1
EXHIBIT 2.2
--------------------------------------------------------------------------------
AGREEMENT FOR STATUTORY MERGER
--------------------------------------------------------------------------------
PROMEDCO, INC.
PROMEDCO OF NORTHERN NEVADA, INC.
AND
WESTERN MEDICAL MANAGEMENT CORPORATION, INC.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
NOVEMBER 7, 1996
--------------------------------------------------------------------------------
2
DRAMATIS PERSONAE
-----------------------------------------------------------------------------------------------------------------------------
Player Office Address Home Address
-----------------------------------------------------------------------------------------------------------------------------
ProMedCo, Inc.
-----------------------------------------------------------------------------------------------------------------------------
H. Xxxxx Xxxxx ProMedCo, Inc.
President 000 Xxxxxx Xx.
Xxxxx 0000 (Xxxxxxx) 000-000-0000
Xxxx Xxxxxxx Xxxx Xxxxx, XX 00000
Vice President 000-000-0000
E-mail: xxxxxxxxx@xxx.xxx Fax 000-000-0000
Pager: 1-800-759-7243
Pin #5733551
-----------------------------------------------------------------------------------------------------------------------------
ProMedCo Counsel
-----------------------------------------------------------------------------------------------------------------------------
Xxxx X. Xxxxxxx Boult, Cummings, Xxxxxxx & Xxxxx (Gillmor) 0000 Xxxxxxx Xxxx
615-252-2305 000 Xxxxx Xxxxxx, Xxxxx 0000 Xxxxxxxxx, XX 00000
Fax 000-000-0000 Xxxxxxxxx, XX 00000 615-297-3149
E-mail: xxxxxxxx@xxxx.xxx 000-000-0000 Car 000-000-0000
Fax 000-000-0000 Portable 000-000-0000
Xxxxxx Xxxxxx
000-000-0000
E-mail:xxxxxxx@xxxx.xxx
-----------------------------------------------------------------------------------------------------------------------------
WMM/TMG
-----------------------------------------------------------------------------------------------------------------------------
Xxxx X. ("Xxx") Xxxxxxxxxxx Western Medical Management
CEO Corporation, Inc.
702-686-4846 00 Xxxxxxx Xxx
Fax 000-000-0000 Xxxxx 000
Xxxx, XX 00000
-----------------------------------------------------------------------------------------------------------------------------
3
--------------------------------------------------------------------------------
WMM/TMG Counsel
--------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxxxx Stoel Rives, LLP
000-000-0000 000 Xxxxxxxxxx Xxxxxx
Fax 000-000-0000 Xxxxx 0000
Xxxxxxx, XX 00000-0000
Xxxxxxx X. Xxx Stoel Rives, LLP
000-000-0000 000 XX 0xx Xxx.
Fax 000-000-0000 Xxxxx 0000
Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------------------------------------------------------
4
TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Balance of the ProMedCo Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
COBRA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Clinic Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Code . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Definitive Closing Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Escrow Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Escrow Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Escrow Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Escrow Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Escrow Break Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Exhibit Volume . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Final Closing Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
GAAP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Hypothetical ProMedCo Stock Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Inducement Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Initial Portion of the ProMedCo Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Pension Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Professional Medical Management Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ProMedCo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ProMedCo IPO Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ProMedCo IPO Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ProMedCo-Northern . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ProMedCo-Northern Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ProMedCo Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Service Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Shareholder Representative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
TMG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
WMM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
WMM Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
5
-ii-
ARTICLE 2. MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.1 Merger of WMM into ProMedCo-Northern. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2 Exchange of Shares for Cash and/or Securities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Rights of WMM's Stockholders Pending and Upon Surrender of Certificates. . . . . . . . . . . . . . . . . 5
2.4 Exchange Formula. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Legend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.6 Escrow Closing; Closing; Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.7 Dissenting Stockholders of WMM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.8 Nature of Transaction; Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.9 Transactions and Deliveries at the Escrow Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.10 Consideration Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF WMM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.1 Organization, Corporate Power and Qualification. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Capitalization of WMM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.3 Subsidiaries, Affiliates, Affiliated Companies and Joint Venture. . . . . . . . . . . . . . . . . . . . 12
3.4 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.5 Absence of Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.6 Absence of Certain Recent Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.7 Title to Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.8 Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.9 Burdensome Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.10 Absence of Related Party Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.11 Defaults. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.12 Inventory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.13 Equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.14 Receivables. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.15 Permits and Licenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.16 Litigation, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.17 Court Orders, Decrees and Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
3.18 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.19 Immigration Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.20 Program Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.21 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.22 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.23 Pension, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.24 Employee Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.25 Insurance and Bonds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.26 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.27 Healthcare Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
3.28 Facility Compliance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6
-iii-
3.29 Improper Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.30 Books of Account; Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.31 No Finders or Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.32 Stockholder Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.33 Review of Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.34 Authority; Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.35 Consents and Approvals of Governmental Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.36 No Adverse Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.37 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PROMEDCO AND PROMEDCO-NORTHERN . . . . . . . . . . . . . . . . . . . . . 24
4.1 Organization and Standing of ProMedCo and ProMedCo-Northern. . . . . . . . . . . . . . . . . . . . . . 24
4.2 Capitalization of ProMedCo. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.3 ProMedCo Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.4 Authority; Binding Effect. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.5 No Finders or Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.6 Consents and Approvals of Governmental Authorities. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.7 Pending Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.8 Compliance with other Instruments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.9 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.10 Absence of Certain Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 5 COVENANTS OF PROMEDCO AND PROMEDCO-NORTHERN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.1 Best Efforts to Secure Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.2 Corporate Action. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.3 Handling of Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.4 Non-Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 6 COVENANTS OF WMM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.1 Access and Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.2 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
6.3 Compliance with Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.4 Best Efforts to Secure Consents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.5 Unusual Events. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.6 Interim Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
6.7 Departmental Violations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.8 Insurance Ratings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.9 Maintain Insurance Coverage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
6.10 Exclusive Dealings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7
-iv-
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF WMM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
7.1 Representations and Warranties True. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.2 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.3 Authority. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.4 No Obstructive Proceeding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.5 Delivery of Certain Certified Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.6 No Agency Proceedings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.7 Closing Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.8 Proceedings and Documents Satisfactory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PROMEDCO AND PROMEDCO-NORTHERN . . . . . . . . . . . . . . . . 32
8.1 Representations and Warranties True. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.2 No Obstructive Proceeding. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.3 Opinion of WMM Counsel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.4 Dissenters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.5 Service Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.6 Employment Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.7 Pooling Letters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.8 Stockholder Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.9 Inducement Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.10 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.11 Proceedings and Documents Satisfactory. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.12 No Adverse Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.13 Delivery of Certain Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
8.14 Closing Transactions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 9 TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.1 Optional Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.2 Notice of Abandonment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.3 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 10 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.1 Indemnification by Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.2 Indemnification by ProMedCo and ProMedCo-Northern. . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.3 Representation, Cooperation and Settlement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.4 Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.5 Restrictions and Limitations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
10.6 Shareholder Representative. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8
-v-
ARTICLE 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.1 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.3 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.4 Alternative Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.5 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.6 Legal Fees and Costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.7 Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.8 Section Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.9 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.10 Nature and Survival of Representations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.11 Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.12 Assignment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.13 Binding on Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.14 Parties in Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.15 Amendments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.16 Drafting Party. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.17 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.18 Reproduction of Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.19 Press Releases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
APPENDIX 2.9A FORM OF SERVICE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
APPENDIX 2.9B-1 FORMS OF EMPLOYMENT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98
APPENDIX 2.9B-2 LIST OF PROVIDERS' GROSS INCOMES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99
APPENDIX 2.9C FORM OF INTERIM SERVICE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
APPENDIX 2.9D FORM OF INTERIM MANAGEMENT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
APPENDIX 2.9E FORM OF CREDIT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134
APPENDIX 2.9F FORM OF ESCROW SERVICE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143
APPENDIX 7.2 OPINION OF COUNSEL TO PROMEDCO-NORTHERN . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
APPENDIX 8.3 OPINION OF COUNSEL TO WMM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152
APPENDIX 8.8 FORM OF STOCKHOLDER AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 155
APPENDIX 8.9 FORM OF INDUCEMENT AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162
9
AGREEMENT FOR STATUTORY MERGER
AGREEMENT AND PLAN OF REORGANIZATION ("Agreement"), dated as of
November 7, 1996, among ProMedCo, Inc., a Texas corporation ("ProMedCo"),
ProMedCo of Northern Nevada, Inc., a Nevada corporation and a wholly-owned
subsidiary of ProMedCo ("ProMedCo-Northern") and Western Medical Management
Corporation, Inc., a Nevada corporation ("WMM").
RECITAL:
WMM provides medical practice facilities, non-medical personnel and
medical practice management and administrative services to Xxxxxxx Xxxxxx
Medical Group, Ltd., a Nevada corporation dba Northern Nevada Medical Group
("TMG") which in turn operates a multi-specialty medical practice in Reno,
Nevada and other communities in northern Nevada. ProMedCo, through its
subsidiaries, including ProMedCo-Northern, is engaged in the business of
providing medical practice facilities, nonmedical personnel and medical
practice management and administrative services.
WMM desires to merge with ProMedCo-Northern in exchange for voting
shares of Common Stock ProMedCo in a transaction intended to qualify as a
"reorganization" within the meaning of Section 368(a)(1)(A) of the Code.
ProMedCo is in the process of attempting to make an initial public offering of
its common stock, and in connection therewith intends to reincorporate as a
Delaware corporation named Professional Medical Management Company by merging
with a subsidiary having that name. If that reincorporation occurs prior to
the Effective Date of the merger contemplated hereby, all references to
ProMedCo hereunder will be deemed to be references to Professional Medical
Management Company.
The parties hereby agree as follows:
ARTICLE 1 DEFINITIONS
For the purposes of this Agreement, the following definitions shall
apply:
"AFFILIATE" means with respect to any Person which controls, is controlled by,
or is under common control with such Person.
"BALANCE OF THE PROMEDCO SHARES" is defined in Section 2.4.
"CONSIDERATION" means $_______ as adjusted pursuant to Section 2.10.
"COBRA" means Title X of the Consolidated Omnibus Budget Reconciliation Act of
1985, 26 U.S.C. Section 162 et seq.
10
-2-
"CLINIC FACILITY" means the clinic facilities located at 00 Xxxxxxx Xxx, Xxxx,
XX 00000 (Suites 301,302, 303, 801, 803 and 804); 0000 Xxxxxx
Xxxxxxxxx Xxxxx 000, Xxxx, XX 00000; 000 X. Xxxxx Xx., Xxxxx 000,
Xxxx, XX 00000; 000 Xxx Xxxxxx, (Xxxxxx 000 xxx 000), Xxxx, XX 00000;
000 Xxxxxx Xxxxxx, Xxxx, XX 00000; and Incline Medical 000 Xxxxx,
Xxxxx 000, Xxxxxxx Xxxxxxx, XX 00000.
"CODE" means the Internal Revenue Code of 1986, as amended.
"CPA FIRM" is defined in Section 2.10(a).
"CREDIT AGREEMENT" is defined in Section 2.9(e).
"DEFINITIVE CLOSING STATEMENTS" is defined in Section 2.10(a).
"EFFECTIVE DATE" is defined in Section 2.6.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended.
"ESCROW AGREEMENT" means the Escrow Agreement to be dated the Escrow Closing
Date among WMM, ProMedCo-Northern and the Escrow Agent in the form
attached hereto as Appendix 2.9F.
"ESCROW AGENT" means Xxxx X. Xxxxxxx.
"ESCROW CLOSING" and "ESCROW CLOSING DATE" are defined in Section 2.6.
"ESCROW BREAK DATE" is defined in the Escrow Agreement
"EXHIBIT VOLUME" means the volume of Exhibits referred to in this Agreement
prepared and delivered by WMM.
"FINAL CLOSING STATEMENT" is defined in Section 2.10 (a).
"GAAP" means generally accepted accounting principles.
"HYPOTHETICAL PROMEDCO STOCK PRICE" means the hypothetical price per share
ProMedCo stock would have been worth on October 9, 1996 as a publicly
traded company on NASDAQ as determined by an investment banker
mutually acceptable to ProMedCo and WMM and
11
-3-
assuming the merger contemplated hereby and a similar transaction with
King's Daughters Clinics had been consummated by ProMedCo as of that
date.
"INDUCEMENT AGREEMENT" is defined in Section 8.9.
"INITIAL PORTION OF THE PROMEDCO SHARES" is defined in Section 2.4.
"INTERIM MANAGEMENT AGREEMENT" is defined in Section 2.9(d).
"INTERIM SERVICE AGREEMENT" is defined in Section 2.9(c).
"INVENTORY" means the inventory of WMM.
"IRS" means the Internal Revenue Service.
"PENSION PLAN" and "PENSION PLANS" means any "employee pension benefit plan"
listed in Exhibit 3.22.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust or unincorporated
organization.
"PROFESSIONAL MEDICAL MANAGEMENT COMPANY" means Professional Medical Management
Company, a Delaware corporation, with which ProMedCo intends to merge
in connection with its initial public offering.
"PROMEDCO" means ProMedCo, Inc., a Texas corporation which is the sole
shareholder of ProMedCo-Northern; if ProMedCo merges with Professional
Medical Management Company prior to the Effective Date, "ProMedCo"
shall mean Professional Medical Management Company.
"PROMEDCO IPO DATE" means the date on which ProMedCo first sells stock to the
public pursuant to its initial public offering.
"PROMEDCO IPO PRICE" means the price per share at which ProMedCo offers
ProMedCo Stock to the public at its initial public offering.
"PROMEDCO-NORTHERN" means ProMedCo of Northern Nevada, Inc., a Nevada
corporation.
12
-4-
"PROMEDCO-NORTHERN DISTRIBUTION" shall have the meaning ascribed thereto in the
Service Agreement.
"PROMEDCO STOCK" is defined in Section 2.3; if the ProMedCo merger with
Professional Medical Management Company occurs prior to the Effective
Date, "ProMedCo Stock shall mean the Common Stock, with a par value
$.01 per share of Professional Medical Management Company.
"SERVICE AGREEMENT" means the undated Services Agreement between
ProMedCo-Northern and TMG in the form attached hereto as Appendix
2.9A.
"SHAREHOLDERS" mean the following individuals who are shareholders of WMM:
Xxxxxx X. Xxxxxxx, M.D., Xxxxxxxxx Xxxxxx, M.D., Xxxxx Xxxxx, M.D.,
Xxxxxxx Xxxxxx, M.D., Xxxxxxxx XxXxx, M.D., Xxxx Xxxxxx, M.D., Xxxx X.
Xxxxxxxxxxx, Xxxxxx Xx, M.D., Xxxxxxx X. Xxxxxxxxx, and Xxxxxx
Xxxxxxxx.
"SHAREHOLDER REPRESENTATIVE" is defined in Section 10.6.
"TMG" means Xxxxxxx Goring Medical Group, Ltd., a Nevada corporation dba The
Northern Nevada Medical Group.
"WMM" means Western Medical Management Corporation, Inc., a Nevada corporation.
"WMM FINANCIAL STATEMENTS" is defined in Section 3.4.
ARTICLE 2. MERGER
2.1 MERGER OF WMM INTO PROMEDCO-NORTHERN. WMM shall be merged with
and into ProMedCo-Northern on the Effective Date in accordance with the
applicable laws of the States of Nevada and Delaware as provided in a Plan of
Merger to be set forth in the Articles of Merger which shall be prepared by
ProMedCo's counsel and agreed to by WMM's Counsel, certain provisions of which
shall be as follows:
(a) SURVIVING CORPORATION. ProMedCo-Northern shall be the
surviving corporation (the "Surviving Corporation") from and
after the Effective Date, and the name of the Surviving
Corporation shall be ProMedCo of Northern Nevada, Inc." On the
Effective Date, the separate existence of WMM shall cease, and
the Surviving Corporation shall without other transfer succeed
to all the rights and property, subject to all debts
13
-5-
and liabilities, of WMM and ProMedCo-Northern in the same
manner as if the Surviving Corporation itself had incurred
them.
(b) ARTICLES OF INCORPORATION. From and after the Effective Date,
the Articles of Incorporation of ProMedCo-Northern shall be
the Articles of Incorporation of the Surviving Corporation.
(c) BY-LAWS. From and after the Effective Date, the by-laws of
ProMedCo-Northern as they exist on the date hereof shall be
the by-laws of the Surviving Corporation.
(d) DIRECTORS AND OFFICERS. The directors and officers of
ProMedCo-Northern immediately prior to the Effective Date
shall be the officers and directors, respectively, of the
Surviving Corporation, to serve, in both cases, until their
successors shall have been elected and shall qualify or until
otherwise provided by law and the Articles of Incorporation
and by-laws of the Surviving Corporation.
2.2 EXCHANGE OF SHARES FOR CASH AND/OR SECURITIES. The manner and
basis of exchanging and converting the shares of common stock of the
ProMedCo-Northern and WMM on the Effective Date shall be as follows:
(a) COMMON STOCK OF PROMEDCO. By virtue of the Merger and without
any action of the holder thereof each share of common stock of
ProMedCo-Northern outstanding on the Effective Date shall
remain outstanding and unchanged as a share of the common
stock of the Surviving Corporation.
(b) COMMON STOCK OF WMM. By virtue of the merger and without
any action of the holders thereof each share of no par value
Series A Preferred Stock of WMM ("WMM Preferred Stock") and
each share common stock of WMM ("WMM Common Stock")
outstanding at the Effective Date shall be deemed canceled and
reclassified into the number of shares of the no par value
common shares of ProMedCo ("ProMedCo Common Stock") determined
in accordance with the formula set forth in Section 2.4
hereof, except that any share of WMM Common Stock then owned
by WMM shall be canceled. The Surviving Corporation shall not
deliver any fraction of a share of ProMedCo Common Stock in
exchange for WMM Common Stock but will deliver a whole number
of shares of ProMedCo Common Stock rounded up to the next
whole number.
2.3 RIGHTS OF WMM'S STOCKHOLDERS PENDING AND UPON SURRENDER OF
CERTIFICATES. From and after the Effective Date, except as provided in the
Nevada Business Corporation Act with
14
-6-
respect to rights of dissenting stockholders, each holder of a certificate
representing shares of WMM Common Stock shall be entitled, upon surrender
thereof to the Surviving Corporation, to receive in exchange therefor the
consideration to which such holder would otherwise be entitled on the basis
provided for in Section 2.4 of this Agreement.
2.4 EXCHANGE FORMULA. The WMM Preferred Stock and Common Stock shall
be converted in to the number of shares of ProMedCo Stock resulting from
application of the following formulas:
(a) WMM PREFERRED STOCK:
Y = Pref/Price
(b) COMMON STOCK
Z = [Shares-(Y x PS)]/WMMS
where
Pref = $5.00 (the WMM Preferred Stock Liquidation Preference).
PS = 8,500 (the number of shares of WMM Preferred Stock per
Section 3.2)
Z = the number of shares of ProMedCo Stock to be exchanged for
each share of WMM Common Stock;
Shares = Consideration/Price;
Consideration has the meaning set forth in Article 1;
Price = ProMedCo IPO Price if the ProMedCo IPO Date occurs on or
prior to January 31, 1997 or if not, the Hypothetical
ProMedCo Stock Price.
WMMS = 11,577 (number of share of WMM Common Stock shares outstanding
per Section 3.2)(1)
--------------------
(1) Thus if Price = $14.00 and Consideration = $4,000,000, ProMedCo
would issue 0.3571 of a share of its Common Stock for each share of WMM
Preferred stock as follows:
Y =Pref/Price
Y = $5.00/$14.00 = 0.3571
and 24.417 shares of its Common Stock for each share of WMM Common Stock as
follows:
Shares = Consideration/Price = $4,000,000/$14.00 = 285,714
Z = (Shares-(Y x PS))/WMMS = (285,714-(0.3571 x 8,500))/11,577 = 24.417
ProMedCo
Shares
--------
Recap: Total Preferred Shares = 8,500 x 0.3571 = 3,035
Total Common Shares = 24.417 x 11,577 = 282,676
-------
Total ProMedCo Shares 285,710
=======
15
-7-
Immediately after the Effective Date, ProMedCo will issue the number of shares
of ProMedCo Stock representing 90% of the number of shares into which the WMM
Common Stock is to be converted (the "Initial Portion of the ProMedCo Shares")
to the WMM Shareholders and on the first anniversary of the Effective Date,
ProMedCo shall issue the remaining 10% of the number of shares into which the
WMM Common Stock is to be converted (the "Balance of the ProMedCo Shares"),
net of all adjustments pursuant to this Agreement, shall be issued to the
former WMM Shareholders.
2.5 LEGEND. The certificates representing ProMedCo Stock issued to
WMM as the result of the transactions contemplated hereby shall bear the
following legend:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED ("THE SECURITIES ACT"), OR ANY
APPLICABLE STATE SECURITIES LAW. THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO OR FOR RESALE
IN CONNECTION WITH THE DISTRIBUTION THEREOF. NO DISPOSITION
OF THESE SECURITIES MAY BE MADE IN THE ABSENCE OF (I) AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT; OR
(II) AN OPINION OF COUNSEL ACCEPTABLE TO THE CORPORATION THAT
SUCH DISPOSITION WITHOUT REGISTRATION IS IN COMPLIANCE WITH
THE SECURITIES ACT."
2.6 ESCROW CLOSING; CLOSING; EFFECTIVE DATE. The deliveries
described in Section 2.9 (the "Escrow Closing") shall take place on November
7, 1996 (the "Escrow Closing Date"), at the offices
16
-8-
of WMM or such other site as may be designated by WMM and ProMedCo-Northern,
and WMM and ProMedCo-Northern shall enter into the Escrow Agreement with the
Escrow Agent on the Escrow Closing Date. In case the Escrow Closing does not
take place on November 7, 1996, the Escrow Closing Date shall be set by mutual
agreement between ProMedCo-Northern and WMM; provided, however, that in no
event shall the Escrow Closing take place later than November 12, 1996 unless
extended by ProMedCo-Northern. The closing of merger and the legal consummation
of other transactions contemplated hereby shall take place on the Escrow Break
Date, as such term is defined in the Escrow Agreement. Upon receipt of the
Articles of Merger from the Escrow Agent, ProMedCo-Northern shall cause the
Articles of Merger to be filed with the appropriate offices in Nevada and the
stock then held by the Escrow Agent shall be distributed to the former WMM
Shareholders. The date on which the Articles of Merger are filed with the
Secretary of State of Nevada shall be the "Effective Date" hereunder. If, as a
result of the adjustment provisions of Section 2.10 the former WMM
Shareholders are entitled to more or fewer shares than they receive pursuant to
the previous sentence of this Section 2.6, ProMedCo-Northern shall cause the
issuance of such additional shares or obtain them from the former WMM
shareholders, as the case may be.
2.7 DISSENTING STOCKHOLDERS OF WMM. Each stockholder of WMM, if any,
who becomes entitled, pursuant to Section 92A.300 of the Nevada Revised
Statues, to payment of the fair value of his WMM Common Stock (a "Dissenting
Stockholder") shall receive payment therefor from the Surviving Corporation but
only after the value thereof shall have been agreed upon or finally determined
pursuant to such provisions. WMM shall not, except with the prior written
consent of ProMedCo, voluntarily make any payment with respect to or settle or
offer to settle any demand for such payment. Shares of WMM Common Stock
acquired by WMM or the Surviving Corporation from Dissenting Stockholders shall
be canceled.
2.8 NATURE OF TRANSACTION; FURTHER ASSURANCES. The parties intend
that the transactions contemplated hereby shall constitute a tax free
reorganization pursuant to Section 368(a)(1)(A) of the Internal Revenue Code
of 1986, as amended, (the "Code") and shall use their best efforts to avoid any
actions not contemplated hereby which are inconsistent with such intention.
ProMedCo, ProMedCo-Northern and WMM, respectively, shall take all such action
as may be necessary or appropriate to effectuate the transactions contemplated
hereby.
2.9 TRANSACTIONS AND DELIVERIES AT THE ESCROW CLOSING. The following
additional transactions shall occur at the Escrow Closing:
(a) TMG and ProMedCo-Northern shall enter into an undated Service
Agreement in the form attached hereto as Appendix 2.9A which
shall be guaranteed by ProMedCo.
17
-9-
(b) TMG shall enter into employment agreements in the form
attached as Appendix 2.9B-1 hereto (the "Provider Employment
Agreements") with each of its Providers, as such term is
defined in the Service Agreement; provided however, Providers,
as a group, representing an aggregate annualized gross income
of less than $375,000 as set forth in Appendix 2.9B-2 need not
enter into such employment agreements.
(c) WMM and TMG shall enter into an Interim Service Agreement in
the form attached hereto as Appendix 2.9C.
(d) ProMedCo-Northern and WMM shall enter into an Interim
Management Agreement in the form attached hereto as Appendix
2.9D.
(e) ProMedCo-Northern and WMM shall enter into a Credit Agreement
in the form attached hereto as Appendix 2.9E and WMM shall
execute and deliver to ProMedCo-Northern the UCC-1 financing
statement contemplated thereby.
(f) ProMedCo-Northern, WMM and the Escrow Agent shall enter into
the Escrow Agreement in the form attached hereto as Appendix
2.9F.
(g) WMM shall deliver the "WMM Instruments" as such term is
defined in the Escrow Agreement.
(h) ProMedCo-Northern shall deliver the remainder of the "ProMedCo
Deliveries", as such term is defined in the Escrow Agreement.
(i) TMG and ProMedCo-Northern shall enter into the Inducement
Agreement in the form attached hereto as Appendix 8.9.
2.10 CONSIDERATION ADJUSTMENTS
(a) DEFINITIVE CLOSING STATEMENTS. Within 120 days after the
Escrow Closing or by such time as is reasonable under the
circumstances, ProMedCo-Northern shall prepare and deliver to
the Shareholders and the Shareholder Representative a final
balance sheet of WMM as of the Escrow Closing Date ("Final
Closing Statement"). ProMedCo-Northern covenants that the
Final Closing Statement shall be true, complete and accurate
and will present fairly the assets and liabilities of WMM as
at the Escrow Closing Date, calculated in a manner consistent
with the WMM Financial Statements (as defined in Section
3.4), and the requirements of this Agreement. The Shareholders
and the Shareholder Representative and their representatives
shall be
18
-10-
provided access to the books and records of ProMedCo-Northern
as necessary to verify the accuracy of such calculations. If
within 30 business days of receipt of the Final Closing
Statement, the Shareholder Representative fails to deliver to
ProMedCo-Northern written notice specifying any unacceptable
entries on the Final Closing Statements and the reasons
therefor, then such Final Closing Statement shall constitute
the Definitive Closing Statements. If the Shareholder
Representative timely and duly delivers such notice within 30
business days of receipt thereof, the parties shall attempt in
good faith to resolve the differences, and if they are unable
to do so, within 20 days thereafter either party may deliver
the Final Closing Statement to a "big six" accounting firm
mutually acceptable to ProMedCo-Northern and the Shareholder
Representative (the "CPA Firm"), who shall have 20 business
days to review the Final Closing Statement and make such
adjustments thereto as it deems necessary to ensure that the
Final Closing Statement has been prepared in a manner
consistent with the WMM Financial Statements calculated on a
consistent basis and the requirements of this Agreement and
conform to consistently applied generally accepted accounting
principles. The Final Closing Statement as so adjusted shall
constitute the Definitive Closing Statement and shall be
binding on ProMedCo, ProMedCo- Northern and the Shareholders.
If the total amount payable by ProMedCo-Northern pursuant to
clause (b) below increases from that shown on the Final
Closing Statement, ProMedCo-Northern shall pay the fees and
expenses of the CPA Firm, otherwise such fees and expenses
shall be borne by the Shareholders.
(b) BALANCE SHEET ADJUSTMENT. To the extent that the Definitive
Closing Statement shows assets at Escrow Closing net of
liabilities to be different from the same assets net of the
same liabilities on the WMM Financial Statements as of
September 30, 1996 (excluding the effects of any adjustments
related to the receivable from TMG), and as adjusted in
accordance with GAAP, the Consideration shall be increased or
reduced, as the case may be, on a dollar for dollar basis.
(c) DISTRIBUTION FUNDS ADJUSTMENTS. If Distribution Funds for the
annualized eight months ended August 31, 1996 (based on the
assumption that the Service Agreement had been in place during
such period) are more or less than $4,977,180 ("Targeted
Distribution Funds") the Consideration shall be increased, or
decreased, as the case may be, on the basis of $1.10 for each
$1.00 of excess or deficiency in the Targeted Distribution
Funds.
(d) PROVIDER DEFICIENCY ADJUSTMENT. To the extent that Providers
listed in Appendix 2.9B-3 representing in excess of $375,000
of annualized gross revenues (such excess if referred to
herein as the "Gross Revenue short Fall") fail to execute
Shareholder
19
-11-
Physician Employment Agreements and/or Non-Shareholder
Employment Agreements as contemplated by Sections 2.9(b) and
(c) hereof, the Consideration shall be reduced at the rate of
$0.43 for each $1.00 of the Gross Revenue Short Fall.
Any reduction in the Consideration resulting from this Section 2.10 shall be
accomplished by first reducing the Balance of the ProMedCo Shares and if such
reductions exhaust the Balance of the ProMedCo Shares, then the Shareholder
shall return within 10 days after a demand therefor by ProMedCo-Northern,
sufficient additional shares of ProMedCo Stock from the Initial Portion of the
ProMedCo Shares to fully satisfy the reduction in Consideration.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF WMM
WMM hereby represents and warrants to ProMedCo and ProMedCo-Northern as
follows:
3.1 ORGANIZATION, CORPORATE POWER AND QUALIFICATION. WMM is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada and has full corporate power and authority and all
authorizations, licenses and permits necessary to own, lease and operate its
properties and assets and to carry on its business as and where it is now being
conducted, to enter into this Agreement, and to consummate the transactions
contemplated hereby. WMM is not qualified to do business in any other
jurisdiction, and owns or leases no assets and has no employees regularly
providing services in any other states or other jurisdiction. No jurisdiction
where WMM is not presently qualified as a foreign corporation has made any
assertion that such corporation's business or ownership of property makes
qualification as a foreign corporation in such jurisdiction necessary. A copy
of the Articles of Incorporation and all amendments thereto as of the date
hereof of WMM certified by the Secretary of State of Nevada and a copy of its
by-laws, as amended to the date hereof (both certified by the Secretary of
WMM), are included as Exhibit 3.1 of the Exhibit Volume and are true, accurate
and complete as of the date hereof. WMM is not currently in default under or
in violation of any provision of its Articles of Incorporation or bylaws.
3.2 CAPITALIZATION OF WMM. The authorized capital stock of WMM
consists of 25,000 shares Series A Preferred Stock without par value common
stock, of which as of the date hereof, 8,500 shares have been duly authorized
by all necessary corporate action on the part of WMM , are validly issued and
outstanding, fully paid and non-assessable, 25,000 shares of Class A Voting
Common Stock without par value of which 11,577 shares have been duly authorized
by all necessary corporate action on the part of WMM , are validly issued and
outstanding, fully paid and non-assessable, and 25,000 shares of Class B
Non-voting Common Stock, without par value, none of which are outstanding. No
assessments have been made with respect to such stock which have not been fully
satisfied. There are no other authorized or outstanding or authorized equity
securities of WMM of any class, kind or character, and there are no outstanding
rights, contracts, rights to
20
-12-
subscribe, conversion rights, exchange rights, warrants, options, calls puts or
other agreements or commitments of any character relating to the capital stock
of WMM or any securities convertible or exchangeable or exercisable for any
shares of stock of any class of capital stock of WMM. Except for the
transactions contemplated by this Agreement, there are not any agreements or
understandings among WMM's stockholders with respect to the voting of shares of
the WMM Stock on any matter. No shares of the capital stock of WMM are
reserved for any purpose; there are no preemptive or similar rights with
respect to the issuance, sale or other transfer (whether present, past or
future) of the capital stock of WMM and there are no agreements or other
obligations (contingent or otherwise) which may require WMM to issue,
repurchase or otherwise acquire any shares of its capital stock or any other
securities. There are no outstanding or authorized stock appreciation/phantom
stock or similar rights with respect to WMM. There are no voting trusts,
proxies, or any other agreements or understandings with respect to the voting
stock of WMM There are no accrued, but unpaid dividends on the Series A
Preferred Stock..
3.3 SUBSIDIARIES, AFFILIATES, AFFILIATED COMPANIES AND JOINT VENTURE.
WMM has no direct or indirect ownership interest in, by way of stock ownership
or otherwise, any corporation, association or business enterprise.
3.4 FINANCIAL STATEMENTS. Exhibit 3.4 consists of the following
financial statements of WMM: (i) balance sheet of WMM at December 31, 1995
and the related statement of operations, stockholders' equity and cash flow for
the three years then ended, together with the audit opinion report thereon of
Xxxxxx Xxxxxxxx & Company, LLP, certified public accountants and (ii)
unaudited balance sheet of WMM at September 30, 1996 and the related statement
of operation for the nine months then ended (such financial statements and the
related notes being herein called "WMM Financial Statements").
The WMM Financial Statements are true, complete and accurate, have
been based upon the information contained in the books and records of WMM and
present fairly the assets, liabilities and financial condition of WMM as of the
dates thereof and the results of its operations for the periods then ended,
prepared in conformity with generally accepted accounting principles, it being
understood that the unaudited portions thereof are subject to normal
adjustments which might arise for audits of its current year, and are without
financial notes. The WMM Financial Statements do not contain any material
inaccuracy and do not suffer from any material omissions.
3.5 ABSENCE OF UNDISCLOSED LIABILITIES. Except as and to the extent
reflected or reserved against in the WMM Financial Statements and except for
commitments and obligations incurred in the ordinary course of business
accruing after September 30, 1996, WMM as of September 30, 1996, had, or will
have at the Escrow Closing Date, no liabilities, claims or obligations (whether
accrued, absolute, contingent, unliquidated or otherwise, whether or not known
to WMM or any directors,
21
-13-
officers or employees of WMM, whether due to become payable and regardless of
when or by whom asserted) of a nature customarily reflected on a corporate
balance sheet prepared in accordance with generally accepted accounting
principles as applied on a basis consistent with prior periods..
3.6 ABSENCE OF CERTAIN RECENT CHANGES. Except as expressly provided
in this Agreement or as set forth on Exhibit 3.6 in alphabetical order
corresponding to the following subsections, since September 30, 1996, and
through the Escrow Closing Date, WMM has not been and will not have:
(a) except in the usual and ordinary course of its business,
consistent with past practice, and in an amount which is usual
and normal incurred any indebtedness or other liabilities
(whether accrued, absolute, contingent or otherwise),
guaranteed any indebtedness or sold any of its assets;
(b) suffered any damage, destruction or loss, whether or not
covered by insurance, in excess of $10,000;
(c) suffered the resignation or other termination of any
management personnel of WMM, or the loss of or other
termination of a business relationship with any material
customers or suppliers of WMM's business;
(d) increased the regular rate of compensation payable by it to
any employee other than normal merit and cost of living
increases granted in the ordinary course of business; or
increased such compensation by bonus, percentage, compensation
service award or similar arrangement theretofore in effect for
the benefit of any of its employees, and no such increase is
required;
(e) established or agreed to establish, amended or terminated any
pension, retirement or welfare plan or arrangement for the
benefit of its employees not theretofore in effect;
(f) suffered any change in its financial condition, assets,
liabilities, operations, prospects or business or suffered any
other event or condition of any character which individually
or in the aggregate has or might reasonably have a material
adverse effect on WMM, it being understood that WMM has
operated at a loss;
(g) experienced any labor organizational efforts, strikes or
complaints other than grievance procedures in the ordinary
course of business or entered into any collective bargaining
agreements with any union;
22
-14-
(h) made any single capital expenditure which exceeded $5,000 or
made aggregate capital expenditures which exceeded $10,000;
(i) except with respect to liens or encumbrances arising by
operation of law, permitted or allowed any of the assets of
WMM to be subjected to any pledge, lien, security interest,
encumbrance, restriction or charge of any kind;
(j) written down the value of any of the assets of WMM, or written
off as uncollectible any notes or accounts receivable, except
for write-downs and write-offs in the ordinary course of
business and consistent with past practice, none of which are
material;
(k) paid, discharged or satisfied any claims, liabilities or
obligations (absolute, accrued, contingent or otherwise) other
than in the usual and ordinary course of business;
(l) suffered any extraordinary losses, canceled any debts or
waived any claims or rights of substantial value, whether or
not in the usual and ordinary course of business;
(m) paid, lent or advanced any amount to, or sold, transferred or
leased any properties or assets (real, personal or mixed,
tangible or intangible) to, or entered into any agreement or
arrangement with, any stockholder of WMM or any of the
officers or directors of WMM or of any "Affiliate" of any of
its officers or directors, except for reimbursement of
ordinary and reasonable business expenses related to the
business of WMM and compensation to officers at rates not
exceeding the rates of compensation at September 30, 1996;
(n) amended, terminated or otherwise altered (whether by action or
inaction) any contract, agreement or license of significant
value to which WMM is a party, except in the ordinary course
of business;
(o) entered into a material transaction other than in the ordinary
course of business or made any change in any method of
accounting or accounting practice;
(p) canceled, or failed to continue, insurance coverages; or
(q) agreed, whether in writing or otherwise, to take any action
described in this Section 3.6.
3.7 TITLE TO ASSETS. The assets of WMM consisting of owned personal
property are subject to no liens or encumbrances except the security interests
of record set forth on Exhibit 3.7 of the
23
-15-
Exhibit Volume, which Exhibit is a copy of a Uniform Commercial Code ("UCC")
search as of a recent date duly obtained by WMM and which search shows security
interests of record relating to such assets in every place where such security
interests are properly filed and includes copies of all such financing
statements.
3.8 CONTRACTS. Exhibit 3.8 of the Exhibit Volume lists each
contract, lease, agreement and other instrument to which WMM is a party or is
bound which involves an unperformed commitment or obligation (contingent or
otherwise) within the next 12 months of more than $10,000. Except as noted in
such Exhibit, all such contracts, leases and agreements are in full force and
effect, there has been no threatened cancellation thereof, there are no
outstanding disputes thereunder, each is with unrelated third parties and was
entered into on an arms-length basis in the ordinary course of business and all
will continue to be binding in accordance with their terms after consummation
of the transactions contemplated hereby.
Except as described in Exhibit 3.8 or the other Schedules hereto (and
except for purchase contracts and orders for inventory in the ordinary course
of business consistent with past practice), WMM is not, as of the date of this
Agreement, a party to or bound by any:
(a) material agreement or contract not made in the ordinary course
of business;
(b) employee collective bargaining agreement or other contract
with any labor union;
(c) covenant not to compete binding on WMM;
(d) lease or similar agreement under which WMM is a lessor or
sublessor of any material real property owned or leased by WMM
or any portion of premises otherwise occupied by WMM;
(e) (i) lease or similar agreement under which (A) WMM is lessee
of, or holds or uses, any machinery, equipment, vehicle or
other tangible personal property owned by a third party or
(B)WMM is a lessee or sublessee of any tangible personal
property owned by any of its shareholders, (ii) continuing
contract for the future purchase of materials, supplies or
equipment, or (iii) management, service, consulting or other
similar type of contract, in any such case which has a future
liability within the next 12 months in excess of $10,000, and
which is not terminable by WMM for a cost of less than
$10,000;
24
-16-
(f) license or other agreement relating in whole or in part to,
trademarks (including, but not limited to, any license or
other agreement under which WMM has the right to use any of
the same owned or held by a third party);
(g) agreement or contract under which WMM has borrowed or lent any
money or issued any note, bond, indenture or other evidence of
indebtedness or directly or indirectly guaranteed
indebtedness, liabilities or obligations of others for an
amount in excess of $10,000 (other than (i) endorsements for
the purpose of collection in the ordinary course of business
and (ii) advances to employees of WMM in the ordinary course
of business);
(h) mortgage, pledge, security agreement, deed of trust or other
document granting a lien against the assets of WMM (including
liens upon properties acquired under conditional sales,
capital leases or other title retention or security devices
but excluding operating leases);
(i) other agreement, contract, lease, license, commitment or
instrument to which WMM is a party or by or to which WMM or
any of it assets or businesses are bound or subject, which has
an aggregate future liability within the next 12 months in
excess of $10,000 and is not terminable by WMM for a cost of
less than $10,000; or
(j) any agreement, contract, understanding or business venture
with any physician, other provider or any other Person which
violates the Medicare/Medicaid Fraud and Abuse amendments or
any regulations thereunder adopted by the U.S. Department of
Health and Human Services.
3.9 BURDENSOME AGREEMENTS. Except as is set forth in Exhibit 3.9 of
the Exhibit Volume, WMM is not a party to, nor are any of its assets subject to
or bound or affected by, any provision of any order of any court or other
agency of government or any indenture, agreement or other instrument or
commitment which materially adversely affects the operations, earnings, assets,
properties, liabilities, business or prospects of WMM or its condition,
financial or otherwise.
3.10 ABSENCE OF RELATED PARTY TRANSACTIONS. Except as disclosed on
Exhibit 3.10, neither WMM, nor any officer, director or Affiliate of WMM, has
any material direct or indirect financial or economic interest in any
competitor or supplier of WMM. WMM is not a party to any transaction or
proposed transaction, including without limitation the leasing of property, the
purchase or sale of materials or goods (except with respect to WMM's service
business) or the furnishing of its services (except as employees of the WMM),
to any Affiliate of WMM, including (without limitation) any family member of a
shareholder of WMM; and WMM has not directly or indirectly
25
-17-
entered into any agreement or commitment which could result in WMM's becoming
obligated to provide funds in respect of or to assume any obligation of any
such affiliated person or entity. Except as set forth on Exhibit 3.10 or as
reflected in the WMM Financial Statements, there are no debts owing to WMM by,
or any contractual agreements or understandings between WMM and, any
shareholder, director or officer of WMM, any member of their respective
families, or any Affiliate of any of the foregoing individuals, and none of the
foregoing individuals or any Affiliate of them owns any property or rights,
tangible or intangible (other than an equitable interest), used in or related
to WMM's business. WMM is not indebted to any shareholder, officer, director
or employee of WMM, or to any member of their respective families, or to any
Affiliate of any of the foregoing individuals, in any amount whatsoever, other
than for payment of salaries and compensation for services actually rendered to
WMM in the ordinary course of their businesses.
3.11 DEFAULTS. Except as disclosed in Exhibit 3.11, WMM is not in
default under, nor has any event occurred which, with the lapse of time or
action by a third party, could result in a default under any outstanding
indenture, mortgage, contract, instrument or agreement to which WMM is a party
or by which WMM may be bound or under any provision of the Articles of
Incorporation or by-laws of WMM. Except as disclosed on Exhibit 3.11, the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement will not violate any provision
of, or result in the breach of, or constitute a default under, any law, the
violation of which would result in a significant liability to WMM, or any
order, writ, injunction or decree of any court, governmental agency or
arbitration tribunal; constitute a violation of or a default under, or a
conflict with, any term or provision of the Articles of Incorporation or
by-laws of WMM or any contract, commitment, indenture, lease, instrument or
other agreement, or any other restriction of any kind to which WMM is a party
or is bound; or cause, or give any party grounds to cause (with or without
notice, the passage of time or both) the maturity of any liability or
obligation of WMM to be accelerated, or increase any such liability or
obligation.
3.12 INVENTORY. The Inventory consists of a quality and quantity
usable and saleable in the ordinary course of business and is carried on the
balance sheet included in the WMM Financial Statements at the lower of cost or
market, except for items of obsolete materials and materials of below standard
quality, all of which have been written down in the latest balance sheet
included in the WMM Financial Statements to net realizable market value or for
which adequate reserves have been provided in the latest balance sheet included
in the WMM Financial Statements. The present quantity of the Inventory of WMM
is reasonable and warranted in the present circumstances of the business
conducted by WMM. The only transactions related thereto since September 30,
1996 have been additions or sales in the ordinary course of business.
3.13 EQUIPMENT. All assets of WMM consisting of equipment are well
maintained and in good operating condition, except for reasonable wear and tear
and except for items which have been
26
-18-
written down in the WMM Financial Statements to a realizable market value or
for which adequate reserves have been provided in the WMM Financial Statements.
The present quantity of all such equipment of WMM is reasonable and warranted
in the present course of the business conducted by WMM. The only transactions
related thereto since September 30, 1996, have been additions thereto in the
ordinary course of business or as disclosed in Exhibit 3.6.
3.14 RECEIVABLES. All notes and accounts receivable of WMM shown on
the latest balance sheet contained in the WMM Financial Statements and all
those arising since the date of such balance sheet have arisen in the ordinary
course of business and have been or are collectible in the ordinary course of
business in the book amounts thereof after provision for losses consistent with
WMM's historical practices.
3.15 PERMITS AND LICENSES. Included as Exhibit 3.15 in the Exhibit
Volume is a schedule of permits and licenses, listing and briefly describing
each permit, license or similar authorization from each governmental authority
issued with respect to the operation or ownership of properties by WMM together
with the designation of the respective expiration dates of each, and also
listing and briefly describing each association in which WMM is a member and
each association or governmental authority by which WMM is accredited or
otherwise recognized. WMM is not required to obtain any additional permits,
licenses or similar authorizations (including, without limitation, any
additional certificates of need) from any governmental authority for the proper
conduct of its business or to become a member of or accredited by any
association or governmental authority other than those listed on Exhibit 3.15
in the Exhibit Volume, the failure of which to obtain will have a material
adverse effect on the operations and business of WMM.
3.16 LITIGATION, ETC. Except as set forth in Exhibit 3.16 of the
Exhibit Volume: (i) there is no litigation, arbitration, governmental claim,
investigation or proceeding pending or to the knowledge of WMM, threatened
against WMM at law or in equity, before any court, arbitration tribunal or
governmental agency; (ii) there are no facts based on which material claims may
be hereafter made against WMM; and (iii) all claims and litigations against WMM
are fully covered by insurance.
3.17 COURT ORDERS, DECREES AND LAWS. There is not outstanding or
threatened any order, writ, injunction or decree of any court, governmental
agency or arbitration tribunal against or affecting WMM or its assets. WMM is
in compliance in all material respects with all applicable federal, state and
local laws, regulations and administrative orders which are material to the
business of WMM and WMM has received no notices of alleged violations thereof.
To the best knowledge of WMM, no governmental authorities are presently
conducting proceedings against WMM and no such investigation or proceeding is
pending or being threatened.
27
-19-
3.18 TAXES. All federal, state and other tax returns of WMM required
by law to be filed have been timely filed, and WMM has paid or provided for all
taxes (including taxes on properties, income, franchises, licenses, sales and
payrolls) which have become due pursuant to such returns or pursuant to any
assessment, except for any taxes and assessments of which the amount,
applicability or validity is currently being contested in good faith by
appropriate proceedings and with respect to which WMM has set aside on its
books adequate reserves. All such tax returns have been prepared in compliance
with all applicable laws and regulations and are true and accurate in all
material respects. The amounts set up as provisions for taxes (including
provision for deferred income taxes) on the WMM Financial Statements are
sufficient for the payment of all unpaid federal, state, county and local taxes
accrued for or applicable to all periods (or portions thereof) ending on or
before the September 30, 1996. There are no tax liens on any of WMM's assets
except those with respect to taxes not yet due and payable and except for any
taxes and assessments of which the amount, applicability or validity is
currently being contested in good faith by appropriate proceedings and with
respect to which WMM has set aside on its books adequate reserves. There are
no pending tax examinations nor has WMM received a revenue agent's report
asserting a tax deficiency. WMM does not expect any taxing authority to claim
or assess any amount of additional taxes against it. No claim has ever been
made by a taxing authority in a jurisdiction where WMM does not file tax
returns that WMM is or may be subject to taxes assessed by such jurisdiction.
3.19 IMMIGRATION ACT. WMM is in compliance with the terms and
provisions of the Immigration and Nationality Act, as amended (the "Immigration
Act") in all material respects. For each employee (as defined in 8 C.F.R.
Section 274a.1(f)(1996)) of WMM for whom compliance with the Immigration Act by
WMM is required, WMM has obtained and retained a complete and true copy of each
such employee's Form I-9 (Employment Eligibility Verification Form) as required
by 8 C.F.R. Section 274a2(b)(2)(1996). WMM has not been cited, fined, served
with a Notice of Intent to Fine or with a Cease and Desist Order, nor, to WMM's
knowledge, has any action or administrative proceeding been initiated or
threatened against WMM, by reason of any actual or alleged failure to comply
with the Immigration Act.
3.20 PROGRAM COMPLIANCE. Neither WMM nor, to its knowledge, any of
its shareholders or employees is a party to, or the beneficiary of, any
agreement, contract, understanding or business venture with any provider or
referral source which violates the Medicare/Medicaid Fraud and Abuse amendments
or any regulations thereunder adopted by the U.S. Department of Health and
Human Services or any regulations adopted by any other federal or state agency
or which results in overutilization of health care services by patients.
28
-20-
3.21 ENVIRONMENTAL MATTERS. Except as disclosed on Exhibit 3.21:
(a) There are no outstanding violations of any consent decrees
entered against WMM regarding environmental matters,
including, but not limited to, matters affecting the emission
of air pollutants, the discharge of water pollutants, the
management of hazardous or toxic substances or wastes, or
noise.
(b) There are no known claimed, threatened or alleged violations
with respect to any federal, state or local environmental law,
rule, regulation, ordinance, permit, license or authorization,
and there are no present discussions by WMM with any federal,
state or local governmental agency concerning any alleged
violation of environmental laws, rules, regulations,
ordinances, permits, licenses or authorizations.
(c) All operations conducted by WMM have been and are in
compliance in all material respects with all federal, state
and local statutes, rules, regulations, ordinances, permits,
licenses and authorizations relating to environmental
compliance and control.
3.22 ERISA.
(a) Except as listed in Exhibit 3.22 of the Exhibit WMM has no
"employee benefit plans", as such term is defined under
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or any other plan or similar
arrangement, written or otherwise, which provides any type of
pension or welfare benefit to any of its directors, employees,
or former employees.
(b) With respect to all of the plans listed in Exhibit 3.22,WMM
has delivered to ProMedCo-Northern true and exact copies of
(i) all plan documents embodying the provisions of such plans,
together with all amendments thereto, (ii) all summary plan
descriptions and summaries of material modifications
pertaining thereto, (iii) copies of the most recent Internal
Revenue Service determination letters, if any, relating to
such plans, (iv) copies of the last three (3) years' Annual
Report (Form 5500 series), as filed with respect to such plans
with the Internal Revenue Service, together with all Schedules
and attachments thereto, including, without limitation, copies
of the plan audits and/or actuarial valuations, (v) copies of
all contract administration agreements between WMM and third
party administrators, (vi) copies of all participant-related
forms currently in use in connection with such plans
including, without limitation, salary reduction agreements and
beneficiary designations and (vii) participant-specific claims
history for any "welfare benefit plan" (within the
29
-21-
meaning of Section 3(1) of ERISA) that has been in existence
during any part of the last three years.
(c) No "prohibited transaction", as such term is defined under
Section 4975(c) of the Code or under Section 406 of ERISA, and
the respective regulations thereunder, has occurred or is
occurring with respect to any "employee benefit plan"
maintained by WMM or with respect to any trustee or
administrator thereof.
3.23 PENSION, ETC.
(a) No "unfunded accrued liability", as such term is defined under
Section 3(30) of ERISA, exists with respect to any "employee
pension benefit plan" listed in Exhibit 3.22 (each a "Pension
Plan" and collectively the "Pension Plans").
(b) None of the Pension Plans or any related trusts have been
partially or fully terminated (through the complete cessation
of contributions thereto or otherwise). In addition there has
not occurred any "reportable events", as such term is defined
under Section 4043 of ERISA, which could have a material
adverse effect on the condition, financial or otherwise, of
WMM.
(c) Neither any of the Pension Plans nor any related trusts have
incurred any "accumulated funding deficiency", as such term is
defined under Section 302(a)(2) of ERISA or Section 412(a) of
the Code (whether or not waived), since the effective date of
ERISA.
(d) With respect to each Pension Plan, there are not in existence
any liabilities other than those liabilities shown on the
Annual Reports (Form 5500 series) delivered to
ProMedCo-Northern in connection herewith. No material change
with respect to the matters covered by the most recent Annual
Report for each Pension Plan has occurred since the filing
date thereof. The terms and operation of each Pension Plan
have complied, and are in compliance, with the applicable
provisions of ERISA and the Code. All Pension Plans have at
all times been and are qualified under Section 401(a) of the
Code, except for those Pension Plans set forth in Exhibit 3.23
of the Exhibit Volume. None of the Pension Plans listed in
Exhibit 3.22 is unfunded.
3.24 EMPLOYEE MATTERS. Included as Exhibit 3.24A of the Exhibit
Volume is a list of all employees of WMM together with their annual rates of
compensation and a list of all people who were paid bonuses in the last 12
months plus the amount thereof. Except as set forth in Exhibit 3.24A, no
written employment agreement to which WMM is a party requires longer than
30
-22-
a four-week notice before termination or agreement to lend, or guarantee any
loan, to an employee or an agreement relating to a bonus, severance pay or
similar plan, agreement, arrangement or understanding. Exhibit 3.24B of the
Exhibit Volume is a brief description of employee benefits of WMM.
3.25 INSURANCE AND BONDS. Exhibit 3.25A contains a description of
all fire, liability and other insurance coverage maintained by WMM currently in
force, including the amounts and losses and risks covered; all such policies
are fully paid as to all premiums heretofore due. Exhibit 3.25B contains a
description of all malpractice liability insurance policies of WMM since
January 1, 1994. Except as set forth on Exhibit 3.25C, WMM has not had in the
last seven years filed a written application for any insurance coverage which
has been denied by an insurance agency or carrier. Exhibit 3.25D sets forth a
list of all claims for any insured loss in excess of $5,000 per occurrence,
filed by WMM during the three year period immediately preceding the date
hereof, including, but not limited to, workers compensation, general liability
and environmental liability. WMM is not in material default with respect to any
provision contained in any such policy and has not failed to give any notice or
present any claim under any such policy in due and timely fashion.
3.26 LABOR MATTERS. There are no collective bargaining agreements
with any labor union to which WMM is a party or by which WMM is bound, and it
is not currently negotiating with a labor union. No employees of WMM have ever
petitioned for a representation election. WMM is in compliance in all material
respects with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and is not
engaged in any unfair labor practice. There is no unfair labor practice
complaint against WMM pending before the National Labor Relations Board. There
is no labor strike, dispute, slowdown or stoppage actually pending or, to its
knowledge, threatened against or affecting WMM. No grievance which might have
a material adverse effect on WMM or the conduct of its business nor any such
arbitration proceeding arising out of or under collective bargaining agreements
is pending and no claim therefor exists. WMM has not experienced any employee
strikes during the last three years. WMM will advise ProMedCo-Northern of any
such labor dispute, petition for representative election or negotiations with
any labor union which shall arise before the Escrow Closing Date. Except as may
be required by COBRA Code or applicable state health care continuation coverage
statutes, WMM has no liability under any plan or arrangement which provides
welfare benefits, including medical and life insurance, to any current retiree
or terminated employee.
3.27 HEALTHCARE COMPLIANCE. WMM is participating in or otherwise
authorized to receive reimbursement from or is a party to Medicare, Medicaid,
and other third-party payor programs (collectively "Third Party Payor
Programs"). 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 to WMM's knowledge, no condition exists or event has occurred which
in itself or with the giving of notice or the lapse of time
31
-23-
or both would result in the suspension, revocation, impairment, forfeiture or
non-renewal of any such Third Party Payor Program. To WMM's knowledge, WMM is
in full compliance in all material respects with the requirements of all such
Third Party Payor Programs applicable thereto.
3.28 FACILITY COMPLIANCE. Each Clinic Facility is duly licensed and
is lawfully operated in accordance with the requirements of all applicable law
in all material respects and has all necessary authorizations for the use and
operation, all of which are in full force and effect. There are no outstanding
notices of deficiencies relating to WMM issued by any governmental authority or
Third Party Payor Program requiring conformity or compliance with any
applicable law or condition for participation of such governmental authority or
Third Party Payor program, and WMM has neither received notice nor has any
knowledge or reason to believe that such necessary authorizations may be
revoked or not renewed in the ordinary course.
3.29 IMPROPER PAYMENTS. Neither WMM nor, to its knowledge, any
officer or employee of WMM have made any bribes, kickbacks or other improper
payments on behalf of WMM or received any such payments from vendors, suppliers
or other persons contracting with WMM.
3.30 BOOKS OF ACCOUNT; REPORTS. The books of account of WMM in
reasonable detail, accurately and fairly reflect its transactions and the
disposition of its assets.
3.31 NO FINDERS OR BROKERS. Neither WMM nor any officer or director
of WMM has engaged any finder or broker in connection with the transactions
contemplated hereunder.
3.32 STOCKHOLDER AGREEMENTS. WMM intends to request each of its
non-dissenting stockholders to execute and deliver Stockholder Agreements as
contemplated by Section 8.8 hereof. WMM has no reason to believe that any of
the statements, representations and warranties made forth in such Stockholder
Agreements by its shareholders are not true and correct.
3.33 REVIEW OF INFORMATION. WMM has been afforded access to all
material information concerning ProMedCo and, in addition thereto, has been
afforded the opportunity to ask questions of, and receive answers from,
ProMedCo concerning the business and properties of ProMedCo and to review any
materials relating to ProMedCo.
3.34 AUTHORITY; BINDING EFFECT. WMM has full power and authority to
enter into this Agreement and, subject to the approval of stockholders as
required by Nevada law, to carry out the transactions contemplated hereby. The
Board of Directors of WMM has taken all action required by law and by WMM's
Articles of Incorporation and by-laws, or otherwise, to authorize the execution
and delivery of this Agreement and the transactions contemplated hereby.
Subject to the foregoing, the execution, delivery, and performance of this
Agreement constitutes the valid and
32
-24-
binding agreement of WMM enforceable in accordance with its terms (except as
the same may be restricted, limited or delayed by applicable bankruptcy or
other laws affecting creditors' rights generally and except as to the remedy of
specific performance which may not be available under the laws of various
jurisdictions) assuming that this Agreement has been duly authorized, delivered
and executed by ProMedCo and ProMedCo-Northern and constitutes the valid and
binding obligation, enforceable against ProMedCo and ProMedCo-Northern in
accordance with its terms (except as enforceability against ProMedCo and
ProMedCo-Northern may be restricted, limited or delayed to the same extent as
referred to in parenthetical phrase immediately above).
3.35 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No
characteristic of WMM or of the nature of its business or operations requires
any consent, approval or authorization of, or declaration, filing or
registration with any governmental or regulatory authority in connection with
the execution and delivery of this Agreement by WMM and the consummation by WMM
of the transactions contemplated hereby other than the filing of the Articles
of Merger with the Secretary of State of Nevada.
3.36 NO ADVERSE EFFECT. There is no event or condition of any kind
or character pertaining to the business, assets or prospects of WMM that may
adversely affect such business, assets or prospects other than general economic
conditions affecting the United States or Reno, Nevada or which may affect the
industry in which WMM participates as a whole.
3.37 DISCLOSURE. The representations and warranties by WMM in this
Agreement and the statements of WMM in this Agreement and the documents and
certificates furnished or to be furnished by WMM to ProMedCo and
ProMedCo-Northern pursuant hereto do not contain and will not contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements contained herein or therein in the
circumstances, under which they were made, not misleading. WMM has disclosed to
ProMedCo and ProMedCo-Northern all facts known to WMM material to the assets,
liabilities, business, operation and property of WMM. There are no facts known
to WMM not yet disclosed which would materially adversely affect the future
operations of WMM.
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF PROMEDCO AND PROMEDCO-NORTHERN
ProMedCo and ProMedCo-Northern hereby represent and warrant as
follows:
4.1 ORGANIZATION AND STANDING OF PROMEDCO AND PROMEDCO-NORTHERN.
ProMedCo and ProMedCo-Northern are each corporations duly organized, validly
existing and in good standing under the laws of the state of Texas and Nevada,
respectively; each has full corporate power and
33
-25-
authority to conduct its business as now being conducted; and each is duly
qualified to do business in each jurisdiction in which the nature of the
property owned or leased or the nature of the business conducted by it requires
such qualification.
4.2 CAPITALIZATION OF PROMEDCO. The authorized capital stock of
ProMedCo consists of 700,000 shares of no par value Series A Convertible
Preferred Stock, 20,000,000 shares of no par value Common Stock and 2,600,000
shares of no par value Class B Common Stock, of which as of the date hereof,
500,000 shares of Series A Convertible Preferred Stock, 4,789,250 shares of
Common Stock and 1,226,150 shares of Series B Common Stock are validly issued
and outstanding, fully paid and non-assessable. In the event ProMedCo merges
with Professional Medical Management Company prior to the Effective Date, the
outstanding capital structure of Professional Medical Management Company will
be substantially identical to that of ProMedCo set forth in this Section 4.2
except for the conversion of the Series A Convertible Preferred Stock and Class
B Common Stock into Common Stock and the issuance of Common Stock to the public
at the ProMedCo IPO Price; the authorized number of shares of Common Stock may
be greater and there may be authorization for a "blank check" preferred stock.
4.3 PROMEDCO STOCK. The ProMedCo Stock to be issued in connection
with the transactions contemplated hereby will be, upon issuance thereof, duly
authorized, validly issued, fully paid and non-assessable.
4.4 AUTHORITY; BINDING EFFECT. Each of ProMedCo and
ProMedCo-Northern has corporate power to execute and deliver this Agreement and
consummate the transactions contemplated hereby and has taken (or by the Escrow
Closing Date will have taken) all action required by law, its Articles of
Incorporation, by-laws or otherwise to authorize such execution and delivery
and the consummation of the transactions contemplated hereby. The execution,
delivery, and performance of this Agreement constitutes the valid and binding
agreement of each of ProMedCo and ProMedCo-Northern enforceable in accordance
with its terms (except as the same may be restricted, limited or delayed by
applicable bankruptcy or other laws affecting creditors' rights generally and
except as to the remedy of specific performance which may not be available
under the laws of various jurisdictions) assuming that this Agreement has been
duly authorized, delivered and executed by WMM and constitutes the valid and
binding obligation, enforceable against WMM in accordance with its terms
(except as enforceability against WMM may be restricted, limited or delayed to
the same extent as referred to in parenthetical phrase immediately above).
4.5 NO FINDERS OR BROKERS. Neither ProMedCo, ProMedCo-Northern nor
any officer or director of either has engaged any finder or broker in
connection with the transactions contemplated hereunder.
34
-26-
4.6 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. No
characteristic of ProMedCo or ProMedCo-Northern or of the nature of their
business or operations requires any consent, approval or authorization of, or
declaration, filing or registration with any governmental or regulatory
authority in connection with the execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby other than the filing
of the Articles of Merger with the Secretary of State of Nevada.
4.7 PENDING LITIGATION. There are no proceedings pending or
threatened, against or affecting ProMedCo in any court or before any
governmental authority or arbitration board or tribunal which involve the
possibility of materially and adversely affecting the properties, business,
prospects, profits or condition (financial or otherwise) of ProMedCo considered
as a whole.
4.8 COMPLIANCE WITH OTHER INSTRUMENTS. ProMedCo is not in violation
or default in any material respect of any provision of its Articles of
Incorporation or by-laws, or of any instrument, judgment, order, writ, decree
or contract to which it is a party or by which it is bound that could
reasonably be expected to have a material adverse effect on ProMedCo's
business, or, to the best of its knowledge, of any provision of any federal or
state statute, rule or regulation applicable to ProMedCo that could reasonably
be expected to have a material adverse effect on ProMedCo's business. The
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not (i) result in any such material
violation or default, (ii) result in any material violation or material breach
of, or permit any third party to rescind any term or provision of, or
constitute a material default under, any material loan, note, indenture,
mortgage, deed of trust, security agreement, lease, contract. license or other
agreement to which ProMedCo is a party or by which ProMedCo or its assets is
bound, or (iii) to the best of ProMedCo's knowledge, violates any laws,
statutes, rule or regulation or order, writ, judgment, injunction or decree of
any court, administrative agency or government body such that such violation
could reasonably be expected to have a material adverse effect on ProMedCo's
business.
4.9 DISCLOSURE. ProMedCo has provided WMM with true and complete
copies of its audited financial statements for the period July 1, 1994 to
December 31, 1994, its fiscal year ended December 31, 1995 and its unaudited
quarterly reports for the fiscal quarters ended March 31, 1996, June 30, 1996
and September 30, 1996. The Financial Statements and all other information
delivered to WMM in connection herewith do not contain and will not contain any
untrue statement of a material fact or omit to state a material fact or
necessary in order to make the statements made herein or therein, in the
circumstances in which they were made, not misleading. The Financial
Statements comply as to form in all material respects with applicable
accounting requirements and with the published rules and regulations of the
Securities and Exchange Commission with respect thereto, have been prepared in
accordance with generally accepted accounting principles and fairly present the
financial position of ProMedCo and its consolidated subsidiaries at the dates
thereof and
35
-27-
the consolidated results of their operations and cash flows for the periods
then ended (subject, in the case of unaudited statements, to normal, recurring
audit adjustments). Since September 30, 1996, there has been no material in
ProMedCo's accounting policies.
4.10 ABSENCE OF CERTAIN CHANGES. Since September 30, 1996, ProMedCo
has conducted its business in the ordinary course and, except for the
execution, delivery and performance of this Agreement or as required hereby,
there has not occurred: (a) any material adverse change in the business,
financial condition, results of operations, prospects or assets of ProMedCo;
(b) other than the transactions contemplated hereby, any entry into any
material commitment or transaction by ProMedCo;(c) any damage destruction or
loss, whether or not covered by insurance, materially and adversely effecting
the business, financial condition, results of operation, prospects or assets of
ProMedCo; or (d) any acquisition or disposition of a material amount of
property or assets of ProMedCo outside of the ordinary course of business.
ARTICLE 5 COVENANTS OF PROMEDCO AND PROMEDCO-NORTHERN
ProMedCo and ProMedCo-Northern hereby covenant and agree as follows:
5.1 BEST EFFORTS TO SECURE CONSENTS. ProMedCo and ProMedCo-Northern
shall use their best efforts to secure before the Closing all necessary
consents and approvals needed to satisfy all the conditions precedent to the
obligations of the parties hereunder.
5.2 CORPORATE ACTION. ProMedCo and ProMedCo-Northern will take all
necessary corporate and other action and use its best efforts to obtain all
consents, approvals and amendments of agreements required of them to carry out
the transactions contemplated by this Agreement and to satisfy the conditions
specified herein.
5.3 HANDLING OF DOCUMENTS. With respect to information provided by
WMM pursuant to this Agreement prior to the Closing, ProMedCo and
ProMedCo-Northern shall keep all such information confidential which is not in
the public domain, except to the extent that such information (i) becomes
generally available to the public other than as a result of a disclosure
directly or indirectly by ProMedCo or ProMedCo-Northern, (ii) was known by
ProMedCo or ProMedCo-Northern on a non-confidential basis prior to disclosure
to ProMedCo or ProMedCo-Northern by WMM pursuant to this Agreement or (iii)
becomes available to ProMedCo or ProMedCo-Northern on a non-confidential basis
from a source (other than WMMor TMG ) which is entitled to disclose the same,
and to exercise the same care in handling such information as it would exercise
with similar information of its own.
36
-28-
5.4 NON-DISCLOSURE. ProMedCo and ProMedCo-Northern will keep
confidential and not disclose to any third party any information relating to
the business of WMM, whether acquired by ProMedCo or ProMedCo-Northern before
or after the Escrow Closing Date, which WMM has not made generally available to
the public.
ARTICLE 6 COVENANTS OF WMM
WMM hereby covenants and agrees as follows:
6.1 ACCESS AND INFORMATION. Between the date of this Agreement and
the Escrow Closing Date; WMM will: (i) provide to ProMedCo-Northern and its
officers, attorneys, accountants and other representatives, during normal
business hours, or otherwise if ProMedCo-Northern deems reasonably necessary,
free and full access to all of the properties, assets, agreements, commitments,
books, records, accounts, tax returns, and documents of WMM and permit them to
make copies thereof; (ii) furnish ProMedCo-Northern and its representatives
with all information concerning the business, properties and affairs of WMM as
ProMedCo-Northern reasonably requests and certified by the officers, if
requested; (iii) cause the independent public accountants of WMM to make
available to ProMedCo-Northern and its representatives all financial
information relating to WMM requested, including all working papers pertaining
to audits and reviews made heretofore by such auditors; (iv) furnish
ProMedCo-Northern true and complete copies of all financial and operating
statements of WMM; (v) permit access to customers and suppliers for
consultation or verification of any information obtained by ProMedCo-Northern
and use their best efforts to cause such customers and suppliers to cooperate
with ProMedCo-Northern in such consultation and in verifying such information;
and (vi) cause their employees, accountants and attorneys to make disclosure of
all material facts known to them affecting the financial condition and business
operations of WMM and to cooperate fully with any audit, review, investigation
or examination made by ProMedCo-Northern and its representatives, including,
without limitation, with respect to:
(a) The books and records of WMM;
(b) The reports of state and federal regulatory examinations;
(c) Leases, contracts and commitments between the WMM and any
other person;
(d) Physical examination of the Clinic Facility; and
(e) Physical examination of the equipment and furnishings within
the Clinic Facility.
37
-29-
6.2 CONDUCT OF BUSINESS. Between the date hereof and the Escrow
Closing Date, except as otherwise expressly approved in writing by
ProMedCo-Northern, WMM shall conduct its business only in the ordinary course
thereof consistent with past practice and in such a manner that the
representations and warranties contained in Article 3 of this Agreement shall
be true and correct at and as of the Escrow Closing Date (except for changes
contemplated, permitted or required by this Agreement) in all material respects
and so that the conditions to be satisfied by WMM at the Closing shall have
been satisfied. WMM will, consistent with conducting its business in
accordance with reasonable business judgment, preserve the business of the WMM
intact; use its reasonable best efforts to keep available to ProMedCo-Northern
the services of the present employees of the WMM (except those dismissed for
cause, those who voluntarily discontinue their employment and those whose
termination is consented to by ProMedCo-Northern) and preserve for
ProMedCo-Northern the goodwill of the suppliers, patients and others having
business relations with the WMM.
6.3 COMPLIANCE WITH AGREEMENT. WMM shall not undertake any course of
action inconsistent with satisfaction of the conditions applicable to it set
forth in this Agreement, and shall do all such acts and take all such measures
as may be reasonably necessary to comply with the representations, agreements,
conditions and other provisions of this Agreement. WMM shall give
ProMedCo-Northern prompt written notice of any change in any information
contained in the representations and warranties made in Article 3 hereof and on
the Exhibits referred to therein (provided, however, that such notice shall not
limit ProMedCo-Northern's rights under Section 8.1 hereof) and of any
condition or event which constitutes a default of any covenant or agreement
made in Article 6 or in any other section hereof.
6.4 BEST EFFORTS TO SECURE CONSENTS. WMM shall take the necessary
corporate and other action and shall use its reasonable best efforts to secure
before the Escrow Closing Date all necessary consents and approvals required to
carry out the transactions contemplated by the Agreement and to satisfy all
other conditions precedent to the obligations of ProMedCo, ProMedCo-Northern
and WMM.
6.5 UNUSUAL EVENTS. Until the Escrow Closing Date, WMM shall
supplement or amend all relevant Exhibits in the Exhibit Volume with respect to
any matter thereafter arising or discovered which, if existing or known at the
date of this Agreement, would have been required to be set forth or described
in such Exhibits; provided, however, that for the purposes of the rights and
obligations of the parties hereunder, any such supplemental disclosure shall
not be deemed to have been disclosed as of the date WMM delivers to
ProMedCo-Northern such supplemental disclosures or to prevent or cure any
misrepresentation, breach of warranty or breach of covenant, unless agreed to
in writing by ProMedCo-Northern; provided further, that if, subsequent to such
disclosures, the merger between ProMedCo-Northern and WMM contemplated hereby
is consummated, then such disclosures shall be effective for purposes of the
indemnification provisions contained in Article 10 of this Agreement.
38
-30-
6.6 INTERIM FINANCIAL STATEMENTS. Within 30 days after the end of
each calendar month subsequent to the date of this Agreement and prior to the
Escrow Closing Date, WMM shall deliver to ProMedCo-Northern an unaudited
balance sheet of WMM as of the end of such calendar month together with the
related statement of operations. All such financial statements shall fairly
present the financial position, results of operations and changes in financial
periods indicated, in accordance with generally accepted accounting principles
consistently applied except that note information may be omitted in such
statements, and that such statements shall be subject to normal year-end audit
adjustments, but only if such adjustments are of a normal, recurring type and
are not material in the aggregate..
6.7 DEPARTMENTAL VIOLATIONS. All notes or notices of violations of
law or municipal ordinances, orders or requirements noted in or issued by the
departments of buildings, fire, labor, health, or any other state or municipal
department having jurisdiction against or affecting the business, property or
assets of WMM shall be complied with prior to the Escrow Closing Date unless
contested in good faith by appropriate proceedings. All such notes or notices,
after the date hereof and prior to the Escrow Closing Date, shall be complied
with by WMM prior to the Escrow Closing Date unless contested in good faith by
appropriate proceedings. Upon written request, WMM shall furnish
ProMedCo-Northern with an authorization to make the necessary searches for such
notes or notices.
6.8 INSURANCE RATINGS. WMM shall take all action reasonably requested
by ProMedCo-Northern to enable it to succeed to the Workers' Compensation and
Unemployment Insurance ratings, insurance policies, deposits and other
interests of WMM and other ratings for insurance or other purposes established
by WMM. ProMedCo-Northern shall not be obligated to succeed to any such
rating, insurance policy, deposit or other interest, except as it may elect to
do so.
6.9 MAINTAIN INSURANCE COVERAGE. From the date hereof until the
Escrow Closing Date, WMM shall maintain and cause to be maintained in full
force and effect the existing insurance on its assets and the operations of WMM
and shall provide, upon request by ProMedCo-Northern, evidence satisfactory to
ProMedCo-Northern that such insurance continues to be in effect and that all
premiums due have been paid.
6.10 EXCLUSIVE DEALINGS. During the period from the date of this
Agreement to the Escrow Closing Date, or until the earlier termination of this
Agreement pursuant to Article 9, WMM 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
39
-31-
entity or group, other than ProMedCo and ProMedCo-Northern, concerning the
purchase of WMM or its assets, or any merger, joint venture or similar
transaction involving WMM and will not enter into any such transaction.
ARTICLE 7 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF WMM
All obligations of WMM which are to be discharged under this Agreement
at the Escrow Closing are subject to the performance, at or prior to the
Closing, of all covenants and agreements contained herein which are to be
performed by ProMedCo and ProMedCo-Northern at or prior to the Escrow Closing
and to the fulfillment at, or prior to, the Escrow Closing, of each of the
following conditions (unless expressly waived in writing by WMM at any time at
or prior to the Escrow Closing):
7.1 REPRESENTATIONS AND WARRANTIES TRUE. All of the representations
and warranties made by ProMedCo and ProMedCo-Northern contained in Article 4 of
this Agreement shall be true as of the date of this Agreement, shall be deemed
to have been made again at and as of the date of Escrow Closing, and shall be
true at and as of the date of Closing in all material respects; ProMedCo and
ProMedCo-Northern shall have performed and complied in all material respects
with all covenants and conditions required by this Agreement to be performed or
complied with by them prior to or at the Escrow Closing; and WMM shall have
been furnished with a certificate of the President or any Vice President of
ProMedCo and of ProMedCo-Northern, dated the Escrow Closing Date, in such
officer's capacity, certifying to the truth of such representations and
warranties as of the Closing and to the fulfillment of such covenants and
conditions.
7.2 OPINION OF COUNSEL. WMM shall have been furnished with an opinion
dated the Escrow Closing Date of Boult, Cummings, Xxxxxxx & Xxxxx, PLC, counsel
to ProMedCo and ProMedCo-Northern, in form and substance satisfactory to WMM,
to the effect set forth as Appendix 7.2 attached hereto.
7.3 AUTHORITY. All action required to be taken by or on the part of
ProMedCo and ProMedCo-Northern to authorize the execution, delivery and
performance of this Agreement by ProMedCo and ProMedCo-Northern and the
consummation of the transactions contemplated hereby shall have been duly and
validly taken by the Boards of Directors of ProMedCo and ProMedCo-Northern and
by the shareholder of ProMedCo-Northern.
7.4 NO OBSTRUCTIVE PROCEEDING. No action or proceedings shall have
been instituted against, and no order, decree or judgment of any court, agency,
commission or governmental authority shall be subsisting against WMM, or the
officers or directors of WMM, which seeks to, or would, render it unlawful as
of the Escrow Closing Date to effect the transactions contemplated
40
-32-
hereby in accordance with the terms hereof, and no such action shall seek
damages in a material amount by reason of the transactions contemplated hereby.
Also, no substantive legal objection to the transactions contemplated by this
Agreement shall have been received from or threatened by any governmental
department or agency.
7.5 DELIVERY OF CERTAIN CERTIFIED DOCUMENTS. At the Escrow Closing,
ProMedCo-Northern shall deliver to WMM accurate copies of the Articles of
Incorporation of each of ProMedCo-Northern and ProMedCo certified (not more
than 30 days prior to the Escrow Closing Date) by the appropriate governmental
authorities, copies of resolutions of the Board of Directors and of the
shareholder of ProMedCo-Northern, certified by the secretary or assistant
secretary of ProMedCo- Northern approving and authorizing the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby, including execution and delivery of the various agreements
and instruments contemplated hereby and copies of resolutions of the Board of
Directors of ProMedCo, certified by the secretary or assistant secretary of
ProMedCo approving the issuance of the ProMedCo Stock and guaranty of this
Agreement and various instruments contemplated hereby.
7.6 NO AGENCY PROCEEDINGS. There shall not be pending or, to the
knowledge of ProMedCo or ProMedCo-Northern, threatened, any claim, suit, action
or other proceeding brought by a governmental agency before any court or
governmental agency, seeking to prohibit or restrain the transactions
contemplated by this Agreement or material damages in connection therewith.
7.7 CLOSING TRANSACTIONS. All the transactions described in Section
2.9 shall have been consummated simultaneously with the Escrow Closing.
7.8 PROCEEDINGS AND DOCUMENTS SATISFACTORY. All proceedings in
connection with the transactions contemplated hereby and all certificates and
documents delivered to WMM pursuant to this Agreement shall be satisfactory in
form and substance to WMM and its counsel acting reasonably and in good faith.
ARTICLE 8 CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PROMEDCO AND
PROMEDCO-NORTHERN
All obligations of ProMedCo and ProMedCo-Northern which are to be
discharged under this Agreement at the Closing are subject to the performance,
at or prior to the Closing, of all covenants and agreements contained herein
which are to be performed by WMM at or prior to the Closing and to the
fulfillment at or prior to the Closing of each of the following conditions
(unless expressly waived in writing by ProMedCo and ProMedCo-Northern at any
time at or prior to the Closing):
41
-33-
8.1 REPRESENTATIONS AND WARRANTIES TRUE. All of the representations
and warranties of WMM contained in Article 3 of this Agreement and all of the
representations and warranties of TMG in the Inducement Agreement shall be true
as of the date of this Agreement, shall be deemed to have been made again at
and as of the Escrow Closing, and shall be true at and as of the date of Escrow
Closing in all material respects (without taking into account any disclosures
made by WMM to ProMedCo and ProMedCo-Northern pursuant to Section 6.5 hereof);
WMM shall have performed or complied in all material respects with all
covenants and conditions required by this Agreement to be performed or complied
with by it prior to or at the Escrow Closing; and ProMedCo and
ProMedCo-Northern shall be furnished with a certificate of the President or any
Vice President of WMM, dated the Escrow Closing Date, in such person's
corporate capacity, certifying to the truth of such representations and
warranties as of the time of the Escrow Closing and to the fulfillment of such
covenants and conditions.
8.2 NO OBSTRUCTIVE PROCEEDING. No action or proceedings shall have
been instituted against, and no order, decree or judgment of any court, agency,
commission or governmental authority shall be subsisting against ProMedCo or
ProMedCo-Northern or the officers or directors of ProMedCo or ProMedCo-Northern
which seeks to, or would, render it unlawful as of the Closing to effect the
transactions contemplated hereby in accordance with the terms hereof, and no
such action shall seek damages in a material amount by reason of the
transaction contemplated hereby. Also, no substantive legal objection to the
transactions contemplated by this Agreement shall have been received from or
threatened by any governmental department or agency.
8.3 OPINION OF WMM COUNSEL. WMM shall have delivered to ProMedCo and
ProMedCo-Northern at the Closing an opinion of Stoel Rives LLP, counsel to WMM,
dated the Escrow Closing Date, in form and substance satisfactory to ProMedCo
and ProMedCo-Northern, to the effect set forth as Appendix 8.3 attached hereto.
8.4 DISSENTERS. Holders of not more than 10% of the outstanding
capital stock of WMM shall have elected to assert their dissenter's rights
under Section 92A.300 of the Nevada Revised Statues.
8.5 SERVICE AGREEMENT. TMG shall have entered into the Service
Agreement with ProMedCo-Northern.
8.6 EMPLOYMENT AGREEMENTS. Holders of at least 90% of the
outstanding capital stock of WMM and all Providers, as such term is defined
in the Service Agreement, shall have entered into employment agreements as
contemplated by Section 2.9 hereof except for Providers representing an
aggregate annualized gross income of less than $375,000 as set forth in
Appendix 2.9B-2.
42
-34-
8.7 POOLING LETTERS. At or prior to the Closing, ProMedCo shall have
received letters from Xxxxxx Xxxxxxxx & Co. LLP in form and substance
satisfactory to ProMedCo to the effect that the transactions contemplated by
this Agreement and the Appendices hereto will constitute a "Pooling of
Interests" under GAAP.
8.8 STOCKHOLDER AGREEMENTS. All of the non-dissenting Shareholders
of WMM shall have executed and delivered a stockholder agreement in the form
attached hereto as Appendix 8.8 (the "Stockholder Agreements").
8.9 INDUCEMENT AGREEMENT. At or prior to the Closing, TMG shall
enter into an Inducement Agreement in the form attached hereto as Appendix 8.9.
8.10 CONSENTS AND APPROVALS. Each of the parties to any agreement or
instrument under which the transactions contemplated hereby would constitute or
result in a default or acceleration of material obligations shall have given
such consent as may be necessary to permit the consummation of the transactions
contemplated hereby without constituting or resulting in a material default or
acceleration under such agreement or instrument, and any consents required from
any public or regulatory agency or organization having jurisdiction shall have
been given. Also, ProMedCo-Northern shall have received releases, waivers of
default and consents to assignment in form satisfactory to it from all parties
to material contracts and agreements to be assumed by ProMedCo-Northern
hereunder if so required thereby. In addition, ProMedCo-Northern and ProMedCo
shall have received approval of the transactions contemplated hereby from
ProMedCo's lenders.
8.11 PROCEEDINGS AND DOCUMENTS SATISFACTORY. All proceedings in
connection with the transactions contemplated hereby and all certificates and
documents delivered to ProMedCo-Northern pursuant to this Agreement shall be
satisfactory in form and substance to ProMedCo and ProMedCo-Northern and its
counsel acting reasonably and in good faith.
8.12 NO ADVERSE CHANGE. From the date of this Agreement until the
Closing, the operations of WMM shall have been conducted in the ordinary course
of business consistent with past practice and from the date of the WMM
Financial Statements until the Closing no event shall have occurred or have
been threatened which has or would have a material and adverse affect upon the
financial condition, assets, liabilities, operations, prospects or business of
WMM; and WMM shall have not sustained any loss or damage to their assets,
whether or not insured, that affects materially and adversely its ability to
conduct its business.
8.13 DELIVERY OF CERTAIN DOCUMENTS. At the Closing, WMM shall have
delivered to ProMedCo-Northern copies of the Articles of Incorporation of WMM
certified (not more than 30
43
-35-
days prior to the Escrow Closing Date) by the appropriate governmental
authorities and copies of resolutions of the stockholders of WMM and of the
Board of Directors of WMM, certified by the secretary of WMM, approving and
authorizing the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby.
8.14 CLOSING TRANSACTIONS. All the transactions described in Section
2.9 shall have been consummated simultaneously with the Closing.
ARTICLE 9 TERMINATION
9.1 OPTIONAL TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby abandoned at any time prior to the Escrow
Closing Date, notwithstanding stockholder approval as follows:
(a) By the mutual consent of ProMedCo, ProMedCo-Northern and WMM;
or
(b) By WMM, if any of the conditions set forth in Article 7 shall
not have met by November 15, 1996; provided that WMM shall not
be entitled to terminate this Agreement pursuant to this
Section 9.1(b) if WMM's willful breach of this Agreement has
prevented the consummation of the transactions contemplated
hereby; or
(c) By ProMedCo-Northern, if any of the conditions provided in
Article 8 hereof have not been met by November 15, 1996;
provided that ProMedCo-Northern shall not be entitled to
terminate this Agreement pursuant to this Section 9.1(c) if
ProMedCo's or ProMedCo-Northern's willful breach of this
Agreement has prevented the consummation of the transactions
contemplated hereby.
9.2 NOTICE OF ABANDONMENT. In the event of such termination by
either ProMedCo and ProMedCo-Northern or WMM pursuant to Section 9.1 above,
written notice shall forthwith be given to the other party hereto.
9.3 TERMINATION. In the event this Agreement is terminated as
provided above, ProMedCo and ProMedCo-Northern shall deliver to WMM all
documents (and copies thereof in their possession) concerning WMM, TMG and
their respective Affiliates previously delivered by WMM and TMG to ProMedCo and
ProMedCo-Northern; and none of the parties nor any of their respective
partners, shareholders, directors, or officers shall have any liability to the
other party for costs, expenses, loss of anticipated profits, consequential
damages, or otherwise, except for any deliberate breach of any of the
provisions of this Agreement.
44
-36-
ARTICLE 10 INDEMNIFICATION
10.1 INDEMNIFICATION BY SHAREHOLDERS. The Shareholders by their
execution of this Agreement, agree severally to indemnify, defend and hold
ProMedCo and ProMedCo-Northern and their Affiliates, and subsidiaries, and its
and their respective employees, representatives, officers and agents, harmless
from and against any claims, losses, liability, obligations, lawsuits,
deficiencies, damages or expense of whatever nature, whether known or unknown,
accrued, absolute, contingent or otherwise including (without limitation)
interest, penalties, attorneys' fees, costs of investigation and all amounts
paid in defense or settlement of the foregoing, suffered or incurred by
ProMedCo or ProMedCo-Northern as a result of a breach of any obligation,
representation, warranty, covenant or agreement made by WMM in this Agreement
or any agreement referred to herein or because any representation or warranty
by WMM contained herein, in any document furnished or required to be furnished
pursuant to this Agreement by WMM to ProMedCo or ProMedCo-Northern or any of
their representatives, or any documents furnished to ProMedCo and
ProMedCo-Northern in connection with the Escrow Closing hereunder, shall be
false.
10.2 INDEMNIFICATION BY PROMEDCO AND PROMEDCO-NORTHERN. ProMedCo and
ProMedCo-Northern agree to indemnify, defend and hold the Shareholders and
their Affiliates, and its and their respective employees, representatives,
officers and agents, harmless from and against any claims, losses, liability,
obligations, lawsuits, deficiencies, damages or expense of whatever nature,
whether known or unknown, accrued, absolute, contingent or otherwise including
(without limitation) interest, penalties, attorneys' fees, costs of
investigation and all amounts paid in defense or settlement of the foregoing,
suffered or incurred by the Shareholders as a result of a breach of any
obligation, representation, warranty, covenant or agreement made by ProMedCo or
ProMedCo-Northern in this Agreement or any agreement referred to herein or
because any representation or warranty by ProMedCo or ProMedCo-Northern
contained herein, in any document furnished or required to be furnished
pursuant to this Agreement by ProMedCo or ProMedCo-Northern to WMM or the
Shareholders or any of their representatives, or any documents furnished to WMM
or the Shareholders in connection with the Escrow Closing hereunder, shall be
false.
10.3 REPRESENTATION, COOPERATION AND SETTLEMENT. With respect to
claims made by third parties, if a party or person named in Sections 10.1 or
10.2 as being entitled to indemnification hereunder (an "Indemnitee") is
threatened with any claim, or any claim is presented to or any action or
proceeding commenced against such party or person, which my give rise to the
right of indemnification hereunder, the Indemnitee will give written notice
thereof promptly (and in no event later than the last survival date of the
representation and warranty for the breach of which indemnification is sought)
to the party or parties bearing the indemnification obligation (the
"Indemnifying Party"). The Indemnifying Party shall have the right to
participate in the defense of such caim, action or proceeding, and, to the
extent the Indemnifying Party so desires, jointly with any other Indemnifying
45
-37-
Party similarly notified, to assume the defense. thereof with counsel mutually
satisfactory to such parties and the Indemnitee. If the Indemnifying Party and
the Indemnitee agree upon mutually satisfactory counsel to assume the defense,
the Indemnifying Party shall assume the expense of such counsel's fees and
shall no longer assume the expense of the Indemnitee's attorneys' fees. In the
event the Indemnifying Party undertakes to compromise or defend any such
liability, the Indemnifying Party shall so notify the Indemnitee in writing
promptly of its intention to do so, and the Indemnitee shall cooperate with the
Indemnifying Party and its counsel in the compromising of or the defending
against any such liabilities or claims, at the expense of the Indemnifying
Party. Such cooperation shall include, but shall not be limited to, the
provision to the Indemnifying Party of reasonable access to the Indemnitee's
business records, research, documents and employees as they relate to the
defense of any indemnified claim. In response to a bona fide settlement offer,
the Indemnifying Party may settle the monetary portion of an indemnifiable
matter which it has duly elected to contest without the consent of the
Indemnitee unless such settlement has an adverse effect upon the Indemnitee, in
which case such matters shall be settled only with the consent of the
Indemnitee; provided, however, that the Indemnifying Party shall not have the
right to agree to a settlement involving injunctive or other equitable relief
without obtaining the prior written consent of the Indemnitee. In the event the
Indemnitee declines to consent to the monetary settlement described in the
preceding sentence (other than a settlement that has an adverse effect on the
Indemnitee), then the Indemnitee shall have no right to indemnification beyond,
and the Indemnifying Party shall have no obligation to pay damages and
attorneys' fees hereunder in excess of, the amount of the proposed settlement.
10.4 REMEDIES CUMULATIVE. The remedies provided herein shall be
cumulative and shall not preclude either WMM or the Shareholders, on the one
hand, or ProMedCo and ProMedCo-Northern, on the other, from asserting any other
rights or seeking any other remedies against the other parties to which they
are entitled by law, including without limitation the right of set-off with
respect to obligations of ProMedCo-Northern under this or any other agreement
to which the Shareholders as a group or individually may be parties.
10.5 RESTRICTIONS AND LIMITATIONS.
(a) LIMITS.
(i) Each Shareholder's liability for indemnification
hereunder shall be limited to the portion of the
Consideration received by or otherwise due to such
Shareholder;
46
-38-
(ii) The liability for any breach of an Employment
Agreement, including the non-competition provisions,
shall be only that of the breaching party and shall
not be satisfied pursuant to the terms of this
Article 10.
(b) TIME PERIODS. No claims for indemnification hereunder shall
be made at any time later than December 31, 1998; provided
however, that the representations and warranties contained in
Sections 3.7, 3.18 and 3.22 shall survive for the period of
the applicable statute of limitations.
10.6 SHAREHOLDER REPRESENTATIVE.
(a) APPOINTMENT. By their execution of this Agreement, the
Shareholders of WMM irrevocably constitute and appoint Xx.
Xxxxxxxxx Xxxxxx and Xxxx X. Xxxxxxxxxxx and each of them, as
the agents and attorneys-in-fact of the Shareholders (the
"Shareholder's Representative") to act for and on behalf of
each of the Shareholders with respect to all matters arising
in connection with the Escrow Agreement described in Section
2.9(f) hereof (the "Escrow Agreement"), including but not
limited to, the power and authority, in the Shareholder's
Representative's sole discretion, to:
(i) take any action contemplated to be taken by,
and receive any notices contemplated to be
given to, the Shareholder's Representative
under the Escrow Agreement;
(ii) negotiate, determine, defend and settle any
dispute which my arise under the Escrow
Agreement between the Shareholder's
Representative and the other parties thereto
and to accept service of process in
connection therewith; and
(iii) make, execute, acknowledge and deliver any
release, assurance, receipt, request,
instruction, notice, agreement, certificate
or other instrument, and to generally do any
and all things and to take any and all
actions which my be requisite, proper or
advisable in connection with the Escrow
Agreement.
(b) INDEMNIFICATION OF SHAREHOLDER'S REPRESENTATIVE. Each
Shareholder shall indemnify and hold the Shareholder's
Representative harmless with respect to anything done by the
Shareholder's Representative in good faith in connection with
their responsibilities hereunder and to reimburse the
Shareholder's Representative, in proportion to their
respective interests in the Balance of the ProMedCo Shares for
47
-39-
any costs or expenses, including attorneys' fees, incurred by
the Shareholder's Representative in the satisfaction of their
responsibilities hereunder.
(c) SELECTION OF SUCCESSOR. If any Shareholder Representative or
any successor Shareholder Representative shall die, become
disabled, or otherwise be unable to continue to act as a
Shareholder Representative hereunder, the Shareholders who
formerly held a majority of the shares of Common Stock of WMM,
within fifteen (15) days of such occurrence, shall appoint a
successor Shareholder Representative and shall promptly notify
the other parties hereto in writing of the identify of such
successor.
ARTICLE 11 MISCELLANEOUS
11.1 EXPENSES. All expenses of the preparation of this Agreement and
of the transactions contemplated hereby, including, without limitation, counsel
fees, accounting fees, investment adviser's fees and disbursements, shall be
borne by the respective parties incurring such expense, whether or not such
transactions are consummated.
11.2 NOTICES. All notices, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered in person or mailed by certified mail or registered mail (postage
prepaid) or sent by reputable overnight courier service (charges prepaid):
To WMM: Western Medical Management Corporation, Inc.
00 Xxxxxxx Xxx
Xxxxx 000
Xxxx, XX 00000
Attention: CEO
with a copy to: Xxxxxxx X. Xxxxxxx
Stoel Rives, LLP
000 Xxxxxxxxxx Xx.
Xxxxx 0000
Xxxxxxx, XX 00000-0000
48
-40-
To ProMedCo and
ProMedCo-Northern: ProMedCo, Inc.
000 Xxxxxx Xxxxxx
Xxxxx 0000
Xxxx Xxxxx, XX 00000
Attention: Chief Executive Officer
with a copy to Xxxx X. Xxxxxxx
Boult, Cummings, Xxxxxxx & Xxxxx, PLC
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
or to such other address as either WMM or ProMedCo may designate by notice to
the other.
11.3 ENTIRE AGREEMENT. This Agreement and the Appendices, Exhibits,
schedules and documents delivered pursuant hereto constitute the entire
contract between the parties hereto pertaining to the subject matter hereof and
supersede all prior and contemporaneous agreements, understandings,
negotiations and discussions, whether written or oral, of the parties, and
there are no representations, warranties or other agreements between the
parties in connection with the subject matter hereof, except as specifically
set forth herein. No supplement, modification or waiver of this Agreement
shall be binding unless executed in writing by the parties to be bound thereby.
11.4 ALTERNATIVE DISPUTE RESOLUTION. Any dispute, disagreement,
claim or controversy arising out of or related to this Agreement (a "Disputed
Matter") may, at the option of either party hereto upon written notice to the
other party, be submitted to non-binding mediation before a mutually acceptable
neutral advisor. To the extent the neutral advisor is compensated, the parties
shall each bear half the cost. Any Disputed Matter that is not resolved
through mediation will be settled by binding arbitration in accordance with the
rules of commercial arbitration of the American Arbitration Association, and
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. Such arbitration shall occur within Washoe
County, Nevada, unless the parties mutually agree to have such proceedings in
some other locale. The arbitrator(s) may in any such proceeding award
attorneys' fees and costs to the prevailing party.
11.5 GOVERNING LAW. THE VALIDITY AND CONSTRUCTION OF THIS AGREEMENT
SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEVADA.
11.6 LEGAL FEES AND COSTS. In the event either party elects to incur
legal expenses to enforce or interpret any provision of this Agreement, the
prevailing party will be entitled to recover such
49
-41-
legal expenses, including, without limitation, reasonable attorneys' fees,
costs and necessary disbursements, in addition to any other relief to which
such party shall be entitled.
11.7 TIME. Time is of the essence for purposes of each and every
provision of this Agreement.
11.8 SECTION HEADINGS. The Section headings are for reference only
and shall not limit or control the meaning of any provision of this Agreement.
11.9 WAIVER. No delay or omission on the part of any party hereto in
exercising any right hereunder shall operate as a waiver of such right or any
other right under this Agreement.
11.10 NATURE AND SURVIVAL OF REPRESENTATIONS. All statements
contained in any certificate delivered by or on behalf of any of the parties to
this Agreement pursuant hereto in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties made by the
respective parties hereunder. The covenants, representations and warranties
made by the parties each to the other in this Agreement or pursuant hereto
shall survive the transactions contemplated hereby and any investigation made
by ProMedCo or ProMedCo-Northern.
11.11 EXHIBITS. All Exhibits, Appendices, schedules and documents
referred to in or attached to this Agreement are integral parts of this
Agreement as if fully set forth herein and all statements appearing therein
shall be deemed to be representations. All items disclosed hereunder shall be
deemed disclosed only in connection with the specific representation to which
they are explicitly referenced.
11.12 ASSIGNMENT. No party hereto shall assign this Agreement
without first obtaining the written consent of the other party, except ProMedCo
and ProMedCo-Northern shall have the right to assign this Agreement to an
Affiliate or any institutional lender providing financing to ProMedCo and its
subsidiaries.
11.13 BINDING ON SUCCESSORS AND ASSIGNS. Subject to Section 11.12,
this Agreement shall inure to the benefit of and bind the respective heirs,
administrators, successors and assigns of the parties hereto. Nothing
expressed or referred to in this Agreement is intended or shall be construed to
give any person other than the parties to this Agreement or their respective
successors or permitted assigns any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein, it
being the intention of the parties to this Agreement that this Agreement shall
be for the sole and exclusive benefit of such parties or such successors and
assigns and not for the benefit of any other person.
50
-42-
11.14 PARTIES IN INTEREST. Nothing in this Agreement is intended to
confer any right on any person other than the parties to it and their
respective successors and assigns, nor is anything in this Agreement intended
to modify or discharge the obligation or liability of any third person to any
party to this Agreement, nor shall any provision give any third person any
right of subrogation or action over against any party to this Agreement.
11.15 AMENDMENTS. This Agreement may be amended, but only in
writing, signed by the parties hereto, at any time prior to the Closing, before
or after approval hereof by the stockholders of WMM, with respect to any of the
terms contained herein, but after such stockholder approval, no amendment shall
be made which reduces the consideration per share paid each such stockholder
without the further approval of such stockholders.
11.16 DRAFTING PARTY. The provisions of this Agreement, and the
documents and instruments referred to herein, have been examined, negotiated,
drafted and revised by counsel for each party hereto and no implication shall
be drawn nor made against any party hereto by virtue of the drafting of this
Agreement.
11.17 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall comprise one and the same instrument.
11.18 REPRODUCTION OF DOCUMENTS. This Agreement and all documents
relating thereto, including without limitation, consents, waivers and
modifications which may hereafter be executed, the Exhibits and documents
delivered at the Closing, and financial statements, certificates and other
information previously or hereafter furnished to ProMedCo-Northern may be
reproduced by ProMedCo-Northern by any photographic, photostatic, microfilm,
microcard, miniature photographic or other similar process and
ProMedCo-Northern may destroy any original documents so reproduced. WMM agrees
and stipulates that any such reproduction shall be admissible in evidence as
the original itself in any judicial or administrative proceeding (whether or
not the original is in existence and whether or not such reproduction was made
by ProMedCo-Northern in the regular course of business) and that any
enlargement, facsimile or further reproduction of such reproduction shall
likewise be admissible in evidence.
51
-43-
11.19 PRESS RELEASES. Except as required by law, no party shall not
make any press releases or other public announcements relating to this
Agreement or the transactions contemplated hereby without the prior written
consent of the others.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
PROMEDCO, INC.
By
--------------------------------
Its
-------------------------------
Name
------------------------------
PROMEDCO OF NORTHERN NEVADA, INC.
By
--------------------------------
Its
-------------------------------
Name
------------------------------
WESTERN MEDICAL MANAGEMENT CORPORATION, INC.
By
--------------------------------
Its
-------------------------------
Name
------------------------------
JOINDER BY SHAREHOLDERS
The undersigned shareholders of Western Medical Management
Corporation, Inc., a Nevada corporation (the "Company"), hereby join the above
Agreement for Statutory Merger for the purpose of being bound thereby.
52
-44-
---------------------------------- ----------------------------------
Xxxxxx X. Xxxxxxx, M.D. Xxxxxxxxx Xxxxxx, M.D.
---------------------------------- ----------------------------------
Xxxxx Xxxxx, M.D. Xxxxxxx Xxxxxx, M.D.
---------------------------------- ----------------------------------
Xxxxxxxx XxXxx, M.D. Xxxx Xxxxxx, M.D.
---------------------------------- ----------------------------------
Xxxx X. Xxxxxxxxxxx Xxxxxx Xx, M.D.
---------------------------------- ----------------------------------
Xxxxxxx X. Xxxxxxxxx Xxxxxx Xxxxxxxx
53
LIST OF APPENDICES
NUMBER DESCRIPTION
2.9A Form of Service Agreement
2.9B-1 Forms of Employment Agreement
2.9B-2 List of Providers' Gross Incomes
2.9C Form of Interim Service Agreement
2.9D Form of Interim Management Agreement
2.9E Form of Credit Agreement
2.9F Form of Escrow Agreement
7.2 Opinion of Counsel to ProMedCo-Northern
8.3 Opinion of Counsel to WMM
8.8 Form of Stockholder Agreement
8.9 Form of Inducement Agreement
54
LIST OF EXHIBITS
NUMBER DESCRIPTION
3.1 Copies of WMM's Articles of Incorporation and Bylaws
3.4 WMM Financial Statements
3.6 Exceptions to Absence of Recent Changes Representation
3.7 Recent UCC report on WMM's assets
3.8 Contracts
3.9 List of Burdensome Agreements
3.10 Related party transactions
3.11 Exceptions to No Default Representation
3.15 Permits and licenses
3.16 Litigation
3.21 Environmental Matters
3.22 List of Employee Benefit Plans
3.23 List of Employee Benefit Plans not qualified under Section
401(a) of the Internal Revenue Code
3.24A List of highly compensated employees
3.24B Description of Employee Benefits
3.25A List of Insurance coverages and bonds
3.25B List of Malpractice Coverages
3.25C Description of denials of coverage
3.25D Claims History
