and Sheridan and the Company shall use their best efforts to prevent or promptly
remedy the same.
2.32 Consummation of Agreement. Sheridan and the Company shall use
their best efforts to perform and fulfill all conditions and obligations on its
Part to be performed and fulfilled under this Agreement, to the end that the
transactions contemplated by this Agreement shall be fully carried out. To this
end, Sheridan and the Company will obtain prior to the Closing all necessary
authorizations or approvals of its Board of Directors.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF CONTINUCARE AND SUBSIDIARY
3.1 Making of Representations and Warranties. As a material inducement
to the Company and the Stockholders to enter into this Agreement and consummate
the contemplated transactions, Continucare and Subsidiary each jointly and
severally, hereby make the representations and warranties to Sheridan and the
Company contained in this Section 3.
3.2 Organization of Continucare and Subsidiary. Continucare and
Subsidiary are each corporations duly organized, validly existing and in good
standing under the laws of Florida with full corporate power to own or lease
their respective properties and to conduct their respective businesses in the
manner and in the places where those properties are owned or leased or that
business is conducted by each of them.
3.3 Authority of Continucare and Subsidiary. Continucare and Subsidiary
each has the full right, authority and power to enter into this Agreement, and
each agreement, document and instrument to be executed and delivered by them
pursuant to this Agreement and to carry out the contemplated transactions. The
execution, delivery and performance by both Continucare and Subsidiary of this
Agreement, and each other agreement, document and instrument have been duly
authorized by all necessary corporate action of both Continucare and Subsidiary
and no other
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action on the Part of either Continucare or Subsidiary is required in connection
therewith. This Agreement, and each other agreement, document and instrument
executed and delivered by both Continucare and Subsidiary pursuant to this
Agreement constitute, or when executed and delivered will constitute, valid and
binding obligations of Buyer enforceable in accordance with their terms. The
execution, delivery and performance by both Continucare and Subsidiary of this
Agreement, and each agreement, document and instrument:
(a) does not and will not violate any provision of the
Articles of Incorporation or by-laws of either of them;
(b) does not and will not violate any laws of the United
States or of any state or any other jurisdiction applicable to either of them or
require either of them to obtain any approval, consent or waiver of, or make any
filing with, any person or entity (governmental or otherwise) which has not been
obtained or made; and,
(c) does not and will not result in a breach of, constitute a
default under, accelerate any obligation under, or give rise to a right of
termination of any indenture, loan or credit agreement, or other agreement
mortgage, lease, permit, order, judgment or decree to which either of them is a
Party and which is material to the business and financial condition of either
Continucare or Subsidiary and their parent and affiliated organizations on a
consolidated basis.
3.4 Litigation. There is no litigation pending or, to its
knowledge, threatened against either Continucare or Subsidiary which would
prevent or hinder the consummation of the transactions contemplated by this
Agreement.
3.5 Finder's Fee. Buyer has not incurred or become liable for
any broker's commission or finder's fee relating to or in connection with the
transactions contemplated by this Agreement.
SECTION 4
COVENANTS OF BUYER
4.1 Making of Covenants and Agreement. Buyer hereby makes the
covenants and agreements in this Section 4.
4.2 Confidentiality. Buyer jointly and severally agrees that,
unless and until the Closing has been consummated, Buyer and its officers,
directors, agents and representatives will hold in strict confidence, and will
not use any confidential or proprietary data or information obtained from
Sheridan or the Company with respect to the business or financial condition of
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<PAGE> 16
Sheridan or the Company except for the purpose of evaluating, negotiating and
completing the transaction contemplated hereby. Information generally known in
the industries of Sheridan or the Company or which has been disclosed to Buyer
by a third Company which has a right to do so shall not be deemed confidential
or proprietary information for purposes of this agreement. If the transaction
contemplated by this Agreement is not consummated, Buyer and its officers,
directors, agents and representatives will return to Sheridan or the Company (or
certify that it has destroyed) all copies of data and information, including but
not limited to financial information, Customer lists, business and corporate
records, worksheets, test reports, tax returns, lists, memoranda, and other
documents prepared by or made available to Buyer in connection with the
transaction.
4.3 Consummation of Agreement. Buyer shall use its best efforts
to perform and fulfill all conditions and obligations on its Part to be
performed and fulfilled under this agreement, to the end that the transactions
contemplated by this agreement shall be fully carried out. To this end, Buyer
will obtain prior to the Closing all necessary authorizations or approvals of
its Board of Directors, lessors, landlords, managed care plans and third Party
Payors.
SECTION 5
CONDITIONS FOR CLOSING AND
PROCEDURE FOR CLOSING
5.1 Conditions to the obligations of Buyer. The obligation of
Buyer to consummate this Agreement and the contemplated transactions are subject
to the fulfillment, prior to or at the Closing, of the following conditions
precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of Sheridan and the Company contained in this
Agreement shall be true and correct as of the date of this Agreement and as of
the Closing Date as though made on and as of the Closing; and Sheridan and the
Company shall, on or before the Closing, have performed all of their obligations
under this Agreement which by the terms are to be performed on or before the
Closing.
(b) No Material Change. There shall have been no material
adverse change in the financial condition, prospects, properties, assets,
liabilities, business or operations of the Company since the date of the Base
Balance Sheet, whether or not in the ordinary course of business.
(c) Approval of Buyer's Counsel. All actions, proceedings,
instruments and documents required to carry out this Agreement and the
contemplated transactions and all related legal matters contemplated this
Agreement shall have been approved by counsel for Buyer that counsel shall have
received on behalf of Buyer all other certificates, opinions, and documents in
form satisfactory to counsel, as Buyer may reasonably require from Sheridan or
the Company to evidence compliance with the terms and conditions of this
Agreement as of the Closing and the
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correctness as of the Closing of the representations and warranties of Sheridan
and the Company and the fulfillment of their respective covenants.
(d) No Litigation. There shall have been no determination by
Buyer, acting in good faith, that the consummation of the transactions
contemplated by this Agreement has become inadvisable or impracticable by reason
of the institution or threat by any person or any federal, state or other
governmental authority of litigation, proceedings or other action against Buyer,
Sheridan or the Company or any material adverse change in the laws or
regulations applicable to the Company.
(e) Consents. Sheridan and the Company shall have made all
filings with and notifications of governmental authorities, regulatory agencies
and other entities required to be made by the Company in connection with the
execution and delivery of this Agreement, the performance of the contemplated
transactions and the continued operation of the business of the Company by Buyer
subsequent to the Closing; and the Company and Buyer shall have received all
authorizations, waivers, consents and permits, in form and substance reasonably
satisfactory to Buyer, from all third Company, including, without limitation,
applicable governmental authorities, regulatory agencies, lessors, lenders and
contract Company, required to permit the continuation of the business of the
Company and the consummation of the transactions contemplated by this Agreement,
and to avoid a breach, default, termination, acceleration or modification of any
material indenture, loan or credit agreement or any other material agreement,
contract, instrument, mortgage, lien, lease, permit, authorization, order, writ,
judgment, injunction, decree, determination or arbitration award as a result of,
or in connection with, the execution and performance of this Agreement.
(f) Acquisition Audits. Not used in this Agreement.
(g) Employee Programs. The Company shall have taken all steps
necessary under the relevant documents and applicable law to maintain the
qualification of each Employee Program identified on Schedule 2.23
notwithstanding the purchase of the Company Shares by Buyer.
(h) Resignations. The Company shall have delivered to Buyer
the resignations of all of the Directors of the Company and of all officers of
the Company as may be requested by Buyer at least five days prior to the
Closing, those resignations to be effective at the Closing.
(i) Satisfaction of Obligations. Sheridan shall pay in full
the Company's outstanding debts and obligations which were incurred during the
Relevant Period and prior to the Closing Date and which were then due or payable
on or before the Closing Date, including without limitation, all pension plan
contribution, professional fees (accounting and legal fees), taxes and accounts
payable and the Company shall provide the Buyer with evidence of those
satisfactions. In addition, a proration shall be done for all accrued, but
unpaid expenses such as payroll, rent and vacation as of the Closing Date.
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5.2 Conditions to Obligations of the Company and Sheridan. The
obligation of Sheridan and the Company to consummate this Agreement and the
contemplated transactions is subject to the fulfillment, prior to or at the
Closing, of the following conditions precedent:
(a) Representations; Warranties; Covenants. Each of the
representations and warranties of Buyer contained in Section 3 shall be true and
correct in all material respects as though made on and as of the Closing and
Buyer shall, on or before the Closing, have performed all of its obligations
under this Agreement which by the terms are to be performed on or before the
Closing.
(b) Approval of the Company's Counsel. All actions,
proceedings, instruments and documents required to carry out this Agreement and
the contemplated transactions and all related legal matters contemplated by this
agreement shall have been approved by Jay Marcus, Esq., in his capacity as
General Counsel for Sheridan and the Company, and that counsel shall have
received on behalf of Sheridan and the Company all other certificates, opinions
and documents in form satisfactory to that counsel as Sheridan may reasonably
require from Buyer to evidence compliance with the terms and conditions of this
Agreement as of the Closing and the correctness as of the Closing of the
representations and warranties of Buyer and the fulfillment of its covenants.
(c) No Litigation. There shall have been no determination by
the Company or Sheridan, acting in good faith, that the consummation of the
transactions contemplated by this Agreement has become inadvisable or
impracticable by reason of the institution or threat by any person or any
federal, state or other governmental authority of material litigation,
proceedings or other action against Buyer, Sheridan or the Company.
Section 5.3 Procedure at the Closing. At the Closing, the Company
agree to take the following steps in the order listed below (provided, however,
that upon their completion all of these steps shall be deemed to have occurred
simultaneously):
(a) legal counsel for Sheridan and the Company shall deliver a
legal opinion to the Buyer in substantially the form of Exhibit C attached to
this Agreement;
(b) legal counsel for the Buyer shall deliver a legal opinion
to Sheridan in substantially the form of Exhibit D attached to this Agreement;
(c) Sheridan and the Company shall execute and deliver
resolutions adopted by the board of directors of Sheridan and the Company
approving the transactions contemplated by this Agreement, certified by the
corporate secretary of Sheridan and the Company;
(d) the Buyer shall execute and deliver resolutions adopted by
the board of directors of the Buyer approving the transactions contemplated by
this Agreement, certified by the corporate secretary of the Buyer;
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<PAGE> 19
(e) the Company shall deliver to the Buyer a Certificate of
Sheridan and the Company's President dated as of the Closing to the effect that
the statements contained in Sections 5.1(a) and (b) are true and correct;
(f) the Buyer shall deliver to the Company a Certificate of
the Buyer's President dated as of the Closing Date to the effect that the
statements contained in Section 5.2(a) are true and correct;
(g) the Buyer shall deliver the Closing Funds to Sheridan;
(h) Not used in this Agreement.
(i) NOT USED IN THIS AGREEMENT
(j) Sheridan shall deliver stock certificates to the Buyer and
shall execute and deliver stock powers of attorney and any other documentation
necessary to effectuate a transfer of the Company Stock to the Buyer;
(k) the Buyer shall deliver to the Company a Certificate of
Good Standing issued by the Secretary of State of Florida;
(l) the Company shall deliver to the Buyer a Certificate of
Good Standing issued by the Secretary of State of Florida.
(m) the transfer of Sheridan's Post Office Box where it
receives Payment of accounts receivable for the Company.
SECTION 6
RIGHTS AND OBLIGATIONS SUBSEQUENT TO CLOSING
6.1 Survival of Warranties. Each of the representations,
warranties, agreements, covenants and obligations in this Agreement or in any
schedule, exhibit, certificate or financial statement delivered by any Party to
the other Party incident to the contemplated transactions are material, shall be
deemed to have been relied upon by the other Party and shall survive the Closing
regardless of any investigation and shall not merge in the performance of any
obligation by either Party to this Agreement for a time period ending on April
10, 1999.
6.2 Access to Sheridan's Computer System. Sheridan shall provide a
representative of Buyer with access to its computer system, Patient billing and
collection records, during normal business hours for a period not to exceed 180
days in order for Buyer to collect any and all accounts receivable existing as
of the Closing Date. In addition, Sheridan agrees to train Buyer's
representative on the use of Sheridan's billing systems.
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SECTION 7
INDEMNIFICATION
7.1 Indemnification by the Stockholders. Sheridan agrees
subsequent to the Closing to indemnify and hold the Company, Buyer and its
subsidiaries and affiliates and persons serving as officers, directors,
partners or employees of the Company or Buyer (individually a "Buyer
Indemnified Party" and collectively the "Buyer Indemnified Company") harmless
from and against any damages, liabilities, losses, taxes, fines, penalties,
costs, and expenses (including, without limitation, reasonable fees of counsel)
of any kind or nature whatsoever (whether or not arising out of third-Party
claims and including all amounts Paid in investigation, defense or settlement
of the foregoing) which may be sustained or suffered by any of them arising
out of or based upon any of the following matters:
(a) fraud, intentional misrepresentation or a deliberate or
wilful breach by Sheridan or the Company of any of their representations,
warranties or covenants under this Agreement or in any certificate, schedule or
exhibit delivered pursuant to this Agreement;
(b) any other breach of any representation, warranty or
covenant of Sheridan or the Company under this Agreement or in any certificate,
schedule or exhibit delivered pursuant to this Agreement, or by reason of any
claim, action or proceeding asserted or instituted growing out of any matter or
thing constituting a breach of those representations, warranties or covenants;
and
(c) Except for any Matter from the Prior Period any liability
of the Company for Taxes arising from an event or transaction as a result of the
Closing which have not been Paid or provided for by the Company, including
without limitation, any increase in Taxes due to the unavailability of any loss
or deduction claimed by the Company. Notwithstanding the provisions of Section
7.1, Sheridan has no obligation whatsoever to indemnify any Party for any Matter
whatsoever from the Prior Period or pertaining in any Part to the Caveat.
7.2 Limitations on Indemnification by the Buyer. No
indemnification shall be Payable pursuant to Subsection 7.1(b) above to any
Buyer Indemnified Party, unless the total of all claims for indemnification
pursuant to Section 7.1 shall exceed Fifty Thousand Dollars ($50,000.00) in the
aggregate, whereupon the full amount of claims in excess of $50,000.00 shall be
recoverable in accordance with the terms of this Agreement. Furthermore,
notwithstanding anything in this agreement no claim for indemnification shall
survive the Closing Date only for a period of two (2) years.
7.3 Indemnification by Buyer. Buyer agrees to indemnify and hold
Sheridan harmless from and against any damages, liabilities, losses and expenses
(including, without limitation, reasonable fees of counsel) of any kind or
nature whatsoever (whether or not arising out of third-Party claims and
including all amounts Paid in investigation, defense or settlement of the
foregoing) which may be sustained or suffered by Sheridan out of or based upon
any breach of
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any representation, warranty or covenant made by Buyer in this Agreement or in
any certificate delivered by Buyer under this Agreement, or by reason of any
claim, action or proceeding asserted or instituted growing out of any matter or
thing constituting that breach.
7.4 Limitation on Indemnification by Buyer. No indemnification
pursuant to Section 7.3 shall be Payable to Sheridan, unless the total of all
claims for indemnification pursuant to Section 7.3 shall exceed Fifty Thousand
Dollars ($50,000.00) in the aggregate, whereupon the full amount of all claims
shall be recoverable in accordance with the terms of this Agreement.
Furthermore, notwithstanding anything in this Agreement, no claim for
indemnification may be made after April 10, 1999.
7.5 Notice; Defense of Claims. An indemnified Party may make
claims for indemnification under this Agreement by giving written notice of the
claim to the indemnifying Party within the period in which indemnification
claims can be made under this Agreement. If indemnification is sought for a
claim or liability asserted by a third Party, the indemnified Party shall also
give written notice of the claim to the indemnifying Party promptly after it
receives notice of the claim or liability being asserted, but the failure to do
so shall not relieve the indemnifying Party from any liability except to the
extent that it is prejudiced by the failure or delay in giving that notice. The
notice shall summarize the bases for the claim for indemnification and any claim
or liability being asserted by a third Party. Within twenty (20) days after
receiving any notice, the indemnifying Party shall give written notice to the
indemnified Party stating whether it disputes the claim for indemnification and
whether it will defend against any third Party claim or liability at its own
cost and expense. If the indemnifying Party fails to give notice that it
disputes an indemnification claim within twenty (20) days after receipt of
notice of the claim, it shall be deemed to have accepted and agreed to the
claim, which shall become immediately due and Payable. The indemnifying Party
shall be entitled to direct the defense against a third Party claim or liability
with counsel selected by it (subject to the consent of the indemnified Party,
which consent shall not be unreasonably withheld) as long as the indemnifying
Party is conducting a good faith and diligent defense. The indemnified Party
shall at all times have the right to fully participate in the defense of a third
Party claim or liability at its own expense directly or through counsel;
provided, however, that if the named Company to the action or proceeding include
both the indemnifying Party and the indemnified Party and the indemnified Party
is advised that representation of both Company by the same counsel would be
inappropriate under applicable standards of professional conduct, the
indemnified Party may engage separate counsel at the expense of the indemnifying
Party. If no notice of intent to dispute and defend a third Party claim or
liability is given by the indemnifying Party, or if that good faith and diligent
defense is not being or ceases to be conducted by the indemnifying Party, the
indemnified Party shall have the right, at the expense of the indemnifying
Party, to undertake the defense of that claim or liability (with counsel
selected by the indemnified Party), and to compromise or settle it, exercising
reasonable business judgment. If the third Party claim or liability is one that
by its nature cannot be defended solely by the indemnifying Party, then the
indemnified Party shall make available all information and assistance as the
indemnifying Party may reasonably request and shall cooperate with the
indemnifying Party in that defense, at the expense of the indemnifying Party.
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SECTION 8
MISCELLANEOUS
8.1 Fees and Expenses.
(a) Except as contained herein, each of the Company will bear
its own expenses in connection with the negotiation and the consummation of the
transactions contemplated by this Agreement, and no expenses of Sheridan or the
Company relating in any way to the purchase and sale of the Company Shares under
this Agreement and the contemplated transactions, including without limitation
legal, accounting or other professional expenses of Sheridan or the Company
shall be charged to or Paid by the Company or Buyer.
(b) Sheridan will Pay all costs incurred, whether at or
subsequent to the Closing, in connection with the transfer of the Company Shares
to Buyer as contemplated by this Agreement, including without limitation, all
transfer taxes and charges applicable to that transfer, and all costs of
obtaining permits, waivers, registrations or consents with respect to any
assets, rights or contracts of the Company.
8.2 Governing Law. This Agreement shall be construed under and
governed by the internal laws of the State of Florida without regard to its
conflict of laws provisions.
8.3 Notices. Any notice, request, demand or other communication
required or permitted under this Agreement shall be in writing and shall be
deemed to have been given if delivered or sent by facsimile transmission, upon
receipt, or if sent by registered or certified mail, upon the sooner of the date
on which receipt is acknowledged or the expiration of three days after deposit
in United States post office facilities properly addressed with postage prepaid.
All notices to a Party will be sent to the addresses listed below or to any
other address or person as a Party may designate by notice to each other Party
under this Agreement:
if to Sheridan: Sheridan Healthcare, Inc.
4651 Sheridan Street, Suite 400
Hollywood, Florida 33021
Attention: Jay A. Marcus, Esq. Vice President
and General Counsel
if to the Company: Arthritis & Rheumatic Disease
Specialties, Inc.
4651 Sheridan Street, Suite 400
Hollywood, FL 33021
Attention: Jay A. Martus, Esq. Vice President
and General Counsel
if to the Buyer: ContinuCare Corporation
100 SE Second Street, 36th Floor
Miami, Florida 33131
Attention: Susan Tarbe, Esq. Executive V.P.
and General Counsel
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with a copy to: Jay A. Ziskind, Esq.
Ziskind & Arvin, P.A.
444 Brickell Avenue
Suite 905
Miami, Florida 33131
Any notice given under this Agreement may be given on behalf of any Party by his
counsel or other authorized representatives.
8.4 Entire Agreement. This Agreement, including the Schedules and
Exhibits referred to in this Agreement and the other writings specifically
identified in this Agreement or contemplated by this Agreement, is complete,
reflects the entire agreement of the Company with respect to its subject matter,
and supersedes all previous written or oral negotiations, commitments and
writings. No promises, representations, understandings, warranties and
agreements have been made by any of the Company to this Agreement except as
referred to in this Agreement or in its Schedules and Exhibits or in other
writings; and all inducements to the making of this Agreement relied upon by
either Party to this Agreement have been expressed in this Agreement or in the
Schedules or Exhibits or in other writings.
8.5 Assignability; Binding Effect. This Agreement shall only be
assignable by Buyer to a corporation or partnership controlling, controlled by
or under common control with Buyer upon written notice to Sheridan and the
Company. This Agreement may not be assigned by Sheridan or the Company without
the prior written consent of Buyer. This Agreement shall be binding upon and
enforceable by, and shall inure to the benefit of, the Company to this Agreement
and their respective successors and permitted assigns.
8.6 Captions and Gender. The captions in this Agreement are for
convenience only and shall not affect the construction or interpretation of any
term or provision of this Agreement. The use in this Agreement of the masculine
pronoun in reference to a Party to this Agreement shall be deemed to include the
feminine or neuter, as the context may require.
8.7 Execution in Counterparts. For the convenience of the Company
and to facilitate execution, this Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same document.
8.8 Amendments. This Agreement may not be amended or modified,
nor may compliance with any condition or covenant contained in this Agreement be
waived, except by a writing duly and validly executed by each Party to this
Agreement, or in the case of a waiver, the Party waiving compliance.
8.9 Severability. The invalidity or unenforceability of any one
or more of the words, phrases, sentences, clauses, or sections contained in this
Agreement shall not affect the validity or enforceability of the remaining
provisions of this Agreement or any Part of any provision, all of which are
inserted conditionally on their being valid in law, and in the event that
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any one or more of the words, phrases, sentences, clauses or sections contained
in this Agreement shall be declared invalid or unenforceable, this Agreement
shall be construed as if the invalid or unenforceable word or words, phrase or
phrases, sentence or sentences, clause or clauses, or section or sections had
not been inserted or shall be enforced as nearly as possible according to their
original terms and intent to eliminate any invalidity or unenforceability. If
any invalidity or unenforceability is caused by the length of any period of
time or the size of any area contained in any Part of this Agreement, the period
of time or area, or both, shall be considered to be reduced to a period or area
which would cure the invalidity or unenforceability.
8.10 Litigation; Prevailing Party. Except as otherwise required
by applicable law or as expressly provided in this Agreement, in the event of
any litigation, including appeals, with regard to this Agreement, the prevailing
Party shall be entitled to recover from the non-prevailing Party all reasonable
fees, costs, and expenses of counsel (at pre-trial, trial and appellate levels).
8.11 Publicity. Subject to applicable law, all press releases and
other publicity, except as required by applicable law, concerning the
transactions contemplated by this Agreement will be subject to the prior review
and approval of Sheridan, the Company and the Buyer, provided that the approval
shall not be unreasonably withheld or delayed.
8.12 No Breach. The Company agrees that the execution of this
Agreement shall not be deemed to be an assignment of any contract where consent
to that assignment is required by the terms of that contract provided, however
the Buyer shall obtain the Consents, and assume and discharge all obligations
relating to those consents.
8.13 Construction. This Agreement shall be construed without
regard to any presumption or other rule requiring construction against the Party
causing this Agreement to be drafted, including any presumption of superior
knowledge or responsibility based upon a Party's business or profession or any
professional training, experience, education or degrees of any member, agent,
officer of employee of any Party. If any words in this Agreement have been
stricken out or otherwise eliminated (whether or not any other words or phrases
have been added) and the stricken words initialed by the Party against whom the
words are construed, then this Agreement shall be construed as if the words so
stricken out or otherwise eliminated were never included in this Agreement and
no implication or inference shall be drawn from the fact that those words were
stricken out or otherwise eliminated.
8.14 Jurisdiction; Venue; Inconvenient Forum; Jury Trial. ANY
SUIT, ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, OR ANY JUDGMENT
ENTERED BY ANY COURT IN RESPECT TO THIS AGREEMENT SHALL BE BROUGHT IN THE COURTS
OF THE STATE OF FLORIDA OR IN THE U.S. DISTRICT COURT FOR THE SOUTHERN DISTRICT
OF FLORIDA IN BROWARD COUNTY, AND THE Company ACCEPTS THE EXCLUSIVE PERSONAL
JURISDICTION OF THOSE COURTS FOR THE PURPOSE OF ANY SUIT, ACTION OR PROCEEDING.
IN ADDITION, THE Company KNOWINGLY, INTENTIONALLY AND IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THEY MAY NOW OR
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LATER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT, OR ANY JUDGMENT ENTERED BY ANY COURT BROUGHT
IN THE STATE OF FLORIDA, AND FURTHER, KNOWINGLY, INTENTIONALLY AND IRREVOCABLY
WAIVE ANY CLAIM THAT ANY SUIT, ACTION OR PROCEEDING BROUGHT IN THE STATE OF
FLORIDA HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH Party WAIVES ALL RIGHTS
TO ANY TRIAL BY JURY IN ALL LITIGATION RELATING TO OR ARISING OUT OF THIS
AGREEMENT.
IN WITNESS WHEREOF, the Company to this Agreement have caused
this Agreement to be duly executed as of the Closing Date.
BUYER:
CONTINUCARE CORPORATION,
a Florida corporation
By:
---------------------------
Its:
---------------------------
SUBSIDIARY:
CONTINUCARE PHYSICIAN PRACTICE
MANAGEMENT, INC., a Florida
corporation
By:
---------------------------
Its:
---------------------------
SHERIDAN:
SHERIDAN HEALTHCARE, INC.,
a Delaware corporation
By:
---------------------------
Its:
---------------------------
COMPANY:
ARTHRITIS & RHEUMATIC DISEASE
SPECIALTIES, INC.
a Florida corporation
By:
---------------------------
Its:
---------------------------
25
