SHARE EXCHANGE AGREEMENT
by and among
PRG FLORIDA XII, INC.,
MELBOURNE EYE ASSOCIATES OF BREVARD, INC.,
MELBOURNE EYE ASSOCIATES, P.A.,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D., Trustee U.T.D. March 24, 1980
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D., Trustee U.T.D. September 26, 1988
▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.,
▇▇▇▇▇ ▇▇▇▇▇▇, M.D.,
L. ▇▇▇▇ ▇▇▇▇▇▇▇, M.D.,
K. ▇▇▇▇▇▇▇▇ ▇▇, M.D., Trustee U.T.D. November 24, 1989
and
PHYSICIANS RESOURCE GROUP, INC.
SHARE EXCHANGE AGREEMENT
This SHARE EXCHANGE AGREEMENT (this "Agreement"), made and
executed as of the 4th day of October, 1996, is by and among PRG
FLORIDA XII, INC., a Delaware corporation ("PRG Sub"); PHYSICIANS
RESOURCE GROUP, INC., a Delaware corporation ("PRG"); and MELBOURNE
EYE ASSOCIATES OF BREVARD, INC., a Florida corporation and MELBOURNE
E Y E ASSOCIATES, P.A., a Florida professional association
(collectively, the "Company"); and ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D., Trustee
U.T.D. March 24, 1980, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D., Trustee U.T.D.
September 26, 1988, ▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D., ▇▇▇▇▇ ▇▇▇▇▇▇, M.D., L. ▇▇▇▇
▇▇▇▇▇▇▇, M.D. and K. ▇▇▇▇▇▇▇▇ ▇▇, M.D., Trustee U.T.D. November 24,
1989 all individual residents of the State of Florida (individually
"Shareholder," and collectively "Shareholders").
WITNESSETH:
WHEREAS, Company operates an ophthalmology practice in Melbourne,
Florida ("Business");
WHEREAS, Shareholders are the only shareholders of Company;
WHEREAS, PRG Sub is engaged in the business of acquiring the
assets of and managing non-medical aspects of ophthalmology practices
and is a wholly-owned subsidiary of PRG; and
WHEREAS, the Shareholders desire to convey to PRG Sub, and PRG
Sub desires to acquire from the Shareholders, one hundred percent of
the issued and outstanding capital stock Company (the Stock ) in
consideration for PRG Sub conveying to the Shareholders the PRG stock
identified in Annex I (hereinafter the PRG Stock ), all upon the
terms and subject to the conditions set forth herein, in accordance
a n d subject to the terms of Internal Revenue Code Section
368(a)(1)(B).
NOW THEREFORE, in consideration of the mutual promises and
covenants hereinafter set forth, and for other good and valuable
consideration, the sufficiency of which is hereby acknowledged, the
parties hereby agree as follows:
Section 1. Terms of the Exchange of Stock.
The exchange of the outstanding capital stock of PRG and the
Company which is to be exchanged hereunder shall occur on the 9th day
of October, 1996 ("Closing Date"), unless another date is mutually
agreed upon among the parties hereto and shall be based on the
respective representations, warranties and agreements of the parties
hereto, and shall be subject to the terms and conditions herein
stated.
1.1 Conveyance of Stock. Subject to and upon the terms and
conditions contained herein, on the Closing Date, Shareholders shall
convey, transfer, deliver and assign to PRG Sub all of the Stock, free
and clear of all obligations, security interests, claims, liens and
encumbrances whatsoever. Subject to and upon the terms and
conditions contained herein, on the Closing Date, PRG shall convey,
transfer, deliver and assign to the Shareholders the PRG Stock free
and clear of all obligations, security interests, claims, liens and
encumbrances other than the terms and provisions of the Stockholders
Agreement.
1.2 Conveyance of PRG Stock. As consideration for the sale of
t h e Stock, PRG Sub shall, on the Closing Date, provide the
Shareholders with the consideration specified in Annex I attached
hereto (the Consideration").
1.3 Subsequent Actions. If, at any time after the Closing Date,
PRG Sub or PRG shall consider or be advised that any stock powers,
deeds, bills of sale, assignments, assurances or any other actions or
things are necessary or desirable to vest, perfect or confirm of
record or otherwise in PRG Sub its right, title or interest in, to or
under any of the Stock or otherwise to carry out this Agreement, in
return for the consideration set forth in this Agreement, the officers
and directors of PRG Sub shall be authorized to execute and deliver,
in the name and on behalf of Company and each Shareholder or
otherwise, to carry out all such deeds, bills of sale, assignments and
assurances and to take and do, in the name and on behalf of PRG Sub or
otherwise, all such other actions and things as may be necessary or
desirable to vest, perfect or confirm any and all right, title and interest in,
to and under the Stock in PRG Sub or otherwise to carry out this
Agreement. If, at any time after the Closing Date, the Shareholders
shall consider or be advised that any stock powers, deeds, bills of
sale, assignments, assurances or any other actions or things are
necessary or desirable to vest, perfect or confirm of record or
otherwise in Shareholders its right, title or interest in, to or under
any of the PRG Stock or otherwise to carry out this Agreement, in
return for the consideration set forth in this Agreement, the officers
and directors of Shareholders shall be authorized to execute and
deliver, in the name and on behalf of PRG and PRG Sub or otherwise, to
carry out all such deeds, bills of sale, assignments and assurances
and to take and do, in the name and on behalf of PRG Sub or otherwise,
all such other actions and things as may be necessary or desirable to
vest, perfect or confirm any and all right, title and interest in, to
and under the PRG Stock in PRG Sub or otherwise to carry out this
Agreement.
Section 2. Representations and Warranties of Company and the
Shareholders.
The Company and the Shareholders, jointly and severally, hereby
represent and warrant to PRG Sub and PRG as follows:
2.1 C o r p orate Existence; Good Standing. Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Florida. Company has all necessary
corporate powers to own all of its assets and to carry on its business
as such business is now being conducted. Company does not own stock
in or control, directly or indirectly, any other corporation,
association or business organization, nor is Company a party to any
joint venture or partnership. Shareholders are the sole shareholders
of Company and own all outstanding shares of capital stock free of all
security interests, claims, encumbrances and liens in the amounts set
forth on Exhibit 2.1. Each share of Company's common stock has been
legally and validly issued and fully paid and nonassessable. No
shares of capital stock of Company are owned by Company in treasury.
There are no outstanding (a) bonds, debentures, notes or other
obligations the holders of which have the right to vote with the
stockholders of Company on any matter, (b) securities of Company
convertible into equity interests in Company, or (c) commitments,
options, rights or warrants to issue any such equity interests in
Company, to issue securities of Company convertible into such equity
interests, or to redeem any securities of Company. No shares of
capital stock of Company have been issued or disposed of in violation
of the preemptive rights, rights of first refusal or similar rights of
any of Company's stockholders. Company is not required to qualify to
do business as a foreign corporation in any other state or
jurisdiction by reason of its business, properties or activities in or
relating to such other state or jurisdiction. Company does not have
any assets, employees or offices in any state other than Florida.
2.2 Power and Authority for Transactions. Company has the
corporate power to execute, deliver and perform this Agreement and all
agreements and other documents executed and delivered by it pursuant
to this Agreement or to be executed and delivered on the Closing Date,
and has taken all action required by law, its Articles or Certificate
of Incorporation, its Bylaws or otherwise, to authorize the execution,
delivery and performance of this Agreement and such related documents.
Each Shareholder has the legal capacity to enter into and perform this
Agreement and the other agreements to be executed and delivered in
connection herewith. Company has obtained the approval of its
stockholders necessary to the consummation of the transactions
contemplated herein. This Agreement and all agreements and documents
executed and delivered in connection herewith have been, or will be as
of the Closing Date, duly executed and delivered by Company and the
Shareholders, as appropriate, and constitute or will constitute the
legal, valid and binding obligations of Company and the Shareholders,
enforceable against Company and the Shareholders in accordance with
their respective terms, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights
generally or the availability of equitable remedies. The execution
and delivery of this Agreement, and the agreements executed and
delivered pursuant to this Agreement or to be executed and delivered
on the Closing Date, do not, and, subject to the receipt of consents
described on Exhibit 2.5, the consummation of the actions contemplated
hereby will not, violate any provision of the Articles or Certificate
of Incorporation or Bylaws of Company or any provisions of, or result
in the acceleration of, any obligation under any mortgage, lien,
lease, agreement, rent, instrument, order, arbitration award, judgment
or decree to which Company or any Shareholder is a party or by which
Company or any Shareholder is bound, or violate any material
restrictions of any kind to which Company is subject, or result in any
lien or encumbrance on any of Company's assets or the Stock.
2.3 Permits, Licenses and Governmental Authorizations. All
building or other permits, certificates of occupancy, concessions,
g r a nts, franchises, licenses, certificates of need and other
governmental authorizations and approvals required for the conduct of
the Business, or waivers thereof, have been duly obtained and are in
full force and effect and are described on Exhibit 2.3. There are no
p r oceedings pending or, to the knowledge of Company and the
S h areholders, threatened, which may result in the revocation,
cancellation or suspension, or any adverse modification, of any
thereof.
2.4 Corporate Records. True and correct copies of the Articles
or Certificate of Incorporation, Bylaws and minutes of Company and all
amendments thereto of Company have been delivered to PRG Sub. The
minute books of Company contain all accurate minutes of the meetings
of and consents to actions taken without meetings of the Board of
Directors and stockholders of Company since its formation. The books
of account of Company have been kept accurately in the ordinary course
of business and the revenues, expenses, assets and liabilities of
Company have been properly recorded in such books.
2.5 Consents. Except as set forth on Exhibit 2.5, no consent,
authorization, permit, license or filing with any governmental
authority, any lender, lessor, any manufacturer or supplier or any
other person or entity is required to authorize, or is required in
connection with, the execution, delivery and performance of this
Agreement and the agreements and documents contemplated hereby on the
part of Company or the Shareholders.
2.6 Company's Financial Information. Company has heretofore
furnished PRG Sub with financial information about the Company, which
information is set forth in the financial statements on Exhibit 2.6
attached hereto (the Financial Statements ), including the unaudited
Balance Sheet ("Balance Sheet") as of the date set forth therein
("Balance Sheet Date"). The Financial Statements for the periods
indicated, reflect all liabilities of Company required to be reported
i n a c cordance with generally accepted accounting principles
consistently applied ( GAAP ), reflect all contingent liabilities of
Company required to be reported in accordance with GAAP as of their
respective dates, and present fairly the financial position of Company
as of such dates and the results of operations and cash flows for the
period or periods reflected therein.
2.7 Leases. Exhibit 2.7 attached hereto sets forth a list of
all leases pursuant to which Company leases, as lessor or lessee, real
or personal property used in operating the Business or otherwise. All
such leases listed on Exhibit 2.7 are valid and enforceable in
accordance with their respective terms, and there is not under any
such lease any existing default by Company, as lessor or lessee, or
any condition or event of which Company or any Shareholder has
knowledge which with notice or lapse of time, or both, would
constitute a default, in respect of which Company has not taken
adequate steps to cure such default or to prevent a default from
occurring.
2.8 Condition of Assets. The assets owned by the Company
constitute the only assets necessary for the conduct of the Business.
All of the assets of the Company are in good condition and repair
subject to normal wear and tear and conform with all applicable
o r d inances, regulations and other laws, and Company and the
Shareholders have no knowledge of any latent defects therein.
2.9 Title to and Encumbrances on Property. A description of all
interests in real and personal property owned by the Company is set
forth on Exhibit 2.9. The Company has good, valid and marketable
title to all of its personal and real property, free and clear of any
liens, claims, charges, exceptions or encumbrances, except for those,
if any, which are set forth in Exhibit 2.9 attached hereto. The real
and personal property described on Exhibit 2.9 and Exhibit 2.7
constitute the only real and personal property used in the conduct of
the Company's business. Upon consummation of the transactions
contemplated hereby, such interest in real and personal property shall
be free and clear of all liens, security interests, claims and
encumbrances and evidence of such releases of liens and claims shall
be provided to PRG Sub on the Closing Date.
2.10 Inventories. All inventories of the Company used in the
conduct of the Business are reflected on the Balance Sheet in
accordance with generally accepted accounting principles consistently
applied. The items of Company's inventory have been acquired in the
ordinary course of its business, are adequate for the reasonable
requirements of the Business, and, to the best knowledge of the
Company and the Shareholders, may be used for their intended purposes.
All of the assets of the Company constituting inventory are owned or
used by Company, is in good, current, standard and merchantable
condition and is not obsolete or defective.
2.11 Intellectual Property Rights; Names. Except as set forth on
Exhibit 2.11, Company has no right, title or interest in or to
patents, patent rights, corporate names, assumed names, manufacturing
p r ocesses, trade names, trademarks, service marks, inventions,
specialized treatment protocols, copyrights, formulas and trade
secrets or similar items and such items are the only such items
necessary for the conduct of the Business. Set forth in Exhibit 2.11
is a listing of all names of all predecessor companies of Company,
including the names of any entities from whom Company previously
acquired significant assets. Except for off-the-shelf software
licenses and except as set forth on Exhibit 2.11, Company is not a
licensee in respect of any patents, trademarks, service marks, trade
n a m e s, copyrights or applications therefor, or manufacturing
processes, formulas or trade secrets or similar items and no such
licenses are necessary for the conduct of the Business. No claim is
pending or has been made to the effect that the present or past
operations of Company infringe upon or conflict with the asserted
rights of others to any patents, patent rights, manufacturing
p r ocesses, trade names, trademarks, service marks, inventions,
licenses, specialized treatment protocols, copyrights, formulas, know-
how and trade secrets. Company has the sole and exclusive right to
use all of its assets constituting proprietary rights without
infringing or violating the rights of any third parties and no
consents of any third parties are required for the use thereof by PRG
Sub.
2.12 Directors and Officers; Payroll Information; Employees. Set
forth on Exhibit 2.12 attached hereto is a true and complete list, as
of the date of this Agreement of: (a) the name of each director and
officer of Company and the offices held by each, (b) the most recent
payroll report of Company, showing all current employees of Company
and their current levels of compensation, (c) promised increases in
compensation of employees of Company that have not yet been effected,
(d) oral or written employment agreements or independent contractor
agreements (and all amendments thereto) to which Company is a party,
copies of which have been delivered to PRG Sub, and (e) all employee
manuals, materials, policies, procedures and work-related rules,
copies of which have been delivered to PRG Sub. Company is in
compliance with all applicable laws, rules, regulations and ordinances
respecting employment and employment practices. Company has not
engaged in any unfair labor practice. There are no unfair labor
practices charges or complaints pending or threatened against Company,
and Company has never been a party to any agreement with any union,
labor organization or collective bargaining unit.
2.13 Legal Proceedings. Except as set forth on Exhibit 2.13,
neither Company nor any Shareholder nor any of the assets of the
Company is subject to any pending, nor does Company or any
Shareholder have knowledge of any threatened, litigation, governmental
investigation, condemnation or other proceeding against or relating to
o r a ffecting Company, any Shareholder, the Business or the
transactions contemplated by this Agreement, and, to the knowledge of
Company and the Shareholders, no basis for any such action exists, nor
is there any legal impediment of which Company or any Shareholder has
knowledge to the continued operation of its business in the ordinary
course, subject to consents set forth on Exhibit 2.5.
2.14 Contracts. Company has delivered to PRG Sub true copies of
all written, and disclosed to PRG Sub all oral, outstanding contracts,
obligations and commitments of Company ("Contracts"), all of which are
listed or incorporated by reference on Exhibit 2.7 (in the case of
leases), Exhibit 2.12 (in the case of employment agreements) and
Exhibit 2.14 (in the case of Contracts other than leases) attached
hereto. Except as otherwise indicated on such Exhibits, all of such
Contracts are valid, binding and enforceable in accordance with their
terms and are in full force and effect, and no defenses, offsets or
counterclaims have been asserted or may be made by any party thereto.
Except as indicated on such Exhibits, there is not under any such
Contract any existing default by Company, or any condition or event of
which Company or any Shareholder has knowledge which with notice or
lapse of time, or both, would constitute a default. Company and the
Shareholders have no knowledge of any default by any other party to
such Contracts. Neither Company nor the Shareholders have received
notice of the intention of any party to any Contract to cancel or
terminate any Contract and have no reason to believe that any
amendment or change to any Contract is contemplated by any party
thereto. Other than those contracts, obligations and commitments
listed on Exhibit 2.7, Exhibit 2.12 and Exhibit 2.14, Company is not a
party to any material written or oral agreement contract, lease or
arrangement, including any:
(a) Contract related to the sale of any assets of the
Company other than this Agreement;
(b) Employment, consulting or compensation agreement or
arrangement;
(c) Labor or collective bargaining agreement;
(d) Lease agreement with respect to any property, whether
as lessor or lessee;
(e) Deed, ▇▇▇▇ of sale or other document evidencing an
interest in or agreement to purchase or sell real or personal
property;
(f) Contract for the purchase of materials, supplies or
equipment (i) which is in excess of the requirements of the Business
now booked or for normal operating inventories, or (ii) which is not
terminable upon notice of thirty (30) days or less;
(g) Agreement for the purchase from a supplier of all or
substantially all of the requirements of the Business of a particular
product or service;
(h) Loan agreement or other contract for money borrowed or
lent or to be borrowed or lent to another;
(i) Contracts containing non-competition covenants; or
(j) Other contracts or agreements that involve either an
unperformed commitment in excess of $1,000 or that terminate or can
only be terminated by Company on more than 30 days after the date
hereof.
2.15 Subsequent Events. Company has not, since the Balance Sheet
Date:
(a) Incurred any material obligation or liability
(absolute, accrued, contingent or otherwise) or entered into any
contract, lease, license or commitment, except in connection with the
performance of this Agreement, other than in the ordinary course of
business or incurred any indebtedness;
(b) D i s c h arged or satisfied any material lien or
encumbrance, or paid or satisfied any material obligation or liability
( a b s olute, accrued, contingent or otherwise) other than (i)
l i abilities shown or reflected on the Balance Sheet or (ii)
liabilities incurred since the Balance Sheet Date in the ordinary
course of business;
(c) Formed or acquired or disposed of any interest in any
corporation, partnership, joint venture or other entity;
(d) Made any payments to or loaned any money to any person
or entity other than in the ordinary course of business;
(e) Lost or terminated any employee, patient, customer or
supplier that has, individually or in the aggregate, a material
adverse effect on the Business;
(f) Increased or established any reserve for taxes or any
other liability on its books or otherwise provided therefor, except as
may have been required due to income or operations of Company since
the Balance Sheet Date;
(g) Mortgaged, pledged or subjected to any lien, charge or
other encumbrance any of the assets of the Company, tangible or
intangible;
(h) Sold or contracted to sell or transferred or contracted
to transfer any of the assets used in the conduct of the Business,
cancelled any debts or claims or waived any rights, except in the
ordinary course of business;
(i) Except in the ordinary course or business consistent
with past practices, granted any increase in the rates of pay of
employees, consultants or agents, or by means of any bonus or pension
plan, contract or other commitment, increased the compensation of any
officer, employee, consultant or agent;
(j) Other than capital expenditures in an amount of
approximately $18,000, authorized or incurred any capital expenditures
in excess of Five Thousand and No/100 Dollars ($5,000.00);
(k) Except for this Agreement and any other agreement
executed and delivered pursuant to this Agreement, entered into any
material transaction other than in the ordinary course of business or
permitted hereunder;
(l) Redeemed, purchased, sold or issued any stock, bonds or
other securities;
(m) Experienced damage, destruction or loss (whether or not
covered by insurance) materially and adversely affecting any of its
properties, assets or business or the Business, or experienced any
other material adverse change in its financial condition, assets,
prospects, liabilities or business;
(n) Declared or paid a distribution, payment or dividend of
any kind on the capital stock of Company;
(o) Repurchased, approved any repurchase or agreed to
repurchase any of Company's capital stock; or
(p) Suffered any material adverse change in the Business or
to the Company.
2.16 Accounts Receivable/Payable. The Balance Sheet reflects the
amount, as of the Balance Sheet Date and determined in conformity with
generally accepted accounting principles and the past practices
employed by Company of the Company s (i) accounts receivable, net of
allowances for uncollectible and doubtful amounts ( Accounts
Receivable ) and (ii) current accounts payable and current accrued
liabilities (other than the current portion of long-term debt)
( Accounts Payable ). Exhibit 2.16 contains a true and accurate (i)
statement of all Accounts Receivable, (ii) statement of all Accounts
Payable and (iii) statement of the working capital ( Working Capital )
of the Company as of the Balance Sheet Date. The Company maintains
its accounting records in sufficient detail to substantiate the
accounts receivable reflected on the Balance Sheet and has given and
will give to PRG Sub full and complete access to those records,
including the right to make copies therefrom. Since the Balance Sheet
Date, the Company has not changed any principle or practice with
respect to the recordation of accounts receivable or the calculation
of reserves therefor, or any material collection, discount or write-
off policy or procedure. Accounts Receivable are recorded in amounts
estimated to be net of contractual allowances related to third-party
payor arrangements. The Company is in substantial compliance with the
terms and conditions of such third-party payor arrangements, and the
reserves established by the Company are adequate to cover any
liability resulting from lack of compliance. Following Closing, the
administration of the collection of Accounts Receivable and the
payment of Accounts Payable shall be as set forth in the Service
Agreement.
2.17 Taxes. Company has filed all tax returns (including tax
reports and other statements) required to be filed by it, and made all
payments of taxes (including any interest, penalty or addition
thereto) required to be made by it, on or before the date of this
Agreement, with respect to income taxes, real and personal property
taxes, sales taxes, use taxes, employment taxes, excise taxes and
other taxes. All such tax returns are complete and accurate in all
respects and properly reflect the relevant taxes for the periods
covered thereby. Company has no tax liability, except for real and
personal property taxes for the current period not yet due and payable
and sales, use, employment and similar taxes for periods as to which
such taxes have not yet become due and payable. The unpaid taxes of
Company did not, as of the Balance Sheet Date, exceed the reserve for
taxes (rather than any reserve for deferred taxes established to
reflect timing differences between book and taxable income) set forth
on the face of the Balance Sheet (rather than in any notes thereto),
as adjusted for the passage of time through the Closing Date (in
accordance with the past custom and practice of Company). Company and
the Shareholders have not received any notice that any tax deficiency
or delinquency has been asserted against Company. There are no audits
relating to taxes of Company threatened, pending or in process.
Company is not currently the beneficiary of any waiver of any statute
of limitations in respect of taxes nor of any extension of time within
which to file any tax return or to pay any tax assessment or
deficiency. There are no liens or encumbrances relating to taxes on
or threatened against any of the assets of Company. Company has
withheld and paid all taxes required by law to have been withheld and
paid by it. Neither Company nor any predecessor of Company is or has
been a party to any tax allocation or sharing agreement or a member of
an affiliated group of corporations filing a consolidated federal
income tax return. Company has delivered to PRG Sub correct and
complete copies of Company's three most recently filed annual state
and federal income tax returns, together with all examination reports
and statements of deficiencies assessed against or agreed to by
Company during the three calendar year period preceding the date of
this Agreement. Company has neither made any payments, is obligated
to make any payments, or is a party to any agreement that under any
circumstance could obligate it to make any payments that will not be
deductible under Code section 280G.
2.18 Liabilities; Debt. Except to the extent reflected or
reserved against on the Balance Sheet, Company did not have, as of the
Balance Sheet Date, and has not incurred since that date and will not
have occurred as of the Closing Date, any liabilities or obligations
of any nature, whether accrued, absolute, contingent or otherwise, and
whether due or to become due, other than those incurred in the
ordinary course of business. Company and the Shareholders do not
know, or have reasonable grounds to know, of any basis for the
assertion against Company as of the Balance Sheet Date, of any claim
or liability of any nature in any amount not fully reflected or
reserved against on the Balance Sheet, or of any claim or liability of
any nature arising since that date other than those incurred in the
ordinary course of business or contemplated by this Agreement. All
indebtedness of Company (including without limitation, indebtedness
for borrowed money, guaranties and capital lease obligations) is
described on Exhibit 2.18 attached hereto.
2.19 Insurance Policies. Company, each Shareholder and each
physician employee of Company carries property, liability,
malpractice, workers' compensation and such other types of insurance
as is customary in the industry. Valid and enforceable policies in
such amounts are outstanding and duly in force and will remain duly in
force through the Closing Date. All such policies are described in
Exhibit 2.19 attached hereto and true and correct copies have been
delivered to PRG Sub. Neither Company nor any Shareholder has
received notice or other communication from the issuer of any such
insurance policy cancelling or amending such policy or threatening to
do so. Neither Company, nor each Shareholder nor any physician
employee of Company has any outstanding claims, settlements or
premiums owed against any insurance policy.
2.20 Employee Benefit Plans. Except as set forth on Exhibit 2.20
attached hereto, Company has neither established, nor maintains, nor
i s obligated to make contributions to or under or otherwise
participate in, (a) any bonus or other type of compensation or
employment plan, program, agreement, policy, commitment, contract or
arrangement (whether or not set forth in a written document); (b) any
p e nsion, profit-sharing, retirement or other plan, program or
arrangement; or (c) any other employee benefit plan, fund or program,
including, but not limited to, those described in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").
All such plans listed on Exhibit 2.20 (individually "Company Plan,"
and collectively "Company Plans") have been operated and administered
in all material respects in accordance with all applicable laws, rules
and regulations, including without limitation, ERISA, the Internal
Revenue Code of 1986, as amended, Title VII of the Civil Rights Act of
1964, as amended, the Equal Pay Act of 1967, as amended, the Age
Discrimination in Employment Act of 1967, as amended, and the related
rules and regulations adopted by those federal agencies responsible
for the administration of such laws. No act or failure to act by
Company has resulted in a "prohibited transaction" (as defined in
ERISA) with respect to the Company Plans. No "reportable event" (as
defined in ERISA) has occurred with respect to any of the Company
Plans. Company has not previously made, is not currently making, and
is not obligated in any way to make, any contributions to any multi-
employer plan within the meaning of the Multi-Employer Pension Plan
Amendments Act of 1980. With respect to each Company Plan, either (i)
the value of plan assets (including commitments under insurance
contracts) is at least equal to the value of plan liabilities or (ii)
the value of plan liabilities in excess of plan assets is disclosed on
the Balance Sheet, all as of the Closing Date.
2.21 Adverse Agreements. Company is not, and will not be as of
the Closing Date, a party to any agreement or instrument or subject to
any charter or other corporate restriction or any judgment, order,
writ, injunction, decree, rule or regulation that materially and
adversely affects the condition (financial or otherwise), operations,
assets, liabilities, business or prospects of Company or the Business.
2.22 Compliance with Laws in General. Company, the Shareholders
and Company's physician and licensed employees, and the conduct of the
Business, have complied with all applicable laws, rules, regulations
and licensing requirements, including, without limitation, the Federal
Environmental Protection Act, the Occupational Safety and Health Act,
the Americans with Disabilities Act and any environmental laws and
medical waste laws, and there exist no violations by Company, any
Stockholder or any physician or licensed employee of Company of any
federal, state or local law or regulation. Neither Company nor any
Shareholder has received any notice of a violation of any federal,
state and local laws, regulations and ordinances relating to the
operations of the Business and the Company and no notice of any
pending inspection or violation of any such law, regulation or
ordinance has been received by Company or any Shareholder.
2.23 Medicare and Medicaid Programs. Company, each Shareholder
and each physician and licensed employee of Company is qualified for
participation in the Medicare and Medicaid programs and is party to
provider agreements for such programs which are in full force and
effect with no defaults having occurred thereunder. Company, each
Shareholder and each physician and licensed employee of Company has
timely filed all claims or other reports required to be filed with
respect to the purchase of services by third-party payors, and all
such claims or reports are complete and accurate, and has no liability
to any payor with respect thereto. There are no pending appeals,
overpayment determinations, adjustments, challenges, audit, litigation
or notices of intent to open Medicare or Medicaid claim determinations
or other reports required to be filed by Company, each Shareholder and
each licensed employee of Company. Neither Company, nor any
Shareholder, nor any physician or licensed employee of Company has
been convicted of, or pled guilty or nolo contendere to, patient abuse
or negligence, or any other Medicare or Medicaid program related
offense and none has committed any offense which may serve as the
basis for suspension or exclusion from the Medicare and Medicaid
programs.
2.24 Fraud and Abuse. Company, the Shareholders and all persons
and entities providing professional services for Company's business,
the Business or relating to the assets have not, to the knowledge of
Company and the Shareholders, engaged in any activities which are
prohibited under Section 1320a-7b or Section 1395nn of Title 42 of the United
States Code or the regulations promulgated thereunder, or related
state or local statutes or regulations, or which are prohibited by
rules of professional conduct, including, but not limited to, the
following: (a) knowingly and willfully making or causing to be made a
f a lse statement or representation of a material fact in any
application for any benefit or payment; (b) knowingly and willfully
making or causing to be made any false statement or representation of
a material fact for use in determining rights to any benefit or
payment; (c) any failure by a claimant to disclose knowledge of the
occurrence of any event affecting the initial or continued right to
any benefit or payment on its own behalf or on behalf of another, with
the intent to fraudulently secure such benefit or payment; and (d)
knowingly and willfully soliciting or receiving any remuneration
(including any kickback, bribe or rebate) directly or indirectly,
overtly or covertly, in cash or in kind, or offering to pay or receive
such remuneration (i) in return for referring an individual to a
person for the furnishing or arranging for the furnishing of any item
or service for which payment may be made in whole or in part by
Medicare or Medicaid, or (ii) in return for purchasing, leasing or
ordering or arranging for, or recommending, purchasing, leasing or
ordering any good, facility, service or item for which payment may be
made in whole or in part by Medicare or Medicaid, or (e) referring a
patient for designated health services to or providing designated
health services to a patient upon referral from an entity or person
with which the physician or an immediate family member has a financial
relationship, and to which no exception under Section 1395nn of Title
42 of the United States Code applies.
2.25 No Untrue Representations. No representation or warranty by
Company or any Shareholder in this Agreement, and no Exhibit or
certificate issued or executed by, or information furnished by,
officers or directors of Company or any Shareholder and furnished or
to be furnished to PRG Sub or PRG pursuant hereto, or in connection
with the transactions contemplated hereby, contains or will contain
any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statements or facts
contained therein not misleading.
2.26 Economic Risk; Sophistication. The Shareholders are able to
bear the economic risk of an investment in PRG common stock acquired
pursuant to this Agreement and can afford to sustain a total loss of
such investment and has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks
of the proposed investment and therefore has the capacity to protect
its own interests in connection with the acquisition of the PRG common
stock. The Shareholders or their representatives have had an adequate
opportunity to ask questions and receive answers from the officers of
PRG concerning any and all matters relating to the background and
experience of the officers and directors of PRG, the plans for the
operations of the business of PRG, and any plans for additional
acquisitions and the like. The Shareholders or their representatives
have asked any and all questions in the nature described in the
preceding sentence and all questions have been answered to their
satisfaction
2.27 Distributions and Repurchases. No distribution, payment or
dividend of any kind has been declared or paid by Company on any of
its capital stock since the Balance Sheet Date other than in the
ordinary course of business. No repurchase of any of Company's
capital stock has been approved, effected or is pending, or is
contemplated by the Board of Directors of Company.
2.28 Suppliers. Company has provided to PRG a complete and
accurate list of the ten (10) largest suppliers of Company in terms of
dollar volume of transactions for the last fiscal year and the current
fiscal year to date, showing, with respect to each, the name, address
and aggregate dollar volume of purchases from such supplier.
2.29 Banking Relations. Set forth in Exhibit 2.29 is a complete
and accurate list of all arrangements that Company has with any bank
or other financial institution, indicating with respect to each
relationship the type of arrangement maintained (such as checking
account, borrowing arrangements, safe deposit box, etc.) and the
person or persons authorized in respect thereof.
2.30 Ownership Interests of Interested Persons; Competitors.
Except pursuant to ownership of an optical shop and real estate
investment entities, no officer, employee, director or stockholder of
Company, or their respective spouses, children or affiliates, owns
directly or indirectly, on an individual or joint basis, any interest
in, has a compensation or other financial arrangement with, or serves
as an officer or director of, any customer or supplier or competitor
of Company or any organization that has a material contract or
arrangement with Company. Neither Company, nor any of its directors,
officers, employees, consultants or the Shareholders nor any affiliate
of such person is, or within the last three years was, a party to any
contract, lease, agreement or arrangement, including, but not limited
to, any joint venture or consulting agreement with any physician,
hospital, pharmacy, home health agency or other person or entity which
is in a position to make or influence referrals to, or otherwise
generate business for, Company or to provide services, lease space,
lease equipment or engage in any other venture or activity with
Company.
2.31 Payors. Company has provided to PRG a true, complete and
correct list of the names and addresses of each payor of Company's
services which accounted for more than 10% of revenues of Company in
the preceding fiscal year. Company has good relations with all such
payors and other material payors of Company and none of such payors
has notified Company that it intends to discontinue its relationship
with Company or to deny any claims submitted to such payor for
payment.
Section 3. Representations and Warranties of PRG Sub and PRG.
PRG Sub and PRG hereby represent and warrant to Company and the
Shareholders as follows:
3.1 Corporate Existence: Good Standing. PRG and PRG Sub are each
a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. Each of PRG and PRG Sub has
all necessary corporate powers to own all of its assets and to carry
on its business as such business is now being conducted.
3.2 Power and Authority for Transactions. Each of PRG and PRG
Sub has the corporate power to execute, deliver and perform this
Agreement and all agreements and other documents executed and
delivered by it pursuant to this Agreement or to be executed and
delivered on the Closing Date, and has taken all action required by
law, its Certificate of Incorporation, its Bylaws or otherwise, to
authorize the execution, delivery and performance of this Agreement
and such related documents. This Agreement and all agreements and
documents executed and delivered in connection herewith have been, or
will be as of the Closing Date, duly executed and delivered by PRG and
PRG Sub, as appropriate, and constitute or will constitute the legal,
valid and binding obligations of PRG and PRG Sub enforceable against
PRG and PRG Sub in accordance with their respective terms, except as
may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally or the availability of equitable
remedies. The execution and delivery of this Agreement, and the
agreements executed and delivered pursuant to this Agreement or to be
executed and delivered on the Closing Date, do not, and, subject to
the receipt of consents that have or will be obtained as of the
Closing Date, the consummation of the actions contemplated hereby will
not, violate any provision of the Certificate of Incorporation or
Bylaws of PRG or PRG Sub or any provisions of, or result in the
acceleration of, any obligation under any mortgage, lien, lease,
agreement, rent, instrument, order, arbitration award, judgment or
decree to which PRG or PRG Sub is a party or by which PRG or PRG Sub
is bound, or violate any material restrictions of any kind to which
Company is subject, or result in any lien or encumbrance on any of
PRG s or PRG Sub s assets or the PRG Stock.
3.3 Capital Stock. All of the outstanding shares of the common
stock of PRG Sub are or will be as of the Closing Date validly issued,
fully paid and nonassessable and are or will be as of the Closing Date
owned directly by PRG, free and clear of all liens, claims and
encumbrances. The issuance and delivery by PRG of shares of the
common stock of PRG in connection with the acquisition contemplated
hereby will be as of the Closing Date duly and validly authorized by
all necessary corporate action on the part of PRG. The shares of PRG
common stock to be issued in connection with the acquisition
contemplated hereby, when issued in accordance with the terms of this
Agreement, will be validly issued, fully paid and nonassessable.
3.4 No Untrue Representations. No representation or warranty by
PRG Sub or PRG in this Agreement, and no Exhibit or certificate issued
by officers or directors of PRG Sub or PRG and furnished or to be
furnished to Company or the Shareholders pursuant hereto, or in
connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact, or omits or will omit
to state a material fact necessary to make the statements or facts
contained therein not misleading.
Section 4. Covenants of Company and the Shareholders.
Company and the Shareholders, jointly and severally, agree that
between the date hereof and the Closing Date (unless expressly
otherwise provided herein):
4.1 Consummation of Agreement. Company and the Shareholders
shall use their best efforts to cause the consummation of the
transactions contemplated hereby in accordance with their terms and
conditions.
4.2 Business Operations. Company and the Shareholders shall
operate the Business and use the assets of the Company in the ordinary
course. Company and Shareholders shall not enter into any lease,
contract, indebtedness, commitment, purchase or sale or acquire or
dispose of any capital asset relating to the Business or the assets of
the Company except in the ordinary course of business. Company and
the Shareholders shall use their best efforts to preserve the Business
and assets of the Company intact and shall not take any action that
would have an adverse effect on the Business or assets of the Company,
including without limitation, any action the primary purpose or effect
of which is to generate or preserve cash; provided that Company may
continue to operate in the ordinary course of business. Company and
the Shareholders shall use their best efforts to preserve intact the
relationships with payors, customers, suppliers, patients and others
having significant business relations with Company. Company shall
collect its receivables and pay its trade payables in the ordinary
course of business. Company shall not introduce any new method of
management, operations or accounting. The parties hereto acknowledge
and agree that the Company may enter into a Service Agreement with
Brevard Eye Care of Florida, Inc., which agreement shall be in form
and substance satisfactory to PRG and PRG Sub.
4.3 Access and Notice. Company and the Shareholders shall
permit PRG and PRG Sub and PRG and its authorized representatives have
had access to, and inspected all of the assets and business of
Company, including employees, customers and suppliers and permit PRG,
PRG Sub and their authorized representatives to inspect and make
copies of all documents, records and information with respect to the
business or assets of Company as PRG, PRG Sub or their representatives
may request. Company and the Shareholders shall promptly notify PRG
Sub in writing of (a) any notice or communication relating to a
default or event that, with notice or lapse of time or both, could
become a default, under any contract, commitment or obligation to
which Company is a party or relating to the Business or the assets of
the Company, and (b) any adverse change in Company's or the Business'
financial condition or the assets of the Company.
4.4 Approvals of Third Parties and Permits and Consents.
Company and the Shareholders shall use their best efforts to secure
all necessary approvals and consents of third parties to the
consummation of the transactions contemplated hereby, including
consents described on Exhibit 2.5. Company and the Shareholders shall
use their best efforts to obtain all licenses, permits, approvals or
other authorizations required under any law, rule, regulation, or
otherwise to provide the services of Company contemplated by the
Service Agreement and to conduct the intended business of Company and
operate the Business and use the assets of the Company.
4.5 Acquisition Proposals. Company and the Shareholders shall
not, and shall use their best efforts to cause Company's employees,
agents and representatives not to, initiate, solicit or encourage,
directly or indirectly, any inquiries or the making or implementation
of any proposal or offer, including without limitation, any proposal
or offer to the Shareholders, with respect to a merger, acquisition,
consolidation or similar transaction involving, or the purchase of all
or any significant portion of the assets or any equity securities of
Company or engage in any negotiations concerning, or provide any
confidential information or data to, or have any discussions with, any
person relating to such proposal or offer, and Company and the
Shareholders will immediately cease any such activities, discussions
or negotiations heretofore conducted with respect to any of the
foregoing. Company and the Shareholders shall immediately notify PRG
Sub if any such inquiries or proposals are received.
4.6 Funding of Accrued Employee Benefits. Company hereby
covenants and agrees that it will take whatever steps are necessary to
pay or fund completely for any accrued benefits, where applicable, or
vested accrued benefits for which Company or any entity might have any
liability whatsoever arising from any insurance, pension plan,
employment tax or similar liability of Company to any employee or
other person or entity (including, without limitation, any Company
Plan and any liability under employment contracts with Company)
allocable to services performed prior to the Closing Date. Company
acknowledges that the purpose and intent of this covenant is to assure
that PRG Sub shall have no liability whatsoever at any time after the
Closing Date with respect to any of Company's employees or similar
persons or entities, including, without limitation, any Company Plan.
4.7 Employee Matters. Company shall not, without the prior
written approval of PRG or PRG Sub, except as required by law,
increase the cash compensation of any Shareholder or other employee or
an independent contractor of Company, adopt, amend or terminate any
c o mpensation plan, employment agreement, independent contractor
agreement, employee policies and procedures or employee benefit plan,
take any action that could deplete the assets of any employee benefit,
or fail to pay any premium or contribution due or file any report with
respect to any employee benefit plan, or take any other actions with
respect to its employees or employee matters which might have an
adverse effect upon Company, its business, assets or prospects.
4.8 Distributions and Repurchases. Except as set forth on
Exhibit 4.8, no distribution, payment or dividend of any kind will be
declared or paid by Company, nor will any repurchase of any of
Company's capital stock be approved or effected. PRG acknowledges
that the Company on the Closing Date will have no cash and/or cash
balances or cash equivalents.
4.9 Requirements to Effect Acquisition. Company and each
Shareholder shall use their best efforts to take, or cause to be
taken, all actions necessary to effect the acquisition contemplated
hereby under applicable law, including without limitation, the filing
with the appropriate government officials of all necessary documents
in form approved by counsel for the parties to this Agreement.
4.10 Voting of Shares; Irrevocable Proxy. Each Shareholder
agrees that until the earlier of the Closing Date or the termination
of this Agreement, each such Shareholder shall vote all shares of
Company common stock owned by the Shareholders at any meeting of the
stockholders of Company or take action by written consent for adoption
of this Agreement, as hereby amended, and in favor of the acquisition
and any other transactions contemplated by this Agreement, and against
any action, omission or agreement which would impede or interfere
with, or have the effect of discouraging, the acquisition contemplated
hereby.
4.11 Accounting and Tax Matters. Company will not change in any
material respect the accounting methods or practices followed by
Company (including any material change in any assumption underlying,
or any method of calculating, any bad debt, contingency or other
reserve), except as may be required by generally accepted accounting
principles. Company will not make any material tax election except in
the ordinary course of business consistent with past practice, change
any material tax election already made, adopt any tax accounting
method except in the ordinary course of business consistent with past
practice, change any tax accounting method, enter into any closing
agreement, settle any tax claim or assessment or consent to any tax
claim or assessment or any waiver of the statute of limitations for
any such claim or assessment. Company will duly, accurately and
timely (without regard to any extensions of time) file all returns,
information statements and other documents relating to taxes of
Company required to be filed by it, and pay all taxes required to be
paid by it, on or before the Closing Date.
4.12 Conversion Transaction. Prior to the Closing, the Company
shall file with the Secretary of State of Florida an amendment to
and/or restatement of the Company s Articles of Incorporation and
shall take such other action as may be necessary to convert itself
into a general business corporation in accordance with all applicable
laws, rules and regulations.
4.13 Leases. PRG Sub shall have entered into a building lease
(collectively, the "Building Lease") with the owners of the properties
located at ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇; ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇; and ▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ on
terms and conditions satisfactory to PRG, the terms and conditions of
which shall include, without limitation, (i) a five year initial term
plus three five-year renewal options, (ii) a lease rate equal to the
fair market value lease rate, as agreed to by PRG, (iii) a right of
first refusal to acquire such property upon any proposed sale thereof
to any Shareholder of any family member or affiliate of any
Shareholder, and (iv) such other provisions to be acceptable to PRG.
PRG shall guarantee the rental payments to be made pursuant to the
Building Lease.
4.14 The Clinic.
(a) Good Standing/Existence. Florida Eye Associates, Inc., a
Florida corporation (the "Clinic") is a Florida corporation duly
organized, validly existing and in good standing under the laws of the
State of Florida. The Clinic has all necessary power to own all of its
assets and to carry on its business as such business is now being
conducted. The Shareholders are the sole shareholders of the Clinic
and own such interests free of all security interests, claims,
encumbrances and liens in the amounts set forth on Exhibit 2.1. Each
interest of the Clinic has been legally and validly issued and fully
paid and nonassessable. There are no outstanding (a) bonds,
debentures, notes or other obligations the holders of which have the
right to vote with the shareholder of the Clinic on any matter, (b)
securities of the Clinic convertible into equity interests in the
Clinic, or (c) commitments, options, rights or warrants to issue any
such equity interests in the Clinic, to issue securities of the Clinic
convertible into such equity interests, or to redeem any securities of
the Clinic. No interests of the Clinic have been issued or disposed
of in violation of the preemptive rights, rights of first refusal or
similar rights of any of the Clinic's shareholders. The Clinic is not
required to qualify to do business as a foreign entity in any other
state or jurisdiction by reason of its business, properties or
activities in or relating to such other state or jurisdiction. The
Clinic does not have any assets, employees or offices in any state
other than Florida.
(b) Corporate Records. True and correct copies of the Articles
of Incorporation, Bylaws and minutes of the Clinic and all amendments
thereto of the Clinic have been delivered to PRG and are in form and
substance satisfactory to PRG and PRG Sub. The minute books of the
Clinic contain all accurate minutes of the meetings of and consents to
actions taken without meetings of the shareholders of the Clinic since
its formation. The books of account of the Clinic have been kept
accurately in the ordinary course of business and the revenues,
expenses, assets and liabilities of the Clinic have been properly
recorded in such books.
(c) Corporate Power. The Clinic has the power to execute,
deliver and perform its obligations under all agreements and other
documents to be executed and delivered by it pursuant to this
Agreement, including without limitation, the Service Agreement and
each Employment Agreement or to be executed and delivered on the
Closing Date, and has taken all action required by law, its Articles
of Incorporation, Bylaws or otherwise, to authorize the execution,
delivery and performance of such documents. The Service Agreement and
the other agreements contemplated hereby have been duly executed and
delivered by the Clinic and constitute or will constitute the legal,
valid and binding obligations of the Clinic enforceable against the
Clinic in accordance with their respective terms, except as may be
limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
The execution and delivery of the Service Agreement and the other
agreements contemplated hereby will not violate any provision of the
organizational documents of the Clinic or any provisions of, or result
in the acceleration of, any obligation under any mortgage, lien,
lease, agreement, rent, instrument, order, arbitration award, judgment
or decree to which the Clinic is a party or by which the Clinic is
bound, or violate any material restrictions of any kind to which the
Clinic is subject, or result in any lien or encumbrance on any of the
Clinic's assets.
(d) No Business. The Clinic has not commenced business since
its organization. Other than its Articles of Incorporation, Bylaws
and as of the Closing Date, the Service Agreement and the Employment
Agreements, the Clinic is not a party to or subject to any agreement,
indenture or other instrument. The Clinic does not own any assets
(tangible or intangible) other than (i) the assets described on
Exhibit 4.4 attached hereto, and (ii) the consideration received upon
the issuance of shares of its capital stock, and the Clinic does not
have any liabilities, accrued, contingent or otherwise (known or
unknown and asserted or unasserted).
Section 5. Covenants of PRG and PRG Sub.
PRG and PRG Sub, jointly and severally, agree that between the
date hereof and the Closing Date:
5.1 Consummation of Agreement. PRG and PRG Sub shall use their
b e s t efforts to cause the consummation of the transactions
contemplated hereby in accordance with their terms and provisions.
PRG and PRG Sub will use their best efforts to take, or cause to be
taken, all actions necessary to effect the acquisition contemplated
hereby under applicable law, including without limitation the filing
with the appropriate government officials of all necessary documents
in form approved by counsel for the parties to this Agreement.
5.2 Approvals of Third Parties and Permits and Consents. PRG
and PRG Sub shall use their best efforts to secure all necessary
approvals and consents of third parties to the consummation of the
transactions contemplated hereby.
5.3 Listing Application. PRG shall prepare and submit to the
New York Stock Exchange (the NYSE ) a listing application covering
the stock consideration and shall use its best efforts to obtain
approval for the listing of the stock consideration upon official
notice of issuance.
Section 6. PRG Sub and PRG Conditions Precedent.
The obligations of PRG Sub and PRG hereunder are subject to the
fulfillment at or prior to the Closing Date of each of the following
conditions:
6.1 Representations and Warranties. The representations and
warranties of Company and the Shareholders contained herein shall have
been true and correct in all respects when initially made and shall be
true and correct in all respects as of the Closing Date.
6.2 Covenants and Conditions. Company and the Shareholders
shall have performed and complied with all covenants and conditions
required by this Agreement to be performed and complied with by
Company and the Shareholders prior to the Closing Date.
6.3 Proceedings. No action, proceeding or order by any court or
governmental body shall have been threatened orally or in writing,
asserted, instituted or entered to restrain or prohibit the carrying
out of the transactions contemplated hereby.
6.4 No Material Adverse Change. No material adverse change in
t h e c ondition (financial or otherwise), operations, assets,
liabilities, business or prospects of Company shall have occurred
since the Balance Sheet Date.
6.5 Due Diligence Review. By the Closing Date, PRG Sub and PRG
shall have completed a due diligence review of the business,
operations and financial statements of Company, the Business and the
assets of the Company, the results of which shall be satisfactory to
PRG Sub and PRG in their sole discretion.
6.6 Approval by the Board of Directors. This Agreement and the
transactions contemplated hereby shall have been approved by the Board
of Directors of PRG or a committee thereof.
6.7 Employment Arrangements. Prior to the Closing Date, the
Company will cause each physician employee of the Company and other
employees that have existing employment agreements with the Company to
assign his or her employment agreement with the Company to the Clinic
and execute a separation and release agreement ("Separation and
Release Agreement") in form and substance satisfactory to PRG and PRG
Sub.
6.8 Service Agreement. On the Closing Date, Clinic, the
Shareholders, PRG and PRG Sub shall execute and deliver a Service
Agreement (the "Service Agreement"), in substantially the form
attached hereto as Exhibit 6.7, pursuant to which PRG Sub will provide
management services to the Shareholders and Clinic.
6.9 Consents and Approvals. Company and the Shareholders shall
have obtained all necessary government and other third-party approvals
and consents.
6.10 Closing Deliveries. PRG Sub shall have received all
documents, duly executed in form satisfactory to PRG Sub and its
counsel, referred to in Section 8.1.
6.11 Debt and Receivables. There shall be no indebtedness,
receivables or payables between Company and its shareholders or
affiliates and Company shall not have any liabilities, including
indebtedness, guaranties and capital leases, that are not set forth on
the Exhibits attached hereto, including without limitation, Exhibit
2.18. On or before the Closing Date, the Company and Shareholders
shall deliver copies of UCC releases and other documentation
satisfactory to PRG and PRG Sub indicating that the Company shall not
liable for any indebtedness to First Union National Bank and
NationsBank as of the Closing Date, and such releases shall be filed
with the appropriate authorities within two business days following
the Closing Date.
6.12 No Change in Working Capital. As of the Closing Date, there
shall be no material change in the Working Capital.
6.13 NYSE Listing. The stock consideration shall have been
approved for listing on the NYSE, subject to official notice of
issuance.
Section 7. Company's and the Shareholder's Conditions Precedent.
The obligations of Company and the Shareholders hereunder are
subject to fulfillment at or prior to the Closing Date of each of the
following conditions:
7.1 Representations and Warranties. The representations and
warranties of PRG Sub and PRG contained herein shall have been true
and correct in all respects when initially made and shall be true and
correct in all respects as of the Closing Date.
7.2 Covenants and Conditions. PRG Sub and PRG shall have
performed and complied with all covenants and conditions required by
this Agreement to be performed and complied with by PRG Sub and PRG
prior to the Closing Date.
7.3 Proceedings. No action, proceeding or order by any court or
governmental body shall have been threatened orally or in writing,
asserted, instituted or entered to restrain or prohibit the carrying
out of the transactions contemplated hereby.
7.4 Closing Deliveries. Company shall have received all
documents, duly executed in form satisfactory to Company and its
counsel, referred to in Section 8.2.
7.5 NYSE Listing. The stock consideration shall have been
approved for listing on the NYSE, subject to official notice of
issuance.
7.6 Service Agreement. On the Closing Date, Clinic, the
Shareholders, PRG and PRG Sub shall execute and deliver a Service
Agreement (the "Service Agreement"), in substantially the form
attached hereto as Exhibit 6.7, pursuant to which PRG Sub will provide
management services to the Shareholders and Clinic.
Section 8. Closing Deliveries.
8.1 Deliveries of Company and the Shareholders. At or prior to
the Closing, Company and the Shareholders shall deliver to PRG Sub the
following, all of which shall be in a form satisfactory to counsel to
PRG Sub and PRG:
(a) an executed original Service Agreement and executed
originals of all documents required by that agreement, including but
not limited to security agreements and powers of attorneys referred to
therein;
(b) a copy of the resolutions of the Board of Directors of
Company authorizing the execution, delivery and performance of this
Agreement, the Service Agreement and all related documents and
agreements each certified by the Secretary as being true and correct
copies of the original thereof;
(c) a copy of the resolutions of the Board of Directors of
the Clinic authorizing the execution, delivery and performance of the
Service Agreement, each certified by the Secretary of the Clinic as
being true and correct copies of the original thereof;
(d) certificates of the President of Company and of each
Shareholder, dated as of the Closing Date, (i) as to the truth and
correctness of the representations and warranties of Company and each
Shareholder contained herein; (ii) as to the performance of and
compliance by Company and each Shareholder with all covenants
contained herein; and (iii) certifying that all conditions precedent
of Company and each Shareholder to the Closing have been satisfied;
(e) a certificate of the Secretary of Company certifying as
to the incumbency of the directors and officers of Company and as to
the signatures of such directors and officers who have executed
documents delivered at the Closing on behalf of Company;
(f) a certificate of the Secretary of the Clinic certifying
as to the incumbency of the directors and officers of the Clinic and
as to the signatures of such directors and officers who have executed
documents delivered at the Closing on behalf of the Clinic;
(g) a certificate, dated within 10 days of the Closing
Date, of the Secretary of the State of Florida establishing that
Company is in existence and is in good standing to transact business
in its state of incorporation;
(h) a certificate, dated within 10 days of the Closing
Date, of the Secretary of the State of Florida establishing that
Clinic is in existence and is in good standing to transact business in
its state of incorporation;
(i) an opinion of counsel to Company and the Shareholders
opining as to the execution and delivery of this Agreement and the
other documents and agreements to be executed pursuant hereto, the
good standing and authority of Company, the enforceability of this
Agreement and the other agreements and documents to be executed in
connection herewith, and other matters reasonably requested by PRG
Sub;
(j) all authorizations, consents, approvals, permits and
licenses referred to in Sections 2.3 and 2.5;
(k) a Stockholder s Agreement (herein so called) in form
attached hereto as Exhibit 8.1(k) executed by Shareholders and their
spouses;
(l) stock certificates evidencing all shares of the Stock
together with blank stock powers executed by each Shareholder;
(m) resignations of officers and directors of the Company
as requested by PRG Sub; and
(n) such other instruments and documents as reasonably
requested by PRG or PRG Sub to carry out and effect the purpose and
intent of this Agreement.
8.2 Deliveries of PRG Sub and PRG. At or prior to the Closing,
PRG Sub and PRG shall deliver to Company the following, all of which
shall be in a form satisfactory to counsel to Company and the
Shareholders or the Clinic, as applicable:
(a) the Consideration (being stock certificates evidencing
the PRG Stock);
(b) an executed Service Agreement;
(c) a copy of the resolutions of the Board of Directors of
PRG Sub and PRG (or a committee thereof) authorizing the execution,
delivery and performance of this Agreement and all related documents
and agreements each certified by the Secretary as being true and
correct copies of the original thereof;
(d) certificates of the President of PRG Sub and PRG, dated
as of the Closing Date, (i) as to the truth and correctness of the
representations and warranties of PRG Sub and PRG contained herein;
(ii) as to the performance of and compliance by PRG Sub and PRG with
all covenants contained herein; and (iii) certifying that all
conditions precedent of PRG Sub and PRG to the Closing have been
satisfied;
(e) a certificate of the Secretary of PRG Sub and PRG
certifying as to the incumbency of the directors and officers of PRG
Sub and PRG and as to the signatures of such directors and officers
who have executed documents delivered at the Closing on behalf of PRG
Sub and PRG;
(f) certificates, dated within 10 days of the Closing Date,
of the Secretary of the State of Delaware establishing that PRG Sub
and PRG are in existence and are in good standing to transact business
in the State of Delaware and the State of Florida;
(g) an opinion of counsel to PRG and PRG Sub opining as to
the execution and delivery of this Agreement and the other documents
and agreements to be executed pursuant hereto, the good standing and
authority of PRG and PRG Sub, the enforceability of this Agreement and
the other agreements and documents to be executed in connection
herewith, and other matters reasonably requested by Company;
(h) the Stockholder s Agreement; and
(i) such other instruments and documents as reasonably
requested by Company or Shareholders to carry out and effect the
purpose and intent of this Agreement.
Section 9. Nature and Survival of Representations and Warranties;
Indemnification.
9.1 Nature and Survival. All statements contained in this
Agreement or in any Exhibit attached hereto, any agreement executed
pursuant hereto, and any certificate executed and delivered by any
party pursuant to the terms of this Agreement, shall constitute
representations and warranties of Company and the Shareholders,
jointly and severally, or of PRG Sub and PRG, jointly and severally,
as the case may be. All such representations and warranties, and all
representations and warranties expressly labeled as such in this
Agreement shall survive the date of this Agreement and the Closing
Date for a period of five (5) years following the Closing Date, except
that (i) the representations and warranties set forth in Section 2.23,
2.24 or 2.25 with respect to environmental and medical waste laws and
health care laws and matters shall survive for a period of fifteen
(15) years and tax representations shall survive until one year after
the expiration of the applicable statute of limitations. Each party
covenants with the other parties not to make any claim with respect to
such representations and warranties, against any party after the date
on which such survival period shall terminate. No party shall be
entitled to claim indemnity from any other party pursuant to Section
9.2 or 9.3 hereof, unless such party has timely given the notice
required in Section 9.2, 9.3 or 9.4 hereof, as the case may be. Each
party hereby releases, acquits and discharges the other party from any
and all claims and demands, actions and causes of action, damages,
costs, expenses and rights of setoff with respect to which the notices
required by Section 9.2, 9.3 or 9.4, as applicable, are not timely
provided.
9.2 Indemnification by PRG Sub and PRG. PRG SUB AND PRG,
JOINTLY AND SEVERALLY (FOR PURPOSES OF THIS SECTION 9.2 AND, TO THE
EXTENT APPLICABLE, SECTION 9.4, "INDEMNITOR"), SHALL INDEMNIFY AND
HOLD THE SHAREHOLDERS, AND THEIR RESPECTIVE AGENTS AND EMPLOYEES (EACH
OF THE FOREGOING, INCLUDING THE SHAREHOLDERS, FOR PURPOSES OF THIS
S E C TION 9.2 AND, TO THE EXTENT APPLICABLE, SECTION 9.4, AS
" I NDEMNIFIED PERSON"), HARMLESS FROM AND AGAINST ANY AND ALL
LIABILITIES, LOSSES, DAMAGES, ACTIONS, SUITS, COSTS, DEFICIENCIES AND
E X PENSES (INCLUDING, BUT NOT LIMITED TO, REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL THROUGH APPEAL) ARISING FROM OR BY REASON OF
OR RESULTING FROM ANY BREACH BY INDEMNITOR OF ANY REPRESENTATION,
WARRANTY, AGREEMENT OR COVENANT CONTAINED IN THIS AGREEMENT (INCLUDING
T H E EXHIBITS HERETO) AND EACH DOCUMENT, CERTIFICATE OR OTHER
INSTRUMENT FURNISHED OR TO BE FURNISHED BY INDEMNITOR HEREUNDER, AND,
FROM AND AFTER THE CLOSING DATE, ARISING FROM OR BY REASON OF OR
RESULTING FROM INDEMNITOR'S MANAGEMENT AND THE OWNERSHIP OF THE
COMPANY. IN CONNECTION WITH INDEMNITOR'S OBLIGATION TO INDEMNIFY FOR
EXPENSES, INDEMNITOR SHALL REIMBURSE EACH INDEMNIFIED PERSON FOR ALL
SUCH EXPENSES AS THEY ARE INCURRED BY SUCH INDEMNIFIED PERSON,
PROVIDED THAT SUCH INDEMNIFIED PERSON AGREES IN WRITING TO REFUND ALL
SUCH REIMBURSED EXPENSES IF AND TO THE EXTENT THAT IT IS FINALLY
JUDICIALLY DETERMINED THAT SUCH INDEMNIFIED PERSON IS NOT ENTITLED TO
INDEMNIFICATION HEREUNDER.
9.3 Indemnification by the Shareholders. THE SHAREHOLDERS (FOR
PURPOSES OF THIS SECTION 9.3 AND, TO THE EXTENT APPLICABLE, SECTION
9.4, "INDEMNITOR"), JOINTLY AND SEVERALLY, SHALL INDEMNIFY AND HOLD
PRG SUB, PRG AND THEIR RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS,
AGENTS AND EMPLOYEES (EACH OF THE FOREGOING, INCLUDING PRG SUB AND
PRG, FOR PURPOSES OF THIS SECTION 9.3 AND, TO THE EXTENT APPLICABLE,
SECTION 9.4, AS "INDEMNIFIED PERSON") HARMLESS FROM AND AGAINST ANY
AND ALL LIABILITIES, LOSSES, CLAIMS, DAMAGES, ACTIONS, SUITS, COSTS,
DEFICIENCIES AND EXPENSES (INCLUDING, BUT NOT LIMITED TO, REASONABLE
FEES AND DISBURSEMENTS OF COUNSEL THROUGH APPEAL) ARISING FROM OR BY
REASON OF OR RESULTING FROM ANY BREACH BY INDEMNITOR OF ANY
REPRESENTATION, WARRANTY, AGREEMENT OR COVENANT CONTAINED IN THIS
A G R EEMENT (INCLUDING THE EXHIBITS HERETO) AND EACH DOCUMENT,
CERTIFICATE, OR OTHER INSTRUMENT FURNISHED OR TO BE FURNISHED BY
INDEMNITOR HEREUNDER, AND, WITH RESPECT TO ALL TIMES PRIOR TO THE
CLOSING DATE, ARISING FROM OR BY REASON OF OR RESULTING FROM THE
INDEMNITOR'S MANAGEMENT AND CONDUCT OF THE OWNERSHIP OR OPERATION OF
THE COMPANY AND FROM ANY ALLEGED ACT OR NEGLIGENCE OF INDEMNITOR OR
ITS EMPLOYEES, AGENTS AND INDEPENDENT CONTRACTORS IN OR ABOUT THE
COMPANY'S BUSINESS, AND WITH RESPECT TO (I) ANY VIOLATION BY THE
COMPANY OR THE SHAREHOLDERS OR THEIR CONSULTANTS, OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS AND AFFILIATES OF STATE OR FEDERAL LAWS GOVERNING
HEALTHCARE FRAUD AND ABUSE, OR ANY OVERPAYMENT OR OBLIGATION ARISING
OUT OF OR RESULTING FROM CLAIMS SUBMITTED TO ANY THIRD PARTY PAYOR,
WHETHER ON OR AFTER THE CLOSING DATE, (II) TAXES OF THE COMPANY OR ANY
OTHER PERSON (INCLUDING ANY SHAREHOLDER) ARISING FROM OR AS A RESULT
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, (III) ANY
LIABILITY OF THE COMPANY OR THE SHAREHOLDERS FOR COSTS AND EXPENSES
( I N C LUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) INCURRED IN
C O N N E CTION WITH THE NEGOTIATION, PREPARATION OR CLOSING OF
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE OTHER DOCUMENTS TO
BE EXECUTED IN CONNECTION HEREWITH, (IV) ANY ACCRUED UNFUNDED
RETIREMENT OR PENSION PLAN LIABILITIES AND (V) ANY LIABILITIES THAT
ARE PAST DUE AS OF THE CLOSING DATE, THAT ARE NOT REFLECTED ON THE
BALANCE SHEET, THAT ARE NOT INCURRED IN THE ORDINARY COURSE OF
BUSINESS AND THAT ARE OTHERWISE EXCLUDED PURSUANT TO THE TERMS OF THIS
AGREEMENT. IN CONNECTION WITH INDEMNITOR'S OBLIGATION TO INDEMNIFY
FOR EXPENSES, INDEMNITOR SHALL REIMBURSE EACH INDEMNIFIED PERSON FOR
ALL SUCH EXPENSES AS THEY ARE INCURRED BY SUCH INDEMNIFIED PERSON,
PROVIDED THAT SUCH INDEMNIFIED PERSON AGREES IN WRITING TO REFUND ALL
SUCH REIMBURSED EXPENSES IF AND TO THE EXTENT THAT IT IS FINALLY
JUDICIALLY DETERMINED THAT SUCH INDEMNIFIED PERSON IS NOT ENTITLED TO
INDEMNIFICATION HEREUNDER.
9.4 Indemnification Procedure. Within sixty (60) days after
Indemnified Person receives written notice of the commencement of any
action or other proceeding in respect of which indemnification or
reimbursement may be sought hereunder, or within such lesser time as
may be provided by law for the defense of such action or proceeding,
such Indemnified Person shall notify Indemnitor thereof. If any such
action or other proceeding shall be brought against any Indemnified
P e rson, Indemnitor shall, upon written notice given within a
reasonable time following receipt by Indemnitor of such notice from
Indemnified Person, be entitled to assume the defense of such action
or proceeding with counsel chosen by Indemnitor and reasonably
satisfactory to Indemnified Person; provided, however, that any
Indemnified Person may at its own expense retain separate counsel to
p a r ticipate in such defense. Notwithstanding the foregoing,
Indemnified Person shall have the right to employ separate counsel at
Indemnitor's expense and to control its own defense of such action or
p r oceeding if, in the reasonable opinion of counsel to such
Indemnified Person, (a) there are or may be legal defenses available
to such Indemnified Person or to other Indemnified Persons that are
different from or additional to those available to Indemnitor and
w h ich could not be adequately advanced by counsel chosen by
Indemnitor, or (b) a conflict or potential conflict exists between
Indemnitor and such Indemnified Person that would make such separate
representation advisable; provided, however, that in no event shall
Indemnitor be required to pay fees and expenses hereunder for more
than one firm of attorneys of Indemnified Person in any jurisdiction
in any one action or proceeding or group of related actions or
proceedings. Indemnitor shall not, without the prior written consent
of any Indemnified Person, settle or compromise or consent to the
entry of any judgment in any pending or threatened claim, action or
proceeding to which such Indemnified Person is a party unless such
settlement, compromise or consent includes an unconditional release of
such Indemnified Person from all liability arising or potentially
arising from or by reason of such claim, action or proceeding.
9.5 Certain Tax Matters.
(a) PRG shall prepare and file or cause to be prepared and
filed any tax returns, statements and reports ("Tax Returns") of the
Company covering taxable periods ending on or before the Closing Date
which have not been filed on or before the Closing Date. Shareholders
shall, jointly and severally, within fifteen (15) days after payment
thereof and receipt of notice of such payment, reimburse, indemnify
and hold harmless PRG and the Company for all taxes, and all related
interest, penalties and additions to tax ("Taxes"), with respect to
taxable periods of the Company ending on or before the Closing Date.
(b) PRG shall prepare and file or cause to be prepared and
filed any Tax Returns of the Company covering taxable periods which
begin before the Closing Date and end after the Closing Date
("Straddle Periods"). Shareholders shall, jointly and severally,
within fifteen (15) days after payment thereof and notice of such
payment, reimburse, indemnify and hold harmless PRG and the Company
for all Taxes for any Straddle Period, to the extent related to the
portion of the Straddle Period ending on the Closing Date. For such
purposes, the portion of any Tax attributable to the portions of a
Straddle Period ending on the Closing Date and beginning after the
Closing Date shall be determined by apportioning the Tax for the
entire Straddle Period among such periods based on the number of days
in each such period, provided that, in the case of Taxes based upon or
related to income or receipts, such portion shall be the amount of Tax
which would have been due if the relevant Straddle Period ended on the
Closing Date. Any credits relating to a Straddle Period shall be
taken into account as though the relevant Straddle Period ended on the
Closing Date. All determinations necessary to give effect to the
foregoing allocations shall be made in a manner consistent with prior
practices of the Company.
(c) The Company, Shareholders, PRG and PRG Sub shall
reasonably cooperate with each other in connection with the filing of
Tax Returns pursuant to this Section 9.5(c) and any audit, litigation
or other proceeding with respect to Taxes. Such cooperation shall
include the provision of copies, at the requesting party's expense, of
records and information relevant to any such Tax Return or proceeding
and making employees available on a mutually convenient basis to
provide additional information and explanation of any material
provided hereunder.
9.6 Right of Setoff. In the event of any breach of warranty,
representation, covenant or agreement by any party hereto giving rise
to indemnification hereunder, the other party shall be entitled to
offset the amount of damages incurred by it as a result of such breach
of warranty, representation, covenant or agreement against any amounts
payable under the Service Agreement.
9.7 L i m i tation on Indemnification. Notwithstanding the
provisions hereof, the Shareholders shall not be required to indemnify
PRG or PRG Sub unless, and to the extent that, the aggregate amount of
damages, losses, liabilities, costs and other sums ( Damages )
incurred by PRG and PRG Sub shall exceed an amount equal to $100,000.
Notwithstanding the provisions hereof, PRG and PRG Sub shall not be
required to indemnify the Shareholders unless, and to the extent that,
the aggregate amount of Damages incurred by the Shareholder shall
exceed an amount equal to $100,000.
Section 10. Termination. This Agreement may be terminated:
(a) at any time by mutual agreement of all parties;
(b) at any time by PRG or PRG Sub if any representation or
warranty of Company or any Shareholder contained in this Agreement or
in any certificate or other document executed and delivered by the
Company or any Shareholder pursuant to this Agreement is or becomes
untrue or breached in any material respect or if Company or any
Shareholder fails to comply in any material respect with any covenant
or agreement contained herein, and any such misrepresentation,
noncompliance or breach is not cured, waived or eliminated within
twenty (20) days after receipt of written notice thereof;
(c) at any time by the Company or the Shareholders if any
representation or warranty of PRG or PRG Sub contained in this
Agreement or in any certificate or other document executed and
delivered by PRG or PRG Sub pursuant to this Agreement is or becomes
untrue or breached in any material respect or if PRG or PRG Sub fails
to comply in any material respect with any covenant or agreement
contained herein and such misrepresentation, noncompliance or bread is
not cured, waived or eliminated within twenty (20) days after receipt
of written notice thereof;
(d) by PRG, PRG Sub, Company or the Shareholders if the
transaction contemplated hereby shall not have been consummated by
October 15, 1996; or
(e) by PRG at any time prior to the Closing Date if PRG
determines in its sole discretion as the result of its legal,
financial and operational due diligence with respect to Company, that
such termination is desirable and in the best interests of PRG.
Section 11. Noncompetition.
11.1 Prohibited Activities. In order to protect PRG, PRG Sub and
each of their affiliates (collectively, the "PRG Group") against the
u n a uthorized use or disclosure of any of their confidential
i n f o r mation presently known or hereinafter acquired by the
S h a reholders and other good and valuable consideration, each
Shareholder hereby agrees that, subject to adjustment pursuant to
Section 11.5, for a period of five (5) years following the Closing
Date, each Shareholder and his or her respective affiliates shall not
knowingly, directly or indirectly, for herself or himself or on or
b e h a lf of any other corporation, person, firm, partnership,
association or any other entity (whether as an individual, agent,
employee, offer director or in any other capacity):
(a) directly or indirectly establish, operate or provide
ophthalmological physician services at any medical office, clinic or
out-patient and/or ambulatory treatment or diagnostic facility or
other healthcare facility providing services similar to those provided
by the PRG Clinic Group or engage or participate in or finance any
business which engages in direct competition with the business being
conducted by PRG Clinic Group anywhere within 25 miles of any location
of PRG Clinic Group ( PRG Clinic Group shall mean all professional
associations or corporations or other entities for which PRG, or its
subsidiaries or affiliates provide management services within twenty-
five (25) miles of any location of the Clinic and its affiliates or
successors in interest; or
(b) a c t an officer, director, employee, consultant,
shareholder, lender, guarantor or agent of, or otherwise assist any
entity which is engaged in any business of the same nature as, or in
direct competition with the physician practice management business in
which PRG and its affiliates are now engaged or other business in
which such entities become engaged.
Nothing contained in this Agreement shall be construed to provide
that any Shareholder shall be in breach of this Section 11.1 or any
other provision of this Agreement by virtue of his provision of
medical services to and on behalf of Brevard Eye Care of Florida, P.A.
or by virtue of his ownership of interests in Physicians Optical Lab,
Inc., Ambulatory Surgery Center Support Services, Eye Docs of Suntree,
Eye Docs, Inc. of Palm Bay, Eye Docs, Inc. of Melbourne or ASC of
Brevard, Inc.
11.2 Damages.
(a) Because of the difficulty of measuring economic losses
to PRG and PRG Sub as a result of the breach of the foregoing
covenant, and because of the immediate and irreparable damage that
would be caused to PRG and PRG Sub for which it would have no other
adequate remedy, the Shareholders agree that, in the event of a breach
by them of the foregoing covenant, the covenant may be enforced by PRG
or PRG Sub by injunctions and restraining orders. The foregoing right
is in addition to the right to receive liquidated damages set forth in
subparagraph (b) below.
(b) Because of the difficulty of measuring economic losses
as a result of a breach by a Shareholder of the foregoing covenant,
such Shareholder agrees to that in the event of a breach of the
foregoing covenant the breaching Shareholder shall be obligated to pay
to PRG as liquidated damages an amount set forth below opposite the
year following Closing in which the breach occurs times such
Shareholder s ownership of the Company on the date hereof:
Year Following
Closing in Which
Breach Occurs Damages
1st $ 8,000,000.00
2nd $ 6,400,000.00
3rd $ 4,800,000.00
4th $ 3,200,000.00
5th $ 1,600,000.00
11.3 Reasonable Restraint. It is agreed by the parties that the
foregoing covenants in this Section 11 impose a reasonable restraint
on the Shareholders in light of the activities and business of PRG and
PRG Sub on the date of the execution of this Agreement and the future
plans of PRG and PRG Sub.
11.4 Severability; Reformation. The covenants in this Section 11
are severable and separate, and the unenforceability of any specific
covenant shall not affect the provisions of any other covenant.
Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth
are unreasonable, then it is the intention of the parties that such
restrictions be enforced to the fullest extent which the court deems
reasonable, and the Agreement shall thereby be reformed.
11.5 Term. It is specifically agreed that the period of
five (5) years stated above, shall be computed by excluding from such
computation any time during which any Shareholder is in violation of
any provision of this Section 11. The covenants contained in this
Section 11 shall have no effect if the transactions contemplated by
this Agreement are not consummated for any reason but otherwise shall
not be affected by any breach of any other provision hereof by any
party hereto.
Section 12. N o n disclosure of Confidential Information. The
Shareholders recognize and acknowledge that they had in the past,
currently have, and in the future may possibly have, access to certain
confidential information of PRG or PRG Sub that is valuable, special
and unique assets of PRG's or PRG Sub's businesses. The Shareholders
agree that they will not disclose such confidential information to any
person, firm, corporation, association or other entity for any purpose
or reason whatsoever, unless (i) such information becomes available to
or known by the public generally through no fault of the Shareholders,
(ii) disclosure is required by law or the order of any governmental
authority under color of law, provided, that prior to disclosing any
information pursuant to this clause (ii), the Shareholders shall, if
possible, give prior written notice thereof to the other parties
hereto, and provide such other parties hereto with the opportunity to
contest such disclosure, (iii) the Shareholders reasonably believe
that such disclosure is required in connection with the defense of a
lawsuit against the disclosing party, or (iv) the Shareholders are the
sole and exclusive owner of such confidential information as a result
of the transactions contemplated hereunder or otherwise. In the event
of a breach or threatened breach by the Shareholders of the
provisions of this Section 12, PRG or PRG Sub shall be entitled to an
injunction restraining the Shareholders from disclosing, in whole or
in part, such confidential information. Nothing herein shall be
construed as prohibiting PRG or PRG Sub from pursuing any other
available remedy for such breach or threatened breach, including the
recovery of damages. The obligations of the parties under this Section
12 shall survive the termination of this Agreement.
Section 13. Miscellaneous.
13.1 Notices. Any communications required or desired to be given
hereunder shall be deemed to have been properly given if sent by hand
delivery, or by facsimile and overnight courier, to the parties hereto
at the following addresses, or at such other address as either party
may advise the other in writing from time to time:
If to PRG:
Physicians Resource Group, Inc.
Three Lincoln Centre
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to PRG Sub:
PRG Florida XII, Inc.
Three Lincoln Centre
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy of each notice directed to PRG Sub or PRG to:
▇▇▇▇▇ ▇. ▇▇▇▇, III, Esquire
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to Company or the Shareholders:
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, P.A.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
All such communications shall be deemed to have been delivered on the
date of hand delivery or on the next business day following the
deposit of such communications, properly addressed and postage prepaid
with the overnight courier.
13.2 Further Assurances. Each party hereby agrees to perform any
further acts and to execute and deliver any documents which may be
reasonably necessary to carry out the provisions of Agreement.
13.3 Each Party to Bear Costs. Each of the parties to this
Agreement shall pay all of the costs and expenses incurred by such
party in connection with the transactions contemplated by this
Agreement, whether or not such transactions are consummated. Without
limiting the generality of the foregoing and whether or not such
liabilities may be deemed to have been incurred in the ordinary course
of business, PRG Sub and PRG shall not be liable to or required to
pay, either directly or indirectly, any (a) fees and expenses of legal
counsel, accountants, auditors or other persons or entities retained
by Company, the Clinic or the Shareholders for services rendered in
connection with negotiating and closing the transactions contemplated
by this Agreement or the documents to be executed in connection
herewith, whether or not such costs or expenses are incurred before or
after the Closing Date, and (b) local, state and federal income taxes
or other similar charges on income or gain incurred by Company, the
C l i nic or the Shareholders as a result of the transactions
contemplated hereby.
13.4 Public Disclosures. Except as otherwise required by law, no
party to this Agreement shall make any public or other disclosure of
this Agreement or the transactions contemplated hereby without the
prior consent of the other parties. The parties to this Agreement
shall cooperate with respect to the form and content of any such
disclosures.
13.5 GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
FLORIDA AND APPLIED WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAWS
PRINCIPLES.
13.6 Captions. The captions or headings in this Agreement are
made for convenience and general reference only and shall not be
construed to describe, define or limit the scope or intent of the
provisions of this Agreement.
13.7 Integration of Exhibits. All Exhibits attached to this
Agreement are integral parts of this Agreement as if fully set forth
herein, and all statements appearing therein shall be deemed disclosed
for all purposes and not only in connection with the specific
representation in which they are explicitly referenced.
13.8 ENTIRE AGREEMENT/AMENDMENT. THIS INSTRUMENT, INCLUDING ALL
EXHIBITS ATTACHED HERETO, CONTAINS THE ENTIRE AGREEMENT OF THE PARTIES
AND SUPERSEDES ANY AND ALL PRIOR OR CONTEMPORANEOUS AGREEMENTS BETWEEN
THE PARTIES, WRITTEN OR ORAL, WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREBY.
13.9 Counterparts; Telefax. This Agreement may be executed in
several counterparts, each of which when so executed shall be deemed
to be an original, and such counterparts shall together constitute and
be one and the same instrument. A telefax copy of this Agreement and
all signatures thereon shall constitute an original for all purposes.
13.10 Binding Effect/Assignment. This Agreement shall be
binding on, and shall inure to the benefit of, the parties hereto, and
their respective successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No
party may assign any right or obligation hereunder without the prior
written consent of the other parties; provided, however, that PRG Sub
and PRG may assign its rights and obligations hereunder to an
affiliate and to their lender or lenders.
13.11 No Rule of Construction. The parties acknowledge that
this Agreement was initially prepared by PRG Sub, and that all parties
have read and negotiated the language used in this Agreement. The
parties agree that, because all parties participated in negotiating
and drafting this Agreement, no rule of construction shall apply to
this Agreement which construes ambiguous language in favor of or
against any party by reason of that party's role in drafting this
Agreement.
13.12 Costs of Enforcement. In the event that PRG Sub or PRG,
on the one hand, or Company or the Shareholders, on the other hand,
file suit in any court against any other party to enforce the terms of
this Agreement against the other party or to obtain performance by it
hereunder, the prevailing party will be entitled to recover all
reasonable costs, including reasonable attorneys' fees, from the other
party as part of any judgment in such suit. The term "prevailing
party" shall mean the party in whose favor final judgment after appeal
(if any) is rendered with respect to the claims asserted in the
C o mplaint. "Reasonable attorneys' fees" are those reasonable
attorneys' fees actually incurred in obtaining a judgment in favor of
the prevailing party.
13.13 Amendments; Waivers. This Agreement may be amended,
modified or supplemented only by an instrument in writing executed by
all the parties hereto. Any waiver of the terms and conditions hereof
must be in writing, and signed by the parties hereto. The waiver of
any of the terms and conditions of this Agreement shall not be
construed as a waiver of any other terms and conditions hereof.
13.14 Choice of Forum. Each of the parties hereto agree that
should any suit, action or proceeding arising out of this Agreement be
instituted by any party hereto (other than a suit, action or
proceeding to enforce or realize upon any final court judgment arising
out of this Agreement), such suit, action or proceeding shall be
instituted only in a state or federal court in Dallas County, Texas.
Each of the parties hereto consents to the in personam jurisdiction of
any state or federal court in Dallas County, Texas and waives any
objection to the venue of any such suit, action or proceeding. The
parties hereto recognize that courts outside Dallas County, Texas may
also have jurisdiction over suits, actions or proceedings arising out
of this Agreement, and in the event that any party hereto shall
institute a proceeding involving this Agreement in a jurisdiction
outside Dallas County, Texas, the party instituting such proceeding
shall indemnify any other party hereto for any losses and expenses
that may result from the breach of the foregoing covenant to institute
proceedings only in a state or federal court in Dallas County, Texas.
13.15 Service of Process. Service of any and all process
that may be served on any party hereto in any suit, action or
proceeding arising out of this Agreement may be made in the manner and
to the address set forth in Section 16.1 and service thus made shall
be taken and held to be valid personal service upon such party by any
party hereto on whose behalf such service is made.
13.16 Severability. If any provision of this Agreement shall
be found to be illegal, invalid or unenforceable under present or
future laws, such provision shall be fully severable and this
Agreement shall be construed and enforced as if such provision never
comprised a part hereof; and the remaining provisions hereof shall
remain in full force and effect. In lieu of such provision, there
shall be added automatically as part of this Agreement, a provision as
similar in its terms to such provision as may be possible and be
legal, valid and enforceable.
[End of Page]
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the day and year first above written.
PRG FLORIDA XII INC.
By: _________________________
Its: _________________________
MELBOURNE EYE ASSOCIATES OF BREVARD, INC.
By: _________________________
Its: _________________________
MELBOURNE EYE ASSOCIATES, P.A.
By: _________________________
Its: _________________________
PHYSICIANS RESOURCE GROUP, INC.
By: _________________________
Its: _________________________
______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, M.D., Trustee U.T.D.
March 24, 1980
______________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, M.D., Trustee U.T.D.
September 26, 1988
______________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
______________________________
▇▇▇▇▇ ▇▇▇▇▇▇, M.D.
______________________________
K. ▇▇▇▇▇▇▇▇ ▇▇, M.D., Trustee U.T.D.
November 24, 1989
______________________________
L. ▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
INDEX TO EXHIBITS
Exhibit Description
2.1 Corporate Existence; Good Standing
2.3 Permits and Licenses
2.5 Consents
2.7 Leases
2.9 Real and Personal Property; Encumbrances
2.11 Patents and Trademarks; Names
2.12 Directors and Officers; Payroll Information
2.13 Litigation
2.14 Contracts (other than Leases)
2.16 Accounts Receivable
2.18 Debt
2.19 Insurance Policies
2.20 Employee Benefit Plans
2.29 Banking Relations
4.4 Clinic Assets
4.8 Distributions
6.7 Form of Service Agreement
8.1(k) Stockholder's Agreement
ANNEX I Consideration