AGREEMENT AND PLAN OF REORGANIZATION
by and among
OPHTHALMOLOGICAL ASSOCIATES, LTD.,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.,
PRG GR ACQ. CORP.,
and
PHYSICIANS RESOURCE GROUP, INC.
TABLE OF CONTENTS
Page
Section 1. The Merger
1.1 Merger of PRG Sub into the Company . . . . . . . . . . . 1
1.2 Merger Certificates . . . . . . . . . . . . . . . . . . . 1
1.3 Articles of Incorporation of Surviving Corporation . . . 2
1.4 Bylaws of the Surviving Corporation . . . . . . . . . . . 2
1.5 Directors of the Surviving Corporation . . . . . . . . . 2
1.6 Officers of the Surviving Corporation . . . . . . . . . . 2
1.7 Conversion of Company Common Stock . . . . . . . . . . . 2
1.8 Exchange of Certificates Representing Shares of
Company Common Stock . . . . . . . . . . . . . . . . . . 2
1.9 Subsequent Actions . . . . . . . . . . . . . . . . . . . 3
Section 2. Representations and Warranties of the Company and the
Shareholders
2.1 Corporate Existence; Good Standing . . . . . . . . . . . 3
2.2 Power and Authority for Transactions . . . . . . . . . . 3
2.3 Permits, Licenses and Governmental Authorizations . . . . 4
2.4 Corporate Records . . . . . . . . . . . . . . . . . . . . 4
2.5 Consents . . . . . . . . . . . . . . . . . . . . . . . . 4
2.6 The Company's Financial Information . . . . . . . . . . . 4
2.7 Leases . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.8 Condition of Assets . . . . . . . . . . . . . . . . . . . 4
2.9 Title to and Encumbrances on Property . . . . . . . . . . 4
2.10 Inventories . . . . . . . . . . . . . . . . . . . . . . . 4
2.11 Intellectual Property Rights; Names . . . . . . . . . . . 5
2.12 Directors and Officers; Payroll Information; Employees . 5
2.13 Legal Proceedings . . . . . . . . . . . . . . . . . . . . 5
2.14 Contracts . . . . . . . . . . . . . . . . . . . . . . . . 5
2.15 Subsequent Events . . . . . . . . . . . . . . . . . . . . 6
2.16 Accounts Receivable/Payable . . . . . . . . . . . . . . . 7
2.17 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.18 Liabilities; Debt . . . . . . . . . . . . . . . . . . . . 8
2.19 Insurance Policies . . . . . . . . . . . . . . . . . . . 8
2.20 Employee Benefit Plans . . . . . . . . . . . . . . . . . 8
2.21 Adverse Agreements . . . . . . . . . . . . . . . . . . . 8
2.22 Compliance with Laws in General . . . . . . . . . . . . . 8
2.23 Medicare and Medicaid Programs . . . . . . . . . . . . . 9
2.24 Fraud and Abuse . . . . . . . . . . . . . . . . . . . . . 9
2.25 No Untrue Representations . . . . . . . . . . . . . . . . 9
2.26 Accredited Investor Status . . . . . . . . . . . . . . . 9
2.27 Distributions and Repurchases . . . . . . . . . . . . . . 9
2.28 Suppliers . . . . . . . . . . . . . . . . . . . . . . . . 9
2.29 Banking Relations . . . . . . . . . . . . . . . . . . . . 10
2.30 Ownership Interests of Interested Persons; Competitors . 10
2.31 Payors . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3. Representations and Warranties of PRG Sub and PRG
3.1 Corporate Existence: Good Standing . . . . . . . . . . . 10
3.2 Power and Authority . . . . . . . . . . . . . . . . . . . 10
3.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . 10
3.4 No Untrue Representations . . . . . . . . . . . . . . . . 10
3.5 Legal Proceedings . . . . . . . . . . . . . . . . . . . . 11
3.6 Fraud and Abuse . . . . . . . . . . . . . . . . . . . . . 11
3.7 Absence of Litigation . . . . . . . . . . . . . . . . . . 11
Section 4. Closing Date Representations and Warranties of the
Shareholders
4.1 Corporate Existence and Good Standing of the Clinic . . . 11
4.2 Corporate Records . . . . . . . . . . . . . . . . . . . . 12
4.3 Power and Authority for Transactions . . . . . . . . . . 12
4.5 Compliance with Laws . . . . . . . . . . . . . . . . . . 12
Section 5. Covenants of the Company and the Shareholders
5.1 Consummation of Agreement . . . . . . . . . . . . . . . . 12
5.2 Business Operations . . . . . . . . . . . . . . . . . . . 12
5.3 Access and Notice . . . . . . . . . . . . . . . . . . . . 12
5.4 Approvals of Third Parties and Permits and Consents . . . 13
5.5 Acquisition Proposals . . . . . . . . . . . . . . . . . . 13
5.6 Funding of Accrued Employee Benefits . . . . . . . . . . 13
5.7 Employee Matters . . . . . . . . . . . . . . . . . . . . 13
5.8 Distributions and Repurchases . . . . . . . . . . . . . . 13
5.9 Requirements to Effect Merger . . . . . . . . . . . . . . 13
5.10 Voting of Shares. . . . . . . . . . . . . . . . . . . . . 13
5.11 Accounting and Tax Matters . . . . . . . . . . . . . . . 13
5.12 Conversion Transaction . . . . . . . . . . . . . . . . . 14
5.13 Leases . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 6. Covenants of PRG and PRG Sub
6.1 Consummation of Agreement . . . . . . . . . . . . . . . . 14
6.2 Approvals of Third Parties and Permits and Consents . . . 14
6.3 Listing Application . . . . . . . . . . . . . . . . . . . 14
Section 7. Covenants of the Shareholders
7.1 Formation of the Clinic . . . . . . . . . . . . . . . . . 14
7.2 Access . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.3 Licenses and Permits . . . . . . . . . . . . . . . . . . 14
7.4 Corporate Governance. . . . . . . . . . . . . . . . . . . 14
Section 8. PRG Sub and PRG Conditions Precedent
8.1 Representations and Warranties. . . . . . . . . . . . . . 15
8.2 Covenants and Conditions. . . . . . . . . . . . . . . . . 15
8.3 Proceedings . . . . . . . . . . . . . . . . . . . . . . . 15
8.4 No Material Adverse Change. . . . . . . . . . . . . . . . 15
8.5 Due Diligence Review. . . . . . . . . . . . . . . . . . . 15
8.6 Approval by the Board of Directors . . . . . . . . . . . 15
8.7 Service Agreement . . . . . . . . . . . . . . . . . . . . 15
8.8 Employment Arrangements . . . . . . . . . . . . . . . . . 15
8.9 Consents and Approvals . . . . . . . . . . . . . . . . . 15
8.10 Closing Deliveries. . . . . . . . . . . . . . . . . . . . 15
8.11 Corporate Governance. . . . . . . . . . . . . . . . . . . 15
8.12 Debt and Receivables. . . . . . . . . . . . . . . . . . . 15
8.13 Dissenting Shares . . . . . . . . . . . . . . . . . . . . 16
8.14 Stock Consideration . . . . . . . . . . . . . . . . . . . 16
8.15 No Change in Working Capital . . . . . . . . . . . . . . 16
Section 9. T h e Company's and the Shareholder's Conditions
Precedent
9.1 Representations and Warranties . . . . . . . . . . . . . 16
9.2 Covenants and Conditions . . . . . . . . . . . . . . . . 16
9.3 Proceedings . . . . . . . . . . . . . . . . . . . . . . . 16
9.4 Closing Deliveries. . . . . . . . . . . . . . . . . . . . 16
9.5 Stock Consideration . . . . . . . . . . . . . . . . . . . 16
Section 10. Closing Deliveries
10.1 Deliveries of the Company and the Shareholders . . . . . 16
10.2 Deliveries of PRG Sub and PRG . . . . . . . . . . . . . . 17
Section 11. Nature and Survival of Representations and Warranties;
Indemnification
11.1 Nature and Survival . . . . . . . . . . . . . . . . . . . 18
11.2 Indemnification by PRG Sub and PRG . . . . . . . . . . . 18
11.3 Indemnification by the Company and the Shareholders . . . 19
11.4 Indemnification Procedure . . . . . . . . . . . . . . . . 19
11.5 Certain Tax Matters . . . . . . . . . . . . . . . . . . . 20
11.6 Right of Setoff . . . . . . . . . . . . . . . . . . . . . 20
Section 12. Termination
Section 13. Noncompetition
13.1 Prohibited Activities . . . . . . . . . . . . . . . . . . 21
13.2 Damages . . . . . . . . . . . . . . . . . . . . . . . . . 21
13.3 [Intentionally Blank] . . . . . . . . . . . . . . . . . . 22
13.4 Severability; Reformation . . . . . . . . . . . . . . . . 22
13.5 Term . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 14. Nondisclosure of Confidential Information
Section 15. Investment Representations. . . . . . . . . . . . . . . . 23
Section 16. Miscellaneous
16.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 23
16.2 Further Assurances . . . . . . . . . . . . . . . . . . . 24
16.3 Each Party to Bear Costs . . . . . . . . . . . . . . . . 24
16.4 Public Disclosures . . . . . . . . . . . . . . . . . . . 24
16.5 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 24
16.6 Captions . . . . . . . . . . . . . . . . . . . . . . . . 24
16.7 Integration of Exhibits . . . . . . . . . . . . . . . . . 24
16.8 ENTIRE AGREEMENT/AMENDMENT . . . . . . . . . . . . . . . 24
16.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . 24
16.10 Binding Effect/Assignment . . . . . . . . . . . . . . . 24
16.11 No Rule of Construction . . . . . . . . . . . . . . . . 24
16.12 Costs of Enforcement . . . . . . . . . . . . . . . . . . 24
16.13 Amendments; Waivers . . . . . . . . . . . . . . . . . . 25
16.14 Choice of Forum . . . . . . . . . . . . . . . . . . . . 25
16.15 Service of Process . . . . . . . . . . . . . . . . . . . 25
16.16 Severability . . . . . . . . . . . . . . . . . . . . . . 25
AGREEMENT AND PLAN OF REORGANIZATION
This AGREEMENT AND PLAN OF REORGANIZATION, made and executed as
of the 30th day of October, 1996, is by and among PRG GR ACQ. CORP.,
an Illinois corporation ("PRG Sub"); PHYSICIANS RESOURCE GROUP, INC.,
a Delaware corporation ("PRG"); OPHTHALMOLOGICAL ASSOCIATES, LTD., an
Illinois medical corporation (the Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇,
M.D., ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D., all
i n d i vidual residents of the State of Illinois (individually
"Shareholder," and collectively "Shareholders").
WITNESSETH:
WHEREAS, the Company operates an ophthalmology practice in
Belleville, Illinois;
WHEREAS, Shareholders are the only shareholders of the 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 Boards of Directors of each of the Company, PRG and
PRG Sub have determined that a business combination between the
parties is in the best interests of their respective companies and
stockholders and accordingly have agreed to effect the Merger
(hereinafter defined) upon the terms and conditions set forth herein;
WHEREAS, it is intended that for federal income tax purposes the
Merger shall qualify as a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
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. The Merger.
The Merger of PRG Sub with and into the Company shall occur on
the 30th day of October, 1996 ("Closing Date"), unless another date is
mutually agreed upon among the parties hereto, 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 Merger of PRG Sub into the Company. On the Closing Date,
PRG Sub shall be merged with and into the Company in accordance with
this Agreement and the separate corporate existence of PRG Sub shall
thereupon cease (the "Merger"). The Merger is intended to be a "tax-
free reorganization" pursuant to Section 368(a) of the Code and the
p a rties hereto shall not report the transaction in a manner
inconsistent therewith or otherwise take any action that would prevent
the Merger from qualifying as such; provided, however, that the actual
tax effect of the transactions contemplated by this Agreement is not a
condition precedent to the closing of the transactions contemplated
hereby and no party hereto makes or has made any representation,
w a r ranty or covenant to any other party hereto as to such
qualification. The Company shall be the surviving corporation in the
Merger (in such capacity, hereinafter referred to as the "Surviving
Corporation") and shall continue to be governed by the laws of the
State of Illinois and the separate corporate existence of Surviving
Corporation with all its rights, privileges, powers, immunities,
purposes and franchises shall continue unaffected by the Merger,
except as set forth herein. The Merger shall have the effects
specified in the Illinois Business Corporation Law.
1.2 Merger Certificates. If all conditions to the Merger set
forth herein have been fulfilled or waived in accordance herewith and
this Agreement shall not have been terminated pursuant to the terms
hereof, the parties hereto shall cause to be properly executed and
filed on the Closing Date a Certificate of Merger meeting the
requirements of the Illinois Business Corporation Law. The Merger
shall be effective on the Closing Date notwithstanding the date of the
filing of the Certificate of Merger.
1.3 A r t i cles of Incorporation of Surviving Corporation.
Effective on the Closing Date, the Certificate of Incorporation of PRG
S u b shall be the Articles of Incorporation of the Surviving
Corporation and to the extent the foregoing is not permitted by law,
the Articles of Incorporation of the Surviving Corporation shall be
the Articles of Incorporation of the Company and shall immediately be
amended to contain the terms and provisions of the Articles of
Incorporation of PRG Sub.
1.4 Bylaws of the Surviving Corporation. The Bylaws of PRG Sub
on the Closing Date shall be the Bylaws of the Surviving Corporation,
until duly amended in accordance with their terms.
1.5 Directors of the Surviving Corporation. The persons who are
directors of PRG Sub immediately prior to the Closing Date shall, from
and after the Closing Date, be the directors of the Surviving
Corporation until their successors have been duly elected or appointed
and qualified or until their earlier death, resignation or removal in
accordance with the Surviving Corporation's Articles of Incorporation
and Bylaws.
1.6 Officers of the Surviving Corporation. The persons who are
officers of PRG Sub immediately prior to the Closing Date shall, from
and after the Closing Date, be the officers of the Surviving
Corporation and shall hold their same respective office(s) until their
earlier death, resignation or removal.
1.7 C o nversion of Company Common Stock. The manner of
converting shares of the Company in the Merger shall be as follows:
(a) As a result of the Merger and without any action on the
part of the holder thereof, all shares of Company common stock issued
and outstanding on the Closing Date shall cease to be outstanding and
shall be cancelled and retired and shall cease to exist, and each
holder of a certificate representing any such shares of Company common
stock shall thereafter cease to have any rights with respect to such
shares of Company common stock, except the right to receive, without
interest, the consideration specified in Annex I attached hereto (in
the aggregate, the "Merger Consideration").
(b) Each share of Company common stock held in the
Company's treasury, if any, on the Closing Date, by virtue of the
Merger, shall cease to be outstanding and shall be cancelled and
retired without payment of any consideration therefor and shall cease
to exist.
(c) On the Closing Date, each share of PRG Sub common stock
issued and outstanding as of the Closing Date shall be surrendered in
exchange for a share of validly issued, fully paid and nonassessable
share of common stock of Surviving Corporation.
1.8 Exchange of Certificates Representing Shares of Company
Common Stock.
(a) At or after the Closing Date, (i) the Shareholders, as
the holders of all outstanding certificates representing shares of
Company common stock, shall, upon surrender of such certificates, be
entitled to receive the Merger Consideration and (ii) until the
certificates representing Company common stock have been surrendered
by Shareholders and replaced by certificates representing PRG common
stock, or until the certificates of PRG common stock are received by
Shareholders, whichever is first, the certificates for Company common
stock shall, for all purposes, be deemed to evidence ownership of PRG
common stock.
(b) The Shareholders shall deliver to PRG on the Closing
Date the certificates representing Company common stock owned by them,
duly endorsed in blank by the Shareholders, or accompanied by blank
stock powers, with signatures guaranteed by a national bank, and with
all necessary transfer tax and other revenue stamps, acquired at the
Shareholders' expense, affixed and cancelled. The Shareholders agree
to cure any deficiencies with respect to the endorsement of the
certificates or other documents of conveyance with respect to such
Company common stock or with respect to the stock powers accompanying
any Company common stock. Upon such delivery, the Shareholder shall
be entitled to receive in exchange therefor a certificate representing
that number of shares of PRG common stock and the amount of any cash
such Shareholder is entitled to receive pursuant to Sections 1.7
hereof, after giving effect to any required tax withholdings.
(c) Notwithstanding Section 1.7 or any other provision of
this Section 1.8, no fractional shares of PRG common stock will be
issued.
1.9 Subsequent Actions. If, at any time after the Closing Date,
the Surviving Corporation shall consider or be advised that any 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 the Surviving Corporation its right, title or interest
in, to or under any of the rights, properties or assets of the Company
or PRG Sub acquired or to be acquired by the Surviving Corporation as
a result of, or in connection with, the Merger or otherwise to carry
out this Agreement, and to effect the cancellation of all outstanding
shares of Company common stock in return for the consideration set
forth in this Agreement, the officers and directors of the Surviving
Corporation shall be authorized to execute and deliver, in the name
and on behalf of the Company, each Shareholder 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 the
Company and 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 such rights, properties or
assets in the Surviving Corporation or otherwise to carry out this
Agreement.
Section 2. Representations and Warranties of the 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 Corporate Existence; Good Standing. The Company is a
professional corporation duly organized, validly existing and in good
standing under the laws of the State of Illinois. The 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. The Company
does not own stock in or control, directly or indirectly, any other
corporation, association or business organization, nor is the Company
a party to any joint venture or partnership. The shareholders are the
sole shareholders of the 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
common stock has been legally and validly issued and fully paid and
nonassessable. No shares of capital stock of the Company are owned by
the 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 the Company on any matter, (b)
securities of the Company convertible into equity interests in the
Company, or (c) commitments, options, rights or warrants to issue any
such equity interests in the Company, to issue securities of the
Company convertible into such equity interests, or to redeem any
securities of the Company. No shares of capital stock of the Company
have been issued or disposed of in violation of the preemptive rights,
rights of first refusal or similar rights of any of the Company's
stockholders. The 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. The Company does not have any assets,
employees or offices in any state other than Illinois.
2.2 Power and Authority for Transactions. The 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,
a n d has taken all action required by law, its Articles 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. The 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 the Company and
the Shareholders, as appropriate, and constitute or will constitute
the legal, valid and binding obligations of the Company and the
Shareholders, enforceable against the 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 of
Incorporation or Bylaws of the 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 the Company or any Shareholder is a party or by
which the Company or any Shareholder is bound, or violate any material
restrictions of any kind to which the Company is subject, or result in
any lien or encumbrance on any of the Company's assets.
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 to be maintained by
the Company, the Shareholders and each physician or licensed employee
of the Company have been duly obtained and are in full force and
effect and are described on Exhibit 2.3. There are no proceedings
pending or, to the knowledge of the Company and the Shareholders,
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
of Incorporation, Bylaws and minutes of the Company and all amendments
thereto of the Company have been delivered to PRG Sub. The minute
books of the Company contain all accurate minutes of the meetings of
and consents to actions taken without meetings of the Board of
Directors and stockholders of the Company since its formation. The
books of account of the Company have been kept accurately in the
ordinary course of business and the revenues, expenses, assets and
liabilities of the 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 the Company or the Shareholders.
2.6 The Company's Financial Information. The Company has
heretofore furnished PRG Sub with copies of financial information
("Financial Statements") about the Company as set forth on Exhibit 2.6
attached hereto, including the unaudited Balance Sheet ("Balance
Sheet") as of May 31, 1996 ( Balance Sheet Date ). All such financial
statements have been prepared in accordance with generally accepted
accounting principles consistently followed throughout the periods
indicated, reflect all liabilities of the Company, including all
contingent liabilities of the Company, as of their respective dates,
and present fairly the financial position of the 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 the Company leases, as lessor or lessee,
real or personal property used in operating the business of the
Company 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 the Company, as
lessor or lessee, or any condition or event of which the Company or
any Shareholder has knowledge which with notice or lapse of time, or
both, would constitute a default, in respect of which the Company has
not taken adequate steps to cure such default or to prevent a default
from occurring.
2.8 Condition of Assets. All of the plants, structures and
equipment used by the Company in its business are in good condition
and repair subject to normal wear and tear and conform with all
applicable ordinances, regulations and other laws, and the 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 its business are reflected on the Balance Sheet in
accordance with generally accepted accounting principles consistently
applied. The items of the Company's inventory have been acquired in
the ordinary course of its business, are adequate for the reasonable
requirements of its business, and, to the best knowledge of the
Company and the Shareholders, may be used for their intended purposes.
All of the inventory owned or used by the 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, the 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 its business. Set forth in Exhibit 2.11
is a listing of all names of all predecessor companies of the Company,
including the names of any entities from whom the Company previously
acquired significant assets. Except for off-the-shelf software
licenses and except as set forth on Exhibit 2.11, the 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 its business. No claim is
pending or has been made to the effect that the present or past
operations of the 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. The Company has the sole and exclusive right
to use all such 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 the Surviving Corporation.
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 the Company and the offices held by each, (b) the most
recent payroll report of the Company, showing all current employees of
the Company and their current levels of compensation, (c) promised
increases in compensation of employees of the Company that have not
yet been effected, (d) oral or written employment agreements or
independent contractor agreements (and all amendments thereto) to
which the 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. The Company is in compliance with all applicable laws, rules,
regulations and ordinances respecting employment and employment
practices. The Company has not engaged in any unfair labor practice.
There are no unfair labor practices charges or complaints pending or
threatened against the Company, and the Company has never been a party
to any agreement with any union, labor organization or collective
bargaining unit.
2.13 Legal Proceedings. Other than as would not have a material
a d v erse effect, neither the Company nor any Shareholder nor
outstanding shares of the Company's stock nor any of the Company's
assets is subject to any pending, nor does the Company or any
Shareholder have knowledge of any threatened, litigation, governmental
investigation, condemnation or other proceeding against or relating to
or affecting the Company, any Shareholder, the outstanding shares of
the Company's stock, any of the assets of the Company, the operations,
business or prospects of the Company or the transactions contemplated
by this Agreement, and, to the knowledge of the Company and the
Shareholders, no basis for any such action exists, nor is there any
legal impediment of which the 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. The Company has delivered to PRG Sub true copies
of all written, and disclosed to PRG Sub all oral, outstanding
contracts, obligations and commitments of the 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 the Company, or
any condition or event of which the Company or any Shareholder has
knowledge which with notice or lapse of time, or both, would
constitute a default. The Company and the Shareholders have no
knowledge of any default by any other party to such Contracts.
Neither the 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 of the Company listed on
Exhibit 2.7, Exhibit 2.12 and Exhibit 2.14, the 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 not made in the ordinary course of business 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 its 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 Company 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 the Company on more than 30 days after the date
hereof.
2.15 Subsequent Events. The 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 its 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 the 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 Company's
business or 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) 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 experienced any other material
a d verse 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 the Company;
(o) Repurchased, approved any repurchase or agreed to
repurchase any of the Company's capital stock; or
(p) Suffered any material adverse change in the business of
the Company or to the assets of 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 the 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 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 Section 7.3(c) of
the Service Agreement.
2.17 Taxes. The 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. The 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 the 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 the
Company). The Company and the Shareholders have not received any
notice that any tax deficiency or delinquency has been asserted
against the Company. There are no audits relating to taxes of the
Company threatened, pending or in process. The 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 the Company. The Company has withheld and paid
all taxes required by law to have been withheld and paid by it.
Neither the Company nor any predecessor of the 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. The Company has delivered to PRG Sub correct and
complete copies of the 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 the Company during the three calendar year period preceding the
date of this Agreement. The 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, the 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. The Company and the Shareholders
do not know, or have reasonable grounds to know, of any basis for the
assertion against the 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 the Company (including without limitation,
i n debtedness for borrowed money, guaranties and capital lease
obligations) is described on Exhibit 2.18 attached hereto.
2.19 Insurance Policies. The Company, each Shareholder and each
physician employee of the 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 the 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 the Company, nor each Shareholder nor any physician
employee of the 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, the Company has neither established, nor maintains,
nor is 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 the
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. The Company has not previously made, is not currently making,
and is not obligated in any way to make, any contributions to any
multiemployer 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. The 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 the Company.
2.22 C o mpliance with Laws in General. The Company, the
Shareholders and Company's physician and licensed employees 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 the Company, any Shareholder or
any physician or licensed employee of the Company of any federal,
state or local law or regulation. Neither the 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 assets of the Company and no notice of
any pending inspection or violation of any such law, regulation or
ordinance has been received by the Company or any Shareholder.
2.23 M e d icare and Medicaid Programs. The Company, each
Shareholder and each physician and licensed employee of the 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. The
Company, each Shareholder and each physician and licensed employee of
the 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 the
Company, each Shareholder and each licensed employee of the Company.
Neither the Company, nor any Shareholder, nor any physician or
licensed employee of the 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. Other than as would not have a material
adverse effect, the Company, the Shareholders and all persons and
entities providing professional services for the Company's business
have not, to the knowledge of the 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 false 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
the Company or any Shareholder in this Agreement, and no Exhibit or
certificate issued or executed by, or information furnished by,
officers or directors of the 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 known to be untrue by the
Company or any Shareholder, or omits or will omit to state a material
fact necessary to make the statements or facts contained therein not
misleading.
2.26 A c credited Investor Status. Each Shareholder is an
"accredited investor" as defined in Rule 501(a) under the Securities
Act of 1933, as amended (the "Securities Act").
2.27 Distributions and Repurchases. No distribution, payment or
dividend of any kind has been declared or paid by the Company on any
of its capital stock since the Balance Sheet Date. No repurchase of
any of the Company's capital stock has been approved, effected or is
pending, or is contemplated by the Board of Directors of the Company.
2.28 Suppliers. Set forth in Exhibit 2.28 is a complete and
accurate list of the ten (10) largest suppliers of the 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 the 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 as set forth in Exhibit 2.30, no officer, employee, director or
stockholder of the 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 the Company or any organization that has
a material contract or arrangement with the Company. Neither the
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, the
Company or to provide services, lease space, lease equipment or engage
in any other venture or activity with the Company except as set forth
on Exhibit 2.30.
2.31 Payors. Exhibit 2.31 sets forth a true, complete and
correct list of the names and addresses of each payor of the Company's
services which accounted for more than 10% of revenues of the Company
in the preceding fiscal year. The Company has good relations with all
such payors and other material payors of the Company and none of such
payors has notified the Company that it intends to discontinue its
relationship with the 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 the Company and
the Shareholders as follows:
3.1 Corporate Existence: Good Standing. PRG and PRG Sub are
corporations duly organized and existing and in good standing under
the laws of the State of Delaware and Illinois, respectively..
3.2 Power and Authority. Each of PRG Sub and PRG has corporate
power to execute, deliver and perform this Agreement and all
agreements and other documents executed and delivered by it pursuant
to this Agreement, and has taken all actions required by law, its
Certificate or Articles of Incorporation, its Bylaws or otherwise, to
authorize the execution, delivery and performance of this Agreement
and such related documents. The execution and delivery of this
Agreement and the agreements related hereto executed and delivered
pursuant to this Agreement do not and, subject to the receipt of
consents to assignments of leases and other contracts where required
a n d the receipt of regulatory approvals where required, the
consummation of the transactions contemplated hereby will not, violate
any provision of the Certificate or Articles of Incorporation or
Bylaws of either PRG Sub or PRG or any provisions of, or result in the
acceleration of, any obligation under any mortgage, lien, lease,
agreement instrument, order, arbitration award, judgment or decree to
which PRG Sub or PRG is a party or by which either of them is bound,
or violate any restrictions of any kind to which PRG Sub or PRG is
subject.
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 Merger 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 Merger, 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 the 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 known to be untrue by
PRG or PRG Sub, or omits or will omit to state a material fact
necessary to make the statements or facts contained therein not
misleading.
3.5 Legal Proceedings. Other than as would not have a material
adverse effect, neither PRG or PRG Sub nor any of said companies
assets are subject to any pending, nor does PRG or PRG Sub have
knowledge of any threatened, litigation, governmental investigation,
condemnation or other proceeding against or relating to or affecting
PRG or PRG Sub or any of the assets of either, the operations,
business or prospects of either, or the transactions contemplated by
this agreement, and, to the knowledge of PRG and PRG Sub, no basis for
any such action exists, nor is there any legal impediment to which PRG
or PRG Sub had knowledge to the continued operation of their business
in the ordinary course.
3.6 Fraud and Abuse. Other than as would not have a material
adverse effect, PRG and PRG Sub have not, to their knowledge, 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, 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 false 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 the 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 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.
3.7 Absence of Litigation. No action or proceeding by or before
any court or other governmental body has been instituted or is, to the
best of PRG and PRG Sub s knowledge, threatened with respect to the
transactions contemplated by this agreement, or which would materially
and adversely affect the value of the shares of PRG stock.
Section 4. Closing Date Representations and Warranties of the
Shareholders.
The Shareholders, jointly and severally, represent and warrant
that the following will be true and correct as of the Closing Date as
if made on such date:
4.1 Corporate Existence and Good Standing of the Clinic. Green
W a ltman Eye Institute, Ltd. of Illinois, an Illinois medical
corporation (the "Clinic") is a medical corporation duly organized,
validly existing and in good standing under the laws of the State of
Illinois. The Clinic has all necessary corporate 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 4.1. 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 shareholders 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 Illinois.
4.2 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 directors 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.
4.3 Power and Authority for Transactions. The Clinic has the
corporate 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, its Bylaws or otherwise, to
authorize the execution, delivery and performance of such documents.
The Service Agreement, the Employment 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, the Employment
Agreements 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.
4.4 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).
4.5 Compliance with Laws. The Clinic has complied with all
applicable laws, regulations and licensing requirements and has filed
with the proper authorities all necessary statements and reports.
Section 5. Covenants of the Company and the Shareholders.
The Company and the Shareholders, jointly and severally, agree
that between the date hereof and the Closing Date:
5.1 Consummation of Agreement. The 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.
5.2 Business Operations. The Company and the Shareholders shall
operate the Company's business in the ordinary course. The Company
shall not enter into any lease, contract, indebtedness, commitment,
purchase or sale or acquire or dispose of any capital asset except in
the ordinary course of business. The 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 the Company may
continue to operate in the ordinary course of business. The 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 the Company. The
Company shall collect its receivables and pay its trade payables in
the ordinary course of business. The Company shall not introduce any
new method of management, operations or accounting. On the Closing
Date, the Company shall not be engaged in the practice of medicine and
shall not provide medical services.
5.3 Access and Notice. The Company and the Shareholders shall
permit PRG and PRG Sub and their authorized representatives access to,
and make available for inspection, all of the assets and business of
the Company and all of its assets, 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 the Company as PRG, PRG Sub
o r their representatives may request. The 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 the Company is a party,
and (b) any adverse change in the Company's business, financial
condition or the conditions of its assets.
5.4 Approvals of Third Parties and Permits and Consents. The
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. The 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 the Company
contemplated by the Service Agreement and to conduct the intended
business of the Company.
5.5 Acquisition Proposals The Company and the Shareholders
shall not, and shall use their best efforts to cause the 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 the 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
the Company and the Shareholders will immediately cease any such
activities, discussions or negotiations heretofore conducted with
respect to any of the foregoing. The Company and the Shareholders
shall immediately notify PRG Sub if any such inquiries or proposals
are received.
5.6 Funding of Accrued Employee Benefits. The 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 the Company or any entity might have
any liability whatsoever arising from any insurance, pension plan,
employment tax or similar liability of the Company to any employee or
other person or entity (including, without limitation, any Company
Plan and any liability under employment contracts with the Company)
allocable to services performed prior to the Closing Date. The
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 the Company's employees
or similar persons or entities, including, without limitation, any
Company Plan.
5.7 Employee Matters. The 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 the Company, adopt, amend or terminate
any compensation 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 the Company, its business, assets or prospects.
5.8 Distributions and Repurchases. No distribution, payment or
dividend of any kind will be declared or paid by the Company, nor will
any repurchase of any of the Company's capital stock be approved or
effected.
5.9 Requirements to Effect Merger. The Company and each
Shareholder shall use their best efforts to take, or cause to be
taken, all actions necessary to effect the Merger 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.
5.10 Voting of Shares. 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 the Company
or take action by written consent for adoption of this Agreement, as
hereby amended, and in favor of the Merger 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 Merger.
5.11 Accounting and Tax Matters. The Company will not change in
any material respect the accounting methods or practices followed by
t h e 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. The 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. The 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 the Company required to be filed by it, and pay all taxes
required to be paid by it, on or before the Closing Date.
5.12 C o n v ersion Transaction. Prior to the Merger, the
Shareholders and the Company shall file with the Secretary of State of
Illinois an amendment to and/or a 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.
5.13 Leases. PRG shall have entered into a building lease (the
"Building Lease") with the owner of the property located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, in substantially the form
attached hereto as Exhibit 5.13.
Section 6. Covenants of PRG and PRG Sub.
PRG and PRG Sub, jointly and severally, agree that between the
date hereof and the Closing Date:
6.1 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 Merger under applicable
law, including without limitation the filing with the appropriate
government officials all necessary documents in form approved by
counsel for the parties to this Agreement.
6.2 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.
6.3 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 7. Covenants of the Shareholders.
The Shareholders, jointly and severally, agree that between the
date hereof and the Closing Date:
7.1 Formation of the Clinic. The Shareholders shall form the
Clinic, in the form of entity approved by PRG and PRG Sub in the State
of Illinois, and the organizational documents of the Clinic shall be
in form and substance satisfactory to PRG and PRG Sub.
7.2 Access. The Shareholders shall permit PRG, PRG Sub and
their authorized representatives full access to, and make available
for inspection, all of the assets and records of the Clinic, and
permit PRG, PRG Sub and their authorized representatives to inspect
and make copies of all documents, records and information with respect
to the affairs of the Clinic as PRG, PRG Sub and their representatives
may request.
7.3 Licenses and Permits. The Shareholders shall use their best
e f f orts to obtain all licenses, permits, approvals or other
authorizations required under any law, statute, rule, regulation or
ordinance, or otherwise necessary or desirable to consummate the
transactions or provide the services contemplated by the Service
Agreement and the Employment Agreements, and to conduct the intended
business of the Clinic.
7.4 Corporate Governance. Within three (3) months following the
▇ ▇ ▇▇▇▇▇ Date, the Clinic, if any, shall establish governance
provisions that are reasonably acceptable to PRG providing for (i) a
maximum length of employment for non-owner physicians prior to their
admission to ownership in the Clinic, (ii) terms of ownership
admission to the Clinic, (iii) a compensation structure for ongoing
owner physicians, (iv) retirement of physicians from the ownership of
the Clinic and (v) buy-out provisions for retiring or inactive owner
physicians.
Section 8. 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:
8.1 Representations and Warranties. The representations and
warranties of the 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.
8.2 Covenants and Conditions. The 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 the
Company and the Shareholders prior to the Closing Date.
8.3 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.
8.4 No Material Adverse Change. No material adverse change in
t h e c ondition (financial or otherwise), operations, assets,
liabilities, business or prospects of the Company shall have occurred
since the Balance Sheet Date.
8.5 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 the Company, the results of
which shall be satisfactory to PRG Sub and PRG in their sole
discretion.
8.6 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.
8.7 Service Agreement. On the Closing Date, the Clinic, the
Shareholders, PRG and Surviving Corporation shall execute and deliver
a Service Agreement (the "Service Agreement"), in substantially the
form attached hereto as Exhibit 8.7, pursuant to which Surviving
Corporation will provide management services to the Shareholders and,
if applicable, the Clinic.
8.8 Employment Arrangements. Prior to the Closing Date, the
Company will terminate, and will cause each physician employee of the
Company and other licensed employees that have existing employment
agreements with the Company to terminate his or her employment
agreement with the Company, execute a separation and release agreement
("Separation and Release Agreement").
8.9 Consents and Approvals. The Company and the Shareholders
shall have obtained all necessary government and other third-party
approvals and consents.
8.10 Closing Deliveries. PRG Sub shall have received all
documents, duly executed in form satisfactory to PRG Sub and its
counsel, referred to in Section 10.1.
8.11 C o r porate Governance. PRG shall have approved the
governance provisions of the Clinic, if applicable, adopted in
accordance with Section 7.4.
8.12 Debt and Receivables. There shall be no indebtedness,
receivables or payables between the Company and its shareholders or
affiliates and the Company shall not have any liabilities, including
indebtedness, guaranties and capital leases, that are not approved by
PRG.
8.13 Dissenting Shares. No holder of the Company's common stock
shall have demanded appraisal for the shares of Company common stock
held by such holder in accordance with the Illinois Business
Corporation Law.
8.14 Stock Consideration. The stock consideration shall have
been approved for listing on the NYSE, subject to official notice of
issuance.
8.15 No Change in Working Capital. There shall have been no
change in the Working Capital.
Section 9. T h e Company's and the Shareholder's Conditions
Precedent.
The obligations of the Company and the Shareholders hereunder are
subject to fulfillment at or prior to the Closing Date of each of the
following conditions:
9.1 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.
9.2 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.
9.3 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.
9.4 Closing Deliveries. The Company shall have received all
documents, duly executed in form satisfactory to the Company and its
counsel, referred to in Section 10.2.
9.5 Stock Consideration. The stock consideration shall have
been approved for listing on the NYSE, subject to official notice of
issuance.
Section 10. Closing Deliveries.
10.1 Deliveries of the Company and the Shareholders. At or prior
to the Closing, the 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) executed Separation and Release Agreements;
(c) a copy of the resolutions of the Board of Directors of
the Company 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) a copy of the resolutions of the Board of Directors of
the Clinic authorizing the execution, delivery and performance of the
Service Agreement and the Employment Agreements, each certified by the
Secretary of the Clinic as being true and correct copies of the
original thereof;
(e) certificates of the President of the Company and of
each Shareholder, dated as of the Closing Date, (i) as to the truth
and correctness of the representations and warranties of the Company
and each Shareholder contained herein; (ii) as to the performance of
and compliance by the Company and each Shareholder with all covenants
contained herein; and (iii) certifying that all conditions precedent
of the Company and each Shareholder to the Closing have been
satisfied;
(f) a c ertificate of the Secretary of the Company
certifying as to the incumbency of the directors and officers of the
Company and as to the signatures of such directors and officers who
have executed documents delivered at the Closing on behalf of the
Company;
(g) 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;
(h) a certificate, dated within 10 days of the Closing
Date, of the Secretary of the State of Illinois establishing that the
Company is in existence and is in good standing to transact business
in its state of incorporation;
(i) a certificate, dated within 10 days of the Closing
Date, of the Secretary of the State of Illinois establishing that
Clinic is in existence and is in good standing to transact business in
its state of incorporation;
(j) a n opinion of counsel to the 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 the 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;
(k) all authorizations, consents, approvals, permits and
licenses referred to in Sections 2.3 and 2.5; and
(l) the resignations of the directors and officers of the
Company as requested by PRG Sub;
(m) a Shareholder Release in form attached hereto as
Exhibit 10.1(m) executed by each Shareholder;
(n) a Stockholder s Agreement in form attached hereto as
Exhibit 10.1(n) executed by each Shareholder and their spouses; and
(o) 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.
10.2 Deliveries of PRG Sub and PRG. At or prior to the Closing,
PRG Sub and PRG shall deliver to the Company and/or Shareholders the
following, all of which shall be in a form satisfactory to counsel to
the Company and the Shareholders or the Clinic, as applicable:
(a) the Merger Consideration;
(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 Illinois, as applicable;
(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 the Company;
(h) the Stockholder s Agreement;
(i) reimbursement for the cost incurred by the Company for
the medical record audit performed by ▇▇▇▇▇▇▇▇ Consulting Group; and
(j) such other instruments and documents as reasonably
requested by the Company or Shareholders to carry out and effect the
purpose and intent of this Agreement.
Section 11. Nature and Survival of Representations and Warranties;
Indemnification.
11.1 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 the 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 Sections
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 11.2 or 11.3 hereof, unless such party has timely
given the notice required in Sections 11.2, 11.3 or 11.4 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 11.2, 11.3 or 11.4,
as applicable, are not timely provided.
11.2 Indemnification by PRG Sub and PRG. PRG SUB AND PRG,
JOINTLY AND SEVERALLY (FOR PURPOSES OF THIS SECTION 11.2 AND, TO THE
EXTENT APPLICABLE, SECTION 11.4, "INDEMNITOR"), SHALL INDEMNIFY AND
HOLD THE SHAREHOLDERS, AND THEIR RESPECTIVE AGENTS AND EMPLOYEES (EACH
OF THE FOREGOING, INCLUDING THE SHAREHOLDERS, FOR PURPOSES OF THIS
SECTION 11.2 AND, TO THE EXTENT APPLICABLE, SECTION 11.4, 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 AND FROM ANY ALLEGED ACT OR NEGLIGENCE OF INDEMNITOR OR ITS
EMPLOYEES, AGENTS AND INDEPENDENT CONTRACTORS IN OR ABOUT THE
COMPANY S BUSINESS AFTER THE CLOSING DATE. 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.
11.3 Indemnification by the Company and the Shareholders. THE
COMPANY AND THE SHAREHOLDERS (FOR PURPOSES OF THIS SECTION 11.3 AND,
TO THE EXTENT APPLICABLE, SECTION 11.4, "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
11.3 AND, TO THE EXTENT APPLICABLE, SECTION 11.4, 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 AGREEMENT (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, AND (IV) ANY ACCRUED UNFUNDED
R E T IREMENT OR PENSION PLAN LIABILITIES. 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.
11.4 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.
11.5 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
Surviving Corporation 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,
r e imburse, indemnify and hold harmless PRG and the Surviving
Corporation 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 Surviving Corporation 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 Surviving
Corporation 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, Surviving Corporation
and PRG Sub shall reasonably cooperate with each other in connection
with the filing of Tax Returns pursuant to this Section 11.5(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.
11.6 Right of Setoff. In the event of any breach of warranty,
r e p resentation, covenant or agreement by the Company or the
Shareholders giving rise to indemnification under Section 11.3 or
Section 11.5 hereof, PRG, Surviving Corporation or PRG Sub 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 by PRG, PRG Sub or Surviving Corporation,
including the amounts payable under the Service Agreement.
Section 12. 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 the 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 the Company or any
Shareholders 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, the Company or the Shareholders if the
merger contemplated hereby shall not have been consummated by October
31, 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 the Company,
that such termination is desirable and in the best interests of PRG.
Section 13. Noncompetition.
13.1 Prohibited Activities. In order to protect PRG, PRG Sub,
the Surviving Corporation and each of their affiliates (collectively,
the "PRG Group") against the unauthorized use or disclosure of any of
their confidential information presently known or hereinafter acquired
by the Shareholders and other good and valuable consideration, each
Shareholder hereby agrees that, subject to adjustment pursuant to
Section 13.5, 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) establish, operate or provide physician services at any
medical office, clinic or out-patient and/or ambulatory treatment or
diagnostic facility providing services similar to those provided by
the Company or engage or participate in or finance any business which
engages in direct competition with the business being conducted by
PRG, PRG Sub, Surviving Corporation or any practice managed by PRG or
any subsidiary of PRG anywhere within 25 miles of any location of the
Clinic; provided, however, that this provision shall not prohibit the
each Shareholder or any of his or her affiliates from purchasing or
holding an aggregate equity interest of up to 2%, so long as such
Shareholder and his or her affiliates combined do not purchase or hold
an aggregate equity interest of more than 5%, in any business in
direct competition with the PRG, PRG Sub, Surviving Corporation or any
practice managed by PRG or any subsidiary of PRG; or
(b) induce or attempt to influence any employee of PRG, PRG
Sub, Surviving Corporation or any practice managed by PRG or any
subsidiary of PRG to terminate his or her employment, or to hire any
such employee, whether or not so induced or influenced, except that
any such employee may be hired with PRG's prior written consent.
13.2 Damages.
(a) Because of the difficulty of measuring economic losses
to PRG, Surviving Corporation 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, Surviving Corporation 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, Surviving Corporation
or PRG Sub by injunctions and restraining orders. The foregoing right
is in addition to the right to receive 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:
Year Following
Closing in Which
Breach Occurs Damages
1st $2,000,000.00
2nd $1,600,000.00
3rd $1,200,000.00
4th $800,000.00
5th $400,000.00
13.3 [Intentionally Blank]
13.4 Severability; Reformation. The covenants in this Section 13
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.
13.5 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 13. The covenants contained in this
Section 13 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 14. Nondisclosure of Confidential Information.
(a) 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, Surviving Corporation or
PRG Sub that is valuable, special and unique assets of PRG's,
Surviving Corporation'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 14, PRG, Surviving Corporation or PRG Sub shall be
e n t i tled to an injunction restraining the Shareholders from
disclosing, in whole or in part, such confidential information.
Nothing herein shall be construed as prohibiting PRG, Surviving
Corporation 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 14 shall survive the
termination of this Agreement.
(b) PRG and PRG Sub recognize and acknowledge that they had in
the past, currently have, and in the future may possibly have, access
to certain confidential information of Company and Shareholders that
is valuable, special and unique assets of Company and Shareholders
business. PRG and PRG Sub 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 PRG or PRG Sub, (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), PRG and PRG Sub 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)
PRG and PRG Sub reasonably believe that such disclosure is required in
connection with the defense of a lawsuit against the disclosing party,
or (iv) PRG and PRG Sub are the sole and exclusive owners of such
confidential information as a result of the transaction contemplated
hereunder or otherwise. In the event of breach or threatened breach
by PRG or PRG Sub of the provisions of this Section 14, Shareholders
and Company shall be entitled to an injunction restraining PRG and PRG
S u b from disclosing, in whole or in part, such confidential
information. Nothing herein shall be construed as prohibiting
Shareholders and Company 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 14 shall survive the
termination of this agreement.
Section 15. Investment Representations. 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 have such knowledge and experience in
financial and business matters that they are capable of evaluating the
merits and risks of the proposed investment and therefore have the
capacity to protect their own interests in connection with the
acquisition of the PRG common stock. The Shareholders or their
respective purchaser 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 respective
purchaser representatives have asked any and all questions in the
nature described in the preceding sentence and all questions have been
answered to their satisfaction.
Section 16. Miscellaneous.
16.1 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 Gr Acq. Corp.
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 the Company or the Shareholders:
Ophthalmological Associates, Ltd.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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.
16.2 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.
16.3 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, Surviving Corporation 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 the 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
the Shareholders shall be liable for all such costs and expenses of
the Company, and (b) local, state and federal income taxes or other
similar charges on income or gain incurred by the Company, the Clinic
or the Shareholders as a result of the transactions contemplated
hereby.
16.4 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.
16.5 GOVERNING LAW. THIS AGREEMENT SHALL BE INTERPRETED,
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND APPLIED WITHOUT GIVING EFFECT TO ANY CONFLICTS OF LAWS
PRINCIPLES.
16.6 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.
16.7 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.
16.8 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.
16.9 Counterparts. 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
16.10 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,
Surviving Corporation and PRG may assign its rights and obligations
hereunder to an affiliate and to their lender or lenders.
16.11 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.
16.12 Costs of Enforcement. In the event that PRG Sub,
Surviving Corporation or PRG, on the one hand, or the 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 Complaint. "Reasonable attorneys' fees" are
those reasonable attorneys' fees actually incurred in obtaining a
judgment in favor of the prevailing party.
16.13 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.
16.14 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.
16.15 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.
16.16 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 GR ACQ. CORP.
By: __________________________________
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Vice President
OPHTHALMOLOGICAL ASSOCIATES, LTD.
By: ___________________________________
Its: ___________________________________
PHYSICIANS RESOURCE GROUP, INC.
By: _________________________________________
▇▇▇▇▇▇▇ ▇. ▇'▇▇▇▇▇, Senior Vice President
________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
INDEX TO EXHIBITS
Exhibit Description
2.1 Capitalization of the Company
2.3 Permits and Licenses
2.5 Consents
2.6 Financial Statements
2.7 Leases
2.9 Real and Personal Property; Encumbrances
2.11 Patents and Trademarks; Names
2.12 D i rectors and Officers; Payroll Information;
Employment Agreements
2.14 Contracts (other than Leases)
2.16 Accounts Receivable
2.18 Debt
2.19 Insurance Policies
2.20 Employee Benefit Plans
2.28 Suppliers
2.29 Banking Relations
2.30 Ownership Interests
2.31 Payors
4.1 Capitalization of Clinic
4.4 Clinic Assets
5.13 Form of Lease
8.7 Form of Service Agreement
10.1(m) Shareholder Release
10.1(n) Stockholder's Agreement
ANNEX I Merger Consideration