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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made as of this
___ day of _________, 2000 by and between XxxxxxXxxxxx.xxx, Inc., a corporation
incorporated under the laws of the State of Delaware (the "Company"), XX.xxx,
Inc., a corporation incorporated under the laws of the State of Delaware and a
subsidiary of the Company ("HG"), Physician Report Cards, Inc., a corporation
incorporated under the laws of the State of Delaware and a wholly-owned
subsidiary of the Company ("Newco"), and Xxxxx X. Xxxxxxxx, an individual, and
Xxxxx X. Xxxxxxxx, an individual (together, the "Individuals").
BACKGROUND
The Individuals and the Company own all of the issued and outstanding
common stock of HG, par value $0.001 (the "HG Shares").
The Board of Directors of the Company, the Board of Directors of HG and
the Individual desire to consummate a merger whereby HG will be merged with and
into Newco and the Individuals will each receive shares of the Company's common
stock, par value $0.001 (the "Company Shares"), in exchange for the HG Shares
owned by such individuals.
WITNESSETH
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in consideration of the mutual
representations, warranties, agreements and covenants contained herein, hereby
agree as follows:
ARTICLE 1 - THE MERGER
SECTION 1.1 The Merger Subsidiary. HG is to be merged with and into
Newco, a wholly-owned subsidiary of the Company (the "Merger") as set forth in
Section 1.2 hereof. Newco was formed to facilitate the Merger. The Company will
(i) cause Newco to execute and deliver this Agreement pursuant to Section 251 of
Delaware Law, and (ii) execute a formal written consent under Section 228 of
Delaware Law as the sole stockholder of Newco, approving the execution, delivery
and performance of this Agreement by Newco.
SECTION 1.2 The Merger. At the Effective Time (as defined in Section
1.3 hereof) and subject to and upon the terms and conditions of this Agreement
and Delaware Law, the Merger shall be consummated, whereby HG shall be merged
with and into Newco, the separate corporate existence of HG shall cease, and
Newco shall continue as the surviving corporation which shall be a wholly owned
subsidiary of the Company. As the surviving corporation after the Merger, Newco
is herein sometimes referred to as the "Surviving Corporation" and HG as the
non-surviving corporation after the Merger is herein sometimes referred to as
the "Merged Corporation." The Company, the Individuals and Newco are herein
referred to collectively as the "Parties" and each individually as a "Party".
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SECTION 1.3 Effective Time. As promptly as practicable after the date
hereof, the Parties shall cause the Merger to be consummated by filing a
Certificate of Merger with the Secretary of State of the Sate of Delaware with
respect to the Merger, in such form as required by, and executed in accordance
with, the relevant provisions of Delaware Law (the time of such filing being the
"Effective Time").
SECTION 1.4 Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of Delaware Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time all the property, rights, privileges, powers and franchises of HG
shall continue with, or vest in, as the case may be, Newco as the Surviving
Corporation. As of the Effective Time, the Surviving Corporation shall be a
direct wholly owned subsidiary of the Company.
SECTION 1.5 Subsequent Actions. If, at any time after the Effective
Time, 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 continue in, 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, privileges, franchises or assets of the
Merged Corporation 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, the officers and directors of the Surviving Corporation shall be
directed and authorized to execute and deliver, in the name and on behalf of the
Merged Corporation, all such deeds, bills of sale, assignments and assurances
and to take and do, in the name and on behalf of such corporation 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, privileges, franchises or assets in the Surviving
Corporation or otherwise to carry out this Agreement.
SECTION 1.6 Certificate of Incorporation: Bylaws; Directors and
Officers of Surviving Corporation. At the Effective Time:
(1) the Certificate of Incorporation of Newco as in effect
immediately prior to the Effective Time shall be the Certificate of
Incorporation of the Surviving Corporation, until thereafter amended as
provided by law and such Certificate of Incorporation;
(2) the Bylaws of Newco immediately prior to the Effective
Time shall be the Bylaws of the Surviving Corporation, until thereafter
amended as provided by law and the Certificate of Incorporation and the
Bylaws of such Surviving Corporation; and
(3) the directors of Newco immediately prior to the Effective
Time shall become the directors of the Surviving Corporation,
comprising the entire Board of Directors of the Surviving Corporation,
from and after the Effective Time, in each case until their successors
are elected and qualified or until their resignation or removal
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(4) the officers of Newco immediately prior to the Effective
Time shall continue to serve in their respect offices of the Surviving
Corporation from and after the Effective Time, in each case until their
successors are appointed or until their resignation or removal. If, at
the Effective Time, a vacancy shall exist in any office of the
Surviving Corporation, such vacancy may thereafter be filled in the
manner provided by law and the Bylaws of the Surviving Corporation.
ARTICLE 2 - EFFECT ON STOCK OF THE SURVIVING
CORPORATION AND THE MERGED CORPORATION
SECTION 2.1 Conversion of Securities. The manner and basis of
converting the shares of common stock of the Surviving Corporation and the
Merged Corporation at the Effective Time, by virtue of the Merger and without
any action on the part of any of the Parties or the holder of any of such
securities, shall be as hereinafter set forth in this Article II.
SECTION 2.2 Conversion of HG Shares.
(5) Subject to Section 2.2(b) and except as set forth in
Section 2.6 with respect to Dissenting Shares (hereinafter defined),
each HG Share issued and outstanding immediately before the Effective
Time (excluding those canceled pursuant to Section 2.3) and all rights
in respect thereof, shall at the Effective Time, without any action on
the part of any holder thereof, forthwith cease to exist and be
converted into and become exchangeable for 0.93827 Company Shares.
(6) As of the Effective Time, all shares of HG Shares
converted pursuant to Section 2.2(a) shall no longer be outstanding and
shall automatically be canceled and retired and shall cease to exist,
and each holder of a certificate (each, an "Old Certificate")
representing any such shares of HG Shares shall cease to have any
rights with respect thereto, except the right to receive Company
Shares, in accordance with Section 2.2(a) and any cash in lieu of
fractional Company Shares to be paid in consideration therefor upon
surrender of such certificate in accordance with Section 2.4, without
interest.
SECTION 2.3 Cancellation of Treasury Shares and Company-Owned Shares.
At the Effective Time, each HG Share held in the treasury of HG or owned by the
Company immediately prior to the Effective Time shall be canceled and retied and
no shares of stock or other securities of HG or the Surviving Corporation shall
be issuable, and no payment or other consideration shall be made, with respect
thereto.
SECTION 2.4 Transfer Books. The stock transfer books of HG shall be
closed at the Effective Time and no transfer of any HG Shares will thereafter be
recorded on an of such stock transfer books. IN the event of a transfer of
ownership of HG Shares that is not registered in the stock transfer records of
HG Shares at the Effective Time, if the certificate for such HG shares as the
case may be, is surrendered as provided herein, accompanied by all documents
required to evidence and effect such transfer and by evidence of payment of any
applicable stock transfer
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tax, then, (i) in the case of transferred HG Shares, a certificate or
certificates representing the number of whole shares of the Company into which
such HG Shares shall have been converted shall be issued to the transferee
together with a cash payment in lieu of fractional shares, if any, in accordance
with Section 2.6 hereof.
SECTION 2.5 No Fractional Share Certificates.
(7) No scrip or fractional share certificate for Company
Shares will be issued in certificate or book entry form upon the
surrender for exchange of Old Certificates, and an outstanding
fractional share interest will not entitle the owner thereof to vote,
to receive dividends or to any rights of a stockholder of the Company
or of the Surviving Corporation with respect to such fractional share
interest.
(8) As soon as practicable after the determination of the
amounts of cash, if any, to be paid to holders of HG Shares with
respect to any fractional share interests, the Company shall make
available such amounts, net of any required withholding, to such
holders of HG Shares, subject to and in accordance with the terms
hereof. The amount of cash to be so delivered shall be computed based
upon the closing price per share of the Company Shares on the Nasdaq
Small Cap Market on the Effective Date.
SECTION 2.6 Dissenting Shares. Notwithstanding Section 2.2, HG Shares
issued and outstanding immediately prior to the Effective Time and which are
held by a holder who has not voted such shares in favor of the Merger by
executing this Agreement, who shall have delivered a written demand for
appraisal of such shares in the manner provided by the Delaware Law and who, as
of the Effective Time, shall not have effectively withdrawn or lost such right
to appraisal ("Dissenting Shares") shall not be converted pursuant to Section
2.2. The holders thereof shall be entitled only to such rights as are granted by
Section 262 of the Delaware Law. Each holder of Dissenting Shares who becomes
entitled to payment for such Dissenting Shares pursuant to Section 262 of the
Delaware Law shall receive payment therefor from the Surviving Corporation in
accordance with the Delaware Law; provided however that (i) if any such holder
of Dissenting Shares shall have failed to establish his entitlement to appraisal
rights as provided in Section 262 of the Delaware Law, (ii) if any holder of
Dissenting Shares shall have effectively withdrawn his demand for appraisal of
such Dissenting Shares or lost his right to appraisal and payment for his or her
Dissenting Shares under Section 262 of the Delaware Law or (iii) if neither any
holder of Dissenting Shares nor the Surviving Corporation shall have filed a
petition demanding a determination of the value of all Dissenting Shares within
the time provided in Section 262 of the Delaware Law, such holder shall forfeit
the right to appraisal of such Dissenting Shares and each such Dissenting Share
shall be treated as if it had been converted, as of the Effective Time, pursuant
to Section 2.2, as appropriate. HG shall give the Company prompt notice of any
demands received by HG for appraisal of HG Shares and the Company shall have the
right to participate in all negotiations and proceedings with respect to such
demands.
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ARTICLE 3 - REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of the Individuals. Each
Individual hereby represents and warrants to the Company that:
(9) he or she is an "accredited investor" within the meaning
of Rule 501 under the Securities Act of 1933, as amended ("the
Securities Act");
(10) he or she has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company's
stage of development so as to be able to evaluate the risks and merits
of his or her investment in the Company and he or she is able
financially to bear the risks thereof;
(11) he or she has had an opportunity to discuss the Company's
business, management and financial affairs with the Company's
management;
(12) the Company Shares being purchased by him or her are
being acquired for his or her own account for the purpose of investment
and not with a view to or for sale in connection with any distribution
thereof;
(13) he or she understands that (i) the Company shares have
not been registered under the Securities Act by reason of their
issuance in a transaction exempt from the registration requirements of
the Securities Act pursuant to Section 4(2) thereof and Rule 506
promulgated under the Securities Act, (ii) the Company Shares must be
held indefinitely unless a subsequent disposition thereof is registered
under the Securities Act or is exempt from such registration, (iii) the
Company Shares will bear a legend to such effect and (iv) the Company
will make a notation on its transfer books to such effect; and
(14) if he or she sells any Company Shares pursuant to Rule
144 promulgated under the Securities Act, he or she will take all
necessary steps in order to perfect the exemption from registration
provided thereby.
ARTICLE 4 - ACKNOWLEDGMENTS
SECTION 4.1 Legend. Each Individual hereby agrees that certificates
representing the company Shares issued to him or her pursuant hereto may bear
the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933. SUCH SHARES HAVE BEEN ACQUIRED FOR INVESTMENT
AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SHARES UNDER THE SECURITIES ACT OF
1933, UNLESS, IN THE OPINION (WHICH SHALL BE IN FORM AND SUBSTANCE SATISFACTORY
TO THE CORPORATION) OF COUNSEL SATISFACTORY TO THE CORPORATION, SUCH
REGISTRATION IS NOT REQUIRED.
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SECTION 4.2 Approval. Each Party that is a stockholder of HG hereby
agrees and confirms that such Party's execution of this Agreement shall operate
as such Party's written consent to this Agreement in such Party's capacity as a
stockholder of HG pursuant to Delaware General Corporation Law Section 228(b)
and shall have the same force and effect as resolutions duly adopted at a
meeting of stockholders of HG, duly called and held in accordance with law and
the by-laws of HG. The Consent delivered pursuant to this Section 4.2 shall be
effective as of the date first written above upon the execution and delivery of
a copy of this Agreement (whether in the form of an original copy or a telecopy)
by the minimum number of votes that would be necessary to authorize or take the
actions contemplated hereby at a meeting at which all the stockholders having a
right to vote thereon were present and voted by the stockholders of record of HG
entitled to express consent or dissent in writing, and it shall not be necessary
for the signatures of the stockholders to appear on the same copy hereof.
ARTICLE 5 - GENERAL PROVISIONS
SECTION 5.1 Entire Agreement. This Agreement sets forth the entire
understanding of the parties with respect to the transactions contemplated
hereby and supersedes all prior agreements or understandings amount the parties
regarding those matters.
SECTION 5.2 Amendment/Modification. This Agreement may be amended,
modified or supplemented only by a written instrument duly executed by each of
the parties. If any provision of this Agreement shall for any reason be held to
be invalid, illegal, or unenforceable in any respect, such invalidity,
illegality, or unenforceability shall not affect any other provision hereof, and
this Agreement shall be construed as if such invalid, illegal or unenforceable
provision had never been contained herein. This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective heirs, legal
representatives, successors and permitted assigns of the parties. Nothing in
this Agreement shall confer any rights upon any entity other than the parties
hereto and their respective heirs, legal representatives, successors and
permitted assigns. No party shall assign this Agreement or any right, benefit or
obligation hereunder without the consent of each other party. Any term or
provision of this Agreement may be waived at any time by the party entitled to
the benefit thereof by a written instrument duly executed by such party.
SECTION 5.3 Further Action. Each party shall execute and deliver any
and all documents and take any and all other actions that may be deemed
reasonably necessary by their respective counsel to complete the transactions
contemplated hereby.
SECTION 5.4 Interpretation. Unless the context of this Agreement
clearly requires otherwise, (a) references to the plural include the singular,
the singular the plural, the part the whole, (b) references to any gender
include all genders, (c) "including" has the inclusive meaning frequently
identified with the phrase "but not limited to" and (d) references to
"hereunder" or "herein" relate to this Agreement. The section and other headings
contained in this Agreement are for reference purposes only and shall not
control or affect the construction of this Agreement or the interpretation
thereof in any respect. Any reference to a party's being satisfied with any
particular item or to a party's determination of a particular item presumes that
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such standard will not be achieved unless such party shall be satisfied or shall
have made such determination in its sole or complete discretion.
SECTION 5.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be binding as of the date first written above,
and all of which shall constitute one and the same instrument. Each such copy
shall be deemed an original, and it shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.
SECTION 5.6 Governing Law. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Delaware without regard
to its provisions concerning choice of laws or choice of forum.
IN WITNESS WHEREOF, the parties have executed this agreement as of the
date first above written.
XXXXXXXXXXXX.XXX, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President
XX.XXX, INC.
By: /s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Chief Executive Officer
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PHYSICIAN REPORT CARDS, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
President
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
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