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Title:

Asset Purchase Agreement

Entities:

PainCare Holdings, Inc.; McDermott, Will & Emery

Date:

2005

Size:

157KB total

Price:

$45

ID:

#821447

 

 

► Purchase & Sale ► Purchase ► Asset Purchase Agreements
► Healthcare ► Healthcare Facilities
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ASSET PURCHASE AGREEMENT

BY AND AMONG

PAINCARE HOLDINGS, INC.,

PAINCARE SURGERY CENTERS III, INC.,

CENTER FOR PAIN MANAGEMENT ASC, LLC,

AND ITS

MEMBERS

Dated as of September 26, 2005






TABLE OF CONTENTS


Page





1.

PURCHASE AND SALE OF ASSETS

1

1.1

Assets to be Transferred

1

1.2

Excluded Assets

4

2.

ASSUMPTION OF LIABILITIES

4

2.1

Liabilities to be Assumed

4

2.2

Liabilities Not to be Assumed

5

2.3

Taxes Arising from Transaction

5

2.4

Income and Franchise Taxes

5

2.5

Product, Medical Malpractice and Service Liability

5

2.6

Litigation Matters

5

2.7

Infringements

5

2.8

Transaction Expenses

5

2.9

Liability For Breach

5

2.10

Liabilities to Affiliates

6

2.11

Violation of Laws or Orders

6

3.

PURCHASE PRICE - PAYMENT

6

3.1

Purchase Price Consideration

6

3.2

Closing Consideration

6

3.3

Payment of Closing Consideration

6

3.4

Closing Time Adjustments

7

3.5

Promissory Note and Guaranty

9

3.6

Allocation of Purchase Price

9

3.7

Escrow Agreement and Transition Management Services

9

4.

REPRESENTATIONS AND WARRANTIES OF SELLERS

10

4.1

Organization; Authority

10

4.2

No Violation

10

4.3

Appraisal Reports

11

4.4

Compliance With Laws and Orders

11

4.5

Title to and Condition of Properties

12

4.6

Insurance

13

4.7

Contracts and Commitments

14

4.8

Employee Benefit Plans

16

4.9

Intellectual Property

16

4.10

Product Warranty and Product Liability

16

4.11

Assets Necessary to Business

17

4.12

No Brokers or Finders

17

4.13

Financial Statements

17

4.14

Conduct Since Date of Recent Balance Sheet

17

4.15

Company and Affiliates

18

4.16

Liabilities

18

4.17

Accounts Receivable

19

4.18

Environmental Matters

19

4.19

Personnel

20

4.20

Bank Accounts

21

4.21

Tax Matters

21

4.22

Litigation

22

4.23

Health Care Compliance

22

4.24

Fraud and Abuse

22

4.25

Rates and Reimbursement Policies

23

4.26

Medical Staff

23

4.27

Medical Providers

24

4.28

Third-party Payors

25

4.29

Disclosure

25

4.30

Corporate Practice or Fee Splitting

25

4.31

Staff Privileges

25

4.32

Securities Representation

25

4.33

HIPAA

27

4.34

Improper and Other Payments

27

4.35

Medical Waste

27

4.36

Transfer of Custody of Patient Medical Records

28

4.37

Certain Representations with respect to the Centers

28

5.

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

28

5.1

Organization of PainCare and Subsidiary

29

5.2

Authorization of Transaction

29

5.3

PainCare Shares

29

5.4

No Conflicts; Consents

29

5.5

Consents

30

5.6

Brokers

30

5.7

Full Disclosure

30

6.

RESTRICTIVE COVENANTS

30

6.1

Restricted Period

30

6.2

Confidentiality, Press Releases, and Public Announcements

32

6.3

Bulk Sales Compliance

33

7.

FURTHER COVENANTS OF SELLERS

33

7.1

Access to Information and Records

33

7.2

Maintain Organization

33

7.3

No Breach

33

7.4

Maintenance of Insurance

33

7.5

Consents

33

7.6

Other Action

33

7.7

Disclosure

34

8.

CONDITIONS PRECEDENT TO PURCHASERS OBLIGATIONS

34

8.1

Representations and Warranties True on the Closing Time

34

8.2

Compliance With Agreement

34

8.3

Absence of Litigation

34

9.

CONDITIONS PRECEDENT TO SELLERS OBLIGATIONS

35

9.1

Representations and Warranties True on the Closing Time

35

9.2

Compliance With Agreement

35

10.

CLOSING

35

10.1

Closing

35

10.2

Documents to be Delivered by the Sellers

36

10.3

Documents to be Delivered by the Purchaser

37

11.

POST-CLOSING COVENANTS

37

11.1

General

37

11.2

Option Agreement

38

11.3

Tax Returns

38

11.4

Transition

38

11.5

Litigation Support

38

12.

REGISTRATION

38

13.

SURVIVAL AND  INDEMNIFICATION

38

13.1

Survival of Representations and Warranties

38

13.2

Indemnification Provisions for the Benefit of PainCare and the Subsidiary

39

13.3

Indemnification Provisions for the Benefit of the Sellers

39

13.4

Matters Involving Third Parties

39

13.5

Limitation

40

14.

MISCELLANEOUS

41

14.1

Disclosure Schedules

41

14.2

Assignment; Parties in Interest

41

14.3

Notice

41

14.4

Entire Agreement

42

14.5

Counterparts

42

14.6

Headings

43

14.7

Governing Law; Jurisdiction

43

14.8

Attorneys Fees

43

14.9

Amendments and Waivers

43

14.10

Severability

43

14.11

Expenses

43

14.12

Further Assurances

43

14.13

Construction

44

14.14

Survival

44

14.15

Incorporation of Exhibits and Schedules

44

15.

DEFINITIONS

44



 

-i-

 








ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (the Agreement) is entered into effective the 26th day of September, 2005 (the Execution Date), by and among MARK H. COLEMAN, M.D. (Dr. Coleman), PRABAAL DEY, M.D. (Dr. Dey), MARC A. LOEV, M.D. (Dr. Loev), LESTER A. ZUCKERMAN, M.D. (Dr. Zuckerman), CENTER FOR PAIN MANAGEMENT ASC, LLC, a Maryland limited liability company (the Company), PAINCARE HOLDINGS, INC., a Florida corporation (PainCare) and its wholly owned subsidiary, PAINCARE SURGERY CENTERS III, INC., a Florida corporation (the Subsidiary).  Dr. Dey, Dr. Loev, Dr. Coleman and Dr. Zuckerman are sometimes referred to herein as the Members. The Company and the Members are sometimes referred to herein as the Sellers and PainCare and the Subsidiary are sometimes referred to herein as the Purchaser. The Purchaser and the Sellers are sometimes referred to herein individually as a Party and collectively as the Parties.

W I T N E S S E T H:

A.

The Company owns and operates four (4) Medicare certified and state licensed ambulatory surgical centers that are located at the following locations: (i) 11921 Rockville Pike, Suite 505, Rockville, Maryland 20852; (ii) 3901 Greenspring Avenue, Suite 304, Baltimore, Maryland 21211; (iii) 1150 Professional Court, Suite L, Hagerstown, Maryland 21740; and (iv) 305 Hospital Drive, Suite 304, Glen Burnie, Maryland 21061 (collectively, the Centers).

B.

The Company desires to sell and the Purchaser desires to buy substantially all of the assets, properties, rights, and claims of the Company and the Centers, which assets, properties, rights and claims shall collectively be referred to herein as the Business.

C.

The Members own one hundred percent (100%) of the total issued and outstanding membership interests of the Company, free and clear of any and all Liens (as defined in Section 4.5(a) below).

NOW THEREFORE, in consideration of the mutual promises and covenants herein contained and the sum of ten dollars ($10.00) and other good and valuable consideration paid by the Purchaser to the Company, the receipt and sufficiency of which are hereby acknowledged by the Company, it is mutually covenanted and agreed by the parties hereto as follows:

1.

PURCHASE AND SALE OF ASSETS

1.1

Assets to be Transferred.  Subject to the terms and conditions of this Agreement, on the Closing Time (as defined in Section 10.1 below), and except as otherwise stated, the Subsidiary shall purchase, and the Company shall sell, transfer, convey, assign, and deliver to Subsidiary, all of the Companys Business rights, claims and assets (of every kind, nature, character and description, whether real, personal or mixed, tangible or intangible, accrued, contingent or otherwise, and wherever situated other than the Excluded Assets specified in Section 1.2 below) which are used, held for use or acquired or developed for use by the Company in the Business, or developed in the course of conducting the Business or by Persons employed by the Company in the Business (collectively the Purchased Assets), free and clear of any and all Liens other than those Liens set forth on Disclosure Schedule 4.5(a).  The Purchased Assets shall include, without limitation, all the following assets or rights of the Company, to the extent so used, held, acquired or developed in the Business:

(a)

Cash and Cash Equivalents and Accounts Receivable.  All cash, cash equivalents, and the Accounts Receivable of the Company as of the Closing Time, including without limitation those described in Disclosure Schedule 1.1(a);

(b)

Personal Property.  All of the Companys rights in, to and under all, instruments, equipment, furniture, machinery and other items of tangible personal property including, without limitation, the personal property leases described in the Disclosure Schedule 1.1(b);

(c)

Inventory.  All inventories including, without limitation, supplies, merchandise and durable medical equipment, together with related packaging and delivery materials (collectively the Inventory);


 

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