ASSET CONTRIBUTION AND EXCHANGE AGREEMENT dated as of October 3, 2006 by and among NOVAMED ACQUISITION COMPANY, INC., SURGERY CENTER OF CLEVELAND, L.L.C. AND ITS MEMBERS
Exhibit
10.48
FINAL
EXECUTION COPY
dated
as of October 3, 2006
by
and among
NOVAMED
ACQUISITION COMPANY, INC.,
SURGERY
CENTER OF CLEVELAND, L.L.C.
AND
ITS
MEMBERS
i
THIS ASSET
CONTRIBUTION AND EXCHANGE AGREEMENT
(this
“Agreement”)
is
dated as of 12:01 a.m. on October 3, 2006 (the
“Closing
Date”),
by and
among NovaMed
Acquisition Company, Inc., a Delaware corporation (“NovaMed”),
Surgery Center of Cleveland, L.L.C. a Tennessee limited liability company
(“Seller”),
Cataract and Laser Center Partners, L.L.C., a Delaware limited liability company
d/b/a Ambulatory Surgical Centers of America, a member of Seller (“ASCOA”),
each
of the other members of Seller listed on Exhibit
1
(the
“Physician
Members,”
together
with ASCOA, the “Members”),
and
the Member’s Committee as the representative of the Members (the “Members’
Representative”).
Each
of the parties hereto shall sometimes be individually referred to herein as
a
“Party”
and
collectively as the “Parties.”
Certain
capitalized terms have the meanings provided in Section
13.1.
RECITALS
A. Seller
is
engaged in the business of owning and operating a licensed ambulatory surgery
center located
at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the
“Business”).
B. Pursuant
to the terms hereof, immediately prior to the Closing (as defined herein),
Seller will transfer substantially all of its assets (other than the Excluded
Assets), and certain liabilities described herein, to a newly formed Delaware
limited liability company, NovaMed Surgery Center of Cleveland, LLC (the
“New
LLC”)
in
exchange for one hundred percent (100%) of the membership interests in the
New
LLC (“New
LLC Interests”).
C. As
a
condition precedent to Closing, Seller and NovaMed must satisfy certain
conditions as described in this Agreement.
D. Contemporaneous
with the consummation of the transactions contemplated herein, Seller desires
to
transfer and sell to NovaMed, and NovaMed desires to acquire from Seller,
sixty-five percent (65%) of the total New LLC Interests in exchange for the
Purchase Price (as defined herein), all on the terms and conditions hereinafter
set forth.
NOW,
THEREFORE,
in
consideration of the mutual covenants of the parties as hereinafter set forth
and other good and valuable consideration, the receipt and sufficiency of which
hereby are acknowledged, the parties hereto hereby agree as
follows:
ARTICLE
I.
CONTRIBUTION
OF ASSETS
TO NEW LLC AND OTHER
PRE-CLOSING COVENANTS
1.1. Formation
of the New LLC.
Prior
to the Closing, the New LLC shall be formed pursuant to the Certificate of
Formation in the form attached hereto as Exhibit
1.1-1.
1.2. Transfer
of Assets to New LLC. Immediately
prior to the Closing, and as a condition precedent to the transactions
contemplated herein, Seller will transfer (the “New
LLC Asset Transfer”)
substantially all of its assets, free and clear of all Liens, in exchange for
one hundred percent (100%) of the New LLC Interests, which assets
(the “Assets”),
include, without limitation, the following (except
to the extent that any of Seller’s assets or properties are designated as
Excluded Assets in Section
1.3
below):
(a) all
inventory and supplies with respect to the Business (collectively, the
“Inventory”);
(b) all
of
the tangible and intangible personal property with respect to the Business,
including, without limitation, machinery, equipment, fixtures, phone numbers,
computer hardware and software that are listed on Schedule
1.2(b)
(collectively, the “Personal
Property”);
(c) all
prepaid expenses relating to the Business set forth on Schedule
1.2(c);
(d) all
contract rights with respect to the contracts, agreements, commitments or
relationships (oral or written) listed on Schedule
1.2(d),
purchase orders, licenses and leases pertaining to the Business, including
all
leasehold improvements, rights under any restrictive covenants accruing to
the
benefit of the Business and any provider agreements relating to the operation
of
the Business (collectively, the “Assumed
Contracts”);
(e) all
names
and tradenames of Seller and the Business, including, without limitation, “The
Surgery Center of Cleveland” and all derivations thereof;
(f) all
records, files and papers primarily pertaining to the Business, including
general business records, accounting records and Medical Records;
(g) all
Permits, licenses and certificates of need relating to the operation of the
Business,
to the
extent transferable or assignable;
(h) all
causes of action, claims, warranties, guarantees, refunds, rights of recovery
and set-off of every kind and character, relating primarily to the Assets or
the
Business;
(i) all
casualty insurance and warranty proceeds of Seller received after the Closing
Date with respect to damage to, nonconformance of, or loss to, the
Assets;
(j) to
the
extent permitted by law, all accounts receivable or other rights to receive
payment owing to Seller (the “Accounts
Receivable”);
(k) all
of
the goodwill of and associated with the Business;
(l) the
real
property, personal property, inventory, supplies, equipment and contracts owned
by any Member or any Affiliate of Seller or any Member primarily used in, or
necessary for, the continued conduct of the Business and set forth on
Schedule
1.2(l)
(collectively, the “Member
Assets”),
and
(m) all
fee
simple interests in the real property located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (the “25th
Street Real Property”).
1.3. Excluded
Assets.
Notwithstanding anything to the contrary contained herein, the Assets do not
include the following (collectively, the “Excluded
Assets”):
(a) Seller’s
and Members’ rights under this Agreement, including the consideration paid,
directly or indirectly, to Seller and Members pursuant to this
Agreement
and the
Transaction Documents;
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(b) the
tax
records relating to the Business;
(c) the
Employee Benefit Plans relating to the employees of the Business and any and
all
rights therein or in the assets thereof;
(d) all
Material Contracts other than the Assumed Contracts;
(e) all
cash-on-hand and cash equivalents as of the Closing Date; and
(f) all
personal effects of Seller, any Member
or their
respective Affiliates that are located at the location of the Business other
than the Member Assets as specified on Schedule
1.3(f).
1.4. Excluded
Liabilities.
Notwithstanding
anything to the contrary contained in this Agreement (except for the sentence
immediately following) or in any Transaction Document, the New LLC will not
assume, agree to pay, perform and discharge or in any way be responsible for
any
debts, liabilities or obligations of the Business, Seller, any Member or any
of
their respective Affiliates of any kind or nature whatsoever, arising out of,
relating to, resulting from, or caused by any transaction, status, event,
condition, occurrence or situation relating to, arising out of or in connection
with the Business, the Assets, Seller or any Member existing, arising or
occurring on or prior to the Closing Date, including, without limitation, any
liabilities or obligations relating to or arising from the Excluded Assets
(the
“Excluded
Liabilities”).
Notwithstanding the foregoing, Seller will contribute into New LLC, and New
LLC
will assume and thereafter pay and fully satisfy when due, all liabilities
and
obligations: (a) which
arose prior to the New LLC Asset Transfer and represent normal and current
trade
payables incurred by Seller in connection with the operation of the Business
in
the ordinary course of business, consistent with past custom and practice (to
the extent not delinquent), including without limitation those set forth on
Schedule
1.4(a)
(which
Schedule will be updated by Seller as of the Closing Date) (“Accounts
Payable”);
(b)
the other accrued liabilities of Seller which have been incurred in the ordinary
course of business, consistent with past custom and practice, and which are
specifically set forth on Schedule
1.4(b)
(which
Schedule will be updated by Seller as of the Closing Date) (“Accrued
Liabilities”);
and
(c) arising after the New LLC Asset Transfer under any Assumed Contract (except
for any liability or obligation arising from any breach or failure to perform
under any of the foregoing prior to the Closing Date) (all such liabilities
and
obligations to be so contributed into, and assumed by, the New LLC being
collectively referred to herein as the “New
LLC Assumed Liabilities”).
1.5. Satisfaction
of Liabilities.
Excluding the New LLC Assumed Liabilities, Seller agrees to satisfy all
liabilities of Seller relating to the Business prior to the New LLC Asset
Transfer, or as and when they become due and payable, which
liabilities include, without limitation:
(a) all
payroll expense and other compensation due and owing Seller’s employees for the
period preceding the Closing Date (excluding any paid time off or other
employee-related accruals to the extent they are included in Accrued
Liabilities); and
(b) all
Taxes, including payroll taxes, sales taxes and income taxes accrued up to
the
New LLC Asset Transfer (but excluding any such Taxes to the extent they are
included in Accrued Liabilities).
1.6. Prorations.
NovaMed
and Seller shall prorate, as of the Closing Date, all personal property lease
payments, real estate and personal property Taxes, utilities, charges,
assessments and other similar charges normally prorated upon the sale of assets
of a going concern. The proration shall be set forth on Schedule
1.6
attached
hereto.
3
ARTICLE
II.
SALE
OF NEW LLC INTERESTS BY SELLER TO NOVAMED
2.1. Sale
of Transferred LLC Interests.
In
reliance upon the representations and warranties of NovaMed contained herein,
and on the terms and conditions hereinafter set forth, Seller hereby agrees
to
sell, assign, transfer, convey and deliver to NovaMed at the Closing, free
and
clear of all Liens, all of Seller’s right, title and interest in and to
sixty-five percent (65%) of the issued and outstanding New LLC Interests (the
“Transferred
LLC Interests”).
In
reliance upon the representations and warranties of Seller and Members contained
herein, and on the terms and conditions hereinafter set forth, NovaMed hereby
agrees to purchase the Transferred LLC Interests from Seller for the Purchase
Price set forth in Article
III
hereof.
2.2. Ownership
of New LLC following Transactions.
As a
result of the sales described in this Article
II:
(a)
NovaMed shall own sixty-five percent (65%) percent of the New LLC Interests
in
the New LLC, and (b) the Members shall collectively and individually own
thirty-five percent (35%) the New LLC Interests in the New LLC.
ARTICLE
III.
CONSIDERATION
AND MANNER OF PAYMENT
3.1. Purchase
Price.
The
aggregate purchase price for the Transferred LLC Interests shall be Nine Million
Eight Hundred Fifty Thousand and No/100 Dollars ($9,850,000) (the “Purchase
Price”),
which
the parties agree is the fair market value of the Transferred LLC
Interests.
3.2. Payment
of Purchase Price.
At the
Closing,
NovaMed
will pay to Seller, by wire transfer of immediately available funds to Seller’s
designated bank account, an amount
equal to the Purchase Price, according to the wire transfer instructions
attached as Exhibit
3.2.
3.3. Purchase
Price Adjustment.
Medicare placed a brief hold on payments for all claims for the last nine days
of the Federal fiscal year, September 22, 2006 through September 30, 2006.
To
address this delay with respect to any potential impact on the Accounts
Receivable balance as of the Closing Date, the parties hereto have agreed to
increase the Purchase Price by $12,866.01, which amount shall be payable at
Closing in accordance with Section 3.2 hereof.
ARTICLE
IV.
SELLER’S
AND MEMBERS’ REPRESENTATIONS AND WARRANTIES
Each
of
Seller and Members hereby represents and warrants, jointly and severally, to
NovaMed as of the Closing Date, as follows:
4.1. Seller’s
Organization, Good Standing and Authority.
Seller
is a limited liability company duly organized, validly existing and in good
standing under Tennessee law.
Each of
Seller and Members has full capacity, power, right and authority to enter into
and perform their respective obligations under this Agreement and each of the
Transaction Documents to which each of them is a party. This Agreement and
each
of the Transaction Documents to which each is a party have been duly executed
and delivered by each of Seller and Members, and constitute the valid and
binding obligations of Seller and Members, enforceable against them in
accordance with their respective terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting the rights of creditors generally and the availability of
equitable remedies.
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4.2. Assets.
(a) Seller
has full power and authority to carry on the Business as it is currently being
conducted and to own and hold under lease the properties and assets it now
owns
or holds under lease. Upon
consummation of the transactions contemplated by this Agreement, Seller will
have conveyed, and the New LLC will be vested with, good and marketable title
to
the Assets, free and clear of all Liens.
(b) The
Assets constitute all tangible or intangible property, rights and assets
necessary for the conduct by Seller of the Business as conducted during the
twelve months preceding the Closing Date and, to the knowledge of Seller, there
is no need to acquire or replace any material assets. Seller
has good and marketable title to the Assets, in each case free and clear of
any
and all Liens. All
of
the Assets that are personal property are in operable condition and repair
and
none of such property requires any repair or replacement except for maintenance
in the ordinary course of business. Except as set forth on Schedule
4.2,
none of
the Assets are held under any lease, security agreement, conditional sales
contract or other title retention or security agreement or are located other
than at the Facility.
4.3. Approvals.
Except
as set forth on Schedule
4.3,
no
consent, approval, order or authorization of, or registration, declaration,
notice or filing with, any national, state, provincial, local, governmental,
judicial, public, quasi-public or administrative authority or agency
(collectively, “Governmental
Authority”)
or
other Person is required to be made or obtained by Seller or any Member in
connection with the authorization, execution, delivery and performance of this
Agreement or any other Transaction Document, or the consummation of the
transactions contemplated hereby and thereby.
4.4. New
LLC Interests.
Immediately
prior to the Closing Date, Seller will be the only record and beneficial holder
of the New LLC Interests. Seller
has good and marketable title to the New LLC Interests free and clear of all
Liens, and has full right, power and authority to transfer the Transferred
LLC
Interests to NovaMed as provided herein, without obtaining the consent of any
third party (other than the Manager of the New LLC (the “Manager”)
as set
forth in the terms and conditions of the Operating Agreement of the New LLC).
Upon consummation of the transactions contemplated herein, Seller shall have
transferred good and marketable title to the Transferred LLC Interests free
and
clear of all Liens.
4.5. Financial
Statements.
Seller
has previously delivered to NovaMed unaudited financial statements of Seller,
to
the extent available for the years ending
December
31, 2004 and December 31, 2005, consisting of a balance sheet,
statement of operations and members’ equity and statement of cash flows, and an
interim profit and loss statement for the seven-month period ending on July
31,
2006 (“Financial
Statements”).
Except as set forth on Schedule
4.5,
each of
the Financial Statements (a) has been prepared in accordance with the accrual
basis method of accounting
consistent with past practice; (b)
is
true, complete and correct in all material respects as of the respective dates
and for the respective periods above stated; (c) fairly presents in all material
respects the financial position of Seller at such dates and the results of
its
operations for the periods ended on such dates; and (d) is in all material
respects consistent with Seller’s books and records.
4.6. Absence
of Undisclosed Liabilities.
Neither
Seller nor any Member, with respect to the Business, has any material debts,
liabilities or obligations of any nature (whether accrued, absolute, contingent,
direct, indirect, perfected, inchoate, unliquidated or otherwise and whether
due
or to become
due) arising out of transactions entered into at or prior to the Closing, or
any
transaction, series of transactions, action or inaction at or prior to the
Closing, or any state of facts or condition
existing at or prior to the Closing (regardless of when such liability or
obligation is asserted),
including but not limited to guarantees, liabilities or obligations on account
of Taxes or governmental charges or penalties, interest or fines thereon or
in
respect thereof, except (a) to the extent specifically reflected and accrued
for
or reserved against in the Financial Statements, (b) for liabilities
specifically set forth on Schedule
4.6,
(c)
Taxes or governmental charges that are not yet due and payable, or (d) to the
extent specifically disclosed in any other representation and warranty in this
Agreement.
5
4.7. Inventory.
All of
the Inventory is usable in the ordinary course of business, is fully paid for
and not subject to consignment or conditional sales arrangements and no material
portion of the Inventory is obsolete or damaged.
4.8. Taxes.
Seller
has filed all Tax Returns on
a
timely basis that it is required to have filed in connection with the operation
of the Business, and such returns are true, complete and correct.
Seller
has paid
all Taxes, interest and penalties, if any, reflected on such Tax Returns or
otherwise due and payable by them. Any deficiencies proposed as a result of
any
governmental audits of such Tax Returns have been paid or settled, and there
are
no present disputes as to Taxes payable by Seller in connection with the
operation of the Business. With respect to all amounts of Taxes imposed on
Seller for which Seller is or could be liable, whether to taxing authorities
or
to other Persons, with respect to all
taxable periods or portions of periods ending on or before the Closing Date,
all
applicable Tax laws and agreements have been fully complied with, and all such
amounts required to be paid by Seller to taxing authorities or others on or
before the Closing Date have been paid, or have been fully accrued for or fully
reserved against on the Financial Statements. No issues have been raised and
are
currently pending by any taxing authority in connection with any of the Tax
Returns. No waivers of statutes of limitations with respect to the Tax Returns
have been given by or requested from Seller or any Member. There are no Liens
for Taxes (other than current taxes not yet due and payable) upon any asset
of
Seller. Seller is not a party to any Tax-indemnity, Tax-sharing, Tax allocation
or other similar agreements or arrangements.
4.9. Material
Contracts.
Schedule
4.9
is a
correct and complete list of every material written contract, agreement,
relationship or commitment, every material oral contract, commitment, agreement
or relationship, to which Seller is a party or by which Seller is bound and,
to
the extent directly related to the operation of the Business, to which any
Member is a party or by which any Member is bound (the “Material
Contracts”),
correct and complete copies of which previously have been furnished to NovaMed.
Except as set forth on Schedule
4.9,
neither
Seller nor any Member party to such a Material Contract is in default, and
no
event has occurred which with the giving of notice or the passage of time or
both would constitute a default by such party, under any Material
Contract,
and, to
the knowledge of Seller or any Member, no event has occurred which with the
giving of notice or the passage of time or both would constitute such a default
by any party to any such Material Contract.
4.10. Real
Property.
Seller
owns a fee simple interest in the ▇▇▇▇
▇▇▇▇▇▇
Real Property. At Closing, Seller will convey by Limited Warranty Deed, fee
simple absolute title, to the ▇▇▇▇ ▇▇▇▇▇▇ Real Property to the New LLC.
The
▇▇▇▇
▇▇▇▇▇▇ Real Property constitutes all real properties used or occupied by Seller
in connection with the Business or reflected on the Financial
Statements.
Upon
conveyance of the ▇▇▇▇ ▇▇▇▇▇▇ Real Property by Limited Warranty Deed to the
New
LLC, the New LLC will have a fee simple absolute ownership interest in the
▇▇▇▇
▇▇▇▇▇▇ Real Property, which interest will be free and clear of all Liens, except
for Liens created by the New LLC. With respect to the ▇▇▇▇ ▇▇▇▇▇▇ Real Property:
(a) Seller has all easements
and rights necessary to conduct the Business; (b) no portion thereof is subject
to any pending or, to the knowledge of Seller or any Member, threatened
condemnation proceeding or proceeding by any public
authority; (c) the buildings, plants and structures, including
heating, ventilation
and air conditioning systems, roof, foundation and floors, are in good operating
condition and repair, subject only to ordinary wear and tear, and are not in
violation of any zoning or other Rules; (d) there are no leases, subleases,
licenses, concessions or other agreements, written or oral, granting to any
party or parties the right of use or occupancy of any portion of the
▇▇▇▇
▇▇▇▇▇▇ Real Property; (e) the ▇▇▇▇ ▇▇▇▇▇▇ Real Property is supplied with
utilities and other services necessary for the operation of such
facilities;
(f) the ▇▇▇▇ ▇▇▇▇▇▇ Real Property is not located within a wetland or an
area of flood hazard for which flood insurance is required to be obtained;
and
(g) there are no public improvements which may result in special assessments
against or otherwise affect the ▇▇▇▇ ▇▇▇▇▇▇ Real Property.
6
4.11. Litigation.
Except
as set forth on Schedule
4.11,
there
are no claims, counterclaims, actions, suits, orders, proceedings (arbitration,
mediation or otherwise), investigations or judgments pending or, to the
knowledge of Seller or any Member, threatened against or involving Seller,
the
Business or, with respect to the Business, any Member, or relating to the
transactions contemplated hereby, at law or in equity, in any court or agency,
or before or by any Governmental Authority, nor, to the knowledge of Seller
or
any Member, are there any facts, conditions or incidents that could be
reasonably expected to result in any such actions, suits, proceedings
(arbitration, mediation or otherwise) or investigations.
Except
as set forth on Schedule
4.11,
neither
Seller nor any Member, as it relates to the operation of the Business, is
subject to any judgment, order or decree of any court or Governmental
Authority.
None of
the matters set forth on Schedule
4.11
could
reasonably be expected to result in any Material Adverse Effect on Seller,
the
Assets, the Business or the New LLC.
4.12. Compliance
with Applicable Laws; Permits.
(a) Each
of
Seller and Members, in their conduct of the Business through the Closing Date,
have complied, in all material respects, with applicable federal, state and
local laws and the rules and regulations of all Governmental Authorities having
authority over them, including, without limitation, agencies concerned with
occupational safety, environmental protection, employment practices, Fraud
and
Abuse Laws and Medicare and Medicaid requirements applicable to the Members’ and
Seller's
billing procedures (except denials of claims in the ordinary course of
business). Neither Seller nor any Member has received any written notice of
Seller’s violation of any such rules or regulations, whether corrected or not,
within the last five (5) years. Seller is eligible to receive payment under
Titles XVIII and XIX of the Social Security Act.
Seller
has timely and accurately filed all requisite reports, returns, data, and other
information required by all Governmental Authorities which control, directly
or
indirectly, any of Seller’s activities to be filed with any commissions, boards,
bureaus, and agencies and has paid all sums heretofore due with respect to
such
reports and returns. No such report or return has been inaccurate, incomplete
or
misleading in any material respect. Seller has timely and accurately filed
all
requisite reimbursable claims and other reports required to be filed or
otherwise filed in connection with all state and federal Medicare and Medicaid
programs in which Seller participates that are due on or before the Closing
Date
or which relate to services provided on or before the Closing Date, and Seller
has not billed for any services that were not provided at the Facility. There
are no claims scheduled, pending or, to Seller’s knowledge, threatened before
any authority, including without limitation any intermediary, carrier, or other
state or federal agency with respect to any Medicare and Medicaid claim filed
by
Seller on or before the Closing Date, or program compliance matters. Except
for
routinely scheduled Medicare and Medicaid program participation and
certification surveys pursuant to Seller’s Medicare and Medicaid contracts and
filings, no valid program integrity review related to Seller has been conducted
by any authority in connection with the Medicare or Medicaid programs and no
such review is scheduled, pending, or to Seller’s knowledge, threatened against
or affecting Seller, the Business, the Facility, or the consummation of the
transactions contemplated hereby.
(b) Seller
holds all the permits, licenses, certificates of need and other approvals of
Governmental Authorities necessary or material for the current conduct,
ownership, use, occupancy and operation of the Business and the ▇▇▇▇
▇▇▇▇▇▇
Real Property, including, without limitation, those identified on Schedule
4.12(b)
(“Permits”).
Seller is in compliance in all material respects with such Permits, all of
which
are in full force and effect, and Seller has not received any written notices
to
the contrary. All of the Permits are in good standing, and to Seller’s
knowledge, no suspension, cancellation or adverse action is threatened against
the Permits, and there is no reasonable basis for believing that any Permits
will not be renewed upon expiration.
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(c) Seller
and Members are not in violation of any applicable fraud and abuse laws
including, without limitation, 18 U.S.C. §201 (bribery of public officials); 18
U.S.C. §286 (conspiracy to defraud government with respect to claims); 18 U.S.C.
§287 (false, fictitious or fraudulent claims); 18 U.S.C. §371 (conspiracy to
commit offense or to defraud the government); 18 U.S.C. §666 (theft or bribery
concerning programs receiving federal funds); 42 U.S.C. §1320a-7a (civil
monetary penalties); 42 U.S.C. §1320a-7b (criminal penalties); and 42 U.S.C.
§1395nn (prohibited referrals), each as they may be amended or renumbered from
time to time.
4.13. Transaction
Not a Breach.
Except
as set forth in Schedule
4.13,
the
execution, delivery and performance by Seller and any Member of this Agreement
and the Transaction Documents will not:
(a) Result
in
a breach of any of the terms or conditions of, or constitute a default under,
or
in any manner release any party thereto from any obligation under any mortgage,
note, bond, indenture, contract, agreement, license or other instrument or
obligation of any kind or nature by which Seller or the Business may be bound
or
affected;
(b) Violate
or conflict with any order, writ or injunction of any court, administrative
agency or Governmental Authority to which Seller or any Member is subject;
(c) Constitute
an event which would permit any party to terminate any agreement or accelerate
the maturity of any indebtedness or other obligation;
(d) Violate
any provision of the organizational documents of Seller;
(e) Result
in
the creation or imposition of any Lien upon any property of Seller;
or
(f) Require
any authorization, consent, approval, exemption or other action by or notice
to
any court, Governmental Authority or any other Person.
4.14. Conduct
of Business.
Since
the Review Date, Seller has conducted the Business in the ordinary course of
business, consistent with past custom and practice, and has incurred no material
liabilities other than in the ordinary course of business, consistent with
past
custom and practice, and there has been no Material Adverse Effect on the
assets, financial condition, operating results, employee or patient relations
or
business activities of Seller or the Business. Without limiting the foregoing,
since the Review Date, Seller has not, except in the ordinary course of
business, consistent with past custom and practice, or as otherwise set forth
on
Schedule
4.14:
(a) Incurred
any obligation or liability, absolute, accrued, contingent or otherwise, whether
due or to become due, whether individually or in the aggregate, that has had
or
could be reasonably expected to result in a Material Adverse
Effect;
(b) Pledged
or subjected any of its assets to any Lien;
(c) Voluntarily
or involuntarily sold, transferred, abandoned, surrendered, leased or otherwise
disposed of any of its assets having an aggregate value in excess of
$10,000;
(d) Canceled
or compromised any material debt or claim, or waived or released any right
of
substantial value;
8
(e) Received
any written notice of termination of any contract, lease or other agreement,
or
suffered any damage, destruction or loss that, individually or in the aggregate,
has had or could be reasonably expected to result in a Material Adverse
Effect;
(f) Instituted,
settled or agreed to settle any litigation, action, proceeding or arbitration;
(g) Made
any
purchase commitment other than in the ordinary course of business, consistent
with past custom and practice, exceeding $10,000 per commitment or $25,000
in
the aggregate;
(h) Modified
the timing, course of conduct or other cash management activities with respect
to the collection of accounts receivable of the Business;
(i) Failed
to
pay any accounts or notes payable or any other obligations consistent with
past
practices, except for bona fide disputes arising in the ordinary course of
business;
(j) Entered
into any material transaction, contract or commitment other than in the ordinary
course of business, consistent with past custom and practice, other than the
transactions contemplated by the Transaction Documents;
(k) Suffered
any event or events, whether individually or in the aggregate, that has had
or
could be reasonably expected to result in a Material Adverse Effect;
or
(l) Issued
any equity interests or entered into any agreement or understanding to do
so.
4.15. Health,
Safety and Environment.
Seller
has never generated, transported, treated, stored, disposed of or otherwise
handled any Hazardous Materials at any site, location or facility in connection
with its business or any of its assets in violation of any applicable
Environmental and Safety Requirements (as hereinafter defined), nor does the
▇▇▇▇
▇▇▇▇▇▇
Real Property contain (including containment by means of any underground storage
tank) any Hazardous Materials. Seller: (i) is in material compliance with all
applicable federal, state and local laws, rules, regulations, ordinances and
requirements relating to public health and safety, worker health and safety
and
pollution and protection of the environment, all as amended or hereafter amended
(“Environmental
and Safety Requirements”),
and
(ii) possesses all required permits, licenses, certifications and approvals
and
has filed all notices or applications required thereby or pertaining thereto.
Seller has never been subject to, or received any written notice of, any
private, administrative or judicial inquiry, investigation, order or action,
or
any written notice of any intended or threatened private, administrative, or
judicial inquiry, investigation, order or action relating to the presence or
alleged presence of Hazardous Materials in, under or upon any property leased
or
owned by Seller, nor has Seller any knowledge of any such inquiry,
investigation, order, action or notice. There are no pending, or to the
knowledge of Seller or any Member, threatened, investigations, actions, orders
or proceedings (or written notices of potential investigations, actions, orders
or proceedings) from any Governmental Authority or any other entity regarding
any matter relating to Environmental and Safety Requirements.
4.16. Employees.
Schedule
4.16
is a
true, complete and correct list setting forth the names and current compensation
rate and compensation of all individuals employed by Seller. There
has
been no material increase, other than in the ordinary course of business,
consistent with past custom and practice, in the compensation or rate of
compensation payable to any employees of Seller since the Review Date, nor
since
that date has there been any promise to any employee listed on Schedule
4.16,
orally
or in writing, of any bonus or increase in compensation, except for increases
in
the ordinary course of business consistent with Seller’s past compensation
practices and listed on Schedule 4.16,
and
obligations incurred under existing bonus, insurance, pension or other Employee
Benefit Plans described on Schedule
4.19
or
Schedule
4.20.
Except
as set forth on Schedule
4.16,
there
has been no promise to any employee listed on Schedule
4.16,
orally
or in writing, of any guaranty of employment following the Closing
Date.
9
4.17. Insurance.
Schedule
4.17
sets
forth a list of all policies of insurance currently in effect with respect
to
which Seller is a party or otherwise the beneficiary of coverage, specifying
the
insurer and coverage limits. All such insurance is in full force and effect
and
all premiums due on such policies have been paid. Such insureds have complied
in
all material respects with the provisions of all such policies. Seller has
previously delivered to NovaMed complete and correct copies of all such
policies, together with all riders and amendments thereto in the possession
of
Seller. Except as set forth on Schedule
4.17,
there
are no claims or asserted claims reported to insurers under such policies,
including all medical malpractice claims and similar types of claims, actions
or
proceedings asserted against any of Seller and the Members at any time within
the past five (5) years.
4.18. Affiliate
Transactions.
Excluding ordinary course distributions to its equity holders, there are no
transactions involving the transfer of any cash, property or rights to or from
Seller from, to or for the benefit of any Affiliate or former Affiliate of
Seller (“Affiliate
Transactions”)
during
the period commencing January 1, 2005 and continuing through the date hereof
or
any existing commitments of Seller to engage in the future in any Affiliate
Transactions.
4.19. Employee
Benefit Plans.
Except
as set forth in Schedule
4.19,
neither
Seller nor any Plan Affiliate has maintained, sponsored, adopted, made
contributions to or obligated itself to make contributions to or to pay any
benefits or grant rights under or with respect to any “Employee Pension Benefit
Plan” (as defined in Section 3(2) of ERISA), “Employee Welfare Benefit Plan” (as
defined in Section 3(1) of ERISA), “multi-employer plan” (as defined in Section
3(37) of ERISA), any collective bargaining agreement, plan of deferred
compensation, medical plan, life insurance plan, long-term disability plan,
dental plan or other plan providing for the welfare of any of Seller’s employees
or former employees or beneficiaries thereof, personnel
policy (including but not limited to vacation time, holiday pay, bonus programs,
moving expense reimbursement programs and sick leave), material fringe benefit,
excess benefit plan,
bonus or incentive plan (including but not limited to stock options, restricted
stock, stock bonus and deferred bonus plans), severance agreement, salary
reduction agreement, top hat plan or deferred compensation plan,
change-of-control agreement, employment agreement, consulting agreement or
any
other benefit, program, policy, arrangement, agreement or contract
(collectively, “Employee
Benefit Plans”),
whether or not written or terminated, which reasonably could give rise to or
result in Seller or such Plan Affiliate having any debt, liability, claim or
obligation of any kind or nature, whether accrued, absolute, contingent, direct,
indirect, known or unknown,
perfected or inchoate or otherwise and whether or not due or to become due.
Correct and complete copies of all Employee Benefit Plans previously have been
furnished to NovaMed. The Employee
Benefit Plans are in compliance in all material respects with governing
documents and agreements and with applicable laws.
Seller
represents that it has complied, in all material respects, with the applicable
requirements of COBRA through the Closing Date.
4.20. Personnel
Agreements, Plans and Arrangements.
Except
as listed in Schedule
4.20,
neither
Seller nor any Member is a party to or obligated in connection with the Business
with respect to any outstanding contracts with current or former employees,
agents, consultants,
or advisers.
4.21. Certain
Payments.
None of
Seller, the Members, any director, officer, agent, or employee of Seller or
any
other Person associated with or acting for or on behalf of Seller has, directly
or indirectly, made any contribution, gift, bribe, rebate, payoff, influence
payment, kickback, or other payment to any Person, private or public, regardless
of form, whether in money, property, or services (i) for securing patients
or
referrals, (ii) for patients or referrals secured, (iii) to obtain special
concessions or for special concessions already
obtained, for or in respect of Seller, or (iv) in violation of any
law.
10
4.22. Workers
Compensation.
Schedule
4.22
sets
forth all expenses, obligations, duties and liabilities relating to any pending,
threatened or ongoing claims by employees and former employees (including
dependents and spouses) of Seller (or its predecessors),
and the extent of any specific accrual on or reserve therefor set forth on
the
Financial Statements, for costs, expenses and other liabilities under any
workers compensation laws, regulations, requirements or programs. Except as
set
forth on Schedule
4.22,
to
Seller’s knowledge, no claim, injury, fact, event or condition exists which
would give rise to a material claim by any employees or
former
employees (including dependents and spouses) of Seller under any workers
compensation laws, regulations, requirements or programs. Since the Review
Date,
there has been no material change, other than in the ordinary course of
business, in the information disclosed in Schedule
4.22.
4.23. Accounts
Receivable/Accounts Payable.
(a) Accounts
Receivable.
Except
as set forth on Schedule
4.23(a),
the
Accounts Receivable are valid, binding and legally enforceable obligations
and
are owned by Seller free and clear of all Liens, and, except for contractual
allowances and adjustments, reserves for bad debts and other adjustments that
are consistent with those adjustments made in preparing the Financial
Statements, will not be subject to any offset, counterclaim or other adverse
claim or defense, and may be transferred to the New LLC to the extent permitted
by law. The Accounts Receivable arose in the ordinary and usual course of the
business, and the Accounts Receivable are set forth on the books and records
of
Seller. Schedule
4.23(a)
contains
a complete and accurate list of all Accounts Receivable as of the date stated
thereon. Seller
does not know of any reason why the Accounts Receivable would not be collectible
according to approximately the same ratios as accounts receivable have been
historically collectible.
(b) Accounts
Payable and Accrued Liabilities.
Schedule
1.4(a)
and
Schedule
1.4(b)
sets
forth a complete and correct list of the Accounts Payable and Accrued
Liabilities. Each of the Accounts Payable and Accrued Liabilities are valid
and
have been incurred in connection with the operation of the Business in the
ordinary course of business, consistent with Seller’s past custom and practice.
4.24. Brokers.
All
negotiations relating to this Agreement and the Transaction Documents, and
the
transactions contemplated hereby and thereby, have been carried on without
the
intervention of any Person acting on behalf of any of Seller or any Member
in
such a manner as to give rise to any valid claim for any broker’s or finder’s
fee or similar compensation against NovaMed.
4.25. HIPAA.
Seller
and Members represent and
warrant that (a) all of the Purchased Assets being sold and/or provided by
Seller to NovaMed under this Agreement, including without limitation, any
computer hardware and/or software, are in compliance with the Health Insurance
Portability and Accountability Act of 1996 (Public Law 104-91, 42 U.S.C. 1301
et.
seq.)
and
regulations promulgated thereunder (collectively, “HIPAA”),
and
applicable state laws having similar subject matter to HIPAA (“State
HIPAA”),
and
(b) Seller conducted its business and activities, including, without limitation,
its billing and collection activities, its medical records management
activities, and its general practice management activities, in a manner that
complied with HIPAA and State HIPAA.
4.26. Rates
and Reimbursement Policies.
Seller
does not have any rate appeal currently pending before any Governmental
Authority or any administrator of any third-party payor program.
11
4.27. Physicians.
None of
the physicians who utilize the Center other than ▇▇. ▇▇▇▇ (collectively,
the “Physicians”)
have
threatened to discontinue or to terminate his or her relationship with the
Seller and the provision of services at the Facility. To the knowledge of Seller
or any Member, none of the Physicians have expressed plans to retire from the
practice of medicine in the next five (5) years nor to be involved in the
development or operations of another ambulatory surgery center. During the
three
(3) years preceding the Closing Date, each of the Physicians:
(a) Has
been
duly licensed and registered, and is in good standing by his or her state to
engage in the practice of medicine, and said license and registration have
not
been suspended, revoked or restricted in any manner; and
(b) Has
had
valid professional liability insurance in place in the amounts set forth on
Schedule
4.27(b)
and has
not indicated any intent to terminate or reduce his or her professional
liability coverage.
4.28. Certain
Representations With Respect to the Facility.
(a) The
Facility is qualified for participation in the Medicare program. Complete and
accurate copies of the Facility’s existing letter of acceptance as a Medicare
provider has been furnished to NovaMed. Seller is presently in compliance with
all of the Medicare
conditions of Participation and all applicable terms and conditions required
for
the Facility to remain a qualified Medicare provider.
(b) The
Facility is qualified for participation in the Medicaid program. Complete and
accurate copies of Seller’s existing Medicaid contracts have been furnished to
NovaMed. Seller is presently in compliance with all of the terms, conditions
and
provisions of such contracts.
4.29. No
Designated Health Services.
Seller
does not provide any services that constitute “designated health services”
within the meaning of 42 U.S.C. d
1395nn.
4.30. No
Misrepresentation.
None of
the representations and warranties of Seller and Members set forth in this
Agreement, in any of the certificates, schedules, lists, documents, exhibits,
or
other instruments delivered, or to be delivered, to NovaMed as contemplated
by
any provision hereof
(including the Transaction Documents), contain any untrue statement of a
material fact or omit
to
state a material fact necessary to make the statements contained herein or
therein not misleading.
To the
knowledge of Seller or any Member, there are no material facts which have not
been disclosed to NovaMed which have a Material Adverse Effect, or could
reasonably be anticipated to have a Material Adverse Effect, on the Business
or
Seller’s or Member’s ability to consummate the transactions contemplated
hereby.
ARTICLE
V.
NOVAMED’S
REPRESENTATIONS AND WARRANTIES
NovaMed
hereby represents and warrants to Seller and the Members as of the Closing
Date
as follows:
5.1. Organization.
NovaMed
is a corporation duly organized, validly existing and in good standing under
the
laws of the State of Delaware.
5.2. Authorization.
NovaMed
has full power, right and authority to enter into and perform its obligations
under this Agreement and each of the Transaction Documents to which it is a
party. The execution, delivery and performance by NovaMed of this Agreement
and
each of the Transaction Documents to which it is a party have been
duly
and properly authorized by all requisite corporate action in accordance with
applicable law and with NovaMed’s Certificate of Incorporation.
This
Agreement and each of the Transaction Documents to which NovaMed is a party
have
been duly executed and delivered by NovaMed and are the valid and binding
obligation of NovaMed and are enforceable against
NovaMed in accordance with their respective terms, except as the same may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the rights of creditors generally and the
availability of equitable remedies.
12
5.3. Transaction
Not a Breach.
The
execution, delivery and performance of this Agreement and the Transaction
Documents by NovaMed will not violate and conflict with,
or
result in the breach of any of the terms, conditions, or provisions of NovaMed’s
Certificate of Incorporation or of any contract, agreement, mortgage, or other
instrument or obligation of any nature to which NovaMed is a party or by which
NovaMed is bound.
5.4. Acquisition
of Transferred LLC Interests.
NovaMed
is acquiring the Transferred LLC Interests for its own account and not with
a
view to the distribution or resale thereof. NovaMed has no intention of selling
the Transferred LLC Interests in a public distribution in violation of federal
securities laws or any applicable state securities laws.
5.5. Broker.
All
negotiations relating to this Agreement and the Transaction Documents, and
the
transactions contemplated hereby and thereby, have been carried on without
the
intervention of any Person acting on behalf of NovaMed in such a manner as
to
give rise to any valid claim for any broker’s or finder’s fee or similar
compensation against Seller.
5.6. Approvals.
Except
as set forth on Schedule
5.6,
no
consent, approval, order or authorization of, or registration, declaration
notice or filing with, any Governmental Authority or other Person is required
to
be made or obtained by NovaMed in connection with the authorization, execution,
delivery and performance of this Agreement or any other Transaction Document,
or
the consummation of the transactions contemplated hereby and
thereby.
5.7. No
Misrepresentation.
None of
the representations and warranties of NovaMed set forth in this Agreement or
in
any of the certificates, schedules, lists, documents, exhibits, or other
instruments delivered, or to be delivered, to Seller as contemplated by any
provision hereof (including the Transaction Documents), contain any untrue
statement of a material
fact or omit
to
state a material fact necessary to make the statements contained herein or
therein not misleading.
ARTICLE
VI.
ADDITIONAL
AGREEMENTS
6.1. Release
of Liens and Lien Searches.
Seller
shall procure all applicable releases of liens with respect to those Liens
set
forth on Schedule
4.2,
prior
to or contemporaneously with the New LLC Asset Transfer or the Closing. Seller
shall provide NovaMed with all information and other assistance required for
the
parties to file all applicable UCC termination statements (in form and manner
required by NovaMed or its lenders). Following the filing of all such UCC
termination statements, there shall be no remaining
financing statements, judgments, taxes or other Liens outstanding against Seller
or any of its assets as of the Closing Date.
6.2. Employees;
Labor Relations.
(a) Continuing
Employees.
New LLC
shall offer to employ the employees of Seller listed on Schedule
6.2(a)
(the
“Continuing
Employees”)
as of
the Closing Date, on the terms and conditions established by New LLC in its
sole
discretion. Such offer of employment by New LLC shall not be deemed to create
a
continuing right to employment for any Continuing Employees. Seller shall be
solely responsible for all liabilities relating, directly or indirectly, to
any
of Seller’s employees who do not accept New LLC’s offer of employment. Seller
shall be solely responsible for any employment-related claims filed by any
employees of Seller which relate to facts and circumstances existing on and
prior to the Closing Date, or arise from or relate to completion of the
transactions contemplated by this Agreement or the Transaction Documents,
regardless of when filed.
13
(b) COBRA
Notice.
Seller
agrees that it shall be responsible for all liabilities arising under COBRA
with
respect to any event occurring prior to and on the Closing Date.
(c) Noncompetition
Agreements.
Seller
hereby waives any noncompetition provision that may apply to the Continuing
Employees with respect to New LLC’s hiring of the Continuing
Employees.
(d) Employee
Benefit Plans.
Seller
acknowledges that it will be solely responsible for administering and/or
terminating its Employee Benefit Plans following the Closing.
6.3. Post-Closing
Remittances; New LLC’s Appointment as Attorney-In-Fact.
If,
after the Closing Date, Seller shall receive any remittance from any account
debtors with respect to the Accounts Receivable, Seller shall endorse such
remittance to the order of the New LLC and forward it to the New LLC promptly
following receipt thereof.
Seller
hereby irrevocably constitutes and appoints New LLC and any officer or agent
of
New LLC as Seller’s true and lawful attorney-in-fact, with full power and
authority, in the place and stead of Seller for the limited purposes of
receiving, collecting, indorsing, negotiating and cashing any and all cash,
checks, drafts, payments, accounts receivable and other instruments
(collectively the “Items”)
which
are payable to Seller and which represent Items related to the Business or
which
represent payment on Accounts Receivable related to the Business, and which
in
accordance with the terms of this Agreement, have been sold, conveyed, assigned
or transferred to New LLC or are otherwise for the account of New LLC hereby.
Seller further agrees to execute all documents and take such other action as
New
LLC may reasonably request to confirm the power granted to New LLC by this
Section
6.3.
Notwithstanding the foregoing, in no event shall New LLC receive, collect,
indorse, negotiate or cash such Items pursuant to the above authority if to
do
so would be to violate the laws, regulations or other written guidance of any
state or federal health program. In such event, New LLC and Seller agree to
take
such actions as necessary to convey such payments to New LLC consistent with
applicable laws and regulations.
6.4. Further
Assurances.
The
parties hereto shall execute such further documents, and perform such further
acts, as may be reasonably necessary to transfer and convey the Assets to the
New LLC, and the Transferred LLC Interests to NovaMed, all on the terms
contained herein, and to otherwise comply with the terms of this Agreement
and
consummate the transactions contemplated herein.
6.5. Professional
Liability Tail Coverage.
To the
extent Seller’s professional liability insurance policy for the Facility is on a
claims-made basis (rather than an occurrence basis), Seller shall obtain an
extended reporting (“tail”) professional liability insurance policy covering
acts and omissions occurring at the Facility prior to the Closing Date, in
an
amount equal to the professional liability insurance carried immediately prior
to the Closing Date, or such other amount, and for such period of time, as
determined by mutual agreement of NovaMed and Seller. Upon NovaMed’s request,
Seller shall provide New LLC with proof of such tail professional liability
coverage. The cost and expense of such tail coverage shall be borne solely
by
Seller.
6.6. Credentialing.
As of
the Closing Date, the Members and other physicians credentialed by the Facility
immediately prior to the Closing Date shall receive provisional privileges
to
perform surgical procedures at the Facility that will be operated by the New
LLC
from and after the Closing Date. As a condition to receiving these provisional
privileges, each of the Members hereby agree, and shall cause all of such other
credentialed physicians to agree, that following the Closing Date he or she
will
comply with all of the New LLC’s credentialing requests (including, without
limitation, providing New LLC with any reasonably requested information and
completing any applicable credentialing forms) so that the New LLC may complete
its credentialing review process for each physician by the expiration date
of
the provisional privileges.
14
6.7. Asset
Transfers.
To the
extent of any Member Assets, the Seller will cause the party owning the
applicable Member Assets to contribute such Member Assets to Seller for
contribution to the New LLC, free and clear of all Liens, prior to the Closing
Date.
6.8. Real
Estate Matters.
(a) On
behalf
of New LLC, NovaMed shall obtain
a
commitment (“Commitment”) issued by a title insurance company (the “Title
Company”) for the issuance of ALTA Owner’s Policy of Title Insurance (Form 1970)
for the ▇▇▇▇ ▇▇▇▇▇▇ Real Property (a “Title Policy”), in an amount of the
approximate fair market value of the ▇▇▇▇ ▇▇▇▇▇▇ Real Property. The Commitment
shall show fee simple title to the parcel vested in the Seller, subject only
to
current real estate taxes not yet due or payable as of the Closing Date and
the
Permitted Exceptions. The Title Policy to be issued by the Title Company shall
have all standard and general exceptions deleted to the fullest extent permitted
by applicable law and regulations, including but not limited to the standard
survey exception and any exception relating to rights of parties in possession,
and shall at NovaMed’s option, contain such endorsements as may be reasonably
requested by NovaMed. At Closing, Seller and the Members, as applicable, shall
deliver or cause to be delivered such affidavits or other instruments as the
Title Company may reasonably require to delete the standard and general
exceptions and to provide the endorsements required hereunder. Notwithstanding
anything to the contrary contained in this Agreement, the premium for the Title
Policy at the Closing, including the premium for deletion of the standard survey
exception, and for any other endorsements reasonably requested by NovaMed herein
shall be paid by Seller. Seller shall pay or otherwise be responsible for any
costs, expenses, deposits or security required to insure over an Unpermitted
Encumbrance (as defined herein) or Survey Defect (as defined
herein).
(b) On
behalf
of New LLC, NovaMed shall obtain an as-built survey for the ▇▇▇▇ ▇▇▇▇▇▇ Real
Property (“Survey”) prepared by a registered land surveyor or engineer, licensed
in the state of Tennessee, dated on or after the date of this Agreement,
certified to New LLC, the Title Company, and such other entities as NovaMed
may
designate in writing, and in accordance with the Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys, jointly established and adopted
by ALTA, ACSM and NSPS in 1999, and including all Table A items, and pursuant
to
the Accuracy Standards (as adopted by ALTA, NSPS and ACSM and in effect on
the
date of certification) such that the survey measurements are made in accordance
with the Minimum Angle, Distance and Closure Requirements for Survey
Measurements Which Control Land Boundaries for ALTA/ACSM Land Title Surveys,
sufficient to cause the Title Company to delete the standard printed survey
exception to the extent permitted. Seller shall pay the entire cost of obtaining
the Survey.
(c) If
(i)
the Commitment discloses a title exception other than a Permitted Encumbrance
(an “Unpermitted Encumbrance”) or (ii) the Survey discloses any encroachment,
overlap, boundary dispute, gap or any other matter which renders title to the
▇▇▇▇ ▇▇▇▇▇▇ Real Property uninsurable or reflects that any utility service
to
the improvements or access thereto does not lie wholly within the ▇▇▇▇ ▇▇▇▇▇▇
Real Property, or within an unencumbered easement for the benefit of the ▇▇▇▇
▇▇▇▇▇▇ Real Property, or reflects any other matter adversely affecting the
present use or value of the ▇▇▇▇ ▇▇▇▇▇▇ Real Property (any of the foregoing,
a
“Survey Defect”), then NovaMed shall give written notice to the Seller
specifying NovaMed's objections (the "Title Objections") to one or more of
the
Unpermitted Encumbrances or Survey Defects, together with a copy of the
Commitment and Survey, within ten (10) business days after NovaMed’s receipt of
the Commitment (including legible copies of all exceptions listed on Schedules
B
and C of the Commitment) and Survey. Seller and the Members, at their sole
cost
and expense and using commercially reasonable efforts, shall either (x) cause
all Unpermitted Encumbrances to be removed from the Commitment and/or all Survey
Defects to be eliminated from the Survey prior to the Closing, or (y) if Seller
and the Members reasonably determine that they are unable to cure any
Unpermitted Encumbrance or Survey Defect (1) due to impracticality, or (2)
because it is not commercially reasonable to do so, Seller and the Members
shall
promptly notify NovaMed in writing which Title Objections they cannot or will
not satisfy, in which event NovaMed shall have the option of (A) waiving the
unsatisfied Title Objections, in which event the unsatisfied Title Objections
will become Permitted Exceptions, or (B) terminating this Agreement as provided
in Article X.
15
(d) As
of the
Closing Date Seller shall have delivered to NovaMed the following materials
that
are in the Seller’s and/or Members possession: (i) complete and legible copies
of all Material Contracts relating to or affecting the ▇▇▇▇ ▇▇▇▇▇▇ Real Property
as set forth on Schedule 4.9 and (ii) complete copies of all existing title
insurance policies, title reports or commitments, surveys, appraisals,
mechanical and structural reports, engineering plans, architectural drawings,
and soil studies and similar reports, if any, with respect to the ▇▇▇▇ ▇▇▇▇▇▇
Real Property. Seller shall reimburse NovaMed for the cost of its environmental
report conducted by a consultant retained by NovaMed. Seller shall also be
responsible for all transfer taxes associated with the transfer of the
▇▇▇▇
▇▇▇▇▇▇
Real Property to New LLC.
ARTICLE
VII.
CLOSING
7.1. Time
and Place.
The
closing of the transactions that are the subject of this Agreement shall be
consummated at a closing (the “Closing”)
simultaneous with the execution and delivery of this Agreement and the other
Transaction Documents by the applicable parties, which execution and delivery
shall be via facsimile effective as of the Closing Date, with original documents
to be exchanged by nationally recognized overnight courier for delivery on
the
next business day after the Closing Date.
7.2. Conditions
Precedent.
As a
condition precedent to the consummation of the transactions contemplated herein:
(a) Seller shall have consummated the New LLC Asset Transfer in accordance
with
the terms and conditions of Article
I
hereof;
and (b)
the New LLC shall have received all necessary state licensure and Medicare
approvals to commence the New LLC’s ownership and operation of the Business or,
if such approvals are pending as of the Closing Date, the New LLC shall have
received certificates or other assurance from the applicable Governmental
Authorities satisfactory to NovaMed that such approvals shall be given upon
receipt of evidence of the Closing of the Transaction (with the understanding
that upon commencement of operations, there may be billing delays associated
with procuring third party payor provider numbers).
7.3. Deliveries
of Seller and Members.
At the
Closing, Seller and Members will execute and deliver or cause to be executed
and
delivered to NovaMed:
(a) a
Contribution Agreement to evidence the New LLC Asset Transfer and to effectively
vest the New LLC with full, complete and marketable right, title and interest
in
and to the Assets, in
substantially the form attached hereto as Exhibit
7.3(a) (the
“Contribution
Agreement”);
(b) the
Limited Liability Company Agreement of the New LLC, in the form attached hereto
as Exhibit
7.3(b)
(the
“Operating
Agreement”);
16
(c) a
certificate of the Secretary of Seller as to (i) copies of resolutions of its
Manager(s) and Members authorizing the execution, delivery and performance
of
this Agreement and the Transaction Documents; (ii) a Certificate of Good
Standing issued by the Secretary of State of Tennessee; (iii) its Operating
Agreement; (iv) incumbency and specimen signatures with respect to its officers
executing this Agreement and any Transaction Documents; and (v) its Articles
of
Organization certified by the Secretary of State of Tennessee.
(d) any
required third party consents, filings, and certificates from Seller or any
third party (including, any Governmental Authority) relating to the transfer
of
the Assets, including without limitation, all consents from the State of
Tennessee regarding the transfer of all Permits and licenses relating to the
ownership and operation of the Facility, and copies of all written consents
obtained in connection with the transfer of the Material Contracts;
(e) clearance
certificates or similar documents required by any state taxing authority in
order to relieve NovaMed of any obligation to withhold any portion of the
Purchase Price;
(f) the
Assignment of LLC Interests, substantially in the form attached as Exhibit
7.3(f) (the
“Assignment
of LLC Interests”),
duly
executed by Seller;
(g) a
Limited
Warranty Deed, in a form provided by NovaMed and reasonably satisfactory to
the
Seller and the Members, conveying the ▇▇▇▇ ▇▇▇▇▇▇ Real Property to the New
LLC,
subject only to general real estates taxes not yet due or payable and those
title exceptions agreed to by NovaMed in writing (collectively, the "Permitted
Exceptions")
(h) the
Title
Policy (or a ▇▇▇▇-up of the commitment reflecting the Title Policy to be issued
pursuant to the Commitment) as provided in Section
6.7;
(i) all
applicable documentation releasing Liens covering, concerning or relating to
the
Assets, in form and substance reasonably acceptable to NovaMed;
(j) Redemption
Agreement pursuant to which Seller redeems Physician Members’ ownership
interests in Seller in exchange for Seller’s membership interests in the New
LLC, effective immediately following the Closing Date; and
(k) such
other documents and instruments as NovaMed or its counsel reasonably shall
deem
necessary to consummate the transactions contemplated hereby.
All
documents delivered to NovaMed shall be in form and substance reasonably
satisfactory to counsel for NovaMed.
7.4. Deliveries
of NovaMed.
At the
Closing, NovaMed will deliver or will cause the New LLC to deliver to Seller
simultaneously with the delivery of the items referred to in Section
7.3
above:
(a) the
payment of the Purchase Price;
(b) the
Operating Agreement;
(c) certificate
of the Secretary of NovaMed as to (i) copies of resolutions of its board of
directors authorizing the execution, delivery and performance of this Agreement
and the Transaction Documents; and (ii) incumbency and specimen signatures
with
respect to its officers executing this Agreement and any Transaction
Documents;
17
(d) a
duly
executed Management Agreement (the “Management
Agreement”)
between NovaMed Management Services, LLC and the New LLC, substantially in
the
form of attached Exhibit
7.4(d);
(e) the
Assignment of LLC Interests, duly executed by NovaMed; and
(f) such
other documents and instruments as Seller or its counsel reasonably shall deem
necessary to consummate the transactions contemplated hereby.
All
documents delivered to Seller shall be in form and substance reasonably
satisfactory to the counsel for Seller.
7.5. Change
of Ownership Process.
To the
extent from and after the Closing there are any actions necessary to confirm
or
effect all reasonably necessary licensure and regulatory approvals required
in
connection with New LLC’s ownership and operation of the Business (the receipt
of which is a condition precedent to the Closing), Seller, Members and their
respective agents and representatives agree to cooperate with NovaMed and New
LLC in connection these filings and applications, and will use commercially
reasonable efforts to respond in a timely manner to any information or signature
requests reasonably required in connection with these applications and
notices.
ARTICLE
VIII.
INTENTIONALLY
OMITTED
ARTICLE
IX.
INTENTIONALLY
OMITTED
ARTICLE
X.
INTENTIONALLY
OMITTED
ARTICLE
XI.
COVENANT
NOT TO COMPETE
11.1. Acknowledgment.
Each of
Seller and Members acknowledges and agrees that in order to assure that the
Business will retain its value as a “going concern,” it is necessary that Seller
and Members undertake not to utilize their present special knowledge of the
Business to compete with NovaMed and the Business during the Restricted Period
after the acquisition of Transferred LLC Interests; provided
that
NovaMed acknowledges that the Physician Members (excluding ▇▇. ▇▇▇▇) will
continue to have an interest in the Business through their ownership of a
minority interest in the New LLC. Each of Seller and Members further
acknowledges that (a) NovaMed has been and/or will be engaged in the Business;
(b) each of Seller and Members possesses extensive knowledge and a unique
understanding of the Business, as well as (subsequent to the transactions
contemplated by this Agreement) the proprietary and confidential information
concerning the Business; (c) the agreements and covenants
contained in this Section 11.1
are
essential to protect NovaMed and the value of the Business and are a condition
precedent to NovaMed’s willingness to pay for the Transferred LLC Interests; (d)
NovaMed would be irreparably damaged if Seller and/or any Member were to violate
the terms and conditions of this Article
XI;
and (e)
the
geographic, temporal and business scope of the restrictive covenants in this
Article XI are reasonable.
11.2. Non-Compete.
Each of
Seller and Members hereby agrees that for the five-year period beginning on
the
Closing Date (the “Restricted
Period”;
provided,
that
in the
event that any such party is determined to have violated the covenants set
forth
in this Article
XI,
the
Restricted Period shall be extended day for day for the time period that such
party is in violation of any such covenant), he, she or it shall not, directly
or indirectly,
act as
a director, officer, member or partner of, or own any equity or other financial
interest in, any
Person that owns and/or operates an ambulatory surgery center, licensed surgical
facility or any other outpatient surgical facility that is located within a
thirty (30) mile radius of the current location of the Business.
Notwithstanding the foregoing, and without limiting the terms of the Operating
Agreement, Seller and/or any Member
may (a)
be a director on the Board of Trustees of a hospital, (b) serve on the medical
staff of any hospital, (c) own an interest in the New LLC in accordance with
the
terms of the Operating Agreement; and (d) practice medicine in his or her own
office or the office of the professional entity in which he
or she
is an employee or owner.
In
addition, notwithstanding the restrictions set forth in this Section
11.2,
the
Members listed
on
Schedule
11.2
may
continue to own their equity interests in the facilities set forth across from
their names on Schedule
11.2,
provided at no time during the Restricted Period shall any such Member other
than ASCOA increase his ownership interests in such listed facilities (except
in
the event such increase in ownership interest is the result of no action or
further investment by such Member (e.g.
another
investor is redeemed by the entity)); ASCOA shall be free to increase its
ownership interests in such listed facility.
18
11.3. Property
of the Business.
All
memoranda, notes, lists, records and other documentation or papers (and all
copies thereof), including such items stored in computer memories, or microfiche
or by any other means, which will become the New LLC’s property (after
the consummation
of transactions contemplated by this Agreement), are and shall be the New LLC’s
property and shall be delivered to the New LLC promptly on the request of
NovaMed.
11.4. Blue-Pencil.
If any
court of competent jurisdiction shall at any time deem the term of this
Agreement or any particular restrictive covenant contained in this Article
XI
too
lengthy or the territory too extensive, the other provisions of this
Article
XI shall
nevertheless stand, the Restricted Period herein shall be deemed to be the
longest period permissible by law under the circumstances and the territory
described in Section
11.2
shall be
deemed to comprise the largest territory permissible by law under the
circumstances. The court in each case shall reduce the Restricted Period and/or
territory described in Section
11.2
to
permissible duration or size.
11.5. Remedies.
(a) Each
of
Seller and Members acknowledges and agrees that the covenants set forth in
this
Article
XI
are
reasonable and necessary for the protection of NovaMed and the New LLC’s
business interests, that irreparable
injury will result if Seller or any Member breaches any of the terms of said
restrictive covenants,
and that in the event of actual or threatened breach of any such restrictive
covenants, NovaMed will have no adequate remedy at law. Each of Seller and
Members accordingly agrees that in the event of any actual or threatened breach
by any of them of any of the covenants set forth in this Article XI,
NovaMed
shall be entitled to immediate temporary injunctive and other equitable relief,
without bond and without the necessity of showing actual monetary damages,
subject to hearing as soon thereafter as possible. Nothing contained herein
shall be construed as prohibiting NovaMed from pursuing any other remedies
available to it for such breach or threatened breach, including the recovery
of
any damages which it is able to prove.
The
parties also agree that the existence of any claim or cause of action by Seller
or any Member against NovaMed or any Affiliate, whether predicated upon this
Agreement or otherwise, shall not constitute a defense to the enforcement of
the
restrictive covenants set forth herein, but shall be litigated separately.
(b) To
the
extent Seller or a particular Member breaches a covenant set forth in this
Article
XI,
then
such breach shall only create liability for such breaching Party and shall
not
create liability or responsibility for any other non-breaching Party.
19
11.6 Assignment.
Seller
and Members agree that the rights granted in this Article XI to NovaMed may
be
assigned by NovaMed at its sole and absolute discretion in connection with
any
transaction involving a sale of assets by NovaMed (or any other transaction
substantially similar in effect). All of the provisions of this Article XI
shall
inure to any successors of NovaMed, all of which are specifically third party
beneficiaries of this Article XI with full rights hereunder. In addition, the
parties hereto agree that an assignee of the rights hereunder is an intended,
direct third party beneficiary of Article XI and may enforce such rights in
its
own name in addition to or in lieu of NovaMed.
11.7 Patient
Freedom.
The
parties hereto agree that the benefits afforded either party hereunder are
not
payment for, and are not in any way contingent upon the referral, admission
or
any other arrangement for, the provision of any item or service offered by
any
party hereto. Nothing in this Agreement shall be construed to limit the freedom
of any patient of Seller or any Member
to
choose the facility
or physician from whom any patient shall receive health care services or limit
or interfere with Seller or any Member’s ability to exercise professional
judgment in treating patients or their ability to provide medical services
to
patients.
ARTICLE
XII.
POST-CLOSING
COVENANTS
12.1. Indemnification
by Seller and Members.
From
and after the Closing, each Member (on a Pro Rata Basis (as defined in
Section
13.1))
agrees
to severally (but not jointly as more specifically described in Section
12.6
below)
indemnify NovaMed and its respective Affiliates (including, without limitation,
the New LLC) and each of their respective officers, directors, managers,
employees, agents and fiduciaries (each, a “NovaMed
Indemnified Party”),
from
and against, and to pay to a NovaMed Indemnified Party
or reimburse
a NovaMed Indemnified Party for any and all liabilities
(whether
contingent, fixed or unfixed, liquidated or unliquidated, or otherwise),
obligations, deficiencies, demands, claims, suits, actions, or causes of action,
assessments, losses, costs, expenses, interest, fines, penalties, damages or
costs or expenses of any and all investigations, proceedings, judgments,
environmental analyses, remediations, settlements and compromises (including
reasonable fees and expenses of attorneys, accountants and other experts) but
excluding Consequential Damages (as defined in Section
13.1)
(individually and collectively, the “Losses”)
actually sustained or incurred by any NovaMed Indemnified Party relating to,
resulting from, arising out of or otherwise by virtue of any of the
following:
(a) any
misrepresentation or breach of a representation or warranty contained in this
Agreement by Seller or any Member, or non-compliance with or breach by Seller
or
any Member of any of the covenants or agreements contained in this Agreement
to
be performed by Seller or Members;
(b) the
operation of the Business, including the use of the Assets and the Excluded
Assets, on or prior to the Closing Date, provided, however, that to the extent
that any matter related to the operation of the Business, including the use
of
the Assets, on prior to the Closing Date, is addressed in the representations
and warranties contained in Article IV and is covered by Section 12.1(a) hereof,
such matters shall be excluded from this Section 12.1(b) (other than with
respect to Third Party Claims);
(c) any
Tax
liability of Seller or any Member whatsoever,
including without limitation any Tax liability with respect to or arising from
the transactions contemplated hereby or the structuring of the transactions
contemplated hereby or any Tax liability under the Tennessee bulk sales
laws;
(d) any
violations of or obligations under Environmental and Safety Requirements
relating to acts, omissions, circumstances or conditions to the extent existing
or arising on or prior to the Closing Date, whether or not such acts, omissions,
circumstances or conditions constituted a violation of Environmental and Safety
Requirements as then in effect;
20
(e) to
the
extent not covered by insurance, any liabilities relating to or arising from
the
provision of (or failure to provide) professional medical services, including
any liabilities relating to the failure, prior to the Closing Date, to adhere
to
or comply with any Medicare and Medicaid requirements or Fraud and Abuse
Laws;
(f) any
action, demand, proceeding, investigation or claim (whenever made) by any third
party (including Governmental Authorities) against or affecting NovaMed or
its
Affiliates which, if successful, would give rise to or evidence the existence
of
or relate to a misrepresentation or breach of any of the representations or
warranties contained this Agreement or the non-compliance with or breach of
any
of the covenants contained in this Agreement by Seller or any
Member;
(g) the
Excluded Assets or Excluded Liabilities; or
(h) any
claim
for payment of fees and/or expenses as a broker or finder in connection with
the
origin, negotiation, execution or consummation of this Agreement based upon
any
alleged agreement between the claimant and Seller or any Member.
12.2. Indemnification
by NovaMed.
From
and after the Closing, NovaMed agrees to indemnify, Seller, Members and their
respective Affiliates, and their respective officers, directors, managers,
members, shareholders, employees, trustees, agents, representatives, heirs
and
executors other than the New LLC (each, a “Seller
Indemnified Party”)
from
and against, and to pay to a Seller Indemnified Party or reimburse a Seller
Indemnified Party for any
and
all Losses actually sustained or incurred by any Seller Indemnified Party
relating to, resulting from, arising out of or otherwise by virtue of any of
the
following:
(a) any
misrepresentation or breach of a representation or warranty contained in this
Agreement by NovaMed, or non-compliance with or breach by NovaMed of any of
the
covenants or agreements contained in this Agreement to be performed by
NovaMed;
(b) any
action, demand, proceeding, investigation or claim (whenever made) by any third
party (including Governmental Authorities) against or affecting Seller, Members
or their respective Affiliates which, if successful, would give rise to or
evidence the existence of or relate to a misrepresentation or breach of any
of
the representations or warranties contained in this Agreement or the
non-compliance with or breach of any of the covenants contained in this
Agreement by NovaMed; or
(c) any
claim
for payment of fees and/or expenses as a broker or finder in connection with
the
origin, negotiation, execution or consummation of this Agreement based upon
any
alleged agreement between the claimant and NovaMed.
12.3. Indemnification
Procedure.
(a) Third
Party Claims.
In the
event that subsequent to the Closing any Person entitled to indemnification
under this Agreement (an “Indemnified Party”)
asserts a claim for indemnification or receives notice of the assertion of
any
claim or of the
commencement of any action or proceeding by any entity that is not a party
to
this Agreement or an Affiliate of a party to this Agreement (including, but
not
limited to any domestic or foreign court or Governmental Authority, federal,
state or local) (a “Third
Party Claim”)
against such Indemnified Party, against which a party to this Agreement is
required to provide indemnification under this Agreement (an “Indemnifying
Party”),
the
Indemnified Party shall give written notice together with a statement of any
available information regarding such claim to the Indemnifying Party within
60
days after learning of such claim (or within such shorter time as may be
necessary to give the Indemnifying Party a reasonable opportunity to respond
to
such claim). The Indemnifying Party shall have the right, upon written notice
to
the Indemnified Party (the “Defense
Notice”)
within
30 days after receipt from the Indemnified Party of notice of such claim, which
notice by the Indemnifying Party shall specify the counsel it will
appoint to defend such claim (“Defense
Counsel”),
to
conduct at its expense the defense against such claim in its own name, or if
necessary in the name of the Indemnified Party; provided,
however,
that
the Indemnified Party shall have the right to approve the Defense Counsel,
which
approval shall not be unreasonably withheld, and in the event the Indemnifying
Party and the Indemnified Party cannot agree upon such counsel within 10 days
after the Defense Notice is provided, then the Indemnifying Party shall propose
an alternate Defense Counsel, which shall be subject again to the Indemnified
Party’s approval. If the parties still fail to agree on Defense Counsel, then,
at such time, they shall mutually agree in good faith on a procedure to
determine the Defense Counsel. The delivery of a Defense Notice shall not
constitute an admission with respect to the claim for
indemnification.
21
(i) In
the
event that the Indemnifying Party shall fail to give the Defense Notice, it
shall be deemed to have elected not to conduct the defense of the subject claim,
and in such event the Indemnified Party shall have the right to conduct such
defense in good faith and to compromise and settle the claim without the consent
of the Indemnifying Party and the Indemnifying Party will be liable for all
costs, expenses, settlement amounts or other Losses paid or incurred in
connection therewith.
(ii) In
the
event that the Indemnifying Party does deliver a Defense Notice and thereby
elects to conduct the defense of the subject claim, the Indemnified Party will
cooperate with and make available to the Indemnifying Party such assistance
and
materials as it may reasonably request, all at the expense of the Indemnifying
Party, and the Indemnified Party shall have the right at its expense to
participate in the defense assisted by counsel of its own choosing, provided
that the
Indemnified Party shall have the right to compromise and settle the claim only
with the prior written consent of the Indemnifying Party, which consent shall
not be unreasonably withheld or delayed.
(iii) Without
the prior written consent of the Indemnified Party, the Indemnifying Party
will
not enter into any settlement of any Third Party Claim or cease to defend
against such claim, if pursuant to or as a result of such settlement or
cessation, (i) injunctive or other equitable relief would be imposed against
the
Indemnified Party, or (ii) such settlement or cessation would lead to liability
or create any financial or other obligation on the part of the Indemnified
Party
for which the Indemnified Party is not entitled to indemnification
hereunder.
(iv) The
Indemnifying Party shall not be entitled to control, and the Indemnified Party
shall be entitled to have sole control over, the defense or settlement of any
claim to the extent that claim seeks an order, injunction or other equitable
relief against the Indemnified Party which, if successful, could materially
interfere with the business, operations, assets or condition (financial or
otherwise) of the Indemnified Party (and the cost of such defense shall
constitute an amount for which the Indemnified Party is entitled to
indemnification hereunder).
(v) If
a firm
decision is made to settle a Third Party Claim, which offer the Indemnifying
Party is permitted to settle under this Section
12.3(a),
and the
Indemnifying Party desires to accept and agree to such offer, the Indemnifying
Party will give written notice to the Indemnified Party to that effect. If
the
Indemnified Party fails to consent to such firm offer within 15 calendar days
after its receipt of such notice, the Indemnified Party may continue to contest
or defend such Third Party Claim and, in such event, the maximum liability
of
the Indemnifying Party as to such Third Party Claim will not exceed the amount
of such settlement offer, plus costs and expenses paid or incurred by the
Indemnified Party through the end of such 15-day period.
22
(vi) Any
judgment entered or settlement agreed upon in the manner provided herein shall
be binding upon the Indemnifying Party, and shall conclusively be deemed to
be
an obligation with respect to which the Indemnified Party is entitled to prompt
indemnification hereunder.
(b) Claims
Not Third Party Claims.
With
respect to a claim for indemnification under this Article
XII
that is
not a Third Party Claim:
(i) An
Indemnification Notice shall, to the extent known and reasonably practicable,
specify in reasonable detail the Losses included in the amount so stated, the
date such item was paid or properly accrued, the basis for any anticipated
liability and the specific representation, warranty or covenant to which each
such item is related and the computation of the amount to which such Indemnified
Party claims to be entitled hereunder (an “Indemnification
Notice”)
and be
delivered to the Indemnifying Party.
(ii) In
the
event that the Indemnifying Party shall in good faith object to the
indemnification of an Indemnified Party in respect of any claim or claims
specified in any Indemnification Notice, the Indemnifying Party shall, within
30
days after delivery to the Indemnifying Party of such Indemnification Notice,
deliver to the Indemnified Party written notice to such effect and the
Indemnifying Party and the Indemnified Party shall, within the 30 day period
beginning on the date of delivery to the Indemnified Party of such objection,
attempt in good faith to agree upon the rights of the respective parties with
respect to each of such claims to which the Indemnifying Party shall have so
objected. If the Indemnifying Party, within 30 days after delivery of such
Indemnification Notice, has not delivered written notice to the Indemnified
Party announcing its objections to the claims asserted therein by the
Indemnified Party, then such claims and the Indemnified Party's liability
therefor shall be deemed accepted by the Indemnifying Party. If the Indemnified
Party and the Indemnifying Party shall succeed in reaching agreement on their
respective rights with respect to any of such claims, the Indemnified Party
and
the Indemnifying Party shall promptly prepare and sign a memorandum setting
forth such agreement. If any such dispute has not been so resolved by
negotiation under this Section
12.3(b)(ii)
within
such 30 day time period, then the Indemnified Party and the Indemnifying Party
shall seek to resolve such dispute in accordance with Section
13.12
hereof.
(iii) Claims
for Losses (A) specified in any Indemnification Notice to which an Indemnifying
Party shall not object in writing within 30 days of delivery of such
Indemnification Notice, (B) which are agreed to in a memorandum of agreement
of
the nature described in Section
12.3(b)(ii),
(C) the
validity and amount of which shall have been established by the dispute
resolution process set forth in Section
13.12
hereof
or which have been settled with the consent of the Indemnifying Party, are
hereinafter referred to, collectively, as "Resolved
Claims".
Within
ten days of the determination of the amount of any Resolved Claims, the
Indemnifying Party shall pay to the Indemnified Party an amount equal to the
Resolved Claim by wire transfer in immediately available funds to the account
designated by the Indemnified Party in a notice to the Indemnifying Party not
less than two business days prior to such payment.
23
12.4. Failure
to Give Timely Notice.
A
failure by an Indemnified Party to give timely, complete or accurate notice
as
provided in Section
12.3
will not
affect the rights or obligations of any
party
hereunder except and only to the extent that, as a result of such failure,
any
party entitled to receive such notice was deprived of its right to recover
any
payment under its applicable insurance coverage or was otherwise directly and
materially damaged as a result of such failure to give timely
notice.
12.5. Survival.
Notwithstanding anything contained to the contrary in this Agreement, all
representations and warranties of the parties hereto contained in or arising
out
of the Transaction Documents, or in any schedule or certificate given in
connection herewith and therewith, shall survive the Closing and shall continue
in effect until the 18-month anniversary of the Closing Date; provided,
however,
that
the representations and warranties set forth in Sections 4.2(a),
4.4, 4.6, 4.8, 4.12(b), 4.15 and
4.19 shall
survive until (i) with respect to Sections 4.6
and
4.12(b),
the
five-year anniversary of the Closing Date and (ii) with respect to each of
the
other foregoing Sections, the expiration of the statutes of limitation
applicable to the specific representation or warranty with respect to which
a
claim is made. Unless a specified period is set forth in this Agreement (in
which event such specified period will control),
all covenants and indemnities contained in this Agreement will survive the
Closing and remain in effect indefinitely.
12.6. Limitation
on Indemnification.
(a) The
aggregate amount of the Losses required to be paid by Seller and Members
pursuant to Section
12.1
hereof
shall not exceed the amount of the Purchase Price; provided,
however,
that no
Member shall be liable, in the aggregate, for such Losses pursuant to
Section
12.1
that are
in excess of such Member’s Pro Rata Basis of the Purchase Price.
(b) The
NovaMed Indemnified Parties shall be entitled to indemnification under
Section
12.1(a)
and
Section
12.1(f)
only if
the aggregate amount of all Losses thereunder (on a cumulative basis) exceeds
$150,000 (the “Basket
Amount”),
in
which case the Seller and Members shall be obligated to indemnify the NovaMed
Indemnified Parties only for the excess of the aggregate amount of all such
Losses over the Basket Amount.
(c) Seller
Indemnified Parties shall be entitled to indemnification under Section
12.2(a)
and
Section
12.2(b)
only if
the aggregate amount of all Losses thereunder (on a cumulative basis) exceeds
the Basket Amount, in which case Buyer shall be obligated to indemnify the
Seller Indemnified Parties only for the excess of the aggregate amount of all
such Losses over the Basket Amount.
(d) The
rights set forth in this Article
XII
shall be
each party’s sole and exclusive remedy for any claim or dispute relating to any
breach of a representation, warranty or covenant by the other parties under
this
Agreement; provided,
however,
that
the limitations set forth in this Section
12.6
shall
not apply, and the aggrieved party shall have all remedies available at law
and
in equity, in the case of (i) fraud or intentional misrepresentation by a party
hereto or (ii) any claim or dispute arising under or relating to Article
XI
hereof.
(e) Notwithstanding
anything to the contrary herein, nothing in this Section
12.6
shall be
deemed to limit or impair NovaMed’s rights under Article
XI
hereof.
In addition, for purposes of this Section
12.6,
in no
event shall Losses be construed to include any remedies paid to NovaMed under
Article
XI.
12.7. Right
of Offset.
If any
of Seller and Members is the Indemnifying Party and fail to make any payment
as
contemplated by this Article
XII,
or
shall fail to make any payment when due under the terms of any of the
Transaction Documents, then NovaMed may elect to offset such amount against
any
amount due and owing by the New LLC to Seller or such Member pursuant to the
terms of the Operating Agreement
(including, without limitation, any distributions payable to Seller or such
Member).
24
ARTICLE
XIII.
MISCELLANEOUS
13.1. Definitions. For
purposes of this Agreement, the following terms have the meaning set forth
below:
“Affiliate”
means
an affiliate as defined in Rule 405 under the Securities Act of 1933, as
amended, and includes any past and present Affiliate of a Person; provided
that
with respect to determining any Affiliate of NovaMed, such Affiliates shall
include, without limitation, NovaMed, Inc. and any of its
subsidiaries.
“Code”
means
the Internal Revenue Code of 1986, as amended.
“Consequential
Damages” shall
mean consequential, special, exemplary or punitive damages, except to the extent
that such damages relate to a Third Party Claim in which case they shall not
be
deemed “Consequential Damages” and shall be included in “Losses” for purposes of
Article
XII
hereof.
“ERISA”
means
the Employee Retirement Income Security Act of 1974, as amended.
“Facility”
means
the Medicare-certified, state-licensed ambulatory surgery center located at
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
“Fraud
and Abuse Laws”
means
all fraud and abuse laws promulgated under Section 1128(b) of the Social
Security Act, 42 U.S.C. Section 1320a-7(b) and Section 1877 of the Social
Security Act, 42 U.S.C. Section 1877, and all rules and regulations promulgated
thereunder; any other federal, state or local law relating to the referral
of
patients to medical facilities owned by providers of medical services; and
all
federal statutes (whether set forth in Title XVIII of the Social Security Act
or
elsewhere) affecting the health insurance program for the aged and disabled
established by Title XVIII of the Social Security Act and any statues succeeding
thereto, together with all rules and regulations promulgated
thereunder.
“Hazardous
Materials”
means
(a) hazardous materials, hazardous substances, extremely hazardous substances
or
hazardous wastes, as those terms are defined by the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq., the Resource
Conservation and ▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇ ▇.▇.▇. §▇▇▇▇ et seq., and any other
Environmental and Safety Requirements; (b) petroleum, including crude oil or
any
fraction thereof which is liquid at standard conditions of temperature and
pressure (60 degrees Fahrenheit and 14.7 pounds per square inch absolute);
(c)
any radioactive material, including any source, special nuclear, or by-product
material as defined in 42 U.S.C. §2011 et seq.; (d) asbestos in any form or
condition; and (e) any other material, substance or waste to which liability
or
standards of conduct may be imposed under any Environmental and Safety
Requirements.
“Knowledge”
or
“knowledge”
or
“aware”
and
all
permutations thereof shall mean the knowledge of any of ▇▇▇▇ ▇▇▇▇▇▇▇, an officer
of ASCOA, ▇▇▇▇▇▇ ▇▇▇▇▇, Seller’s administrator, and the members of the Members’
Committee, which any such member shall be deemed to have “Knowledge” of a
particular fact or other matter if: (i) such
individual is actually aware of such fact or matter; or (ii) a prudent
individual could be expected to discover or otherwise become aware of such
fact
or other matter in the course of conducting a reasonably comprehensive
investigation concerning the existence of such fact or other matter.
A
person
(other than an individual) will be deemed to have “Knowledge” of a particular
fact or other matter if any individual who is serving, or who has at any time
served, as a director, or officer of such Person (or in any similar capacity)
has, or at any time had, Knowledge of such fact or other matters.
25
“Liens”
means
any claims, liens, charges, restrictions, options, preemptive rights, mortgages,
hypothecations, assessments, pledges, encumbrances or security interests of
any
kind or nature whatsoever provided, however, that Liens shall neither mean
nor
include Permitted Liens.
“Material
Adverse Effect”
means,
with respect to any Person, a material adverse effect on the business, financial
condition or results of operations of such Person or any of its subsidiaries,
taken as a whole.
“Medical
Records”
shall
mean all medical records of patients treated at the Facility, including, without
limitation, any and all medical charts, files, notes, transcripts, x-ray files,
lab reports, other diagnostic information or materials, insurance information,
billing and payment statements or records of any kind, explanations of benefits,
and other information of or relating to any patient treated at the Facility,
of
any kind and in any form whatsoever; provided
that
Medical Records shall be limited to the records of the Facility and will not
include records of the provider of professional medical services.
“Members’
Committee”
means
a
committee made up of ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇. ▇▇▇▇ ▇.
▇▇▇▇ and each of their successors.
“Permitted
Liens”
means
Liens for current Taxes not yet due and payable.
“Person”
means
any individual, sole proprietorship, partnership, joint venture, trust,
undertaking, unincorporated association, corporation, entity, organization
or
Governmental Authority.
“Pro
Rata Basis”
shall
mean each Member’s percentage interest in Seller as set forth on Exhibit
2.
“Review
Date”
means
December 31, 2005.
“Tax”
means
any federal, state, local or foreign income, gross receipts, franchise,
estimated, alternative minimum, add-on minimum, sales, use, transfer,
registration, value added, excise, natural resources, severance, stamp,
occupation, premium, windfall profit, environmental, customs, duties, real
property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax,
of
any kind whatsoever, including any interest, penalties or additions to tax
or
additional amounts in respect of the foregoing; the foregoing shall include
any
transferee or secondary liability for a Tax and any liability assumed by
agreement or arising as a result of being (or ceasing to be) a member of any
Affiliated Group, as defined in Section 1504 of the Code (or being included,
or
required to be included, in any Tax Return relating thereto).
“Tax
Returns”
means
returns, declarations, reports, claims for refund, information returns or other
documents (including any related or supporting Schedules, statements or
information) filed or required to be filed in connection with the determination,
assessment or collection of any Taxes of any party or the administration of
any
laws, regulations or administrative requirements relating to any
Taxes.
“Transaction
Documents”
means
this Agreement and all agreements and instruments contemplated by and being
delivered pursuant to or in connection with this Agreement.
26
13.2. Notices,
Consents, etc.
Any
notices, consents or other communication required to be sent or given hereunder
by any of the parties shall in every case be in writing and shall be deemed
properly served if (a) delivered personally, (b) sent by registered or certified
mail, in all such
cases with first class postage prepaid, return receipt requested, (c) delivered
by a nationally recognized overnight courier service, or (d) sent by facsimile
transmission to the parties at the addresses as set forth below or at such
other
addresses as may be furnished in writing.
(i) If
to
Seller and Members:
Members’
Committee
c/o
NovaMed Surgery Center of Cleveland, LLC
▇▇▇
▇▇▇▇
▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇.
▇▇▇▇▇
▇. ▇▇▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
with
a
copy to:
▇▇▇▇▇▇
& ▇▇▇▇▇▇ PLLC
1000
Volunteer Building
▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: E.
Mattias Jannerbo, Esq.
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(ii) If
to
ASCOA:
Cataract
and Laser Center Partners
d/b/a
Ambulatory Surgical Centers of America
▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇ ▇▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
with
a
copy to:
▇▇▇▇▇▇▇
▇▇▇▇▇ LLP
▇▇
▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:
▇▇▇▇▇ ▇▇▇▇▇▇
Fax:
▇▇▇-▇▇▇-▇▇▇▇
27
(ii) If
to
NovaMed:
NovaMed
Acquisition Company, Inc.
▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇
▇.
▇▇▇▇
▇▇▇▇
▇.
▇▇▇▇▇▇▇▇, ▇▇.
Fax: (▇▇▇)
▇▇▇-▇▇▇▇
Date
of
service of such notice shall be (A) the date such notice is personally
delivered, (B) three days after the date of mailing if sent by certified or
registered mail, (C) one day after date of delivery to the overnight courier
if
sent by overnight courier or (D) the next succeeding business day after
transmission by facsimile.
13.3. Certain
Taxes.
Seller
and Members will (on a several Pro Rata Basis) pay all transfer taxes and other
taxes and charges, if any (except for any sales taxes and income tax of NovaMed
and its Affiliates),
which may become payable in connection with the transactions contemplated by
this Agreement.
13.4. Remedies
Not Exclusive.
No
remedy conferred by any of the specific provisions of this Agreement or the
Transaction Documents is intended to be exclusive of any other remedy. Each
such
remedy shall be cumulative, and in addition to every other such remedy or any
other remedy existing at law or in equity.
13.5. Severability
and Reformation.
The
unenforceability or invalidity of any provision of this Agreement shall not
affect the enforceability or validity of any other provision. If any
of the
transactions contemplated herein or provisions hereof violates any applicable
law, then the parties
hereto agree to negotiate in good faith such changes to the structure and terms
of the transactions provided for in this Agreement or the Transaction Documents
as may be necessary to make these transactions, as restructured, lawful under
applicable laws and regulations, without materially disadvantaging either party.
The parties to this Agreement shall execute and deliver all documents or
instruments necessary to effect or evidence the provisions of this Section
13.5.
13.6. Amendment
and Waiver.
This
Agreement may be amended, or any provision of this Agreement may be waived,
provided
that
any
such amendment or waiver will be binding on a party hereto only if such
amendment or waiver is set forth in a writing executed by such
party.
The
waiver by any party hereto of a breach of any provision of this Agreement shall
not operate or be construed as a waiver of any other breach.
13.7. Counterparts.
This
Agreement may be executed simultaneously via facsimile or otherwise in two
or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same agreement and shall become effective
when one or more counterparts have been signed by each of the parties hereto
and
delivered to the other.
13.8. Expenses.
Except
as otherwise specifically provided herein, each of the parties shall pay all
costs and expenses incurred or to be incurred by it,
him
or her, as the case may be, in negotiating and preparing this Agreement and
in
closing and carrying out the transactions contemplated by this
Agreement.
28
13.9. Construction.
This
Agreement shall be construed and enforced in accordance with, and all questions
concerning the construction, validity, interpretation and performance
of this
Agreement shall be governed by, the laws of the State of Delaware, without
giving effect to provisions thereof regarding conflict of laws.
13.10. Headings.
The
subject headings of Articles and Sections of this Agreement are included for
purposes of convenience only and shall not affect the construction or
interpretation of any of its provisions.
13.11. Assignment.
This
Agreement may not be assigned by Seller or any Member without the prior written
consent of NovaMed. Subject
to Section
11.6
hereof,
NovaMed may assign this Agreement without the prior written consent of Seller
or
any Member.
13.12. Mediation
and Arbitration.
Except
as expressly set forth herein, the parties hereto agree that any and all
controversies, disputes or claims arising out of or in connection with this
Agreement shall be solely and exclusively resolved in accordance with this
Section
13.12
and not
in any court of law or equity. The parties hereto shall first try in good faith
to settle the dispute by mediation under the Commercial Mediation Rules of
the
American Arbitration Association (“AAA”)
(such
mediation session to be held in Atlanta, Georgia, and to commence within thirty
(30) days after the appointment of the mediator by the AAA). If the controversy,
claim or dispute cannot be settled by mediation, then by arbitration
administered by the AAA under its Commercial Arbitration Rules (such arbitration
to be held in Atlanta, Georgia before a single arbitrator mutually agreed upon
by Seller and NovaMed and to commence within thirty (30) days after the
appointment of the arbitrator by the AAA), and judgment on the award rendered
by
the arbitrator may be entered in any court having jurisdiction thereof.
Notwithstanding the foregoing, nothing herein shall limit NovaMed’s rights to
seek and obtain injunctive relief, specific performance or other equitable
relief in any proceeding commenced in a federal or state court which may be
brought to enforce any provision in Article
XI
hereof.
13.13. Entire
Agreement.
This
Agreement, the Preamble and all the Schedules attached to this Agreement (all
of
which shall be deemed incorporated in the Agreement and made a part hereof)
set forth the entire understanding of the parties with respect to the subject
matter hereof, and shall not be modified or affected by any offer, proposal,
statement or representation, oral or written, made by or for any party in
connection with the negotiation of the terms hereof, and may be modified only
by
instruments signed by all of the parties hereto.
13.14. Third
Parties.
Nothing
herein expressed or implied is intended or shall be construed to confer upon
or
give to any Person, other than the parties to this Agreement and
their respective
permitted successors and assigns, any rights or remedies under or by reason of
this Agreement.
13.15. No
Strict Construction.
The
language used in this Agreement will be deemed to be the language chosen by
the
parties hereto to express their mutual intent, and no rule of strict
construction will be applied against any party hereto.
13.16. Public
Announcement.
Seller
and Members acknowledge
that NovaMed intends to publicly announce the transactions contemplated herein,
whether through a press release, a filing with the Securities and Exchange
Commission, or some other form or medium selected by NovaMed.
13.17. Members’
Representative.
(a) Each
of
the Members hereby constitutes and appoints the Members’ Committee as the
Members’ Representative and as agent and attorney-in-fact for and on behalf of
each Member, with full powers of substitution (and, if substituted, the Members’
Representative will notify NovaMed in writing a reasonable period of time in
advance of such substitution), to give and receive notices and communications,
to agree to, negotiate, enter into settlements and compromises of, and demand
dispute resolution and comply with orders of arbitrators, courts, tribunals
or
other Governmental Authority and awards of arbitrator, courts, tribunals or
other Governmental Authority with respect to any claims or other matters that
may arise under this Agreement or the Transaction Documents, and to take all
actions and execute all such documents necessary or appropriate in the good
faith discretion of the Members’ Representative for the accomplishment of the
transactions contemplated by this Agreement and the Transaction Documents,
including, without limitation, the power:
29
(i) to
receive and hold the proceeds payable pursuant to this Agreement and to
distribute the same to the Members;
(ii) to
execute and deliver the Transaction Documents, a closing statement and all
other
agreements, documents and other papers which the Members’ Representative deems
necessary or appropriate in connection with this Agreement and the Transaction
Documents, or any of the transactions contemplated hereby or
thereby;
(iii) to
terminate, amend, waive or interpret any provision of this Agreement or the
Transaction Documents.
(iv) to
act
for each Member with regard to the indemnification matters referred to in this
Agreement, including, without limitation, the power to compromise or settle
any
claim on behalf of such Member; and
(v) to
do or
refrain from doing any further act or deed on behalf of each Member which the
Members’ Representative deems necessary or appropriate in its sole discretion
relating to the subject matter of this Agreement as fully and completely as
such
Member could if personally present.
(b) No
bond
shall be required of the Members’ Representative, and the Members’
Representative shall receive no compensation for its services.
(c) Each
Member hereby appoints the Members’ Representative such Member’s agent for
service of process for all purposes under this Agreement and the Transaction
Documents, and agrees that service of any process, summons, notice or document
pursuant to the Agreement to the Members’ Representative at its address shall be
effective service of process of any action, suit or proceeding brought against
such Member.
(d) NovaMed
may, for all purposes of this Agreement, assume and treat every notice, payment
or any other action directed to the Members’ Representative as if such notice,
payment or other action had been directed to each Member.
(e) Neither
the Members’ Representative nor any of its agents or employees shall be liable
to any Member of any error of judgment, or any action taken, suffered or omitted
to be taken, under this Agreement except in the case of its gross negligence,
willful misconduct or fraud. The Members’ Representative may consult with legal
counsel, independent public accountants or other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith
by
it in accordance with the advice of such counsel, accounts or experts. NovaMed
shall be entitled to reply on all statements, representations, agreements and
decisions of the Members’ Representative.
30
(f) By
executing and delivering this Agreement, each Member hereby agrees to indemnify
and hold the Members’ Representative harmless from any and all liability, loss,
cost, damage or expense (including attorneys’ fees) reasonably incurred or
suffered as a result of the performance of its duties under this Agreement,
except such that arises from the gross negligence or willful misconduct or
fraud
of the Members’ Representative.
(g) A
decision, act, consent or instruction of the Members’ Representative shall
constitute a decision of all Members and shall be final, binding and conclusive
upon each Members. NovaMed may rely upon any such decision, act, consent or
instruction of the Members’ Representative as being the decision, act, consent
or instruction of the Members. NovaMed is hereby relieved from any liability
to
any Person for any acts done by it in accordance with such decision, acts,
consents or instruction of the Members’ Representative. The Members hereby
releases and discharges NovaMed from and against any liability arising out
of or
in connection with the Members’ Representative actions or inactions on behalf of
the Members.
(h) Notwithstanding
the foregoing or anything else in this Agreement, the Members’ Representative
shall have no authority to defend a breach or alleged breach by Member of
Article
XI
of this
Agreement, as to which such Member shall have the sole authority to
defend.
13.18. Members’
Committee.
Any
action or inaction by the Members’ Committee shall require the approval of a
majority of the three members of the Members’ Committee. Any member of the
Members’ Committee who resigns or is otherwise unable to serve on the Members
Committee shall be replaced by an individual elected by a majority of the
Members.
*
*
*
31
IN
WITNESS WHEREOF,
the
parties have executed this Agreement as of the date first above written.
|
SELLER:
SURGERY
CENTER OF CLEVELAND, L.L.C.
By:/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Its:
President
|
NOVAMED:
NOVAMED
ACQUISITION COMPANY, INC.
By:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇
▇. ▇▇▇▇, President
|
|
MEMBERS:
CATARACT
AND LASER CENTER PARTNERS, L.L.C.,
d/b/a Ambulatory Surgical Centers of America By:/s/
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its:
CEO
|
/s/
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇, M.D.
|
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇
▇. ▇▇▇▇▇, M.D.
|
/s/
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇
▇. ▇▇▇▇, M.D.
|
|
/s/
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇
▇▇▇▇▇, M.D.
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇
▇. ▇▇▇▇▇▇, M.D.
|
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, M.D.
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, M.D.
|
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, M.D.
|
/s/
C. A. ▇▇▇▇
C.
A. ▇▇▇▇, M.D.
|
|
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇, M.D.
|
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇, M.D.
|
|
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, M.D.
|
/s/
▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇, M.D.
|
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, M.D.
|
/s/
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇▇
▇. ▇▇▇▇▇, M.D.
|
|
MEMBERS’
COMMITTEE:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇
▇. ▇▇▇▇▇▇, M.D.
|
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇
▇. ▇▇▇▇▇, M.D.
|
|
/s/
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇
▇. ▇▇▇▇, M.D.
|
EXHIBITS*
| Exhibit 1 | — | Members |
| Exhibit 2 | — | Pro Rata Basis |
| Exhibit 1.1-1 | — | Certificate of Formation |
| Exhibit 3.2 | — | Wire Transfer Instructions |
| Exhibit 7.3(a) | — | Contribution Agreement |
| Exhibit 7.3(b) | — | Operating Agreement |
| Exhibit 7.3(f) | — | Assignment of LLC Interests |
| Exhibit 7.4(d) | — | Management Agreement |
SCHEDULES*
| Schedule 1.2(b) | — | Personal Property |
| Schedule 1.2(c) | — | Prepaid Business Expenses |
| Schedule 1.2(d) | — | Assumed Contracts |
| Schedule 1.2(e) | — | Member Assets |
| Schedule 1.3(f) | — | Excluded Assets/Personal Effects |
| Schedule 1.4(a) | — | Accounts Payable |
| Schedule 1.4(b) | — | Accrued Liabilities |
| Schedule 1.6 | — | Prorations |
| Schedule 4.1 | — | Notifications and Approvals |
| Schedule 4.2 | — | Liens and Encumbered Assets |
| Schedule 4.3 | — | Seller Approvals |
| Schedule 4.5 | — | Financial Statements |
| Schedule 4.6 | — | Liabilities |
| Schedule 4.9 | — | Material Contracts |
| Schedule 4.11 | — | Litigation |
| Schedule 4.12(b) | — | Licenses and Permits |
| Schedule 4.13 | — | No Breaches |
| Schedule 4.14 | — | Conduct of Business |
| Schedule 4.16 | — | Salaries |
| Schedule 4.17 | — | Insurance |
| Schedule 4.19 | — | Employee Benefit Plans |
| Schedule 4.20 | — | Personnel Agreements |
| Schedule 4.22 | — | Workers Compensation |
| Schedule 4.23(a) | — | Accounts Receivable |
| Schedule 5.6 | — | NovaMed Approvals |
| Schedule 6.2(a) | — | Continuing Employees |
| Schedule 11.2 | — | Ownership in other Entities |
*
NovaMed, Inc. agrees to furnish supplementally a copy of any omitted schedule
or
exhibit to the Securities and Exchange Commission upon request.
EXHIBIT
1
Physician
Members
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