Exhibit 10.2
AGREEMENT OF SALE
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AGREEMENT OF SALE, made November 2, 1998, among Rehabilitation Medicine
Practice of N.Y., P.L.L.C. with offices at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, to be known herein as "Purchaser", and Oak Tree Medical Practice, P.C.
("OTPC"), a New York professional corporation, located at ▇▇▇-▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, to be known herein as "Seller" and the
Purchaser and Seller to be known herein collectively as the "Parties";
W I T N E S S E T H:
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WHEREAS, Purchaser desires to acquire, and Seller desires to sell, the
assets of Seller's physical therapy facility located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, New, York, to be known herein as the "The Practice", with such Seller
corporation doing business as noted herein and hereinafter specified, upon the
terms and conditions hereinafter set forth, and
WHEREAS, ▇▇▇▇ ▇. ▇▇▇▇▇, M.D. and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, M.D. intend to form
an entity to which the rights and obligations of this Agreement will be assigned
without any personal liability to either ▇▇. ▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇,
WHEREAS, ▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D. is the Shareholder of OTPC,
NOW, THEREFORE, in consideration of the covenants and agreements
hereafter set forth, and other valuable consideration, the receipt and
sufficiency of which hereby is acknowledged, the Parties hereto agree as
follows:
1. Agreement To Sell. Seller agrees to sell, transfer and deliver to
Purchaser, and Purchaser agrees to purchase, upon the terms and conditions
hereinafter set forth and in accordance with all applicable law and regulations,
all of the assets of The Practice as noted herein.
2. The Assets of the Corporation. It is the understanding of the Parties
that Seller is the owner of the following assets of The Practice (the "Assets"):
(a) the patient files and related medical assets owned by the The
Practice and described in Exhibit A-1 hereto (the "General Assets");
Notwithstanding anything to the contrary contained herein, there shall
be excluded from the Assets, all cash on hand and in Seller's bank accounts and
accounts receivable.
3. Purchase Price. The purchase price to be paid by Purchaser is Twenty
five Thousand ($25,000) Dollars, to be paid in full, at closing.
4. The Closing. The "closing" means the settlement of the obligations of
Seller and Purchaser to each other under this agreement, including the payment
of the purchase price to Seller as provided in Article 3 hereof and the delivery
of the closing documents provided for in Article 5 hereof. The closing shall be
held at the offices of Purchaser and shall take place on or about November 1,
1998 (the "closing date"), or such other date as may be agreed upon by the
parties.
5. Closing Documents. At the closing Seller shall execute and deliver to
Purchaser:
(a) Certified copies of resolutions duly adopted by the Board of
Directors and Shareholder of Seller authorizing the sale of the Assets and the
performance by Seller of its obligations hereunder
(b) An opinion of Seller's counsel, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq. dated as of the
closing date, in form and substance satisfactory to Purchaser's counsel, stating
such counsel's opinion that: (i) Corporation is duly organized, validly existing
and in good standing under the laws of New York; (ii) Seller has full power and
authority, corporate and otherwise, to enter into this agreement and perform its
obligations hereunder; (iii) the execution and delivery of this agreement and
the performance by Seller of its obligations hereunder have been duly authorized
by the Board of Directors and Shareholder of Seller and no further action or
approval is required in order to constitute this agreement as the binding
obligation of Seller, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, moratorium, insolvency or other
laws affecting creditor's rights generally; (iv) the execution and delivery of
this agreement and the performance by Seller of its obligations hereunder do not
and will not violate any provision of the Certificate of Incorporation or Bylaws
of Seller; and (v) except as may be set forth in this agreement, such counsel is
not representing Seller in any suit, action or proceeding against them which, if
adversely determined, would prohibit the consummation of the transactions
contemplated by this agreement, nor is Counsel aware of any other suits,
actions, or proceedings which would affect this transaction.
(c) The Certificate of Incorporation, Bylaws, filing receipts and other
organizational documents of Seller; any bills, vouchers, and records showing the
ownership of the Assets used in the operations of Seller; and all other books of
account, records and contracts of Seller;
(d) Restrictive Covenant as enumerated in Article Ten (10),
(e) Statements executed by Seller, releasing and indemnifying Purchaser from any
and all obligations and liabilities of Seller, other than those specifically
assumed herein,
(f) A ▇▇▇▇ of Sale and such other instruments and information in form and
substance satisfactory to Purchaser's attorneys as may be necessary or proper to
transfer to Purchaser good and marketable title to all other ownership interests
in the Assets to be transferred under this agreement.
(h) An agreement providing for Purchaser to use Seller's computer system and
software for billing for a period of up to six months following the closing.
(i) Such other documents as may be reasonably required in accordance
with the intent and purpose of this agreement
Seller shall do all further acts and things as may be necessary, or reasonably
requested by Purchaser, to consummate the transactions contemplated by this
agreement, including the acquisition of and possession of the Assets. Seller
shall advise Purchaser of, and cause to be delivered to Purchaser, all
applicable trade secrets and proprietary information pertaining to the Assets of
the businesses.
At the closing Purchaser shall execute and deliver to Seller:
Reciprocal documentation and Counsel's opinion as listed in
subparagraphs (a)(b) and (c) above
Except as expressly provided herein, Purchaser shall not be obligated to
pay or perform any obligations or liabilities of Seller including without
limitation, obligations or liabilities of Seller to their creditors or any
legal, accounting, brokerage or finder's fees or any taxes or other expenses in
connection with this agreement or the consummation of the transactions
contemplated hereby.
6. Post Closing. The Parties shall account to each other for payments
received related to services provided at The Practice after the Closing Date.
All payments with respect to dates of service prior to the Closing Date shall
belong to Seller and all payments with respect to dates of service after the
Closing Date shall belong to Purchaser. Either party receiving a payment
belonging to the other shall promptly remit said payment to the other.
7. Representations And Warranties Of Seller. Seller represents and
warrants to Purchaser as follows:
(a) Seller is a professional corporation duly organized and validly
existing under the laws of New York, and is duly qualified to do business in New
York.. Seller has full power and authority to own its assets and to conduct its
business as now carried on, and to carry out and perform their undertakings and
obligations as provided herein. The execution and delivery by Seller of this
agreement and the consummation of the transactions contemplated herein have been
duly authorized by the Board of Directors and Shareholder of Seller and will not
conflict with or breach any provision of the Certificate of Incorporation or
Bylaws of Seller, and do not and will not conflict with or result in any breach
of any condition or provision of, or constitute a default under, or result in
the creation or imposition of any lien, charge or encumbrance upon the Assets by
reason of the provisions of any contract, lien, lease, agreement, instrument or
judgment to which Seller is a party, or which are or purport to be binding upon
Seller or which affect or purport to affect the Assets. No further action or
approval, corporate or otherwise, is required in order to constitute this
agreement the binding and enforceable obligation of Seller.
(b) No action, approval, consent or authorization, including without
limitation any action, approval, consent or authorization of any governmental or
quasi-governmental agency, commission, board, bureau or instrumentality, is
necessary for Seller to constitute this agreement the binding and enforceable
obligation of Sellers or to consummate the transactions contemplated hereby.
(c) Seller is the owner of and has good and marketable title to the
Assets, free of all liens, claims and encumbrances, except as set forth herein.
(d) There are no violations, potential claims of violations or questions
of irregularity regarding any law or governmental rule or regulation pending or,
to the best of Seller's knowledge, threatened against Seller, or the Assets.
Seller has obtained and operated pursuant to all required licenses and has
complied with all laws and governmental rules and regulations applicable to the
business or the Assets. Seller has duly notified all insurance carriers or third
party payers of any suspected or known claims or potential claims which may be
asserted against Seller, or the Assets.
(e) Notwithstanding ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D., potential claim there are no
judgments, liens, suits, actions or proceedings pending or, to the best of
Seller's knowledge, threatened against Seller, or the Assets. Neither Seller,
nor the Assets are a party to, subject to or bound by any agreement or any
judgment or decree of any court, governmental body or arbitrator which would
conflict with or be breached by the execution, delivery or performance of this
agreement, or which could prevent the carrying out of the transactions provided
for in this agreement, or which could prevent the use by Purchaser of the Assets
or adversely affect the conduct of the business by Purchaser.
(f) Seller has not entered into, and the Assets are not subject to, any:
(i) written contract or agreement for the employment of any employee of the
business; (ii) contract with any labor union or guild; (iii) pension,
profit-sharing, retirement, bonus, insurance, or similar plan with respect to
any employee of the business; or (iv) similar contract or agreement affecting or
relating to the Assets.
(g) At the time of the closing, there will be no (secured or unsecured)
creditors of Seller, except for general business creditors or equipment lessors
as may be disclosed herein. Except as set forth herein, Seller shall be liable
for all other obligations incurred by Seller prior to closing.
(h) Seller has filed each tax return, including without limitation all
excise, property, capital gain, sales, franchise and license tax returns,
required to be filed by Seller prior to the date hereof. Each such return is
true, complete and correct, and Seller has paid all taxes, assessments and
charges of any governmental authority required to be paid by them and has
created reserves or made provision for all taxes accrued but not yet payable. No
government entity is now asserting, or to Seller's knowledge threatening to
assert, any deficiency or assessment for additional taxes or any interest,
penalties or fines with respect to Seller. Seller shall hold Purchaser harmless
and indemnify Purchaser against all claims for taxes due from and owed by
Seller.
At the closing Seller shall execute and deliver an affidavit setting forth the
above representations.
8, Representations And Warranties Of Purchaser. Purchaser represents
and warrants to Seller as follows:
(a) Purchaser will be duly organized under the laws of New York, and
duly qualified to do business in New York as a physical therapy practice and as
a physical medicine practice. Purchaser will have full power and authority to
carry out and perform its undertakings and obligations as provided herein. The
execution and delivery by Purchaser of this agreement and the consummation of
the transactions contemplated herein will be duly authorized and will not
conflict with or breach any provision of the organizational documents of
Purchaser. No further action or approval, corporate or otherwise, will be
required in order to constitute this agreement the binding and enforceable
obligation of Purchaser.
(b) Subject to the formation of a duly constituted entity by Drs. Colon
and Kramberg (to which the rights and obligations of this Agreement are to be
assigned), no action, approval, consent or authorization, including without
limitation any action, approval, consent or authorization of any governmental or
quasi-governmental agency, commission, board, bureau or instrumentality, is
necessary for Purchaser to constitute this agreement the binding and enforceable
obligation of Purchaser or to consummate the transactions contemplated hereby.
(c) In the event that ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ remains in employment with the
Purchaser for a cumulative six (6) month period during the 12 months from
closing (minimum of three days a week) Purchaser agrees to pay ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ a
sum equal to Fifty Thousand ($50,000) Dollars immediately upon the realization
that the she has satisfied the terms of this paragraph. Purchaser shall execute
at Closing, an affidavit setting forth the above representations and warranties.
9. Conditions To Closing. The obligations of Purchaser to close
hereunder are subject to the following conditions:
(a) All of the terms, covenants and conditions to be complied with or
performed by Seller under this agreement on or before the closing shall have
been complied with or performed in all material respects.
(b) All representations or warranties of Seller herein are true in all
material respects as of the closing date.
(c) On the closing date, there shall be no liens or encumbrances against
the Assets, or equipment except as enumerated herein.
(d) The business of Seller has been conducted only in the ordinary
course of business. No contracts or purchase agreements/orders will have been
entered into, other than in the ordinary course of business. No expenditures or
credit purchases will be made by Seller other than in the ordinary course of
business.
(e) Seller, and its representatives and advisors will supply, upon
request by Purchaser and its representatives, such pertinent information as may
be required by Purchaser in order to conduct its due diligence survey of Seller.
It is agreed that any documents or information provided hereunder shall be kept
in full and complete confidence.
If this agreement is terminated as provided because any of the above
have not been satisfied, Seller shall return any payments made by Purchaser on
account of the purchase price, whereupon all rights of Purchaser hereunder and
to the businesses shall terminate, and neither Seller nor Purchaser shall have
any further claim against the other hereunder, except as otherwise provided
herein, if Seller wrongfully fails to close this transaction as contemplated
under this Agreement, Purchaser shall be entitled to specific performance as
well as damages.
10. Restrictive Covenant Not to Compete. For a period of two (2) years
from the date of closing, Seller and its affiliates are restricted from opening
NEW outpatient, exclusive physical therapy practices within 25 blocks of
Seller's Manhattan facility located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇.
Seller and their affiliates represents that, for a period of two years, they
will not solicit physical therapy referral business from any source which is
presently referring physical therapy patients to The Practice being purchased.
Seller shall execute at closing, such documents as will evidence this surviving
provision. To the extent a court of competent jurisdiction determines this
provision to be excessively restrictive, the Parties agree to abide by any
modification acceptable to such court.
11. Indemnification. Each party hereto shall indemnify and hold the
other parties harmless from and against all liability, claim, loss, damage or
expense, including reasonable attorneys' fees, incurred or required to be paid
by such other parties by reason of any breach or failure of observance or
performance of any representation, warranty, covenant or other provision
(including lists and Exhibits) of this agreement by such party. Seller will
indemnify and hold Purchaser harmless against all actions, suits, proceedings,
judgments, costs and expenses incurred by or levied against Purchaser, due to
Seller's prior acts, omissions, negligence or other wrongful conduct. Purchaser
shall indemnify and hold Seller harmless against all actions, suits,
proceedings, judgments, costs and expenses incurred by or levied against Seller,
due to Purchaser's acts, omissions, negligence or other wrongful conduct.
12. Risk Of Loss. The risk of loss to the Assets of the businesses sold
hereunder, until the closing, is assumed and shall be borne by Seller. Seller
agrees to keep all of its Assets fully insured against any loss, either by fire,
theft or casualty, to the date of closing. In the event that prior to closing,
such Assets are totally or substantially damaged by reason of fire, theft,
casualty, or breakage, Seller will repair or replace such Assets at or prior to
closing or Purchaser may, in its sole discretion, terminate the within
transaction. In such case, all money heretofore deposited with Seller or
Seller's representative shall be refunded to Purchaser and the parties shall be
released from any further liability hereunder. If the Purchaser elects to
consummate this transaction despite such loss or damage, it may do so by paying
the purchase price set forth herein, reduced by any insurance proceeds received
by Seller.
13. Brokerage. The parties hereto represent and warrant to each other
that they have not dealt with any broker or finder in connection with this
agreement other than ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. Seller shall be solely responsible for
and shall pay at closing all commission, fees, expenses and charges due or owing
to the Broker in connection with this transaction, pursuant to a separate
agreement between the Seller and Broker. Seller shall indemnify, defend and hold
Purchaser harmless from and against any loss, cost, expense, claim or liability
(including, without limitation, reasonable attorney's fees) arising under or in
respect of any claim by any person or entity for any commission, fee or expense
in respect of the transaction contemplated by this Agreement. The provisions of
this Article shall survive the expiration, termination or cancellation of this
Agreement.
14. Notices. All notices, demands and other communications required or
permitted to be given hereunder shall be in writing and shall be deemed to have
been properly given if delivered by hand or by registered or certified mail,
return receipt requested, with postage prepaid, to the parties' at the address
set forth below with copies to their attorneys. The respective attorneys for the
parties hereby are authorized to give any notice required or permitted hereunder
and to agree to adjournments of the closing.
15. Survival. The representations, warranties and covenants contained
herein or in any document, instrument, certificate or schedule furnished in
connection herewith shall survive the delivery of the ▇▇▇▇ of Sale and shall
continue in full force and effect after the closing, except to the extent waived
in writing.
Purchaser: ▇▇▇▇ ▇. ▇▇▇▇▇, M.D. Seller: Oak Tree Medical Practice, P.C.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D. 163-03 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇ Flushing, N.Y. 11365
Copy to: ▇▇▇▇▇▇▇▇, Polland_& Assoc., P.C. Copy to: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇ Briarcliff Manor, N.Y. 10510
Att: ▇▇▇▇▇▇ ▇▇▇▇
16. Further Assurances. In connection with the transactions contemplated
by this agreement, the parties agree to execute and deliver such further
instruments, and to take such further actions, as may be reasonably necessary or
proper to effectuate and carry out the transactions contemplated in this
agreement.
17. Changes Must Be In Writing. No delay or omission by either Seller or
Purchaser in exercising any right shall operate as a waiver of such right or any
other right. This agreement may not be altered, amended, changed, modified,
waived or terminated in any respect or particular unless the same shall be in
writing signed by the party to be bound. No waiver by any party of any breach
hereunder shall be deemed a waiver of any other or subsequent breach.
18. Captions And Exhibits. The captions in this agreement are for
convenience only and are not to be considered in construing this agreement. The
Exhibits annexed to this agreement are an integral part of this agreement, and
where there is any reference to this agreement it shall be deemed to include
said Exhibits.
19. Governing Law. This agreement shall be governed by and construed in
accordance with the laws of the State of New York.
20. Binding Effect. This agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
21. Cancellation. Purchaser reserves the right to cancel this Agreement,
without penalty, if any negative disclosure is discovered regarding Seller, or
the Assets, which would materially affect the value of Assets. Purchaser's right
to cancel under this provision shall be null and void subsequent to actual
closing.
22. Confidentiality. Each party acknowledges and agrees that any
information or data it has acquired from the other party, not otherwise properly
in the public domain, was received in confidence. Each party hereto agrees not
to divulge, communicate or disclose, except as may be required by law or for the
performance of this Agreement (including conducting due diligence or notifying a
party's lender), or use to the detriment of the disclosing party or for the
benefit of any other person or persons, except Purchaser and related entities or
misuse in any way, any confidential information of the disclosing party
concerning the subject matter hereof, including any trade or business secrets of
the disclosing party and any technical or business materials that are treated by
the disclosing party as confidential or proprietary, including without
limitation information (whether in written, oral or machine readable form)
concerning: general business operations, methods of doing business, servicing
clients, client relations, and of pricing and making charge for services and
products; financial information, including costs, profits and sales; marketing
strategies; business forms developed by or for the disclosing party; names of
suppliers, personnel, clients and potential clients; negotiations or other
business contacts with suppliers, personnel, clients and potential clients; form
and content of bids, proposals and contracts; the disclosing party's internal
reporting methods; technical and business data and documentation; software
programs, however embodied; diagnostic techniques; and information obtained by
or given to the disclosing party about or belonging to third parties.
IN WITNESS WHEREOF, the parties have executed this agreement the date
first above written.
SELLER:
Oak Tree Medical Practice, P.C.
ATTEST:
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
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By /s/ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
------------------------- Shareholder
▇▇▇▇ ▇▇▇▇▇▇
Secretary
By /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
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▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
President
PURCHASER:
Rehabilitation Medicine
Center of N.Y., P.L.L.C.
By /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D.,
Manager