DISSOLUTION AGREEMENT
This Dissolution Agreement (this "Agreement") is by and between Prime
Medical Services, Inc., a Delaware corporation ("PMSI"), KCPR, LLC, a Texas
limited liability company ("Prime"), Vision Correction Centers of Kansas City,
P.C., a Missouri professional corporation ("VCC"), Kansas City Laser Vision
Correction Centers, L.L.C., a Missouri limited liability company ("KCL"), and
Xxxxxxx Xxxxx, M.D., an individual residing in Kansas City, Missouri ("Couch"),
and Prime Refractive - Kansas City, L.L.C., a Delaware limited liability company
("Newco") (VCC, KCL, and Couch sometimes hereinafter referred to collectively as
the "Couch Parties"), and shall be effective as of October 1, 2001 (the
"Effective Date").
Preliminary Statements
PMSI, Prime (as successor in interest to Prime RVC, Inc., a Delaware
corporation, "RVC"), VCC, KCL, Couch and Newco (the "Original Parties") have
previously entered into that certain Contribution Agreement, dated as of
September 1, 2000 (the "Contribution Agreement"), pursuant to which Prime and
VCC acquired ownership interests in Newco.
Each of the Original Parties desires that Newco be dissolved under
state law and its assets and liabilities distributed among Prime and VCC as
described below.
Statement of Agreement
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, and for other good, valuable and binding consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound hereby, agree as follows:
Section 1. Dissolution of Newco. Each Original Party agrees to take
such actions as are necessary to cause the dissolution of Newco under Delaware
law as soon as practical following execution of this Agreement.
(a) Distribution of Assets. The parties agree that the Moria
Carrazio-Barraquer Automated Keratome with motorized handpiece complete with
various ring sizes, handpiece, and console, located at Newco's location, shall
be distributed to Prime on the date of dissolution. The parties agree that all
of the remaining assets of Newco, tangible and intangible, shall be distributed
to VCC on the date of dissolution.
(b) Assumption of Liabilities. VCC hereby assumes directly
from Newco, effective upon dissolution of Newco, all of Newco's debts,
liabilities, and obligations, whether known or unknown, absolute, contingent or
otherwise through the time of Newco's dissolution (including, but not limited
to, federal, state, and local taxes, any sales taxes, use taxes and property
taxes, any taxes arising from the dissolution of Newco and any liabilities
arising from any litigation or civil, criminal or regulatory proceeding
involving or related to Newco or its business).
Section 2. Further Assurances. Each of the Original Parties agrees that
it shall take such further actions as are necessary to cause itself and each of
the other Original Parties under its control to perform all of their respective
obligations under this Agreement.
Section 3. Existence and Authority. Each of the parties to this
Agreement represents to the other parties that it has all necessary power and
authority to enter into and perform this Agreement, and that, if it is an
entity, it is duly organized, validly existing and in good standing under the
laws of the state in which it is formed. Each of the Original Parties agrees
that its execution and delivery of this Agreement shall be deemed its consent to
this Agreement, each of the agreements or instruments executed in connection
herewith, and all of the transactions contemplated hereby and thereby.
Section 4. Confidentiality. Each of the Original Parties agrees that
the terms and existence of this Agreement and each other agreement or instrument
executed in connection herewith are confidential. Each of the Original Parties
agrees that it will not, directly or indirectly, disclose such confidential
information to any other person (other than professional advisors, prospective
lenders, investors, employers or employees, or immediate family members who
agree in advance to maintain the confidentiality thereof) without the prior
written consent of each of the other Original Parties. Each Original Party
agrees that a violation on its part of this Section will cause the other parties
hereto irreparable damage for which remedies at law may be insufficient, and for
that reason, it agrees that the other parties shall be entitled as a matter of
right to equitable remedies, including specific performance and injunctive
relief, therefor.
Section 5. Indemnification.
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(a) Indemnification of Prime. Each of the Couch Parties,
jointly and severally, agrees to indemnify and hold harmless Prime, each parent
company, subsidiary and/or affiliate of Prime, and each parent company,
subsidiary, affiliate, shareholder, member, partner (or other owner), officer,
director, manager, agent, employee and representative of any of the foregoing
(collectively, the "Prime Indemnified Parties") from and against any and all
damages, losses, claims, liabilities, demands, charges, suits, penalties, costs
and expenses (including court costs and attorneys' fees and expenses incurred in
investigating and preparing for any litigation or proceeding) (collectively,
"Indemnified Costs"), including, without limitation, Indemnified Costs arising
in connection with the commencement or assertion of any action, proceeding,
demand or claim by a third party (collectively, a "Third-Party Action"), which
any of the Prime Indemnified Parties may sustain, arising out of or related to
(a) any breach or default by any Couch Party of any of the representations,
warranties, covenants or agreements contained in this Agreement or any agreement
or instrument executed in connection with this Agreement, (b) any breach or
default by any Couch Party, occurring prior to the date of this Agreement, of
any of the representations, warranties, covenants or agreements contained in the
Contribution Agreement or any other document or agreement executed in connection
with the Contribution Agreement, (c) any claim, debt, obligation or liability of
any Couch Indemnified Party (as defined below), including, without limitation,
all liabilities and obligations assumed by VCC and guaranteed by Couch and KCL
pursuant to Section 1(b) above, or (d) any actual or alleged actions or
omissions by any Couch Party, or any of their respective directors, officers,
shareholders, agents, employees, representatives, subsidiaries and/or
affiliates.
(b) Indemnification of Couch Parties. PMSI and Prime, jointly
and severally, agree to indemnify and hold harmless each Couch Party, each
subsidiary and/or affiliate of each Couch Party, and each parent company,
subsidiary, affiliate, shareholder, member, partner (or other owner), officer,
director, manager, agent, employee and representative of any of the foregoing
(collectively, the "Couch Indemnified Parties") from and against any and all
Indemnified Costs, including, without limitation, Indemnified Costs arising in
connection with the commencement or assertion of any Third-Party Action, which
any of the Couch Indemnified Parties may sustain, arising out of or related to
(a) any breach or default by PMSI or Prime of any of the representations,
warranties, covenants or agreements contained in this Agreement or any agreement
or instrument executed in connection with this Agreement, (b) any breach or
default by PMSI or Prime, occurring prior to the date of this Agreement, of any
of the representations, warranties, covenants or agreements contained in the
Contribution Agreement or any other document or agreement executed in connection
with the Contribution Agreement, (c) any claim, debt, obligation or liability of
any Prime Indemnified Party, or (d) any actual or alleged actions or omissions
by PMSI, Prime, or any of their respective directors, officers, shareholders,
agents, employees, representatives, subsidiaries and/or affiliates.
Section 6. Representations of Prime and PMSI. Prime and PMSI hereby
jointly and severally represent, warrant and covenant to the Couch Parties, such
representations, warranties and covenants to survive the Closing, as follows:
(a) Binding Commitments. No binding commitments have been made
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by any officer or employee of Prime or PMSI on behalf of Newco.
(b) Release of Liens. Except for liens arising out of
agreements entered into contemporaneously with this Agreement, Prime and PMSI
agree to execute releases of all liens they hold against Newco, any of the
assets owned by Newco immediately prior to dissolution of Newco, or any of the
Couch Parties and shall cooperate in the filing of whatever documents are
necessary to effect such releases.
(c) Good Title. Prime has good title in the Prime Interest,
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free and clear of all liens and encumbrances.
(d) Tax Returns and Elections. Prime has filed all tax returns
of Newco required to be filed on or before the Closing, and attached hereto as
Exhibit 7(d) is a copy of Treasury Form 1065 for calendar year 2000, which is
true, correct, and complete, and the underlying depreciation schedule. Neither
Prime nor PMSI has caused Newco to file a Section 754 election with the Internal
Revenue Service. Prime shall prepare Newco's final tax return for review by
Couch, and upon the consent of Couch (such consent to not be unreasonably
withheld), shall file such return with the Internal Revenue Service.
(e) Liabilities. Immediately after the Closing, none of the
Couch Parties shall have any liability to Prime or PMSI (or any affiliate of
theirs) other than those obligations expressly set forth in this Agreement or
any agreement or instrument executed by a Couch Party contemporaneous with this
Agreement.
Section 7. Ownership of Newco; Authority of Prime. Each of the Couch
Parties and Newco hereby acknowledges that, prior to the Effective Date, Prime
has succeeded by legal assignment to all of RVC's ownership of Newco, as well as
all of RVC's contractual and other legal rights related to Newco (the
"Assignment"). Each of the Couch Parties and Newco hereby consents to and
ratifies the Assignment for all purposes and agrees that Prime has all legal
standing and right to enter into this Agreement as though it were the original
party to the Contribution Agreement in the place of RVC.
Section 8. Miscellaneous.
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(a) Assignment. No party to this Agreement may assign this
Agreement or any or all of its rights or obligations hereunder without first
obtaining the written consent of all other parties hereto. Any assignment in
violation of the foregoing shall be null and void. Subject to the preceding
sentences of this Section, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns. This
Agreement shall not be deemed to confer upon any person not a party to this
Agreement any rights or remedies hereunder.
(b) Amendments. This Agreement cannot be modified or amended
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except by a written agreement executed by all parties hereto.
(c) Waiver of Provisions; Remedies Cumulative. Any waiver of
any term or condition of this Agreement must be in writing, and signed by all of
the parties hereto. The waiver of any term or condition hereof shall not be
construed as either a continuing waiver with respect to the term or condition
waived, or a waiver of any other term or condition hereof. No party hereto shall
by any act (except by written instrument pursuant to this Section), delay,
indulgence, omission or otherwise be deemed to have waived any right, power,
privilege or remedy hereunder or to have acquiesced in any default in or breach
of any of the terms and conditions hereof. No failure to exercise, nor any delay
in exercising, on the part of any party hereto, any right, power, privilege or
remedy hereunder shall operate as a waiver thereof. No single or partial
exercise of any right, power, privilege or remedy hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power,
privilege or remedy. No remedy set forth in this Agreement or otherwise
conferred upon or reserved to any party shall be considered exclusive of any
other remedy available to any party, but the same shall be distinct, separate
and cumulative and may be exercised from time to time as often as occasion may
arise or as may be deemed expedient.
(d) Severability; Illegality. In the event any state or
federal laws or regulations, now existing or enacted or promulgated after the
Effective Date, are interpreted by judicial decision, a regulatory agency or
legal counsel in such a manner as to indicate that any provision hereof may be
illegal, invalid or unenforceable, such provision shall be fully severable and
this Agreement shall be construed and enforced as if such illegal, invalid or
unenforceable provision never comprised a part hereof; and the remaining
provisions hereof shall remain in full force and effect and shall not be
affected by the illegal, invalid or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable
provision, there shall be added automatically as part of this Agreement a
provision that (a) preserves the underlying economic and financial arrangements
between the parties hereto without substantial economic detriment to any
particular party and (b) is as similar in effect to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.
No party to this Agreement shall claim or assert illegality as a defense to the
enforcement of this Agreement or any provision hereof; instead, any such
purported illegality shall be resolved pursuant to the terms of this Section.
(e) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS (BUT NOT THE RULES GOVERNING
CONFLICTS OF LAWS) OF THE STATE OF MISSOURI. ANY CONTROVERSY BETWEEN THE PARTIES
REGARDING THIS AGREEMENT OR ANY OTHER AGREEMENT OR INSTRUMENT EXECUTED IN
CONNECTION WITH THIS AGREEMENT, ANY CLAIMS ARSING OUT OF ANY BREACH OR ALLEGED
BREACH OF THIS AGREEMENT OR SUCH OTHER AGREEMENT OR INSTRUMENT, AND ANY CLAIMS
ARISING OUT OF THE RELATIONSHIP BETWEEN THE PARTIES CREATED HEREUNDER SHALL BE
SUBMITTED TO BINDING ARBITRATION BY ALL PARTIES INVOLVED. THE ARBITRATION
PROCEEDINGS SHALL BE CONDUCTED BY A SINGLE ARBITRATOR PURSUANT TO THE COMMERCIAL
ARBITRATION RULES OF THE AMERICAN ARBITRATION ASSOCIATION (SUBJECT TO THE
EXPRESS PROVISIONS OF THIS SECTION). THE ARBITRATION SHALL BE CONDUCTED IN
KANSAS CITY, MISSOURI. THE ARBITRATOR SHALL NOT HAVE THE RIGHT TO AWARD PUNITIVE
OR EXEMPLARY DAMAGES AGAINST EITHER PARTY.
(f) Notice. Whenever this Agreement requires or permits any
notice, request, or demand from one party to another, the notice, request, or
demand must be given in accordance with the procedures set forth in Section 10.6
of the Contribution Agreement.
(g) Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
(i) The Closing. The Closing shall occur by facsimile
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transmission and overnight courier within one week after the dissolution of
Newco. At the Closing, Prime shall deliver any UCC termination statements
referred to in Section 6(b) above.
[Signature page follows]
S-1
SIGNATURE PAGE TO
DISSOLUTION AGREEMENT
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
PMSI: Prime Medical Services, Inc.
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Xxxxxx Xxxxxxxx, Senior Vice President
Prime: KCPR, LLC
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Xxxxxx Xxxxxxxx, Senior Vice President
Couch: _______________________________________________
Xxxxxxx Xxxxx, M.D.
VCC: Vision Correction Centers of Kansas City, P.C.
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Xxxxxxx Xxxxx, M.D., President
KCL: Kansas City Laser Vision Correction Centers, L.L.C.
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Xxxxxxx Xxxxx, M.D., President
Newco: Prime Refractive - Kansas City, L.L.C.
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Xxxxxxx Xxxxx, M.D., as manager of Newco and
individually as a member of Newco
