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Exhibit 10(l)
MERGER AGREEMENT
THIS MERGER AGREEMENT ("Agreement") is entered into as of the 1st day of
March, 1997, by and among XXXXX XXXXXXXX XXXX, M.D., P.C., an Alabama
professional corporation ("SJH") and REFRACTIVE SURGERY CENTER OF BIRMINGHAM, A
Professional Corporation, an Alabama professional corporation ("RSCB") (both SJH
and RSCB sometimes hereinafter collectively referred to as the "Corporations,"
and individually as "Corporation"); OMEGA EYE ASSOCIATES OF BIRMINGHAM, INC., an
Alabama corporation ("Omega"); OMEGA HEALTH SYSTEMS, INC., a Delaware
corporation ("OHSI") and XXXXX X. XXXX, M.D., a citizen and resident of Alabama
("Stockholder").
W I T N E S S E T H:
WHEREAS, Corporations are Alabama professional corporations, each of which
owns certain assets which are used by and/or result from Stockholder's practice
of providing eye care to patients;
WHEREAS, Stockholder is the sole stockholder of both Corporations and is an
ophthalmologist practicing medicine in the State of Alabama;
WHEREAS, Corporations, Omega and Stockholder intend that the transaction
consummated pursuant to this Agreement shall qualify as a reorganization
pursuant to ss. 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended
("Code" or "I.R.C."); and
WHEREAS, the parties desire to set forth in writing the terms and
conditions under which said transaction will be consummated.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties, it is agreed as
follows:
ARTICLE I.
MERGER TRANSACTION
1.1 BASIC TRANSACTION. (a) Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.1(b)(i), the
Corporations shall be merged with and into Omega in accordance with this
Agreement and the separate corporate existence of each Corporation shall
thereupon cease (the "Merger"). Omega shall be the surviving corporation in
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the Merger (sometimes hereinafter referred to as the "Surviving Corporation").
The Merger shall have the effects specified in Section 10-28-11.06 of the
Alabama Business Corporation Act (the "ABCA"). By execution and delivery of this
Agreement, Stockholder hereby approves the Merger on the terms and subject to
the conditions set forth herein, which approval shall be effective as an action
without a meeting pursuant to the Corporations' bylaws and the ABCA.
(b) Effect of Merger.
(i) General. If all the conditions to the Merger set forth in Article
IV shall have been fulfilled or waived in accordance herewith and this
Agreement shall not have been terminated as provided in Article XIV, the
parties hereto shall cause Articles of Merger meeting the requirements of
the ABCA to be properly executed, verified and delivered for filing in
accordance with the ABCA on the Closing Date set forth in Article III. The
Merger shall become effective upon the later of acceptance for filing of
the Articles by the Secretary of State of the State of Alabama or at such
later time which the parties hereto shall have agreed upon and designated
in the Articles of Merger in accordance with applicable law as in effect at
the time of the Merger (the "Effective Time"). The Surviving Corporation
may, at any time after the Effective Time, take any action (including
executing and delivering any document or instrument) in the name and on
behalf of Omega or the Corporations in order to carry out and effectuate
the transaction contemplated by this Agreement.
(ii) Certificate of Incorporation. The Articles of Incorporation of
Omega in effect at and as of the Effective Time will remain the Articles of
Incorporation of the Surviving Corporation without any modification or
amendment in the Merger.
(iii) Bylaws. The Bylaws of Omega in effect at and as of the Effective
Time will remain the Bylaws of the Surviving Corporation without any
modification or amendment in the Merger.
(iv) Directors and Officers. The directors and officers of Omega in
office at and as of the Effective Time will remain the directors and
officers of the Surviving Corporation (retaining their respective positions
and terms of office).
(v) Omega Shares. Each share of common stock of Omega Eye Associates
of Birmingham, Inc. (the "Omega Stock") issued and outstanding at and as of
the Effective Time will remain issued and outstanding.
1.2 COLLECTION OF ACCOUNTS RECEIVABLE. For a period of six (6) months
following the Effective Time (the "Collection Period"), Omega shall collect the
accounts receivable (the "Accounts") of the Corporations existing as of the
Closing Date. Every thirty (30) days beginning
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the first thirty (30) days after the Closing Date through the end of the
Collection Period, Omega shall pay to Stockholder any accounts so collected,
less four percent (4%) for such collection services (the "Collection Fee").
Beginning sixty (60) days after the Closing Date, and for the remainder of the
Collection Period, the Collection Fee shall be seven percent (7%). The
Collection Fee shall be computed based on the Accounts net of any remaining
accounts payable for goods or services purchased by the Corporations prior to
the Closing Date that are paid by Omega, and set off against the Accounts. After
the Collection Period, Omega shall cease collection efforts on the Accounts, and
will review with the Stockholder the remaining Accounts. Stockholder agrees to
cooperate with Omega in the collection of the Accounts. Stockholder understands
and acknowledges that Omega will exercise only its normal collection efforts to
collect the Accounts. Omega shall not exercise extraordinary efforts, including,
but not limited to, litigation to collect the Accounts.
1.3 SETTLEMENT FOR INTERIM OPERATIONS. While the parties anticipate that
the certain Management Agreement between Omega and X.X. Xxxx, M.D., P.C. is to
be effective March 1, 1997, and the Centers (as that term is defined in that
Management Agreement) are to be operated accordingly, the Merger is not
technically effective under Alabama law until the Articles of Merger and the
Plan of Merger are filed with the Alabama Secretary of State's office on or
about March 6, 1997. The parties will jointly calculate the revenues and
expenses from March 1 through March 6, 1997 and will make an appropriate payment
for the effect of such operations, consistent with the intent of said Management
Agreement.
ARTICLE II.
CONSIDERATION
2.1 CONSIDERATION. As consideration for the Merger, all shares of common
stock of both Corporations shall, without further action on the part of
Stockholder, be exchanged for (i) Seven Hundred Ten Thousand Nine Hundred Sixty
Dollars ($710,960.00) payable in immediately available funds, and (ii) shares of
voting common stock of OHSI (the "OHSI Stock") valued at Seven Hundred Fourteen
Thousand Four Hundred Fourteen Dollars ($714,414.00) to be issued to
Stockholder, subject to the Adjustment (hereinafter defined) set forth in
Section 2.2 (the "Consideration"). Each share of OHSI Stock shall be valued at
the average of the closing price of OHSI Stock for the twenty (20) trading days
ending February 28, 1997. No fractional share of OHSI Stock shall be issued. The
OHSI Stock shall not be registered under the Securities Act (as defined herein),
and will be restricted securities ("Restricted Securities"), as defined in Rule
144(a)(3) under the Securities Act of 1933 (the "1933 Act") that are not fully
transferable, except to the extent provided herein, and the certificates
reflecting the OHSI Stock shall bear a legend to that effect.
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2.2 TAX REPORTING. The Merger shall constitute a reorganization under
I.R.C. ss. 368(a)(1)(A). Each of the parties agrees to report this transaction
for financial and income tax purposes in accordance with the foregoing.
2.3 REGISTRATION RIGHTS. The Stockholder will be entitled to "piggyback"
registration rights for unregistered OHSI Stock, on registrations under the 1933
Act, of OHSI's stock or securities, subject to the right of OHSI and its
underwriters to reduce the number of shares of OHSI Stock proposed to be
registered in view of market conditions, and OHSI shall promptly advise the
Stockholder of any proposed registration. Such underwriter's "cutback" shall be
applied proportionately to all unregistered OHSI Stock or other securities and
unregistered warrants or stock options which are requesting registration at such
time pursuant to contractual rights. The costs of OHSI of registering such OHSI
Stock in a piggyback registration shall be borne by OHSI, except that
underwriting discounts and commissions on OHSI stock sold by Stockholder shall
be paid by the Stockholder, and the cost of Stockholder's counsel to be paid by
Stockholder.
2.4 TRANSFERABILITY OF OHSI STOCK. Provided any transferee under this
subsection acknowledges any restrictions placed on the OHSI Stock, nothing in
this Agreement shall prevent the OHSI Stock from being transferred in whole, or
in part, to one or more members of Stockholder's family, to a trust established
for Stockholder's benefit or the benefit of one or more of the members of the
Stockholder's family, to a family partnership (general or limited) established
by Stockholder or one or more of the members of Stockholder's family, or to any
other entity that is owned by Stockholder and one or more of the members of
Stockholder's family.
2.5 OHSI STOCK ADJUSTMENT. (a) As of February 28, 1999 (the "Adjustment
Date"), there shall be an adjustment (the "Adjustment") to the OHSI Stock based
on the event of certain changes between the Closing Value (hereinafter defined)
and the Adjustment Date Value (hereinafter defined) of the OHSI Stock. For
purposes of this Section 2.2, the "Closing Value" shall mean the value of the
average closing price of OHSI Stock for the twenty (20) trading days ending
February 28, 1997, which amount is $6.61 per share; and the "Adjustment Date
Value" shall mean the value of average closing price of OHSI Stock for the
twenty (20) trading days prior to the Adjustment Date; provided, however, that
the Adjustment Date Value shall neither exceed $10.50, nor be lower than $3.00.
(b) If, on the Adjustment Date, the Adjustment Date Value is greater than
the Maximum Price (hereinafter defined) then the Adjustment shall be an OHSI
Adjustment (hereinafter defined). If, on the Adjustment Date, the Adjustment
Date Value is less than the Minimum Price (hereinafter defined), then the
Adjustment shall be a Stockholder Adjustment (hereinafter defined). If, on the
Adjustment Date, the Adjustment Date Value is neither greater than the Maximum
Price, nor less than the Minimum Price, then there shall be no Adjustment.
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(c) For purposes of this Section 2.2, the "Maximum Price" shall be the
Closing Value plus twenty percent (20%). By way of example, if the Closing Value
is $6.61, then the Maximum Price would be:
$6.61 + ($6.61 x .20) = $7.93
Likewise, the "Minimum Price" shall be the Closing Value minus twenty percent
(20%). By way of example, if the Closing Value is $6.61, then the Minimum Price
would be:
$6.61 - ($6.61 x .20) = $5.29
(d) If the Adjustment is to be an "OHSI Adjustment" then Stockholder will
convey to OHSI a number of shares of OHSI Stock ("Stockholder Giveback")
computed with reference to the following formula:
Stockholder Giveback = Total Closing Shares (hereinafter defined)
x (Adjustment Date Value - Maximum Price)
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Adjustment Date Value
For purposes of this Section 2.2, "Total Closing Shares" is equal to that
portion of the Consideration set forth in Section 2.1 that is to be paid in OHSI
Stock divided by the Closing Value. By way of example, if on the Adjustment
Date, the "Total Closing Shares" equal 108,081 ($714,400/$6.61 per share), the
Maximum Price is $7.93 and the Adjustment Date Value is $8.50 then:
Stockholder Giveback = 108,081 shares
x ($8.50 per share - $7.93 per
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share) $8.50 per share
= 7,248 shares of OHSI Stock
The Stockholder Giveback will be withheld from those shares of OHSI Stock
designated as "Pledged Collateral" in that certain Stock Pledge and Escrow
Agreement, dated as of March 1, 1997, to which Stockholder, OHSI, and Omega are
parties (the "Stock Pledge Agreement").
(e) If the Adjustment is to be a "Stockholder Adjustment," then OHSI agrees
to convey to Stockholder an additional number of shares of OHSI Stock
("Additional Shares") computed with reference to the following formula:
Additional Shares = Total Closing Shares x (Minimum Price
-- Adjustment Date Value)
-------------------------
Adjustment Date Value
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By way of example, if on the Adjustment Date, the Total Closing Shares equal
108,081, the Minimum Price equals $5.29, and the Adjustment Date Value equals
$5.00 then:
Additional Shares = 108,081 shares x ($5.29 - $5.00)
-------------------------------
$5.00
= 6,269 shares of OHSI Stock
(f) Neither the Stockholder Giveback nor the Additional Shares shall
include any fractional share of OHSI Stock. The Additional Shares shall not be
registered, and will be Restricted Securities.
(g) In the event that, prior to the Adjustment Date, OHSI subdivides its
outstanding shares of OHSI voting common stock into a greater number of shares
by means of a stock split or stock dividend or effects a reclassification of its
common stock or issues a dividend on its common stock (a "Stock Event"), then
the parties agree to recalculate the Adjustment set forth in this Section 2.2 in
light of such Stock Event.
ARTICLE III.
THE CLOSING
The closing of the Merger contemplated herein (the "Closing") shall be
shall take place at such time and place as the parties hereto may agree in
writing (the "Closing Date"). The parties agree that the Closing Date shall be
extended, if required, to allow either party to fulfill any condition of this
Agreement, but in no event shall the Closing Date extend beyond March 30, 1997,
unless such extension is agreed to in writing by all of the parties.
ARTICLE IV.
ITEMS TO BE DELIVERED AT OR PRIOR TO CLOSING
4.1 BY STOCKHOLDER OR CORPORATIONS. Stockholder or Corporations, as
applicable, shall execute and deliver on the Closing Date:
(a) Certified resolutions of each Corporation authorizing the execution of
all documents and the consummation of all transactions contemplated hereby.
(b) Articles of Merger and a Plan of Merger under the ABCA which shall be
in the form attached hereto as Exhibit 4.1.1(a) and Exhibit 4.1.1(b),
respectively.
(c) Stock certificates representing ownership of all shares of each
Corporation, duly endorsed to Omega.
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(d) A Certificate, duly executed by Stockholder and the President of each
Corporation, stating that, as of the Closing Date, all representations and
warranties of Stockholder and each respective Corporation contained in this
Agreement or in any Exhibit or Schedule hereto are true and correct in all
material respects, all covenants and agreements contained in this Agreement to
be performed by Stockholder or either Corporation on or prior to the Closing
Date have been performed or complied with, and all conditions to Closing
contained in Section 4.3 hereof have been satisfied.
(e) An opinion of counsel for the Corporation and the Stockholder dated as
of the Closing Date, in form and substance reasonably satisfactory to Omega's
counsel, and where appropriate with reliance upon a certificate from each
Corporation and the Stockholder to the effect that:
(i) Each Corporation (A) is duly incorporated and validly existing
as a professional corporation under the Revised Alabama Professional
Corporation Act, (B) is in good standing as a professional corporation
under the laws of the State of Alabama, and (C) has the corporate power and
authority to hold and own its own properties and carry on its business as
now conducted and.
(ii) Each Corporation has the full corporate power and authority to
execute, deliver and perform this Agreement and all other agreements and
documents contemplated hereby to which such Corporation is a party and
which are necessary to consummate the transaction contemplated hereby and,
all action required of such Corporation necessary for such execution,
delivery and performance has been duly taken.
(iii) This Agreement and all agreements contemplated hereby to which
Corporation is a party have been duly executed and delivered by that
Corporation and constitute the valid and binding agreements of that
Corporation enforceable in accordance with their terms (subject as to
enforcement of remedies to the discretion of the courts in awarding
equitable relief and to applicable bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium and similar laws effecting the rights of
creditors generally). This Agreement and all agreements contemplated hereby
to which Stockholder is a party have been duly executed and delivered by
Stockholder and constitute the valid and binding agreements of Stockholder
enforceable in accordance with their terms (subject as to enforcement of
remedies to the discretion of the courts in awarding equitable relief and
to applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium and similar laws effecting the rights of creditors
generally). The execution and delivery by each Corporation of this
Agreement, and the performance of its obligations hereunder, do not
require, any action or consent (except for actions taken or consents
obtained on or prior to the delivery of such opinion) of any party other
than that Corporation pursuant to any contract, agreement or other
understanding of either Stockholder or that Corporation, or pursuant to any
order or decree to which either Stockholder or that Corporation is a
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party or to which that Corporation's properties or assets are subject and
will not violate any provisions of the articles of association or bylaws of
that Corporation or any order of any court or other agency of the
government.
(iv) To the best of such counsel's knowledge, and based solely on
certificates provided by the Corporations, with respect to both
Corporations (except for the matters included in Schedule 5.10 hereto),
there are no actions, suits, claims, proceedings or investigations pending
or threatened against either Corporation at law or in equity, or before or
by a federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign,
or any professional licensing or disciplinary authority which would
adversely affect the transactions contemplated herein or the right of
either Corporation or Stockholder to enter into this Agreement.
(v) Neither Stockholder nor the Corporations is in default with
respect to any order, writ, injunction or decree of any court or of any
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign which would
adversely affect the rights of either Stockholder or Corporations to enter
into and perform this Agreement.
(f) Such other instruments as may be reasonably requested by Omega or OHSI
in order to give effect to or carry out the intent of this Agreement.
4.2 BY OMEGA AND OHSI. Omega shall execute and deliver on the Closing
Date:
(a) Stock Certificates representing ownership by Stockholder of the OHSI
Stock set forth under Section 2.1.
(b) An opinion of counsel for Omega and OHSI dated as of the Closing Date,
in form and substance reasonably satisfactory to Corporations' and Stockholder's
counsel, and where appropriate with reliance upon a certificate from Omega or
OHSI to the effect that:
(i) Each of Omega and OHSI (A) is duly incorporated, validly
existing, and in good standing under the laws of the State of Alabama and
Delaware, respectively, (B) is duly qualified to transact business in their
respective states of incorporation, and is not required to be so qualified
in any other jurisdiction, and (C) has the corporate power and authority to
hold and own its own properties and carry on its business as now conducted
and as proposed to be conducted.
(ii) Each of Omega and OHSI has the full power and authority to
execute, deliver, and perform this Agreement and all other agreements and
documents contemplated hereof
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to which it is a party and which are necessary to consummate the
transaction contemplated hereby, and all corporate actions of Omega or OHSI
necessary for such execution, delivery and performance have been duly
taken.
(iii) This Agreement and all agreements related to this Agreement to
which Omega is a party have been duly authorized, executed and delivered by
Omega and constitute the legal, valid, and binding agreement of Omega
enforceable in accordance with their terms (subject as to enforcement of
remedies to the discretion of the courts in awarding equitable relief and
to applicable bankruptcy, reorganization, insolvency, moratorium and
similar laws effecting the rights of creditors generally). The execution
and delivery by Omega of this Agreement, and the performance of its
obligations hereunder, do not require any action or consent of any party
other than Omega pursuant to any contract, agreement or other understanding
of Omega, or pursuant to any order or decree to which Omega is a party or
to which its properties or assets are subject and will not violate any
provision of law, the articles of incorporation or bylaws of Omega or any
order of any court or other agency of the government. This Agreement and
all agreements related to this Agreement to which OHSI is a party have been
duly executed and delivered by OHSI and constitute the legal, valid and
binding agreement of OHSI enforceable in accordance with their terms
(subject as to enforcement of remedies to the discretion of the courts in
awarding equitable relief and to applicable bankruptcy, reorganization,
insolvency, moratorium and similar laws effecting the rights of creditors
generally). The execution and delivery by OHSI of this Agreement, and the
performance of its obligations hereunder, do not require any action or
consent of any party other than OHSI pursuant to any contract, agreement or
other understanding of OHSI, or pursuant to any order or decree to which
OHSI is a party or to which its properties or assets are subject and will
not violate any provision of law, the certificate of incorporation or
bylaws of OHSI or any order of any court or agency of the government.
(iv) To the best of such counsel's knowledge, and based solely on
certificates provided by Omega and OHSI, with respect to Omega and OHSI
there are no actions, suits, claims, proceedings or investigations pending
or threatened against Omega or OHSI at law or in equity, or before or by a
federal, state, municipal or other governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, or any
professional licensing or disciplinary authority which would adversely
effect the transactions contemplated herein or the right of OHSI or Omega
to enter into this Agreement.
(v) Neither Omega nor OHSI is in default with respect to any order,
writ, injunction or decree of any court or of any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign
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which would affect the rights of Omega or OHSI to enter into and perform
this Agreement.
(vi) The OHSI Stock has been duly authorized and duly and validly
issued by OHSI, with the authorization and approval of OHSI's Board of
Directors, and such OHSI Stock is fully paid and non-assessable, and is
owned of record by Stockholder.
(vii) Omega is a wholly-owned subsidiary of OHSI.
(c) Articles of Merger and a Plan of Merger under the ABCA which shall be
in the form attached hereto as Exhibit 4.1.1(a) and Exhibit 4.1.1(b).
(d) A Certificate, duly executed by the President of Omega and OHSI,
stating that as of the Closing Date, all representations and warranties of Omega
and OHSI contained in this Agreement or in any Exhibit or Schedule hereto are
true and correct in all material respects, all covenants and agreements
contained in the Agreement to be performed by Omega and OHSI on or prior to the
Closing Date have been performed or complied with and all conditions to Closing
contained in Section 4.4 hereof have been satisfied.
(e) Such other instruments as may be reasonably requested by Stockholder in
order to give effect to or carry out the intent of this Agreement.
4.3 CONDITIONS TO OMEGA'S AND OHSI'S OBLIGATIONS. Omega's and OHSI's
obligation to consummate the transaction as provided in this Agreement shall be
conditioned upon the satisfaction of the following conditions at or prior to the
Closing:
(a) Delivery of Documents. The documents and other items set forth in
Section 4.1 hereof shall have been executed and delivered at Closing.
(b) No Material Adverse Change. Prior to the Closing Date, there shall be
no material adverse change in the assets or liabilities of the Corporations; the
business or condition, financial, or otherwise of the Corporations; or the
results of operations or prospects of the Corporations as a result of any
legislative or regulatory change or revocation of any license or rights of the
Corporations to do business.
(c) Truth of Representations and Warranties. The representations and
warranties of the Corporations and Stockholder contained in this Agreement, or
in any Exhibit or Schedule hereto, shall be true and correct in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date. The
Corporations and Stockholder shall have the express obligation to update all
information contained
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in the Exhibits and Schedules hereto so that such Exhibits and Schedules shall
be true, correct and complete as of the Closing Date.
(d) No Litigation Threatened. No action or proceeding shall have been
instituted or threatened before a court or other government body or by any
public authority to restrain or prohibit any of the transactions contemplated
hereby.
(e) Opinion of Corporations' Counsel. Omega shall have received an opinion
from the Corporations' and Stockholder's counsel, delivered under Section 4.1(e)
above.
(f) Securities Law Compliance. The issuance of the OHSI Stock to the
Stockholder will not violate the securities laws of any state or of the United
States.
(g) Third-Party Consents. Omega shall have received copies of all
third-party consents required to consummate the transaction contemplated by this
Agreement.
(h) Licenses, Permits, Qualification. Immediately prior to the Effective
Time, Stockholder and the Corporations shall have all licenses and permits
necessary to operate their respective businesses.
(i) Medical Malpractice Insurance. All physicians and employees of the
Corporations and Omega must be properly covered by medical malpractice insurance
reasonably satisfactory to OHSI, including, to the extent applicable, medical
malpractice tail insurance to cover prior occurrences.
(j) Distribution of Assets and Discharge of Liabilities. Prior to the
Effective Time, and as a condition to Closing, each Corporation shall have
distributed to Stockholder all of the assets listed on Exhibit 5.8 , which are
not owned by either Corporation and are not being acquired by Omega (the
"Excluded Assets"). Additionally, prior to the Effective Time, each Corporation
shall have paid or discharged all liabilities or charges for costs or fees owed
as a result of the transactions contemplated by this Agreement.
(k) Taxes. The Corporations shall have established an adequate reserve for
the payment of all taxes accrued with respect to taxable periods or portions
thereof ended as of the Effective Time of the Merger contemplated herein.
(l) Xxxx Xxxxxx, O.D. The employment arrangement between Xxxx Xxxxxx, O.D.
and Omega or its affiliates shall have been agreed to on terms mutually
satisfactory to both Omega and Stockholder;
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(m) Xxxxxxx Xxxxxxx, O.D. Stockholder's arrangement with Xxxxxxx Xxxxxxx,
O.D., in Alabaster, AL shall have been agreed to on terms mutually satisfactory
to Omega and Stockholder; and
(n) Children's Trust Assets. The Xxxx Children's Trust Dated December 27,
1992 (the "Children's Trust") shall have executed and delivered to Omega that
xxxx of sale, substantially in the form of Exhibit 4.3(n) attached hereto,
evidencing the purchase by Omega of certain assets owned by the Children's
Trust.
4.4 CONDITIONS TO STOCKHOLDER'S AND CORPORATION'S OBLIGATIONS.
Stockholder's and Corporations' obligations to consummate the transaction as
provided in this Agreement shall be conditioned upon the satisfaction of the
following conditions at or prior to Closing:
(a) Delivery of Documents. The documents and other items set forth in
Section 4.2 hereof shall have been executed and delivered by Omega on the
Closing Date.
(b) Truth of Representations and Warranties. The representations and
warranties of Omega and OHSI contained in this Agreement, or in any Exhibit or
Schedule hereto, shall be true and correct in all material respects on and as of
the Closing Date with the same effect as though such representations and
warranties had been made as of such date.
(c) Opinion of Omega's and OHSI's Counsel. The Corporations and Stockholder
shall have received an opinion from Omega's and OHSI's counsel, delivered under
Section 4.2(b) above.
(d) No Litigation Threatened. No action or proceeding shall have been
instituted or threatened before a court or other government body or by any
public authority to restrain or prohibit any of the transactions contemplated
hereby.
(e) Xxxx Xxxxxx, O.D. The employment arrangement between Xxxx Xxxxxx, O.D.
and Omega or its affiliates shall have been agreed to on terms mutually
satisfactory to both Omega and Stockholder; and
(f) Xxxxxxx Xxxxxxx, O.D. Stockholder's arrangement with Xxxxxxx Xxxxxxx,
O.D., in Alabaster, AL shall have been agreed to on terms mutually satisfactory
to Omega and Stockholder.
(g) Children's Trust Assets. The Children's Trust shall have received from
Omega the consideration recited in that xxxx of sale, substantially in the form
of Exhibit 4.3(n) attached hereto, evidencing the purchase by Omega of certain
assets owned by the Children's Trust.
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ARTICLE V.
REPRESENTATIONS AND WARRANTIES
OF STOCKHOLDER AND THE CORPORATIONS
The Corporations and Stockholder jointly and severally represent, warrant,
covenant and agree with Omega and OHSI that:
5.1 OWNERSHIP OF STOCK. Stockholder is the owner of all of the issued and
outstanding stock of each Corporation, free and clear of all liens,
encumbrances, restrictions and claims of every kind. Stockholder has full legal
right, power and authority to enter into this Agreement.
5.2 EXISTENCE AND GOOD STANDING. Each Corporation is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Alabama. Each Corporation has the corporate power to own its property and to
carry on its business as now being conducted. Alabama is the only jurisdiction
in which the character or location of the properties owned or leased by either
Corporation or the nature of the business conducted by either Corporation makes
such qualification necessary.
5.3 CAPITAL STOCK. SJH has an authorized capitalization consisting of one
hundred (100) shares of common stock, $1.00 par value, of which one hundred
(100) are issued and outstanding and no shares are held in SJH's treasury. RSCB
has an authorized capitalization consisting of one thousand (1000) shares of
common stock, $1.00 par value, of which one thousand (1000) shares are issued
and outstanding and no shares are held in RSCB's treasury. All such outstanding
shares of the Corporations have been duly authorized and validly issued and are
fully paid and nonassessable. There are no outstanding options, warrants,
rights, calls, commitments, conversion rights, rights of exchange, plans or
other agreements of any character providing for the purchase, issuance or sale
of any shares of the capital stock of either Corporation, other than as
contemplated by this Agreement.
5.4 SUBSIDIARIES AND INVESTMENTS. Neither Corporation owns, directly or
indirectly, any capital stock or other equity or ownership or proprietary
interest in any other corporation, partnership, association, trust, joint
venture or other entity.
5.5 FINANCIAL STATEMENTS AND NO MATERIAL CHANGES. Each Corporation has
heretofore furnished Omega with unaudited balance sheets dated December 31,
1993, 1994, 1995 and September 30, October 31, November 30, and December 31,
1996, and unaudited income statements for the twelve month periods ending
December 31, 1993, 1994, 1995 and 1996, all of which are attached hereto as
Schedule 5.5. Such financial statements, including the notes thereto, except as
indicated therein, were prepared in accordance with cash basis federal income
tax principles consistent with past accounting practices of the Corporations and
accurately reflect the
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results of operations for the periods noted therein, and except as indicated
therein, reflect all claims against and all debts and liabilities of the
Corporations, fixed or contingent, as of the respective dates thereof. Since
November 30, 1996, there has been (i) no material adverse change in the assets
or liabilities, financial or otherwise, or in the results of operations of
either Corporation, and (ii) no fact or condition known to the Corporations or
Stockholder which exists or is contemplated or threatened which might cause such
a change in the future.
5.6 MATERIAL CONTRACTS. Except as set forth on Schedule 5.6, neither
Corporation is bound by (a) any agreement, contract, or commitment relating to
the employment of any person by either Corporation, or any loans, deferred
compensation, incentive compensation, pension, profit sharing, retirement, or
other employee benefit plan, (b) any loan or advance to, or investment in, any
other person or entity, or any agreement, contract, or commitment relating to
the making of any such loan, advance, or investment, (c) any guarantee or other
contingent liability in respect of any indebtedness or obligation of any other
person or entity, (d) any agreement, contract, or commitment limiting the
freedom of either Corporation or any of its physicians to practice medicine in
any location or to compete with any other person or entity, or (e) any other
agreement, contract, or commitment which is material to the business of either
Corporation. Except as set forth in Schedule 5.6, to the best of Stockholder's
knowledge each contract or agreement set forth in Schedule 5.6 is in full force
and effect, and there exists no default or event of default or event,
occurrence, condition, or act which, with the giving of notice, the lapse of
time, or the happening of any other event or condition, would become a default
or event of default thereunder, which would have a material adverse effect upon
either Corporation. Except as set forth in Schedule 5.6, to the best of
Stockholder's knowledge neither Corporation has violated any of the terms or
conditions of any contract or agreement set forth in Schedule 5.6 in any
material respect, and to Stockholder's best knowledge, all of the covenants to
be performed by any other party thereto have been fully performed.
5.7 INSURANCE; MALPRACTICE. Schedule 5.7.1 is a list and brief description
of all the Corporations' policies or binders of fire, liability, product
liability, workers compensation, health and other forms of insurance policies or
binders currently in force insuring against risks which will remain in full
force and effect at least through the Closing Date. Schedule 5.7.2 contains a
description of all malpractice liability insurance policies of Stockholder, the
Corporations and each Corporation's professional employees since January 1,
1994. Except as set forth on Schedule 5.7.3, (i) neither the Corporations,
Stockholder, nor their professional employees have, in the last three (3) years,
filed a written application for any insurance coverage which has been denied by
an insurance agency or carrier; and (ii) each Corporation, each Corporation's
professional employees and Stockholder have been continuously insured for
professional malpractice claims during the same period. Schedule 5.7.3 also sets
forth a list of all claims for any insured loss in excess of Five Thousand
Dollars ($5,000.00) per occurrence filed by each Corporation, each Corporation's
professional employees or Stockholder since January 1, 1994, including, but not
limited to, workers compensation, general liability, environmental liability and
professional
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malpractice liability claims. To the best of Stockholder's knowledge, none of
either Corporation, either Corporation's professional employees nor Stockholder
is in material default with respect to any provision contained in any such
policy and none of them has failed to give any notice or present any claim under
any such policy in due and timely fashion, which failure would have a materially
adverse effect upon that Corporation.
5.8 NO CHANGES PRIOR TO CLOSING DATE. To the best knowledge of
Stockholder, during the period from December 31, 1996, through the date hereof,
neither Corporation has, and from the date hereof, neither Corporation shall
have (i) incurred any material uninsured liability or obligation of any nature
(whether accrued, absolute, contingent, or otherwise), except in the ordinary
course of business, or except with the prior written consent of Omega, such
consent not to be unreasonably withheld, (ii) written off as uncollectible any
notes or accounts receivable, except write-offs in the ordinary course of
business charged to applicable reserves, none of which individually or in the
aggregate is material to the Corporation, (iii) conducted its business in such a
manner so as to materially increase its accounts payable or so as to materially
decrease its accounts receivable, (iv) granted any increase in the rate of
wages, salaries, bonuses, or other remunerations of any employee, except in the
ordinary course of business, (v) cancelled or waived any claims or rights of
substantial value, (vi) made any change in any method of accounting, (vii)
otherwise conducted its business or entered into any transaction, except in the
usual and ordinary manner and in the ordinary course of business, (viii) agreed,
whether or not in writing, to do any of the foregoing, nor (ix) disposed of its
assets other than in the ordinary course of business, except for the disposition
of any Excluded Assets listed on Schedule 5.8.
5.9 PRACTICE ASSETS; TITLE; CONDITION. Schedule 5.9.1 contains a true and
complete list of all the non-cash assets of the Corporations at the Closing Date
(the "Practice Assets"). Each Corporation has good and marketable title to all
of its Practice Assets conveyed hereunder. Except as disclosed on Schedule 5.9.2
hereto, none of such Practice Assets is subject to a contract or other agreement
of sale or subject to security interests, mortgages, encumbrances, liens
(including income, personal property and other tax liens) or charges of any kind
or character, except for the lien of property taxes not yet due and payable.
Upon completion of the Merger, the Surviving Corporation shall own the Practice
Assets of the Corporations free and clear of all liens and encumbrances, except
for the lien of property taxes not yet due and payable.
5.10 LITIGATION. Except as listed on Schedule 5.10, to the best of
knowledge of Stockholder, there is no suit, action, proceeding at law or in
equity, arbitration, administrative proceeding or other proceeding or
investigation by any governmental entity pending, or threatened against, or
affecting the Corporations, or any of their respective Practice Assets, or any
physician or other health care professional associated with or employed by
either Corporation, and to the best of Stockholder's knowledge there is no basis
for any of the foregoing.
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5.11 PERMITS AND LICENSES. The Corporations and all physicians and other
health care professionals associated with or employed by the Corporations have
all material permits and licenses required by all applicable laws; have made all
material regulatory filings necessary for the conduct of the Corporations'
business; and are not in violation of any of said permitting or licensing
requirements the violation of which would have a materially adverse effect on
the Corporations. A list of such permits and licenses is attached hereto as
Schedule 5.11.
5.12 AUTHORITY. (a) The execution of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
action, and this Agreement is a valid and binding agreement of the Corporations
enforceable in accordance with its terms (subject as to enforcement of remedies
to the discretion of the courts in awarding equitable relief, and to applicable
bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium and
similar laws effecting the rights of creditors generally). Attached hereto as
Schedule 5.12 is a listing of all third-party consents which must be obtained
prior to the Closing Date as required under Section 4.3 of this Agreement.
(b) To the best knowledge of Stockholder, the execution and delivery of
this Agreement, the consummation of the transactions contemplated hereby, and/or
compliance by the Corporations and Stockholder with any of the provisions
hereof, will not:
(i) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or result in the
termination of, or accelerate the performance required by, or result in the
creation of, any lien, security interest, charge or encumbrance upon any of
the assets to be conveyed hereunder under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, deed of trust, license,
agreement or other instrument or obligation to which the Corporations or
Stockholder are a party, or by which either the Corporations or Stockholder
or any of the assets to be conveyed hereunder is bound; or
(ii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable either to the Corporations or Stockholder or any of
the assets to be conveyed hereunder.
5.13 TAX MATTERS. Except as set forth in Schedule 5.13, each Corporation
has filed or caused to be filed all federal, state and local tax returns which
are required to have been filed by that Corporation, including all income,
excise, franchise, and payroll tax returns, and each Corporation has paid or
established an adequate reserve for all taxes accrued through the Effective Time
and has otherwise complied with all federal, state, local and other tax laws
applicable to it.
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5.14 EMPLOYEE BENEFIT PLANS. (a) List of Plans. Set forth on Schedule 5.14
is an accurate and complete list of all employee benefit plans ("Employee
Benefit Plans") within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), whether or not any Employee
Benefit Plans are otherwise exempt from the provisions of ERISA, established,
maintained or contributed to by the Corporation (including all employers
(whether or not incorporated) which by reason of common control are treated
together with the Corporations and/or Stockholder as a single employer within
the meaning of Section 414 of the Code) since September 2, 1974.
(b) Status of Plans. Neither Corporation has maintained and does not now
maintain or contribute to any Employee Benefit Plan subject to ERISA which is
not in substantial compliance with ERISA, or which has incurred any accumulated
funding deficiency within the meaning of either Section 412 or 418B of ERISA, or
which has applied for or obtained a waiver from the Internal Revenue Service of
any minimum funding requirement under Section 412 of the Code or which is
subject to Title IV of ERISA. Neither Corporation has incurred any liability to
the Pension Benefit Guaranty Corporation ("PBGC") in connection with any
Employee Benefit Plan covering any employees of that Corporation or ceased
operations at any facility or withdrawn from any such Plan in a manner which
could subject it to liability under Section 4062(f), 4063 or 4064 of ERISA, and
knows of no facts or circumstances which might give rise to any liability of
Corporation to the PBGC under Title IV of ERISA which could reasonably be
anticipated to result in any claims being made against the Surviving Corporation
by the PBGC. Neither Corporation has incurred any withdrawal liability
(including any contingent or secondary withdrawal liability) within the meaning
of Sections 4201 and 4202 of ERISA, to any Employee Benefit Plan which is a
Multiemployer Plan (as defined in Section 4001 of ERISA), and no event has
occurred, and there exists no condition or set of circumstances, which represent
a material risk of the occurrence of any withdrawal from or the partition,
termination, reorganization or insolvency of any Multiemployer Plan which would
result in any liability to a Multiemployer Plan.
(c) Contributions. Full payment has been made of all amounts which the
Corporations are required, under applicable law or under any Employee Benefit
Plan or any agreement relating to any Employee Benefit Plan to which Corporation
is a party, to have paid as contributions thereto as of the last day of the most
recent fiscal year of such Employee Benefit Plan ended prior to the date hereof.
The Corporations have made adequate provision for reserves to meet contributions
that have not been made because they are not yet due under the terms of any
Employee Benefit Plan or related agreements. Benefits under all Employee Benefit
Plans are as represented and have not been increased subsequent to the date as
of which documents have been provided.
(d) Tax Qualification. Each Employee Benefit Plan intended to be qualified
under Section 401(a) of the Code has been determined to be so qualified by the
Internal Revenue Service and
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nothing has occurred since the date of the last such determination which
resulted or is likely to result in the revocation of such determination.
(e) Transactions. Neither Corporation has engaged in any transaction with
respect to the Employee Benefit Plans which would subject it to a tax, penalty
or liability for prohibited transactions under ERISA or the Code nor have any of
its directors, officers or employees to the extent they or any of them are
fiduciaries with respect to such plans, breached any of their responsibilities
or obligations imposed upon fiduciaries under Title I of ERISA or would result
in any claim being made under or by or on behalf of any such plans by any party
with standing to make such claim.
(f) Other Plans. Neither Corporation presently maintains any employee
benefit plans or any other foreign pension, welfare or retirement benefit plans
other than those listed on Schedule 5.14.
(g) Documents. Stockholder has delivered or caused to be delivered to
Omega and its counsel true and complete copies of (i) all Employee Benefit Plans
as in effect, together with all amendments thereto which will become effective
at a later date, as well as the latest Internal Revenue Service determination
letter obtained with respect to any such Employee Benefit Plan qualified under
Section 401 or 501 of the Code, and (ii) Form 5500 for the most recent completed
fiscal year for each Employee Benefit Plan required to file such form.
5.15 THIRD-PARTY RELATIONS. The Corporations and Stockholder are not aware
of any problem or disagreements with any third parties with which either
Corporation does business, and the Corporations and Stockholder will use their
respective best efforts from the date of this Agreement until the Closing Date
to operate Corporations' businesses in such a manner so as not to adversely
affect the goodwill of their patients, suppliers, employees, associated
physicians and other such persons or third parties with which the Corporations
do business.
5.16 LEASED PROPERTY. Schedule 5.16 contains a list of all property leases
held by each Corporation and, except as set forth on Schedule 5.16, no material
adverse claim against, or defect in, the interest purportedly leased or given
under or by any such instrument exists, and neither the lessor nor either
Corporation is in default under any of such leases, and neither the Corporations
nor Stockholder is aware of any fact which, with notice and/or the passage of
time, would constitute such a default.
5.17 COMPLIANCE WITH APPLICABLE LAWS. Except as set forth in Schedule 5.17,
and to the best knowledge of Stockholder, the Corporations have operated in
material compliance with all material federal, state, county and municipal laws,
constitutions, ordinances, statutes, rules, regulations and orders applicable
thereto ("Applicable Laws"). No item disclosed on Schedule 5.17 has a material
effect on the operations of either Corporation.
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5.18 EMPLOYEE COMPENSATION. The Corporations have paid or discharged or
will pay or discharge or assume all liabilities for compensation and benefits to
which all employees are entitled through the Effective Time, including but not
limited to all salaries, wages, bonuses, incentive compensation, payroll taxes,
hospitalization and medical expenses, deferred compensation, and vacation and
sick pay, as well as any severance pay becoming due as a result of the
termination of certain of each Corporation's employees.
5.19 ENVIRONMENTAL MATTERS. Each Corporation is in compliance in all
material respects with all federal, state and local environmental laws, rules,
regulations, standards and requirements, including, without limitation those
respecting chemical, radiographic, or biomedical wastes or any other hazardous
substances or materials, as defined in any applicable federal or state law or
regulation ("Hazardous Wastes"). Except as disclosed on Schedule 5.19, any
storage, holding, release, emission, discharge, generation, processing,
disposition, handling or transportation of any Hazardous Wastes from, into or on
any portion of the clinic premises is and has been at all times in compliance in
all material respects with all federal, state and local environmental laws,
rules, regulations, standards and requirements.
5.20 HEALTHCARE COMPLIANCE. Each Corporation is participating in or
otherwise authorized to receive reimbursement from or is a party to Medicare,
Medicaid, and other third-party payors. To the best knowledge of Stockholder,
all necessary certifications and contracts required for participation in such
programs are in full force and effect and have not been amended or otherwise
modified, rescinded, revoked or assigned as of the date hereof, and no condition
exists or event has occurred which in itself or with the giving of notice or the
lapse of time or both would result in the suspension, revocation, impairment,
forfeiture or non-renewal of any such third-party payor program. To the best
knowledge of Stockholder, each Corporation is in compliance in all material
respects with the requirements of all such third-party payors applicable
thereto.
5.21 FRAUD AND ABUSE. Neither the Corporations nor Stockholder nor persons
and entities providing professional services for the Corporations have, to the
knowledge of either the Corporations or Stockholder, engaged in any activities
which are prohibited under 42 U.S.C. ss. 1320a-7b, or the regulations
promulgated thereunder pursuant to such statutes, 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;
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(c) failing to disclose knowledge by a claimant of the occurrence of any
event effecting the initial or continued right to any benefit or payment on its
own behalf or on behalf of another, with intent to fraudulently secure such
benefit or payment; or
(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 or 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.
5.22 FACILITY COMPLIANCE. Each Corporation is duly licensed and is lawfully
operated in accordance with the material requirements of all applicable material
law and has all necessary authorizations for the use and operation, all of which
are in full force and effect. To the best knowledge of Stockholder, there are no
outstanding notices of deficiencies relating to either Corporation issued by any
governmental authority or third-party payor requiring conformity or compliance
with any applicable law or condition for participation of such governmental
authority or third-party payor, neither the Corporations nor Stockholder have
received notice or have any knowledge or reason to believe that such necessary
authorizations may be revoked or not renewed in the ordinary course of business.
5.23 RATES AND REIMBURSEMENT POLICIES. To the best knowledge of
Stockholder, the jurisdiction in which the Corporations are located does not
currently impose any restrictions or limitations on rates which may be charged
to private pay patients receiving services provided by either Corporation. To
the best knowledge of Stockholder, neither Corporation has any rate appeal
currently pending before any governmental authority or any administrator of any
third-party payor program. Neither the Corporation nor Stockholder has knowledge
of any applicable law, which has been enacted, promulgated or issued within the
eighteen (18) months preceding the date of this Agreement or any such legal
requirement proposed or currently pending in the jurisdiction in which the
Corporations are located, which could have a material adverse effect on either
Corporation or may result in the imposition of additional Medicaid, Medicare,
charity, free care, welfare, or other discounted or government assisted patients
at either Corporation or require either Corporation to obtain any necessary
authorization which either Corporation does not currently possess.
5.24 TRADE RELATIONS. To the best knowledge of Stockholder, there
exists no actual or threatened limitation of the business relationship of either
Corporation with any material customer, supplier or landlord or with any person
whose contracts with either Corporation would be material to the operations of
either Corporation. To the best knowledge of Stockholder, there exists no
condition or state of facts or circumstances which (i) are likely to produce a
material adverse
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effect with respect to either Corporation or (ii) prevent the Surviving
Corporation from conducting its business after the consummation of the
transactions contemplated by this Agreement as such business is conducted or
proposed to be conducted.
5.25 EXHIBITS. All the facts recited in Exhibits or Schedules annexed
hereto (as updated as of the Closing Date) shall be deemed to be representations
of fact by the Corporations and Stockholder as though recited in this Article V.
5.26 FULL DISCLOSURE. No representation or warranty made by either the
Corporations or Stockholder in this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading. For purposes of this Article V, the Corporations shall be presumed
to have knowledge of all matters of which the Stockholder or officers of the
Corporations have knowledge, actual or constructive.
5.27 LIABILITIES. Attached hereto as Schedule 5.27 is a list of each
Corporation's liabilities existing on the Closing Date. This list shall include
the Demand Promissory Note dated as of December 31, 1995 in the amount of
$119,040.16 made by SJH to the order of Stockholder. The parties agree that the
amount outstanding on said note is $89,040.16, which amount shall be repaid by
Omega to Stockholder, in cash, at the Closing. The Corporations have no other
material uninsured liabilities (whether asserted or unasserted, whether absolute
or contingent, whether accrued or unaccrued, and whether due or to become due.)
5.28 INVESTMENT INTENT. Stockholder and the Corporations acknowledge that
the OHSI Stock has not been registered under the 1933 Act, and that the OHSI
Stock, except as provided for in Section 2.3, may not be sold, pledged or
otherwise transferred absent such registration, or unless an exemption from
registration is available. The Stockholder is acquiring the OHSI Stock for her
own account, for investment purposes only and not with a view to distribution of
such OHSI Stock within the meaning of Section 2(11) of the 1933 Act. The
Stockholder qualifies as an "accredited investor", as defined in Rule 501(a)
pursuant to the Securities Act. The Stockholder has received from OHSI a copy of
OHSI's Form 10-K for 1994 and 1995, OHSI's 10-Q for the quarter ended September
30, 1996, OHSI's 8-Ks filed March 12, 1996 and September 25, 1996 and OHSI's
1994 and 1995 Annual Report to Shareholders. The Stockholder has had the
opportunity to ask questions of and receive answers from OHSI senior management
concerning OHSI and the terms and conditions of this investment by the
Stockholder. The Stockholder has had the opportunity to obtain other additional
information concerning OHSI from OHSI senior management.
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ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF OMEGA AND OHSI
Omega and OHSI jointly and severally represent, warrant, covenant and agree
with Corporation and Stockholder as follows:
6.1 ORGANIZATION. Omega is a corporation duly organized, validly existing
and in good standing under the laws of the State of Alabama. OHSI is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. Omega and OHSI have the full power to own their
respective property, to carry on their respective businesses as presently
conducted, to enter into this Agreement and to consummate the transactions
contemplated hereby.
6.2 AUTHORITY. Omega and OHSI have taken all necessary action to authorize
the execution, delivery and performance of this Agreement, as well as the
consummation of the transactions contemplated hereby, and at Closing Omega and
OHSI shall deliver an officer's certificate to such effect. The execution and
delivery of this Agreement does not, and the consummation of the transactions
contemplated hereby will not, violate any provisions of the charter or the
bylaws of either Omega or OHSI or any indenture, mortgage, deed of trust, lien,
lease, agreement, arrangement, contract, instrument, license, order, judgment or
decree or result in the acceleration of any obligation thereunder to which
either Omega or OHSI is a party or by which either Omega or OHSI is bound.
6.3 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 Omega's and
OHSI's knowledge, threatened with respect to the transactions contemplated by
this Agreement.
6.4 Shares. Upon delivery of the certificates representing ownership of
the OHSI Stock, such OHSI Stock will be fully paid and nonassessable.
6.5 OMEGA HEALTH SYSTEMS, INc. Omega is a wholly-owned subsidiary of OHSI.
6.6 OHSI STOCK. OHSI has a sufficient number of authorized but unissued
and/or treasury shares of its OHSI Stock available for issuance to Stockholder
in accordance with the provisions of this Agreement. The OHSI Stock to be issued
pursuant to this Agreement will, when so delivered, be (i) duly and validly
issued, fully paid and nonassessable, and (ii) notified for listing on Nasdaq.
6.7 CAPITALIZATION. OHSI has an authorized capitalization of 25,000,000
shares of common stock ("OHSI Comon Stock"), par value $.06 per share, of which
6,879,978 shares are issued and outstanding. All of the issued and outstanding
shares of OHSI Common Stock have been duly and validly issued and are fully paid
and nonassessable. Except as described on
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Schedule 6.7, there are no options, warrants or similar rights granted by OHSI
or any other agreements to which OHSI is a party providing for the issuance or
sale by it of any additional securities. There is no liability for dividends
declared or accumulated but unpaid with respect to any shares of OHSI Common
Stock.
6.8 OMEGA COMMON STOCK. OHSI owns, beneficially and of record, all of the
issued and outstanding shares of Common Stock of Omega, which are validly issued
and outstanding, fully paid and nonassessable, free and clear of all liens and
encumbrances. OHSI has taken all such actions as may be required in its capacity
as the sole shareholder of Omega to approve this transaction.
6.9 OHSI DOCUMENTS. OHSI has heretofore furnished Seller with the
documents filed by OHSI since December 31, 1995, with the Securities and
Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended,
which include OHSI's Form 10-K for 1994 and 1995, OHSI's 10-Q per the quarter
end September 30, 1996, OHSI's 8-Ks filed March 12, 1996 and September 25, 1996
and OHSI's 1994 and 1995 Annual Report to Shareholders' documents (the "OHSI
Documents"). The OHSI Documents, as filed, did not contain any untrue statements
of material facts or omit to state material facts required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. Since the filing dates of the OHSI
Documents, OHSI has not experienced any material adverse change in its business
operations or financial condition. The financial statements contained in the
OHSI Documents, together with the notes thereto, have been prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods indicated, reflect all known liabilities of OHSI,
including all known contingent liabilities as of the end of each period
reflected therein, and present fairly the financial condition of OHSI, as
applicable, at said dates and the consolidated results of operations and cash
flows of OHSI for the periods then ended.
6.10 FRAUD AND ABUSE. To the actual knowledge of OHSI, neither OHSI nor
Omega has engaged in any activities which are prohibited under ss. 1320a-7b 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: (i)
knowingly and willingly making or causing to be made a false statement or
representation of a material fact in any application for any benefit or payment;
(ii) 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; (iii) 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 (iv) 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 (A) in return for referring an
individual to
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a person for the furnishing or arranging for the furnishings of any item or
service for which payment may be made in whole or in part by Medicare or
Medicaid, or (B) in return for purchasing, leasing or ordering or arranging for,
or recommending, purchasing, lease or ordering any good, facility, service or
item for which payment may be made in whole or in part by Medicare or Medicaid.
6.11 LEGAL PROCEEDINGS. There is no material litigation, governmental
investigation or other proceeding pending or, so far as is known to OHSI
threatened against or relating to OHSI or Omega, their respective properties or
business, or the transaction contemplated by this Agreement and, so far as if
known to OHSI and Omega, no basis for any such action exists.
ARTICLE VII.
CONDUCT OF BUSINESS; REVIEW
7.1 CONDUCT OF BUSINESS OF CORPORATION. During the period from the date of
this Agreement to the Closing Date, each Corporation shall conduct its business
only in the ordinary and usual course of business, and the Corporations and
Stockholder shall use their respective best efforts to preserve intact each
Corporation's business organization, keep available the services of its
employees and maintain satisfactory relationships with patients and others
having business, medical or professional relationships with each Corporation.
The Corporations shall immediately notify Omega of any unexpected emergency or
other change in the normal course of its business or in the operation of its
properties and of any governmental complaints, investigations, hearings (or
communications indicating that the same may be contemplated), or adjudicatory
proceedings involving the business or practice of either the Corporations or any
physician employee of the Corporations, and the Corporations shall keep Omega
fully informed of such events and permit its representatives prompt access to
all materials prepared in connection therewith.
7.2 EXCLUSIVE DEALINGS. During the period from the date of this Agreement
to the Closing Date, or upon the earlier termination of this Agreement pursuant
to Article XIV, the Corporations shall refrain from taking any actions, directly
or indirectly, to encourage, initiate, or engage in discussions or negotiations
with, or provide any information to, any corporation, partnership, person, or
other entity or group, other than Omega, concerning the purchase of the
Corporations or their stock or assets, or any merger, joint venture or similar
transaction involving either Corporation and will not enter into any such
transaction. The parties agree that any information provided will be used solely
for the purpose of evaluating the transaction contemplated herein and will be
kept confidential and not disclosed to others. If the transaction contemplated
hereunder shall fail to close for any reason, then each party will promptly
redeliver to the other all written material containing or reflecting any
information concerning the Corporations, Omega or OHSI, regardless of by whom
prepared, and will not retain any copies, extracts or other reproductions in
whole or in part of such written material.
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7.3 REVIEW OF CORPORATION BY OMEGA. Omega, prior to the Closing Date,
through its representatives, may review the assets, books, and records of the
Corporations as well as their financial and legal condition as Omega deems
necessary or advisable to familiarize itself with such assets and other matters;
such review shall not, however, affect the representations and warranties made
by the Corporations herein and in the Exhibits and Schedules attached hereto.
The Corporations shall permit Omega and its representatives to have full access
to the premises and to all books and records of the Corporations during normal
business hours and to cause its officers and employees to furnish Omega with
such financial and operational data and other information with respect to the
business and assets of the Corporations as Omega shall from time to time
reasonably request.
ARTICLE VIII.
TRANSFERS AND FURTHER ASSURANCES
From time to time after the date hereof, at the request of a party hereto
(the "Requesting Party"), the other parties shall, without further
consideration, execute, acknowledge and deliver such further instruments of
transfer and other assurances and shall take such other action as the Requesting
Party reasonably may request in order to effectuate the Merger or any resulting
transfer of assets as a result of the Merger.
ARTICLE IX.
INDEMNIFICATION; SET-OFF
9.1 INDEMNIFICATION OF OMEGA AND OHSI. The Corporations and Stockholder
shall indemnify, defend and hold Omega, OHSI and their respective officers,
directors, shareholders, agents, employees, representatives, successors and
assigns harmless from and against any and all damage, loss, cost, obligation,
claims, demands, assessments, judgments or liability (whether based on contract,
tort, product liability, strict liability or otherwise), including taxes, and
all expenses (including interest, penalties and reasonable attorneys' and
accountants' fees and disbursements) incurred by any of the above-named persons,
resulting from or in connection with any one or more of the following:
(a) Misrepresentations, breach of warranties, failure to perform any
covenant or Agreement of either Corporation or Stockholder contained herein;
(b) Any liabilities or obligations of either Corporation existing as of
the Closing Date and not described on the December 31, 1996 balance sheet;
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(c) Any transaction, event or act that occurred on or prior to the Closing
Date that materially adversely affects the value of the Practice Assets;
(d) Claims, actions or suits by employees or former employees of either
Corporation; or
(e) Stockholder's failure to discharge pension or benefit plan
obligations.
Omega agrees to give prompt notice to Stockholder of the assertion of any claim,
or the threat or commencement of any suit, action, proceeding or other matter in
respect of which indemnity may be sought under this Section 9.1. Stockholder may
participate in the defense of any such suit, action, proceeding or other matter
at Stockholder's expense. Stockholder shall not be liable under this Section 9.1
for any settlement effected without Stockholder's consent of any claim, suit,
action, proceeding or other matter in respect of which indemnity may be sought
under this Section 9.1, which consent shall not be unreasonably withheld. The
indemnity to be paid to Omega under this Section 9.1 may be paid in either cash,
Omega Stock, or some combination of both, at the election of the Shareholder.
For purposes of this Section 9.1, Omega Stock used to pay any indemnity under
this section shall be valued according to the Omega Stock's fair value as
determined pursuant to Section 2 hereof.
9.2 GENERAL INDEMNIFICATION OF STOCKHOLDER AND CORPORATION. Omega and OHSI
shall indemnify, defend and hold the Corporations and their officers, directors,
Stockholder, agents, employees, representatives, successors and assigns harmless
from any and all damage, loss, cost, obligation, claims, demands, assessments,
judgments or liability (whether based on contract, tort, product liability,
strict liability or otherwise), including taxes and all expenses (including
interest, penalties and reasonable attorneys' and accountants' fees and
disbursements) incurred by any of the above-named persons, resulting from or in
connection with misrepresentations, breach of warranties or failure to perform
any covenant or agreement of Omega or OHSI contained herein. Stockholder agrees
to give prompt notice to Omega of the assertion of any claim, or the threat or
commencement of any suit, action, proceeding or other matter in respect of which
indemnity may be sought under this Section 9.2. Omega or OHSI may participate in
the defense of any such suit, action, proceeding or other matter at Omega's or
OHSI's expense. Neither Omega nor OHSI shall be liable under this Section 9.2
for any settlement effected without Omega's or OHSI's consent of any claim,
suit, action, proceeding or other matter in respect of which indemnity may be
sought under this Section 9.2, which consent shall not be unreasonably withheld.
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9.3 SURVIVAL. The representations and warranties of the Corporations,
Stockholder and Omega contained in this Agreement and the indemnifications
contained in this Article IX shall survive the Merger through April 30, 1999
(the "Indemnification Period"). Any matter to which an indemnification pertains
and with respect to which a claim has been asserted or threatened following the
Closing Date, and prior to the expiration of the Indemnification Period, shall
continue to be subject to the indemnifications under this Article IX until
finally terminated, settled, resolved, or adjudicated; and all terms, conditions
and stipulations of this Article IX shall likewise continue to apply.
9.4 SECURITY FOR INDEMNITY. The Corporations and Stockholder hereby agree
that in the event either Omega or OHSI is entitled to indemnification pursuant
to the provisions of this Article IX and either the Corporations or Stockholder
does not pay to Omega or OHSI the amount due hereunder, then Omega or OHSI shall
be entitled to exercise those rights set forth in that certain Stock Pledge and
Escrow Agreement, dated as of March 1, 1997, by and among Omega, OHSI, and
Stockholder.
9.5 LIMITATIONS. The parties agree that no claims for indemnification will
be asserted against the indemnifying party unless and until the aggregate amount
of such claims shall equal or exceed Twenty-five Thousand Dollars ($25,000).
Moreover, the parties agree that the maximum aggregate liability of Stockholder
for payments made pursuant to this Article IX shall not exceed One Million
Dollars ($1,000,000).
9.6 INDEMNIFICATION PROCEDURE. (a) Within sixty (60) days after the
party indemnified under Section 9.1 or Section 9.2 (the "Indemnified Party")
receives written notice of the commencement of any claim, suit, action,
proceeding or other matter in respect of which indemnity may be sought under
Section 9.1 or Section 9.2, or within such lesser time as may be provided by law
for the defense of such claim, suit, action, proceeding or other matter, the
Indemnified Party shall notify the indemnifying party (the "Indemnitor").
(b) If any claim, suit, action, proceeding or other matter shall be
brought against any Indemnified Party, the Indemnitor shall, upon written notice
given within a reasonable time following receipt by the Indemnitor of such
notice from the Indemnified Party, be entitled to assume the defense of such
claim, suit, action, proceeding or other matter with counsel chosen by the
Indemnitor; provided, however, that the Indemnified Party may retain separate
counsel at its own expense to participate in such defense.
(c) Notwithstanding the foregoing, the Indemnified Party shall have the
right to employ separate counsel at Indemnitor's expense and to control its own
defense of any claim, suit, action, proceeding or other matter if, in the
reasonable opinion of counsel to the Indemnified Party that:
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(i) there are or may be legal defenses available to the Indemnified
Party that are different from or additional to those available to
the Indemnitor and which could not be adequately advanced by
counsel chosen by the Indemnitor; or
(ii) a conflict or potential conflict exists between the Indemnitor
and the Indemnified Party that would make separate representation
advisable.
Provided, however, that in no event shall the Indemnitor be required to pay fees
and expenses for more than one (1) firm of attorneys in any jurisdiction in any
one claim, suit, proceeding or other matter.
(d) The Indemnitor shall not be liable under this Article IX for any
settlement effected without Indemnitor's consent of any claim, suit, action,
proceeding or other matter in respect of which indemnity may be sought under
this Article IX, which consent shall not be unreasonable withheld.
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ARTICLE X.
BUYBACK EVENT; REIMBURSEMENT PAYMENT
10.1 BUYBACK EVENT. (a) Should a Buyback Event (hereinafter defined) occur,
then the provisions of this Section 10.1 shall apply. For purposes of this
Section, a "Buyback Event" shall occur upon either of (i) written notice by
Stockholder to P.C., with a copy to Omega of an intent not to perform under
Section 6.9 of the Employment Agreement, or (ii) written notice to Stockholder
from Omega, or from P.C., of nonperformance by Stockholder under Section 6.9 of
the Employment Agreement, and the continuation of such nonperformance for a
period of thirty (30) days (other than as a result of death or Disability as
defined in Section 14.2 of the Employment Agreement of Stockholder, or as a
result of a breach by Omega under Section 6.1 or Section 6.3 of the Management
Agreement) (the written notices described in (i) and (ii) being hereinafter
referred to as the "Buyback Notice").
(b) Should a Buyback Event occur on or before February 28, 1998, then Omega
is obligated to sell, and Stockholder is obligated to buy Stockholder's Practice
(hereinafter defined) (the "Buyback") for an amount (the "Buyback Amount") equal
to One Million One Hundred Fifty Thousand Dollars ($1,150,000).
(c) After February 28, 1998, and through February 28, 1999, upon the
occurrence of a Buyback Event, the Buyback Amount shall equal Nine Hundred
Thousand Dollars ($900,000).
(d) The provisions of this Section 10.1 shall not apply after February 28,
1999.
(e) For purposes of this Section 10.1, the "Practice" shall include the
supplies, inventory, equipment and furniture, and all other tangible personal
property (cash, accounts receivable, and other intangible assets shall be
excluded from such Buyback) acquired by Omega in the Merger and by purchase from
the Xxxx Children's Trust Dated December 27, 1992 and any replacement assets and
replacement liabilities of Omega then existing and relating to Omega's ownership
of the Merger Assets.
(f) The Buyback Amount shall be tendered within thirty (30) days of the
Buyback Notice (the "Closing"), and shall be payable in cash, OHSI common stock,
a note from Stockholder to Omega or some combination thereof. The OHSI common
stock shall be valued at $6.61 per share. Any note of Stockholder shall not
exceed Two Hundred Fifty Thousand Dollars ($250,000) and shall be at an interest
rate of prime plus 1% payable in amortized monthly installments over thirty-six
(36) months. At the Closing, Omega shall deliver to Stockholder a xxxx of sale
and assignment transferring all title to the Practice to Stockholder, subject to
the liabilities related to the Practice which shall then be assumed by
Stockholder as a part of the
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Buyback. The parties agree that to the extent Stockholder shall be required to
assume such liabilities, the Buyback Amount shall be reduced by an amount equal
to the sum of such liabilities.
10.2 REIMBURSEMENT PAYMENT. (a) After February 28, 1999 and through
February 28, 2002, Stockholder shall pay to Omega a Reimbursement Payment
(hereinafter defined) upon either of (i) written notice by Stockholder to P.C.,
with a copy to Omega of an intent not to perform under Section 6.9 of the
Employment Agreement, or (ii) written notice to Stockholder from Omega, or from
P.C., of nonperformance by Stockholder under Section 6.9 of the Employment
Agreement, and the continuation of such nonperformance for a period of thirty
(30) days (other than as a result of death or Disability as defined in Section
14.2 of the Employment Agreement of Stockholder, or as a result of a breach by
Omega under Section 6.1 or Section 6.3 of the Management Agreement) (the written
notices described in (i) and (ii) being hereinafter referred to as the
"Reimbursement Notice"). The parties agree that the Reimbursement Payment is an
amount reasonable and necessary to enable Omega to obtain the services of
another qualified ophthalmologist to provide services at the Centers.
(b) Should a Reimbursement Notice be given on or before February 28, 2000,
then the Reimbursement Payment shall equal Five Hundred Thousand Dollars
($500,000). After February 28, 2000, and through February 28, 2002, the
Reimbursement Payment shall equal Four Hundred Thousand Dollars ($400,000).
(c) The provisions of this Section 10.2 shall not apply after February 28,
2002.
(d) The Reimbursement Amount shall be tendered within thirty (30) days of
the Reimbursement Notice (the "Closing"), and shall be payable, at Stockholder's
option in cash, or OHSI common stock, or some combination thereof. The OHSI
common stock shall be valued at $6.61 per share.
ARTICLE XI.
MEDIATION AND ARBITRATION
11.1 MEDIATION. In the event a dispute arises out of or relating to this
Agreement, or the breach thereof, and if said dispute cannot be settled through
negotiation, the parties agree to attempt in good faith to settle the dispute by
mediation under the Commercial Mediation Rules of the American Arbitration
Association. Unless the parties reach an agreement reduced to writing, this
mediation will be non-binding, but the parties must participate in good faith in
non-binding mediation, before resorting to binding arbitration.
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11.2 BINDING ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or its breach, not satisfied through either
negotiation or mediation, shall be settled by binding arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction.
As soon as reasonably practical after submission of a demand for binding
arbitration, the parties shall select one arbitrator, agreeable to all parties.
This arbitrator will be selected from lists prepared by the American Arbitration
Association. From the American Arbitration Association list the parties will
submit to the American Arbitration Association a ranked list of arbitrators
which are acceptable. The highest ranking acceptable candidate will be selected
by the American Arbitration Association. If no arbitrators from the list
composed by the American Arbitration Association are acceptable by either of the
parties, the American Arbitration Association will compile a second list. This
procedure will be followed until the parties have selected an arbitrator. The
results of the arbitrator's finding will be binding on the parties.
ARTICLE XII.
EXPENSES
Each of the parties shall pay their own costs and expenses incurred or to
be incurred by it in negotiating and preparing this Agreement and in Closing and
carrying out the transactions contemplated by this Agreement. Prior to the
Closing Date, the Corporations shall pay or satisfy any obligation for such
expenses.
ARTICLE XIII.
COSTS
Should any mediation or binding arbitration ("Dispute Resolution") arising
out of this Agreement be instituted by any party to this Agreement against
another party, the party prevailing in such Dispute Resolution shall be
entitled, in addition to such other damages and relief as the mediator or
arbitrator shall award, to reimbursement of reasonable attorneys' fees, costs
and other expenses incurred in the prosecution or defense of such Dispute
Resolution.
ARTICLE XIV.
TERMINATION
Notwithstanding any of the foregoing provisions, this Agreement may be
terminated at any time prior to the Effective Time:
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(a) By mutual written consent of all the parties hereto;
(b) By written notice from Omega or OHSI to a Corporation if any of the
representations and warranties made by that Corporation and Stockholder in this
Agreement or in the Exhibits and Schedules annexed hereto are reasonably
determined by Omega or OHSI to be untrue or inaccurate in any material respect;
or
(c) By written notice from the Corporations or Stockholder to Omega if any
of the representations and warranties made by Omega or OHSI in this Agreement
are reasonably determined by Corporation to be untrue or inaccurate in any
material respect.
ARTICLE XV.
NOTICES
Any notices hereunder shall be deemed to have been given by one party to
the other if it is in writing and it is (a) delivered or tendered in person or
(b) deposited in the United States mail in a sealed envelope, with postage
prepaid, (c) sent by Federal Express, or comparable overnight package service,
or (d) transmitted by facsimile or telecopier to a number given by the
addressee, in any case addressed as follows:
If to Omega or OHSI: Omega Eye Associates of Birmingham, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
with a copy to: Baker, Donelson, Bearman & Xxxxxxxx, P.C.
2000 First Tennessee Building
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
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If to the Corporations
or Stockholder: Xxxxx X. Xxxx, M.D.
000 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
with a copy to: Walston, Wells, Xxxxxxxx & Bains, LLP
000 00xx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx
or to such other address as the party addressed shall have previously designated
by notice to the serving party, given in accordance with this Article XV.
Notices shall be deemed to have been duly given (i) on the date of delivery if
delivered personally; (ii) or on the third day after mailing if mailed as
provided above (iii) when signed for and accepted, if sent by Federal Express,
or comparable overnight package service, or (iv) when received and confirmed, if
sent by facsimile or telecopier; provided, however, that a notice not given as
above shall, if it is in writing, be deemed given if and when actually received
by a party.
ARTICLE XVI.
AMENDMENT AND WAIVER
The parties hereto may by mutual agreement amend this Agreement in any
respect. Any party hereto may extend the time for the performance of any of the
obligations of the other, waive any inaccuracies in representations by the other
contained in this Agreement or in any document delivered pursuant hereto, which
inaccuracies would constitute a breach of this Agreement, waive compliance by
the other with any of the covenants contained in this Agreement and performance
of any obligations by the other, and waive the fulfillment of any condition that
is precedent to the performance by the party so waiving any of its obligations
under this Agreement. Any agreement on the part of any party for any such
amendment, extension or waiver must be in writing and signed by the party
agreeing to be bound thereby. No waiver of any of the provisions of this
Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver.
ARTICLE XVII.
EMPLOYEES - EMPLOYEE BENEFITS
17.1 AFFECTED EMPLOYEES. "Affected Employees" shall mean medical employees,
a list of which is attached hereto as Schedule 17.1, of the Corporations on the
Closing Date.
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17.2 RESPONSIBILITIES. Prior to the Closing Date, each Corporation agrees
to satisfy, or cause its insurance carriers to satisfy, all claims for medical,
health and hospital benefits, whether insured or otherwise (including, but not
limited to, workers' compensation, life insurance, medical and disability
programs), under that Corporation's employee benefit plans brought by, or in
respect of, Affected Employees and former employees of that Corporation prior to
the Closing Date, in accordance with the terms and conditions of such employee
benefit plans or applicable workers compensation statutes without interruption
as a result of the employment by the Surviving Corporation of any such employees
after the Closing Date.
17.3 TERMINATION BENEFITS. The Corporations and Stockholder shall be solely
responsible for, and shall pay or cause to be paid, severance payments and other
termination benefits, if any, to Affected Employees who may become entitled to
such benefits by reason of any events occurring prior to the Closing Date. If
any action on the part of either Corporation prior to the Closing, or if the
Merger pursuant to this Agreement shall result in any liability or claim of
liability for severance payments or termination benefits, or any liability,
forfeiture, fine or other obligation by virtue of any state, federal or local
law, such liability or claim of liability shall be the sole responsibility of
Stockholder, and Stockholder shall indemnify and hold harmless the Surviving
Corporation from any losses resulting directly or indirectly from such liability
or claim.
17.4 EMPLOYEE BENEFIT PLANS. (a) On or prior to the Closing Date,
Stockholder shall cause the Corporations to either terminate any employee
benefit plans maintained by Corporation or cause another entity to assume their
sponsorship through merger, consolidation or transfer of plan assets as
described in ss.414(i) of the Internal Revenue Code of 1986, as amended. Should
the time needed to effect such termination, merger, consolidation, or transfer
extend beyond the Closing Date, any and all costs of such shall be the sole
responsibility of the Stockholder.
(b) The parties acknowledge that the Xxxxx Xxxxxxxx Xxxx, M.D., P.C.
Profit Sharing Plan (the "Plan") is being terminated in connection with this
transaction and that a request for a determination letter from the Internal
Revenue Service is being made in connection with such termination. Omega and
OHSI shall cooperate with Xx. Xxxx in connection with the termination of the
Plan and the request for the determination letter.
ARTICLE XVIII.
MISCELLANEOUS
18.1 PRESS RELEASE. Except as required by law, neither the Corporations nor
Stockholder shall make any press releases or other public announcements relating
to this Agreement or the transactions contemplated hereby, without the prior
written consent of Omega.
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18.2 BINDING EFFECT. This Agreement shall be binding upon, and shall inure
to the benefit of, the parties hereto, their successors and assigns.
18.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof and supersedes any
prior agreements and understandings of the parties in connection therewith.
18.4 GOVERNING LAW; VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the State of Alabama. Any mediation or
binding arbitration with respect to this Agreement shall be conducted in
Jefferson County, Alabama.
18.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
18.6 HEADINGS. The subject headings of the Articles, Sections and
subparagraphs of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions.
18.7 FINDERS. Each party warrants to the other that no finder or broker has
been engaged by it in this transaction and that no finder's or brokerage fees
are due to any person as a result of this Agreement.
18.8 NO THIRD-PARTY BENEFIT. Except as otherwise expressly provided,
nothing in this Agreement, expressed or implied, is intended or shall be
construed to confer upon any person other than the parties hereto, any right,
remedy, or claim, legal or equitable, under or by reason of this Agreement or
any provision thereof.
18.9 ASSIGNMENT. Neither this Agreement nor any of the rights or duties of
any party hereto may be transferred or assigned to any person except by a
written agreement executed by each of the parties hereto, except that Omega or
OHSI reserves the right to assign this Agreement to any affiliate or successor
of either Omega or OHSI.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
day and year hereinabove first set forth.
OMEGA:
OMEGA EYE ASSOCIATES OF
BIRMINGHAM, INC.
By:
---------------------------------------
Xxxxxx X. Xxxxxxx, Executive Vice President
OHSI:
OMEGA HEALTH SYSTEMS, INC.
By:
---------------------------------------
Xxxxxx X. Xxxxxxx, Executive Vice President
SJH:
XXXXX XXXXXXXX XXXX, M.D., P.C.
By:
---------------------------------------
Xxxxx X. Xxxx, M.D., President
RSCB:
REFRACTIVE SURGERY CENTER OF
BIRMINGHAM,
A PROFESSIONAL CORPORATION
By:
---------------------------------------
Xxxxx X. Xxxx, M.D., President
STOCKHOLDER:
------------------------------------------
XXXXX X. XXXX, M.D.
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