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Exhibit 10(p)
MERGER AGREEMENT
THIS MERGER AGREEMENT ("Agreement") is entered into as of this the
29th day of August, 1997, by and among XXXXXXX EYE CARE OPTICAL DEPARTMENT,
INC. an Illinois corporation (the "Corporation"); OMEGA HEALTH SYSTEMS OF
ILLINOIS, INC., an Illinois corporation ("Omega"); OMEGA HEALTH SYSTEMS, INC.,
a Delaware corporation ("OHSI") and XXXXX X. XXXXXXX, M.D., a citizen and
resident of Illinois ("Stockholder").
W I T N E S S E T H:
WHEREAS, Corporation is an Illinois corporation, which owns certain
assets which are used by and/or result from Stockholder's practice of providing
eye care to patients;
WHEREAS, Stockholder is the sole stockholder of Corporation and is an
ophthalmologist practicing medicine in the State of Illinois;
WHEREAS, Corporation, Omega and Stockholder intend that the
transaction consummated pursuant to this Agreement shall qualify as a
reorganization pursuant to ss. 368(a)(1)(A) of the Internal Revenue Code of
1986, as amended ("Code" or "I.R.C."); and
WHEREAS, the parties desire to set forth in writing the terms and
conditions under which said transaction will be consummated.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by the parties, it is
agreed as follows:
ARTICLE I.
MERGER TRANSACTION
1.1 BASIC TRANSACTION. (a) Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in Section 1.1(b)(i)), Corporation
shall be merged with and into Omega in accordance with this Agreement and the
separate corporate existence of Corporation shall thereupon cease (the
"Merger"). Omega shall be the surviving corporation in the Merger (sometimes
hereinafter referred to as the "Surviving Corporation"). The Merger shall have
the effects specified in Section 5/11.52 of the Illinois Business Corporation
Act (the "IBCA"). By execution and delivery of this Agreement, Stockholder
hereby approves the Merger on the terms and subject to the conditions set forth
herein, which approval shall be effective as an action without a meeting
pursuant to Corporation's bylaws and the IBCA.
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(b) Effect of Merger.
(i) General. If all the conditions to the Merger set forth
in Article IV shall have been fulfilled or waived in accordance
herewith and this Agreement shall not have been terminated as provided
in Article XIII, the parties hereto shall cause Articles of Merger
meeting the requirements of the IBCA to be properly executed, verified
and delivered for filing in accordance with the IBCA on the Closing
Date set forth in Article III. The Merger shall become effective upon
the later of acceptance for filing of the Articles by the Secretary of
State of the State of Illinois or at such later time which the parties
hereto shall have agreed upon and designated in the Articles of Merger
in accordance with applicable law as in effect at the time of the
Merger (the "Effective Time"). The Surviving Corporation may, at any
time after the Effective Time, take any action (including executing and
delivering any document or instrument) in the name and on behalf of
Omega or the Corporation in order to carry out and effectuate the
transaction contemplated by this Agreement.
(ii) Certificate of Incorporation. The Articles of
Incorporation of Omega in effect at and as of the Effective Time will
remain the Articles of Incorporation of the Surviving Corporation
without any modification or amendment in the Merger.
(iii) Bylaws. The Bylaws of Omega in effect at and as of the
Effective Time will remain the Bylaws of the Surviving Corporation
without any modification or amendment in the Merger.
(iv) Directors and Officers. The directors and officers of
Omega in office at and as of the Effective Time will remain the
directors and officers of the Surviving Corporation (retaining their
respective positions and terms of office).
(v) Omega Shares. Each share of common stock of Omega Health
Systems of Illinois, Inc. (the "Omega Stock") issued and outstanding
at and as of the Effective Time will remain issued and outstanding.
ARTICLE II.
CONSIDERATION
2.1 CONSIDERATION. As consideration for the Merger, all shares of
common stock of Corporation shall, without further action on the part of
Stockholder, be exchanged for shares of voting common stock of OHSI (the "OHSI
Stock") valued at Five Hundred Thousand Dollars ($500,000) to be issued to
Stockholder (the "Consideration"). Each share of OHSI Stock shall be valued at
the average of the closing price of OHSI Stock for the twenty (20)
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trading days immediately prior to July 28, 1997. No fractional share of OHSI
Stock shall be issued. The OHSI Stock shall not be registered under the
Securities Act of 1933 (the "1933 Act") and will be restricted securities, as
defined in Rule 144(a)(3) under the 1933 Act that are not fully transferable,
except to the extent provided herein, and the certificates reflecting the OHSI
Stock shall bear a legend to that effect.
2.2 TAX REPORTING. The Merger shall constitute a reorganization under
I.R.C. ss. 368(a)(1)(A). Each of the parties agrees to report this transaction
for financial and income tax purposes in accordance with the foregoing.
2.3 REGISTRATION RIGHTS. The Stockholder will be entitled to
"piggyback" registration rights for unregistered OHSI Stock, on registrations
under the 1933 Act, of OHSI's stock or securities, subject to the right of OHSI
and its underwriters to reduce the number of shares of OHSI Stock proposed to
be registered in view of market conditions, and OHSI shall promptly advise the
Stockholder of any proposed registration. Such underwriter's "cutback" shall be
applied proportionately to all unregistered OHSI Stock or other securities and
unregistered warrants or stock options which are requesting registration at
such time pursuant to contractual rights. The costs of OHSI of registering such
OHSI Stock in a piggyback registration shall be borne by OHSI, except that
underwriting discounts and commissions on OHSI stock sold by Stockholder shall
be paid by the Stockholder, and the cost of Stockholder's counsel to be paid by
Stockholder.
2.4 TRANSFERABILITY OF OHSI STOCK. Provided any transferee under this
subsection acknowledges any restrictions placed on the OHSI Stock, nothing in
this Agreement shall prevent the OHSI Stock from being transferred in whole, or
in part, to one or more members of Stockholder's family, to a trust established
for Stockholder's benefit or the benefit of one or more of the members of the
Stockholder's family, to a family partnership (general or limited) established
by Stockholder or one or more of the members of Stockholder's family, or to any
other entity that is owned by Stockholder and one or more of the members of
Stockholder's family.
ARTICLE III.
THE CLOSING
The closing of the Merger contemplated herein (the "Closing") shall
take place at such time and place as the parties hereto may agree in writing
(the "Closing Date"). The parties agree that the Closing Date shall be
extended, if required, to allow either party to fulfill any condition of this
Agreement, but in no event shall the Closing Date extend beyond August 31,
1997, unless such extension is agreed to in writing by all of the parties.
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ARTICLE IV.
ITEMS TO BE DELIVERED AT OR PRIOR TO CLOSING
4.1 BY STOCKHOLDER OR CORPORATION. Stockholder or Corporation, as
applicable, shall execute and deliver on the Closing Date:
(a) Certified resolutions of Corporation authorizing the execution of
all documents and the consummation of all transactions contemplated hereby.
(b) Articles of Merger and a Plan of Merger under the IBCA which shall
be in the form attached hereto as Exhibit 4.1.1(a) and Exhibit 4.1.1(b),
respectively.
(c) Stock certificates representing ownership of all shares of
Corporation, duly endorsed to Omega.
(d) A Certificate, duly executed by Stockholder and the President of
Corporation, stating that, as of the Closing Date, all representations and
warranties of Stockholder and Corporation contained in this Agreement or in any
Exhibit or Schedule hereto are true and correct in all material respects, all
covenants and agreements contained in this Agreement to be performed by
Stockholder or Corporation on or prior to the Closing Date have been performed
or complied with, and all conditions to Closing contained in Section 4.3 hereof
have been satisfied.
(e) An opinion of counsel for the Corporation and the Stockholder
dated as of the Closing Date, in form and substance reasonably satisfactory to
Omega's counsel, and where appropriate with reliance upon a certificate from
Corporation and the Stockholder to the effect that:
(i) Corporation (A) is duly incorporated and validly existing
as a business corporation under the Illinois Business Corporation Act,
(B) is in good standing as a business corporation under the laws of
the State of Illinois, and (C) has the corporate power and authority
to hold its own properties and carry on its business as now conducted.
(ii) Corporation has the full corporate power and authority
to execute, deliver and perform this Agreement and all other
agreements and documents contemplated hereby to which Corporation is a
party and which are necessary to consummate the transaction
contemplated hereby and, all action required of Corporation necessary
for such execution, delivery and performance will have been duly
taken.
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(iii) This Agreement and all agreements contemplated hereby
to which Corporation is a party have been duly executed and delivered
by Corporation and constitute the valid and binding agreements of
Corporation enforceable in accordance with their terms (subject as to
enforcement of remedies to the discretion of the courts in awarding
equitable relief and to applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium and similar laws
effecting the rights of creditors generally). The execution and
delivery by Corporation of this Agreement, and the performance of its
obligations hereunder, do not require, any action or consent of any
party other than Corporation pursuant to any contract, agreement or
other understanding of either Stockholder or Corporation, or pursuant
to any order or decree to which either Stockholder or Corporation is a
party or to which Corporation's properties or assets are subject and
will not violate any provisions of the articles of association or
bylaws of Corporation or any order of any court or other agency of the
government.
(iv) To the best of such counsel's knowledge, with respect to
Corporation (except for the matters included in Schedule 5.10 hereto),
there are no actions, suits, claims, proceedings or investigations
pending or threatened against Corporation at law or in equity, or
before or by a federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, or any professional licensing or disciplinary
authority which would adversely affect the transactions contemplated
herein or the right of Corporation or Stockholder to enter into this
Agreement.
(v) Neither Stockholder nor Corporation is in default with
respect to any order, writ, injunction or decree of any court or of
any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign which would adversely affect the rights of either Stockholder
or Corporations to enter into and perform this Agreement.
(f) Such other instruments as may be reasonably requested by Omega or
OHSI in order to give effect to or carry out the intent of this Agreement.
4.2 BY OMEGA AND OHSI. Omega shall execute and deliver on the Closing
Date:
(a) Stock Certificates representing ownership of the OHSI Stock set
forth under Section 2.1.
(b) An opinion of counsel for Omega and OHSI dated as of the Closing
Date, in form and substance reasonably satisfactory to Corporation's and
Stockholder's counsel, and where appropriate with reliance upon a certificate
from Omega or OHSI to the effect that:
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(i) Each of Omega and OHSI (A) is duly incorporated, validly
existing, and in good standing under the laws of the State of Alabama
and Delaware, respectively, (B) is duly qualified to transact business
in their respective states of incorporation, and is not required to be
so qualified in any other jurisdiction, and (C) has the corporate
power and authority to hold and own its own properties and carry on
its business as now conducted and as proposed to be conducted.
(ii) Each of Omega and OHSI has the full power and authority
to execute, deliver, and perform this Agreement and all other
agreements and documents contemplated hereof to which it is a party
and which are necessary to consummate the transaction contemplated
hereby, and all corporate actions of Omega or OHSI necessary for such
execution, delivery and performance have been duly taken.
(iii) This Agreement and all agreements related to this
Agreement to which Omega is a party have been duly authorized,
executed and delivered by Omega and constitute the legal, valid, and
binding agreement of Omega enforceable in accordance with their terms
(subject as to enforcement of remedies to the discretion of the courts
in awarding equitable relief and to applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws effecting the
rights of creditors generally). The execution and delivery by Omega of
this Agreement, and the performance of its obligations hereunder, do
not require any action or consent of any party other than Omega
pursuant to any contract, agreement or other understanding of Omega,
or pursuant to any order or decree to which Omega is a party or to
which its properties or assets are subject and will not violate any
provision of law, the articles of incorporation or bylaws of Omega or
any order of any court or other agency of the government.
(iv) To the best of such counsel's knowledge, and based
solely on certificates provided by Omega and OHSI, with respect to
Omega and OHSI there are no actions, suits, claims, proceedings or
investigations pending or threatened against Omega or OHSI at law or
in equity, or before or by a federal, state, municipal or other
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or any professional licensing or
disciplinary authority which would adversely effect the transactions
contemplated herein or the right of OHSI or Omega to enter into this
Agreement.
(v) Neither Omega nor OHSI is in default with respect to any
order, writ, injunction or decree of any court or of any federal,
state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign which would
affect the rights of Omega or OHSI to enter into and perform this
Agreement.
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(vi) The OHSI Stock has been duly authorized and duly and
validly issued by OHSI, with the authorization and approval of OHSI's
Board of Directors, and such OHSI Stock is fully paid and
non-assessable, and is owned of record by Stockholder.
(c) Articles of Merger and a Plan of Merger under the IBCA which shall
be in the form attached hereto as Exhibit 4.1.1(a) and Exhibit 4.1.1(b).
(d) A Certificate, duly executed by the President of Omega and OHSI,
stating that as of the Closing Date, all representations and warranties of
Omega and OHSI contained in this Agreement or in any Exhibit or Schedule hereto
are true and correct in all material respects, all covenants and agreements
contained in the Agreement to be performed by Omega and OHSI on or prior to the
Closing Date have been performed or complied with and all conditions to Closing
contained in Section 4.4 hereof have been satisfied.
(e) Such other instruments as may be reasonably requested by
Stockholder in order to give effect to or carry out the intent of this
Agreement.
4.3 CONDITIONS TO OMEGA'S AND OHSI'S OBLIGATIONS. Omega's and OHSI's
obligation to consummate the transaction as provided in this Agreement shall be
conditioned upon the satisfaction of the following conditions at or prior to
the Closing:
(a) Delivery of Documents. The documents and other items set forth in
Section 4.1 hereof shall have been executed and delivered at Closing.
(b) No Material Adverse Change. Prior to the Closing Date, there shall
be no material adverse change in the assets or liabilities of Corporation; the
business or condition, financial, or otherwise of Corporation; or the results
of operations or prospects of Corporation as a result of any legislative or
regulatory change or revocation of any license or rights of Corporation to do
business.
(c) Truth of Representations and Warranties. The representations and
warranties of Corporation and Stockholder contained in this Agreement, or in
any Exhibit or Schedule hereto, shall be true and correct in all material
respects on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date.
Corporation and Stockholder shall have the express obligation to update all
information contained in the Exhibits and Schedules hereto so that such
Exhibits and Schedules shall be true, correct and complete as of the Closing
Date.
(d) No Litigation Threatened. No action or proceeding shall have been
instituted or threatened before a court or other government body or by any
public authority to restrain or prohibit any of the transactions contemplated
hereby.
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(e) Opinion of Corporation's Counsel. Omega shall have received an
opinion from the Corporation's and Stockholder's counsel, delivered under
Section 4.1(e) above.
(f) Securities Law Compliance. The issuance of the OHSI Stock to the
Stockholder will not violate the securities laws of any state or of the United
States.
(g) Third-Party Consents. Omega shall have received copies of all
third-party consents required to consummate the transaction contemplated by
this Agreement.
(h) Licenses, Permits, Qualification. Immediately prior to the
Effective Time, Stockholder and Corporation shall have all licenses and permits
necessary to operate its business.
(i) Distribution of Assets and Discharge of Liabilities. Prior to the
Effective Time, and as a condition to Closing, Corporation shall have
distributed to Stockholder all of the assets listed on Schedule 5.8 , which are
not being acquired by Omega (the "Excluded Assets"). Additionally, prior to the
Effective Time, Corporation shall have paid or discharged all liabilities or
charges for costs or fees owed as a result of the transactions contemplated by
this Agreement.
(j) Taxes. Corporation shall have established an adequate reserve for
the payment of all taxes accrued with respect to taxable periods or portions
thereof ended as of the Effective Time of the Merger contemplated herein.
(k) Stock Purchase Agreement. Omega and Stockholder shall have
executed and delivered to Omega and OHSI that certain Stock Purchase Agreement,
dated as of August 29, 1997, by and between Omega and Stockholder (the "Stock
Purchase Agreement"), substantially in the form of Exhibit4.3(k), attached
hereto.
4.4 CONDITIONS TO STOCKHOLDER'S AND CORPORATION'S OBLIGATIONS.
Stockholder's and Corporation's obligations to consummate the transaction as
provided in this Agreement shall be conditioned upon the satisfaction of the
following conditions at or prior to Closing:
(a) Delivery of Documents. The documents and other items set forth in
Section 4.2 hereof shall have been executed and delivered by Omega on the
Closing Date.
(b) Truth of Representations and Warranties. The representations and
warranties of Omega and OHSI contained in this Agreement, or in any Exhibit or
Schedule hereto, shall be true and correct in all material respects on and as
of the Closing Date with the same effect as though such representations and
warranties had been made as of such date.
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(c) Opinion of Omega's and OHSI's Counsel. The Corporations and
Stockholder shall have received an opinion from Omega's and OHSI's counsel,
delivered under Section 4.2(b) above.
(d) No Litigation Threatened. No action or proceeding shall have been
instituted or threatened before a court or other government body or by any
public authority to restrain or prohibit any of the transactions contemplated
hereby.
(e) Stock Purchase Agreement. Omega and Stockholder shall have
executed and delivered to Stockholder and Corporation the Stock Purchase
Agreement, substantially in the form of Exhibit 4.3(k) attached hereto.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
OF STOCKHOLDER AND CORPORATION
Corporation and Stockholder represent, warrant, covenant and agree
with Omega and OHSI that:
5.1 OWNERSHIP OF STOCK. Stockholder is the owner of all of the issued
and outstanding stock of Corporation, free and clear of all liens,
encumbrances, restrictions and claims of every kind. Stockholder has full legal
right, power and authority to enter into this Agreement.
5.2 EXISTENCE AND GOOD STANDING. Corporation is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Illinois. Corporation has the power to own its property and to carry on its
business as now being conducted. Illinois is the only jurisdiction in which the
character or location of the properties owned or leased by Corporation or the
nature of the business conducted by Corporation makes such qualification
necessary.
5.3 CAPITAL STOCK. Corporation has an authorized capitalization
consisting of One Thousand (1,000) shares of common stock, no par value, of
which Sixty (60) are issued and outstanding and no shares are held in
Corporation's treasury. All such outstanding shares of Corporation have been
duly authorized and validly issued and are fully paid and nonassessable. There
are no outstanding options, warrants, rights, calls, commitments, conversion
rights, rights of exchange, plans or other agreements of any character
providing for the purchase, issuance or sale of any shares of the capital stock
of Corporation, other than as contemplated by this Agreement.
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5.4 SUBSIDIARIES AND INVESTMENTS. Corporation does not own, directly
or indirectly, any capital stock or other equity or ownership or proprietary
interest in any other corporation, partnership, association, trust, joint
venture or other entity.
5.5 FINANCIAL STATEMENTS AND NO MATERIAL CHANGES. Corporation has
heretofore furnished Omega with unaudited financial statements dated December
31, 1994, 1995 and 1996, all of which are attached hereto as Schedule 5.5. Such
financial statements, including the notes thereto, except as indicated therein,
were prepared on a basis consistent with past accounting practices of
Corporation and accurately reflect the results of operations for the periods
noted therein, The balance sheets of Corporation heretofore delivered (or to be
delivered) by Corporation to Omega fairly present the financial condition of
Corporation at the respective dates thereof, and except as indicated therein,
reflect all claims against and all debts and liabilities of Corporation, fixed
or contingent, as of the respective dates thereof. Since December 31, 1996,
there has been (i) no material adverse change in the assets or liabilities,
financial or otherwise, or in the results of operations of Corporation, and
(ii) no fact or condition known to Corporation or Stockholder which exists or
is contemplated or threatened which might cause such a change in the future.
5.6 MATERIAL CONTRACTS. Except as set forth on Schedule 5.6,
Corporation is not bound by (a) any agreement, contract, or commitment relating
to the employment of any person by Corporation, or any loans, deferred
compensation, incentive compensation, pension, profit sharing, retirement, or
other employee benefit plan, (b) any loan or advance to, or investment in, any
other person or entity, or any agreement, contract, or commitment relating to
the making of any such loan, advance, or investment, (c) any guarantee or other
contingent liability in respect of any indebtedness or obligation of any other
person or entity, (d) any agreement, contract, or commitment limiting the
freedom of Corporation or any of its physicians to practice medicine in any
location or to compete with any other person or entity, or (e) any other
agreement, contract, or commitment which is material to the business of
Corporation. Except as set forth in Schedule5.6, to the best of Stockholder's
knowledge each contract or agreement set forth in Schedule 5.6 is in full force
and effect, and there exists no default or event of default or event,
occurrence, condition, or act which, with the giving of notice, the lapse of
time, or the happening of any other event or condition, would become a default
or event of default thereunder, which would have a material adverse effect upon
Corporation. Except as set forth in Schedule 5.6, to the best of Stockholder's
knowledge neither Corporation has not violated any of the terms or conditions
of any contract or agreement set forth in Schedule 5.6 in any material respect,
and to Stockholder's best knowledge, all of the covenants to be performed by
any other party thereto have been fully performed.
5.7 INSURANCE. Schedule 5.7.1 is a list and brief description of all
Corporation's policies or binders of fire, liability, product liability,
workers compensation, health and other forms of insurance policies or binders
currently in force insuring against risks which will
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remain in full force and effect at least through the Closing Date. Except as
set forth on Schedule 5.7.2, neither Corporation, Stockholder, nor their
employees have, in the last three (3) years, filed a written application for
any insurance coverage which has been denied by an insurance agency or carrier.
Schedule 5.7.2 also sets forth a list of all claims for any insured loss in
excess of Five Thousand Dollars ($5,000.00) per occurrence filed by
Corporation, Corporation's employees or Stockholder since January 1, 1994,
including, but not limited to, workers' compensation, general liability, and
environmental liability claims. To the best of Stockholder's knowledge, neither
Corporation, Corporation's employees nor Stockholder is in material default
with respect to any provision contained in any such policy and none of them has
failed to give any notice or present any claim under any such policy in due and
timely fashion.
5.8 NO CHANGES PRIOR TO CLOSING DATE. To the best knowledge of
Stockholder, during the period from December 31, 1996, through the date hereof,
Corporation has not, and from the date hereof, Corporation shall not have (i)
incurred any liability or obligation of any nature (whether accrued, absolute,
contingent, or otherwise), except in the ordinary course of business, or except
with the prior written consent of Omega, such consent not to be unreasonably
withheld, (ii) written off as uncollectible any notes or accounts receivable,
except write-offs in the ordinary course of business charged to applicable
reserves, none of which individually or in the aggregate is material to the
Corporation, (iii) conducted its business in such a manner so as to materially
increase its accounts payable or so as to materially decrease its accounts
receivable, (iv) granted any increase in the rate of wages, salaries, bonuses,
or other remunerations of any employee, except in the ordinary course of
business, (v) canceled or waived any claims or rights of substantial value,
(vi) made any change in any method of accounting, (vii) otherwise conducted its
business or entered into any transaction, except in the usual and ordinary
manner and in the ordinary course of business, (viii) agreed, whether or not in
writing, to do any of the foregoing, (ix) disposed of its assets other than in
the ordinary course of business, except for the disposition of any Excluded
Assets listed on Schedule 5.8; nor (x) allowed inventory levels to fall below
$55,000.
5.9 PRACTICE ASSETS; TITLE; CONDITION. Schedule 5.9.1 contains a true
and complete list of all the non-cash assets of the Corporation at the Closing
Date (the "Practice Assets"). Corporation has good and marketable title to all
of its Practice Assets conveyed hereunder. Except as disclosed on Schedule
5.9.2 hereto, none of such Practice Assets is subject to a contract or other
agreement of sale or subject to security interests, mortgages, encumbrances,
liens (including income, personal property and other tax liens) or charges of
any kind or character. Upon completion of the Merger, the Surviving Corporation
shall own the Practice Assets of the Corporation free and clear of all liens
and encumbrances.
5.10 LITIGATION. Except as listed on Schedule 5.10, to the best of
knowledge of Stockholder, there is no suit, action, proceeding at law or in
equity, arbitration, administrative proceeding or other proceeding or
investigation by any governmental entity pending, or
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threatened against, or affecting Corporation, or any of its Practice Assets, or
any physician or other health care professional associated with or employed by
Corporation, and to the best of Stockholder's knowledge there is no basis for
any of the foregoing.
5.11 PERMITS AND LICENSES. Corporation and all physicians and other
health care professionals associated with or employed by the Corporations have
all material permits and licenses required by all applicable laws; have made
all material regulatory filings necessary for the conduct of the Corporations'
business; and are not in violation of any of said permitting or licensing
requirements the violation of which would have a materially adverse effect on
the Corporations. A list of such permits and licenses is attached hereto as
Schedule 5.11.
5.12 AUTHORITY. (a) The execution of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action, and this Agreement is a valid and binding agreement of
Corporation enforceable in accordance with its terms (subject as to enforcement
of remedies to the discretion of the courts in awarding equitable relief, and
to applicable bankruptcy, reorganization, insolvency, fraudulent conveyance,
moratorium and similar laws effecting the rights of creditors generally).
Attached hereto as Schedule 5.12 is a listing of all third-party consents which
must be obtained prior to the Closing Date as required under Section 4.3 of
this Agreement.
(b) To the best knowledge of Stockholder, the execution and delivery
of this Agreement, the consummation of the transactions contemplated hereby,
and/or compliance by Corporation and Stockholder with any of the provisions
hereof, will not:
(i) violate or conflict with, or result in a breach of any
provision of, or constitute a default (or an event which, with notice
or lapse of time or both, would constitute a default) under, or result
in the termination of, or accelerate the performance required by, or
result in the creation of, any lien, security interest, charge or
encumbrance upon any of the assets to be conveyed hereunder under any
of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, agreement or other instrument or
obligation to which Corporation or Stockholder is a party, or by which
either Corporation or Stockholder or any of the assets to be conveyed
hereunder is bound; or
(ii) violate any order, writ, injunction, decree, statute,
rule or regulation applicable either to the Corporations or
Stockholder or any of the assets to be conveyed hereunder.
5.13 TAX MATTERS. Except as set forth in Schedule 5.13, Corporation
has filed or caused to be filed all federal, state and local tax returns which
are required to have been filed by Corporation, including all income, excise,
franchise, and payroll tax returns, and Corporation has paid or established an
adequate reserve for all taxes accrued through the
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Effective Time and has otherwise complied with all federal, state, local and
other tax laws applicable to it.
5.14 EMPLOYEE BENEFIT PLANS. (a) List of Plans. Set forth on Schedule
5.14 is an accurate and complete list of all employee benefit plans ("Employee
Benefit Plans") within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), whether or not any Employee
Benefit Plans are otherwise exempt from the provisions of ERISA, established,
maintained or contributed to by the Corporation (including all employers
(whether or not incorporated) which by reason of common control are treated
together with Corporation and/or Stockholder as a single employer within the
meaning of Section 414 of the Code) since September 2, 1974.
(b) Status of Plans. Corporation has never maintained and does not now
maintain or contribute to any Employee Benefit Plan subject to ERISA which is
not in substantial compliance with ERISA, or which has incurred any accumulated
funding deficiency within the meaning of either Section 412 or 418B of ERISA,
or which has applied for or obtained a waiver from the Internal Revenue Service
of any minimum funding requirement under Section 412 of the Code or which is
subject to Title IV of ERISA. Corporation has not incurred any liability to the
Pension Benefit Guaranty Corporation ("PBGC") in connection with any Employee
Benefit Plan covering any employees of that Corporation or ceased operations at
any facility or withdrawn from any such Plan in a manner which could subject it
to liability under Section 4062(f), 4063 or 4064 of ERISA, and knows of no
facts or circumstances which might give rise to any liability of Corporation to
the PBGC under Title IV of ERISA which could reasonably be anticipated to
result in any claims being made against the Surviving Corporation by the PBGC.
Corporation has not incurred any withdrawal liability (including any contingent
or secondary withdrawal liability) within the meaning of Sections 4201 and 4202
of ERISA, to any Employee Benefit Plan which is a Multiemployer Plan (as
defined in Section 4001 of ERISA), and no event has occurred, and there exists
no condition or set of circumstances, which represent a material risk of the
occurrence of any withdrawal from or the partition, termination, reorganization
or insolvency of any Multiemployer Plan which would result in any liability to
a Multiemployer Plan.
(c) Contributions. Full payment has been made of all amounts which
Corporation is required, under applicable law or under any Employee Benefit
Plan or any agreement relating to any Employee Benefit Plan to which
Corporation is a party, to have paid as contributions thereto as of the last
day of the most recent fiscal year of such Employee Benefit Plan ended prior to
the date hereof. Corporation has made adequate provision for reserves to meet
contributions that have not been made because they are not yet due under the
terms of any Employee Benefit Plan or related agreements. Benefits under all
Employee Benefit Plans are as represented and have not been increased
subsequent to the date as of which documents have been provided.
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(d) Tax Qualification. Each Employee Benefit Plan intended to be
qualified under Section 401(a) of the Code has been determined to be so
qualified by the Internal Revenue Service and nothing has occurred since the
date of the last such determination which resulted or is likely to result in
the revocation of such determination.
(e) Transactions. Corporation has not engaged in any transaction with
respect to the Employee Benefit Plans which would subject it to a tax, penalty
or liability for prohibited transactions under ERISA or the Code nor have any
of its directors, officers or employees to the extent they or any of them are
fiduciaries with respect to such plans, breached any of their responsibilities
or obligations imposed upon fiduciaries under Title I of ERISA or would result
in any claim being made under or by or on behalf of any such plans by any party
with standing to make such claim.
(f) Other Plans. Corporation presently does not maintain any employee
benefit plans or any other foreign pension, welfare or retirement benefit plans
other than those listed on Schedule 5.14.
(g) Documents. Stockholder has delivered or caused to be delivered to
Omega and its counsel true and complete copies of (i) all Employee Benefit
Plans as in effect, together with all amendments thereto which will become
effective at a later date, as well as the latest Internal Revenue Service
determination letter obtained with respect to any such Employee Benefit Plan
qualified under Section 401 or 501 of the Code, and (ii) Form 5500 for the most
recent completed fiscal year for each Employee Benefit Plan required to file
such form.
5.15 THIRD-PARTY RELATIONS. Corporation and Stockholder are not aware
of any problem or disagreements with any third parties with which Corporation
does business, and Corporation and Stockholder will use their respective best
efforts from the date of this Agreement until the Closing Date to operate
Corporation's business in such a manner so as not to adversely affect the
goodwill of its patients, suppliers, employees, and other such persons or third
parties with which the Corporation does business.
5.16 LEASED PROPERTY. Schedule 5.16 contains a list of all property
leases held by Corporation and, except as set forth on Schedule 5.16, no
material adverse claim against, or defect in, the interest purportedly leased
or given under or by any such instrument exists, and neither the lessor nor
Corporation is in default under any of such leases, and Corporation and
Stockholder are not aware of any fact which, with notice and/or the passage of
time, would constitute such a default.
5.17 COMPLIANCE WITH APPLICABLE LAWS. Except as set forth in Schedule
5.17, and to the best knowledge of Stockholder, the Corporation has operated in
material compliance with all material federal, state, county and municipal
laws, constitutions, ordinances, statutes, rules,
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regulations and orders applicable thereto ("Applicable Laws"). No item
disclosed on Schedule 5.17 has a material effect on the operations of
Corporation.
5.18 EMPLOYEE COMPENSATION. Corporation has paid or discharged or will
pay or discharge or assume all liabilities for compensation and benefits to
which all employees are entitled through the Effective Time, including but not
limited to all salaries, wages, bonuses, incentive compensation, payroll taxes,
hospitalization and medical expenses, deferred compensation, and vacation and
sick pay, as well as any severance pay becoming due as a result of the
termination of certain of Corporation's employees.
5.19 ENVIRONMENTAL MATTERS. Corporation is in compliance in all
material respects with all federal, state and local environmental laws, rules,
regulations, standards and requirements, including, without limitation those
respecting chemical, radiographic, or biomedical wastes or any other hazardous
substances or materials, as defined in any applicable federal or state law or
regulation ("Hazardous Wastes"). Except as disclosed on Schedule 5.19, any
storage, holding, release, emission, discharge, generation, processing,
disposition, handling or transportation of any Hazardous Wastes from, into or
on any portion of the clinic premises is and has been at all times in
compliance in all material respects with all federal, state and local
environmental laws, rules, regulations, standards and requirements.
5.20 FRAUD AND ABUSE. Neither Corporation nor Stockholder nor persons
and entities providing professional services for Corporation has, to the
knowledge of Corporation or Stockholder, engaged in any activities which are
prohibited under 42 U.S.C. ss. 1320a-7b, or the regulations promulgated
thereunder pursuant to such statutes, or related state or local statutes or
regulations, or which are prohibited by rules of professional conduct,
including but not limited to the following:
(a) knowingly and willfully making or causing to be made a false
statement or representation of a material fact in any application for any
benefit or payment;
(b) knowingly and willfully making or causing to be made any false
statement or representation of a material fact for use in determining rights to
any benefit or payment;
(c) failing to disclose knowledge by a claimant of the occurrence of
any event effecting the initial or continued right to any benefit or payment on
its own behalf or on behalf of another, with intent to fraudulently secure such
benefit or payment; or
(d) knowingly and willfully soliciting or receiving any remuneration
(including any kickback, bribe, or rebate), directly or indirectly, overtly or
covertly, in cash or in kind or offering to pay or receive such remuneration
(i) in return for referring an individual to a person for the furnishing or
arranging for the furnishing or any item or service for which payment may be
made in whole or in part by Medicare or Medicaid, or (ii) in return for
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purchasing, leasing, or ordering or arranging for or recommending purchasing,
leasing, or ordering any good, facility, service or item for which payment may
be made in whole or in part by Medicare or Medicaid.
5.21 FACILITY COMPLIANCE. Corporation is duly licensed and is lawfully
operated in accordance with the material requirements of all applicable
material law and has all necessary authorizations for the use and operation,
all of which are in full force and effect. To the best knowledge of
Stockholder, there are no outstanding notices of deficiencies relating to
Corporation issued by any governmental authority or third-party payor requiring
conformity or compliance with any applicable law or condition for participation
of such governmental authority or third-party payor, neither the Corporation
nor Stockholder has received notice or has any knowledge or reason to believe
that such necessary authorizations may be revoked or not renewed in the
ordinary course of business.
5.22 RATES AND REIMBURSEMENT POLICIES. To the best knowledge of
Stockholder, the jurisdiction in which the Corporation is located does not
currently impose any restrictions or limitations on rates which may be charged
to private pay patients receiving services provided by Corporation. To the best
knowledge of Stockholder, neither Corporation has any rate appeal currently
pending before any governmental authority or any administrator of any
third-party payor program. Neither the Corporation nor Stockholder have
knowledge of any applicable law, which has been enacted, promulgated or issued
within the eighteen (18) months preceding the date of this Agreement or any
such legal requirement proposed or currently pending in the jurisdiction in
which Corporation is located, which could have a material adverse effect on
Corporation or may result in the imposition of additional Medicaid, Medicare,
charity, free care, welfare, or other discounted or government assisted
patients at Corporation or require Corporation to obtain any necessary
authorization which Corporation does not currently possess.
5.23 TRADE RELATIONS. To the best knowledge of Stockholder, there
exists no actual or threatened limitation of the business relationship of
Corporation with any material customer, supplier or landlord or with any person
whose contracts with Corporation would be material to the operations of
Corporation. To the best knowledge of Stockholder, there exists no condition or
state of facts or circumstances which (i) are likely to produce a material
adverse effect with respect to either Corporation or (ii) prevent the Surviving
Corporation from conducting its business after the consummation of the
transactions contemplated by this Agreement as such business is conducted or
proposed to be conducted.
5.24 EXHIBITS. All the facts recited in Exhibits or Schedules annexed
hereto (as updated as of the Closing Date) shall be deemed to be
representations of fact by Corporation and Stockholder as though recited in
this Article V.
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5.25 FULL DISCLOSURE. No representation or warranty made by the
Corporation or Stockholder in this Agreement contains or will contain any
untrue statement of a material fact or omits or will omit to state a material
fact necessary to make the statements contained herein or therein not
misleading. For purposes of this Article V, Corporation shall be presumed to
have knowledge of all matters of which the Stockholder or officers of the
Corporation have knowledge, actual or constructive.
5.26 LIABILITIES. Attached hereto as Schedule 5.26 is a list of
Corporation's liabilities existing on the Closing Date. Corporation has no
other liabilities (whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, and whether due or to become due).
5.27 INVESTMENT INTENT. Stockholder and Corporation acknowledge that
the OHSI Stock has not been registered under the 1933 Act, and that the OHSI
Stock, except as provided for in Section 2.3 and Section 2.4, may not be sold,
pledged or otherwise transferred absent such registration, or unless an
exemption from registration is available. The Stockholder is acquiring the OHSI
Stock for his own account, for investment purposes only and not with a view to
distribution of such OHSI Stock within the meaning of Section 2(11) of the 1933
Act. The Stockholder qualifies as an "accredited investor", as defined in Rule
501(a) pursuant to the 1933 Act. The Stockholder has received from OHSI a copy
of OHSI's Form 10-K for 1995 and 1996, OHSI's 10-Q filed ______________, 1997,
OHSI's 8-Ks filed ___________, 1997 and OHSI's 1994, 1995, and 1996 Annual
Report to Shareholders. The Stockholder has had the opportunity to ask
questions of and receive answers from OHSI senior management concerning OHSI
and the terms and conditions of this investment by the Stockholder. The
Stockholder has had the opportunity to obtain other additional information
concerning OHSI from OHSI senior management.
ARTICLE VI.
REPRESENTATIONS AND WARRANTIES OF OMEGA AND OHSI
Omega and OHSI represent, warrant, covenant and agree with Corporation
and Stockholder as follows:
6.1 ORGANIZATION. Omega is a corporation duly organized, validly
existing and in good standing under the laws of the State of Illinois. OHSI is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware. Omega and OHSI have the full power to own their
respective property, to carry on their respective businesses as presently
conducted, to enter into this Agreement and to consummate the transactions
contemplated hereby.
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6.2 AUTHORITY. Omega and OHSI have taken all necessary action to
authorize the execution, delivery and performance of this Agreement, as well as
the consummation of the transactions contemplated hereby, and at Closing Omega
and OHSI shall deliver an officer's certificate to such effect. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provisions of the
charter or the bylaws of either Omega or OHSI or any indenture, mortgage, deed
of trust, lien, lease, agreement, arrangement, contract, instrument, license,
order, judgment or decree or result in the acceleration of any obligation
thereunder to which either Omega or OHSI is a party or by which either Omega or
OHSI is bound.
6.3 ABSENCE OF LITIGATION. No action or proceeding by or before any
court or other governmental body has been instituted or is, to the best of
Omega's and OHSI's knowledge, threatened with respect to the transactions
contemplated by this Agreement.
6.4 SHARES. Upon delivery of the certificates representing ownership
of the OHSI Stock, such OHSI Stock will be fully paid and nonassessable.
6.5 OMEGA HEALTH SYSTEMS, INC. Omega is a wholly-owned subsidiary of
OHSI.
6.6 FRAUD AND ABUSE. Neither OHSI nor Omega has engaged in any
activities which are prohibited under ss. 1320a-7b of Title 42 of the United
States Code or the regulations promulgated thereunder, or related state or
local statutes or regulations, or which are prohibited by rules of professional
conduct, including, but not limited to, the following: (i) knowingly and
willingly making or causing to be made a false statement or representation of a
material fact in any application for any benefit or payment; (ii) knowingly and
willfully making or causing to be made any false statement or representation of
a material fact for use in determining rights to any benefit or payment; (iii)
any failure by a claimant to disclose knowledge of the occurrence of any event
affecting the initial or continued right to any benefit or payment on its own
behalf or on behalf of another, with the intent to fraudulently secure such
benefit or payment; and (iv) knowingly and willfully soliciting or receiving
any remuneration (including any kickback, bribe or rebate) directly or
indirectly, overtly or covertly, in cash or in kind, or offering to pay or
receive such remuneration (A) in return for referring an individual to a person
for the furnishing or arranging for the furnishings of any item or service for
which payment may be made in whole or in part by Medicare or Medicaid, or (B)
in return for purchasing, leasing or ordering or arranging for, or
recommending, purchasing, lease or ordering any good, facility, service or item
for which payment may be made in whole or in part by Medicare or Medicaid.
ARTICLE VII.
CONDUCT OF BUSINESS; REVIEW
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7.1 CONDUCT OF BUSINESS OF CORPORATION. During the period from the
date of this Agreement to the Closing Date, Corporation shall conduct its
business only in the ordinary and usual course of business, and Corporation and
Stockholder shall use their respective best efforts to preserve intact
Corporation's business organization, keep available the services of its
employees and maintain satisfactory relationships with patients and others
having business, medical or professional relationships with Corporation.
Corporation shall immediately notify Omega of any unexpected emergency or other
change in the normal course of its business or in the operation of its
properties and of any governmental complaints, investigations, hearings (or
communications indicating that the same may be contemplated), or adjudicatory
proceedings involving the business or practice of Corporation or any employee
of Corporation, and Corporation shall keep Omega fully informed of such events
and permit its representatives prompt access to all materials prepared in
connection therewith.
7.2 EXCLUSIVE DEALINGS. During the period from the date of this
Agreement to the Closing Date, or upon the earlier termination of this
Agreement pursuant to Article XIII, Corporation shall refrain from taking any
actions, directly or indirectly, to encourage, initiate, or engage in
discussions or negotiations with, or provide any information to, any
corporation, partnership, person, or other entity or group, other than Omega,
concerning the purchase of Corporation or its stock or assets, or any merger,
joint venture or similar transaction involving Corporation and will not enter
into any such transaction. The parties agree that any information provided will
be used solely for the purpose of evaluating the transaction contemplated
herein and will be kept confidential and not disclosed to others. If the
transaction contemplated hereunder shall fail to close for any reason, then
each party will promptly redeliver to the other all written material containing
or reflecting any information concerning Corporation, Omega or OHSI, regardless
of by whom prepared, and will not retain any copies, extracts or other
reproductions in whole or in part of such written material.
7.3 REVIEW OF CORPORATION BY OMEGA. Omega, prior to the Closing Date,
through its representatives, may review the assets, books, and records of
Corporation as well as its financial and legal condition as Omega deems
necessary or advisable to familiarize itself with such assets and other
matters; such review shall not, however, affect the representations and
warranties made by Corporation herein and in the Exhibits and Schedules
attached hereto. Corporation shall permit Omega and its representatives to have
full access to the premises and to all books and records of Corporation during
normal business hours and to cause its officers and employees to furnish Omega
with such financial and operational data and other information with respect to
the business and assets of Corporation as Omega shall from time to time
reasonably request.
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ARTICLE VIII.
TRANSFERS AND FURTHER ASSURANCES
From time to time after the date hereof, at the request of a party
hereto (the "Requesting Party"), the other parties shall, without further
consideration, execute, acknowledge and deliver such further instruments of
transfer and other assurances and shall take such other action as the
Requesting Party reasonably may request in order to effectuate the Merger or
any resulting transfer of assets as a result of the Merger.
ARTICLE IX.
INDEMNIFICATION; SET-OFF
9.1 INDEMNIFICATION OF OMEGA AND OHSI. Corporation and Stockholder
shall indemnify, defend and hold Omega, OHSI and their respective officers,
directors, shareholders, agents, employees, representatives, successors and
assigns harmless from and against any and all damage, loss, cost, obligation,
claims, demands, assessments, judgments or liability (whether based on
contract, tort, product liability, strict liability or otherwise), including
taxes, and all expenses (including interest, penalties and reasonable
attorneys' and accountants' fees and disbursements) incurred by any of the
above-named persons, resulting from or in connection with any one or more of
the following:
(a) Misrepresentations, breach of warranties, failure to perform any
covenant or Agreement of either Corporation or Stockholder contained herein;
(b) Any liabilities or obligations of either Corporation existing as
of the Closing Date and not described on the December 31, 1996 balance sheet;
(c) Any transaction, event or act that occurred on or prior to the
Closing Date that materially adversely affects the value of the Practice
Assets;
(d) Claims, actions or suits by employees or former employees of
Corporation; or
(e) Stockholder's failure to discharge pension or benefit plan
obligations.
Omega agrees to give prompt notice to Stockholder of the assertion of any
claim, or the threat or commencement of any suit, action, proceeding or other
matter in respect of which indemnity may be sought under this Section 9.1.
Stockholder may participate in the defense of any such suit, action, proceeding
or other matter at Stockholder's expense. Stockholder shall not be liable under
this Section 9.1 for any settlement effected without Stockholder's consent of
any claim, suit, action, proceeding or other matter in respect of which
indemnity may be
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sought under this Section 9.1, which consent shall not be unreasonably
withheld. The indemnity to be paid to Omega under this Section 9.1 may be paid
in either cash, OHSI Stock, or some combination of both, at the election of the
Shareholder. For purposes of this Section 9.1, OHSI Stock used to pay any
indemnity under this section shall be valued according to the OHSI Stock's fair
value as determined pursuant to Section 2 hereof.
9.2 GENERAL INDEMNIFICATION OF STOCKHOLDER AND CORPORATION. Omega and
OHSI shall indemnify, defend and hold Corporation and its officers, directors,
Stockholder, agents, employees, representatives, successors and assigns
harmless from any and all damage, loss, cost, obligation, claims, demands,
assessments, judgments or liability (whether based on contract, tort, product
liability, strict liability or otherwise), including taxes and all expenses
(including interest, penalties and reasonable attorneys' and accountants' fees
and disbursements) incurred by any of the above-named persons, resulting from
or in connection with misrepresentations, breach of warranties or failure to
perform any covenant or agreement of Omega or OHSI contained herein.
Stockholder agrees to give prompt notice to Omega of the assertion of any
claim, or the threat or commencement of any suit, action, proceeding or other
matter in respect of which indemnity may be sought under this Section 9.2.
Omega or OHSI may participate in the defense of any such suit, action,
proceeding or other matter at Omega's or OHSI's expense. Neither Omega nor OHSI
shall be liable under this Section 9.2 for any settlement effected without
Omega's or OHSI's consent of any claim, suit, action, proceeding or other
matter in respect of which indemnity may be sought under this Section 9.2,
which consent shall not be unreasonably withheld.
9.3 SURVIVAL. The representations and warranties of the Corporation,
Stockholder and Omega contained in this Agreement and the indemnifications
contained in this Article IX shall survive the Merger through August 29, 1999,
except for (i) any matters involving fraud, which shall have no time
limitation, (ii) any matters involving tax claims which shall terminate on the
expiration of the applicable statute of limitations of the taxing authority,
and (iii) any matters involving environmental or ERISA matters, which shall
terminate August 29, 2002 (the "Indemnification Period"). Any matter to which
an indemnification pertains and with respect to which a claim has been asserted
or threatened following the Closing Date, and prior to the expiration of the
Indemnification Period, shall continue to be subject to the indemnifications
under this Article IX until finally terminated, settled, resolved, or
adjudicated; and all terms, conditions and stipulations of this Article IX
shall likewise continue to apply.
9.4 SECURITY FOR INDEMNITY. The Corporation and Stockholder hereby
agree that in the event either Omega or OHSI is entitled to indemnification
pursuant to the provisions of this Article IX and either the Corporation or
Stockholder does not pay to Omega or OHSI the amount due hereunder, then Omega
or OHSI shall be entitled to exercise those rights set forth
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in that certain Stock Pledge and Escrow Agreement, dated as of August 29, 1997,
by and among Omega, OHSI, and Stockholder.
ARTICLE X.
MEDIATION AND ARBITRATION
10.1 MEDIATION. In the event a dispute arises out of or relating to
this Agreement, or the breach thereof, and if said dispute cannot be settled
through negotiation, the parties agree to attempt in good faith to settle the
dispute by mediation under the Commercial Mediation Rules of the American
Arbitration Association. Unless the parties reach an agreement reduced to
writing, this mediation will be non-binding, but the parties must participate
in good faith in non-binding mediation, before resorting to binding
arbitration.
10.2 BINDING ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or its breach, not satisfied through either
negotiation or mediation, shall be settled by binding arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction.
As soon as reasonably practical after submission of a demand for
binding arbitration, the parties shall select one arbitrator, agreeable to all
parties. This arbitrator will be selected from lists prepared by the American
Arbitration Association. From the American Arbitration Association list the
parties will submit to the American Arbitration Association a ranked list of
arbitrators which are acceptable. The highest ranking acceptable candidate will
be selected by the American Arbitration Association. If no arbitrators from the
list composed by the American Arbitration Association are acceptable by either
of the parties, the American Arbitration Association will compile a second
list. This procedure will be followed until the parties have selected an
arbitrator. The results of the arbitrator's finding will be binding on the
parties.
ARTICLE XI.
EXPENSES
Each of the parties shall pay their own costs and expenses incurred or
to be incurred by it in negotiating and preparing this Agreement and in Closing
and carrying out the transactions contemplated by this Agreement. Prior to the
Closing Date, Corporation shall pay or satisfy any obligation for such
expenses.
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ARTICLE XII.
COSTS
Should any mediation or binding arbitration ("Dispute Resolution")
arising out of this Agreement be instituted by any party to this Agreement
against another party, the party prevailing in such Dispute Resolution shall be
entitled, in addition to such other damages and relief as the mediator or
arbitrator shall award, to reimbursement of reasonable attorneys' fees, costs
and other expenses incurred in the prosecution or defense of such Dispute
Resolution.
ARTICLE XIII.
TERMINATION
Notwithstanding any of the foregoing provisions, this Agreement may be
terminated at any time prior to the Effective Time:
(a) By mutual written consent of all the parties hereto;
(b) By written notice from Omega or OHSI to Corporation if any of the
representations and warranties made by Corporation and Stockholder in this
Agreement or in the Exhibits and Schedules annexed hereto are reasonably
determined by Omega or OHSI to be untrue or inaccurate in any material respect;
or
(c) By written notice from Corporation or Stockholder to Omega if any
of the representations and warranties made by Omega or OHSI in this Agreement
are reasonably determined by Corporation to be untrue or inaccurate in any
material respect.
ARTICLE XIV.
NOTICES
Any notices hereunder shall be deemed to have been given by one party
to the other if it is in writing and it is (a) delivered or tendered in person
or (b) deposited in the United States mail in a sealed envelope, with postage
prepaid in any case addressed as follows:
If to Omega or OHSI: Omega Health Systems of
Illinois, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
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with a copy to: Baker, Donelson, Bearman & Xxxxxxxx, P.C.
2000 First Tennessee Building
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
If to Corporation
or Stockholder: Xxxxx X. Xxxxxxx, M.D.
Ocular Care Associates, S.C.
000 Xxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
with a copy to: Erwin, Martinkus, Xxxx & Xxxxx
000 Xxxx Xxxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxx Xxxxx
or to such other address as the party addressed shall have previously
designated by notice to the serving party, given in accordance with this
Article XIV. Notices shall be deemed to have been duly given (i) on the date of
delivery if delivered personally; (ii) or on the third day after mailing if
mailed as provided above; provided, however, that a notice not given as above
shall, if it is in writing, be deemed given if and when actually received by a
party.
ARTICLE XV.
AMENDMENT AND WAIVER
The parties hereto may by mutual agreement amend this Agreement in any
respect. Any party hereto may extend the time for the performance of any of the
obligations of the other, waive any inaccuracies in representations by the
other contained in this Agreement or in any document delivered pursuant hereto,
which inaccuracies would constitute a breach of this Agreement, waive
compliance by the other with any of the covenants contained in this Agreement
and performance of any obligations by the other, and waive the fulfillment of
any condition that is precedent to the performance by the party so waiving any
of its obligations under this Agreement. Any agreement on the part of any party
for any such amendment, extension or waiver must be in writing and signed by
the party agreeing to be bound thereby. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a
continuing waiver.
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ARTICLE XVI.
EMPLOYEES - EMPLOYEE BENEFITS
16.1 AFFECTED EMPLOYEES. "Affected Employees" shall mean employees, a
list of which is attached hereto as Schedule 16.1, of Corporation on the
Closing Date.
16.2 RESPONSIBILITIES. Prior to the Closing Date, Corporation agrees
to satisfy, or cause its insurance carriers to satisfy, all claims for medical,
health and hospital benefits, whether insured or otherwise (including, but not
limited to, workers compensation, life insurance, medical and disability
programs), under Corporation's employee benefit plans brought by, or in respect
of, Affected Employees and former employees of Corporation prior to the Closing
Date, in accordance with the terms and conditions of such employee benefit
plans or applicable workers compensation statutes without interruption as a
result of the employment by the Surviving Corporation of any such employees
after the Closing Date.
16.3 TERMINATION BENEFITS. Corporation and Stockholder shall be solely
responsible for, and shall pay or cause to be paid, severance payments and
other termination benefits, if any, to Affected Employees who may become
entitled to such benefits by reason of any events occurring prior to the
Closing Date. If any action on the part of Corporation prior to the Closing, or
if the Merger pursuant to this Agreement shall result in any liability or claim
of liability for severance payments or termination benefits, or any liability,
forfeiture, fine or other obligation by virtue of any state, federal or local
law, such liability or claim of liability shall be the sole responsibility of
Stockholder, and Stockholder shall indemnify and hold harmless the Surviving
Corporation from any losses resulting directly or indirectly from such
liability or claim.
16.4 EMPLOYEE BENEFIT PLANS. On or prior to the Closing Date,
Stockholder shall cause the Corporation to either terminate any employee
benefit plans maintained by Corporation or cause another entity to assume their
sponsorship through merger, consolidation or transfer of plan assets as
described in ss.414(i) of the Internal Revenue Code of 1986, as amended. Should
the time needed to effect such termination, merger, consolidation, or transfer
extend beyond the Closing Date, any and all costs of such shall be the sole
responsibility of the Stockholder.
ARTICLE XVII.
MISCELLANEOUS
17.1 PRESS RELEASE. Except as required by law, neither the Corporation
nor Stockholder shall make any press releases or other public announcements
relating to this
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Agreement or the transactions contemplated hereby, without the prior written
consent of Omega.
17.2 BINDING EFFECT. This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto, their successors and assigns.
17.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties pertaining to the subject matter hereof and supersedes any
prior agreements and understandings of the parties in connection therewith.
17.4 GOVERNING LAW; VENUE. This Agreement shall be governed by and
construed in accordance with the laws of the State of Illinois. Any mediation
or binding arbitration with respect to this Agreement shall be conducted in
Vermilion County, Illinois.
17.5 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
17.6 HEADINGS. The subject headings of the Articles, Sections and
subparagraphs of this Agreement are included for purposes of convenience only,
and shall not affect the construction or interpretation of any of its
provisions.
17.7 FINDERS. Each party warrants to the other that no finder or
broker has been engaged by it in this transaction and that no finder's or
brokerage fees are due to any person as a result of this Agreement.
17.8 NO THIRD-PARTY BENEFIT. Except as otherwise expressly provided,
nothing in this Agreement, expressed or implied, is intended or shall be
construed to confer upon any person other than the parties hereto, any right,
remedy, or claim, legal or equitable, under or by reason of this Agreement or
any provision thereof.
17.9 ASSIGNMENT. Neither this Agreement nor any of the rights or
duties of any party hereto may be transferred or assigned to any person except
by a written agreement executed by each of the parties hereto, except that
Omega or OHSI reserves the right to assign this Agreement to any affiliate or
successor of either Omega or OHSI.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year hereinabove first set forth.
OMEGA:
OMEGA HEALTH SYSTEMS OF ILLINOIS, INC.
By:
------------------------------------
Xxxxxx X. Xxxxxxx, Vice
President
OHSI:
OMEGA HEALTH SYSTEMS, INC.
By:
------------------------------------
Xxxxxx X. Xxxxxxx, Executive Vice
President and Chief Financial Officer
CORPORATION:
XXXXXXX EYE CARE OPTICAL DEPARTMENT, INC.
By:
------------------------------------
Xxxxx X. Xxxxxxx, M.D., President
STOCKHOLDER:
---------------------------------------
XXXXX X. XXXXXXX, M.D.
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