EXHIBIT 2.5
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MERGER AGREEMENT
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THIS MERGER AGREEMENT ("Agreement") is made and entered into as of this
30th day of April, 1997 by and between XXXXXXX XXXXX, O.D., a citizen and
resident of the State of California ("Xx. Xxxxx"), and XXXXX XXXXX, wife of Xx.
Xxxxx and a citizen and resident of the State of California, both as Trustees of
the XXXXX FAMILY TRUST DATED AUGUST 18, 1988 (the "Trust") (collectively
referred to herein as "Stockholder"), PRIMARY EYECARE NETWORK, a California
corporation ("PEN"); P.E.N. RESOURCES, INC. ("PEN Resources") (collectively
referred to herein as "Corporations," and individually as "Corporation");OMEGA
HEALTH SYSTEMS, INC., a Delaware corporation ("OHSI"), and OMEGA ACQUISITION
SUBSIDIARY, INC., a California corporation ("Omega").
WITNESSETH
WHEREAS, Stockholder is the sole shareholder in PEN and PEN Resources,
which Corporations are dedicated to the support of optometry through education,
training, publication and vendor programs; and
WHEREAS, Stockholder has agreed to merge each of the Corporations into
Omega (sometimes referred to hereinafter as the "Surviving Corporation"), with
Stockholder receiving OHSI common stock and cash in exchange for Stockholder's
stock in the Corporations; 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 is hereby acknowledged by the parties, it is agreed as
follows:
SECTION 1. MERGER TRANSACTION.
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1.1 BASIC TRANSACTION. (a) Subject to the terms and conditions of this
Agreement, at the Effective Time (as defined in SECTION 1.1.(B)(I)), the
Corporations will be merged with and into Omega in accordance with this
Agreement, and the separate existence of the Corporations shall thereupon cease
(the "Merger"). Omega shall be the Surviving Corporation in the Merger. The
Merger shall have the effects specified in SECTION 1100 ET SEQ. of the
California Corporations Code (the "Code"). By execution and delivery of this
Agreement, Stockholder hereby approves the Merger on the terms and subject to
the conditions set forth herein, which approval shall be effective as an action
without a meeting pursuant to the Corporations' bylaws and the Code.
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(b) EFFECT OF MERGER.
(i) GENERAL. If all the conditions to the Merger set forth in
SECTION 5 shall have been fulfilled or waived in accordance herewith and
this Agreement shall not have been terminated as provided in SECTION 8,
the parties hereto shall cause an Agreement of Merger meeting the
requirements of the Code and substantially in the form of Schedule I
attached hereto (the "Articles of Merger") to be properly executed,
verified and delivered for filing in accordance with the Code on the
Closing Date set forth in SECTION 1.2. The Merger shall become effective
upon the later of acceptance for filing of the Articles by the Secretary
of State of the State of California or at such later time which the
parties hereto shall have agreed upon and designated in the Articles of
Merger in accordance with applicable law as in effect at the time of the
Merger (the "Effective Time"). The Surviving Corporation may, at any time
after the Effective Time, take any action (including executing and
delivering any document or instrument) in the name and on behalf of Omega
or the Corporations in order to carry out and effectuate the transaction
contemplated by this Agreement.
(ii) ARTICLES 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, except that the name of Omega shall be changed to
"Primary Eyecare Network, Inc.".
(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
Acquisition Subsidiary, Inc. (the "Omega Stock") issued and outstanding
at and as of the Effective Time will remain issued and outstanding.
1.2 CLOSING DATE. The closing of the Merger (the "Closing") shall take
place at the Corporation's principal office in San Ramon, California, at 10:00
a.m. local time on April 30, 1997 or 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 be
extended beyond May 10, 1997, unless agreed in writing by Stockholder and Omega.
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1.3 TRANSFER OF THE SHARES. Effective as of the Closing Date, each
Stockholder shall transfer, assign, grant, deliver and convey to Omega all of
Stockholder's right, title and interest in and to the shares of the
Corporations, free and clear of any lien, pledge, charge, security interest or
encumbrance of any nature ("Lien") by delivery by each Stockholder to Omega of
the stock certificates representing the shares of the Corporations duly endorsed
in blank for transfer or accompanied by appropriate stock powers duly executed
in blank, with all transfer taxes, direct or indirect, attributable to the
transfer of the shares of the Corporations paid or provided for. As a result of
the Merger the outstanding shares of the Corporations shall be cancelled and the
Stockholder shall have the right to receive the consideration provided for in
Section 2.1 hereof.
1.4 EVIDENCE OF TRANSFER. At the Closing and thereafter, as Omega may from
time to time request, each Corporation shall execute and deliver to Omega such
documents and instruments of conveyance as may be appropriate and shall take or
cause to be taken such actions as Omega may reasonably request in order to
accomplish the transfer of the shares of the Corporations and the consummation
of the matters contemplated by this Agreement. All such documents shall be in
form reasonably satisfactory to Omega.
SECTION 2. CONSIDERATION
2.1 CONSIDERATION. As consideration for the Merger, all shares of common
stock of the Corporations shall, without further action on the part of
Stockholder, be exchanged for: (i) One Million Four Hundred Eighteen Thousand
Five Hundred Eighteen Dollars ($1,418,518) payable in immediately available
funds by wire transfer paid by Omega to Stockholder at the Closing; and (ii)
voting common stock of Omega Health Systems, Inc. (the "OHSI Stock") valued at
One Million Two Hundred Seventy-five Thousand Nine Hundred Twenty-eight Dollars
($1,275,928) to be issued to Stockholder (hereinafter items (i) and (ii) are
collectively referred to as the "Consideration"). In addition, PEN shall pay to
Xx. Xxxxx Xxxx ("Xx. Xxxx") (a) Four Hundred Eighty One Thousand Four Hundred
Eighty Two Dollars ($481,482) payable in immediately available funds at the
Closing, in satisfaction of the obligation set forth in the employment agreement
between Xx. Xxxxx and Xx. Xxxx, attached hereto as SCHEDULE 2.1.1 and (b) Five
Hundred Thousand Dollars ($500,000) represented by Omega's promissory note,
guaranteed by OHSI, in consideration of Xx. Xxxx'x agreements under the
Employment Agreement attached as Exhibit 5.1.3 and Xx. Xxxx'x consent to this
Merger, which promissory note shall be in the form of Schedule 2.1.2 hereto.
Each share of OHSI Stock shall be valued at the average of the closing price of
OHSI Stock for the thirty (30) trading days ending three (3) business days prior
to the Closing Date, and excluding the five (5) highest and five (5) lowest
daily closing prices. The maximum value of this per-share calculation shall be
Seven and 1/8 Dollars ($7.125). No fractional share of OHSI Stock shall be
issued. The OHSI Stock shall not be registered, and will be restricted
securities that are not freely transferable, except to the extent provided
herein, and the certificates reflecting the OHSI Stock shall bear a legend to
that effect.
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2.2 "PIGGYBACK" REGISTRATION RIGHTS. (a) The Stockholder will be entitled
to "piggyback" registration rights for unregistered OHSI Stock on registrations
of OHSI stock or securities, subject to the right of Omega 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 to OHSI of registering such OHSI
Stock in a piggyback registration shall be borne by OHSI, except that
underwriting discounts and commissions shall be paid by the Stockholder, and the
costs of Stockholder's counsel shall be paid by the Stockholder.
2.3 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 any Stockholder's family, to a trust
established for any Stockholder's benefit or the benefit of one or more of the
members of any Stockholder's family, to a family partnership (general or
limited) established by any Stockholder's or one or more of the members of any
Stockholder's family, or to any other entity that is owned by any Stockholder
and one or more of the members of any Stockholder's family. In the event that
the OHSI Stock is transferred to any permitted transferee in accordance with
this SECTION 2.3, such permitted transferee shall be entitled to all of the
rights of Stockholder pursuant to this Agreement. In addition, nothing in this
Agreement shall prevent the Omega Stock that is not subject to the
indemnification and escrow arrangement provided for in the Stock Pledge and
Escrow Agreement from being sold or transferred, in whole or in part, to an
unrelated third party so long as the applicable registration and qualifications
requirements of the federal and state securities laws are complied with or such
sale or transfer is exempt from such registration and qualification
requirements.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF CORPORATIONS AND STOCKHOLDER
The Corporations and the Stockholder represent and warrant with Omega and
OHSI that, except as set forth in the disclosure schedule accompanying this
Agreement:
3.1 NUMBER OF, TITLE TO AND TRANSFERABILITY OF THE SHARES. The entire
authorized capital stock of PEN consists of 1,000,000 shares of common stock, of
which 1,000 shares are issued and outstanding. The entire authorized capital
stock of PEN Resources consists of 100,000 shares, of which 10,000 shares are
issued and outstanding. All of the issued and outstanding shares of each of the
Corporations have been duly authorized, are validly issued, fully paid, and
nonassessable, and are held of record by Stockholder as set forth on SCHEDULE
3.1 hereof. Stockholder owns beneficially and of record, and has good and
marketable title to, all of the issued and outstanding shares of each
Corporation, and Omega in the Merger shall acquire ownership of the assets of
the Corporations, free and clear of all Liens, except for the liabilities or
obligations listed in the Disclosure Schedules.
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3.2 OPTIONS AND OTHER RIGHTS. There are no outstanding options, warrants,
agreements, calls, conversion rights or other rights to subscribe for, purchase
or otherwise acquire any of the shares of the Corporations or to acquire any
stock or any other equity interest in the Corporations.
3.3 AUTHORITY TO EXECUTE AND PERFORM AGREEMENT. Stockholder has the full
legal right, power and capacity, and all authority and approval required to
enter into, execute and deliver this Agreement and to perform and observe fully
Stockholder's obligations hereunder and to perform the transactions contemplated
hereby. This Agreement has been fully executed and delivered by each Stockholder
and is the valid and binding obligation of Stockholder 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, moratorium and similar laws affecting the rights of
creditors generally.
3.4 TAXES.
(a) Each Corporation has filed all federal, state, local, municipal or
other tax returns ("Tax Returns") that it was required to file, on or before the
Closing Date. All such Tax Returns were correct and complete in all material
respects. All federal, state, local, municipal, or other income, employment, and
other taxes ("Taxes") owed by the Corporations (whether or not shown on any Tax
Return) through the Closing Date have been duly paid or accrued. The
Corporations are not the beneficiary of any extension of time within which to
file any Tax Return. The Corporations have not received notice of any claim made
by an authority in a jurisdiction where the Corporations do not file Tax Returns
that it is or may be subject to taxation by that jurisdiction. There are no
Liens on any of the assets of the Corporations that arose in connection with any
failure (or alleged failure) to pay any Tax.
(b) The Corporations have withheld and paid all Taxes, if any, required to
have been withheld and paid, on or before the Closing Date, in connection with
amounts paid or owing to any employee.
3.5 LITIGATION. Except as set forth on SCHEDULE 3.5 hereto, there are no
judgments unsatisfied against Corporations. Stockholder and Corporations are not
a party to any pending action, suit, proceeding or investigation, at law or in
equity, or otherwise in, for or by any court or governmental board, commission,
agency, department or office arising from the acts of Stockholder or
Corporations or initiation thereof by Stockholder or Corporations that relates
to the business or operations of the Corporations. Stockholder and Corporations
are not subject to any order, judgment, decree or governmental restriction which
adversely affects the shares of the Corporations or which would prevent the
consummation of the transactions contemplated by this Agreement. Stockholder and
Corporations are not in material violation of any law, order, writ, injunction
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or decree, injunction of any court, governmental department or instrumentality
(including, without limitation, applicable environmental protection legislation
and regulations) that relates to the business or operations of the Corporations.
There is no claim, action or proceeding now pending or, to the knowledge of
Stockholder, threatened against Stockholder or Corporations which will, or
could, prevent or delay consummation of the transactions contemplated by this
Agreement.
3.6 MEMBERS. Attached as SCHEDULE 3.6.1 is a list of all of the
Corporations' members as of March 31, 1997, for whom the Corporations provide
services (the "Members"). Attached as SCHEDULE 3.6.2 is a sample application PEN
enters into with the Members (the "Member Application").
3.7 VENDORS. Attached as SCHEDULE 3.7.1 is a list as of March 31, 1997, of
all of the Corporations' vendors who are currently providing products to the
members of PEN Members, (the "Vendors"). Attached as SCHEDULE 3.7.2 are the
contracts the Corporations entered into with the same Vendors (the "Vendor
Contracts"). Except as described on SCHEDULE 3.7.3, or in the Membership
Application materials, the Corporations have no other compensation arrangements
of any sort with Vendors, the terms of which are not substantially similar to
the terms of SCHEDULE 3.7.2.
3.8 EMPLOYEES AND INDEPENDENT CONTRACTORS. Attached as SCHEDULE 3.8.1 is a
list as of March 31, 1997, of all of the Corporations' employees and independent
contractors, including, but not limited to, manufacturers' representatives and
salespersons. Attached as SCHEDULE 3.8.2 and SCHEDULE 3.8.3 are sample contracts
Corporations enters into with such employees and independent contractors. Except
as described on SCHEDULE 3.8.4, the Corporations has no other compensation
arrangements of any sort with any person listed on SCHEDULE 3.8.1, the terms of
which are not substantially similar to the terms of SCHEDULE 3.8.2 or SCHEDULE
3.8.3.
3.9 CONTRACTS OR OTHER AGREEMENTS. Attached as SCHEDULE 3.9 is a list of
written contracts (other than the Member Applications, Vendor Contracts and
those contracts with persons listed on SCHEDULE 3.8.1) the Corporations has with
any third-party ("Other Agreements"). SCHEDULE 3.9 also sets forth a written
description of any verbal agreements that the Corporations have with any
third-party that provide for payments to or from the Corporations in excess of
$10,000 per annum.
3.10 FRAUD AND ABUSE. (a) Corporations and persons and entities providing
professional services for Corporations have not, to the knowledge of Xx. Xxxxx
and Xx. Xxxx, engaged in any activities which are prohibited under 42 U.S.C.
(beta) 1320a-7b, or the regulations promulgated thereundER pursuant to such
statutes, or related state or local statues or regulations, or which are
prohibited by rules of professional conduct; and
(b) To the knowledge of Xx. Xxxxx and Xx. Xxxx, the Corporations are in
substantial compliance with the regulations, found at 42 Code of Federal
Regulations (beta) 1001.952(h), related to the furnishing of "discounts" (as
thAT term is defined in the regulations) in the sale of goods and services by
Corporations to the Members.
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3.11 LABS. The Corporations neither own, nor operate under a management
services or other similar contract, any diagnostic labs of any sort, nor are
under any contract to furnish any diagnostic laboratory services to any Member.
3.12 NO MEDICAL SERVICES. The Corporations neither provide, directly or
indirectly, professional medical services of any kind, including, but not
limited to optometry or ophthalmology; nor do the Corporations engage in,
directly or indirectly, the practice of opticianry, including but not limited
to, the sale, fitting, or repair of glasses or contact lenses.
3.13 ACCURACY AND MATERIALITY. No representation or warranty of
Stockholder or the Corporations contained in this Agreement or any other
document prepared by Corporations and delivered to Omega in connection with this
Agreement contains any untrue statement of a material fact, or fails to state
any material fact necessary in order to make the statements made in this
Agreement or such document not misleading. Each of the representations and
warranties contained in this SECTION 3 shall be deemed to be material to and
have been relied upon by Omega.
3.14 REVIEW AND CONSULTATION. Stockholder has had access to and reviewed
such information and has consulted with all legal counsel, tax counsel,
accountants and other experts and advisors deemed necessary by Stockholder in
connection with the transactions contemplated herein.
3.15 BROKER FEES. Neither Stockholder nor the Corporations has utilized
the services of a broker in connection with this transaction, and neither
Stockholder nor the Corporations has any liability or obligation to pay any fee
or commission to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.
3.16 TANGIBLE ASSETS. Attached hereto as SCHEDULE 3.16 is a true and
complete list of all of the non-cash assets, to which each Corporation is a
party, of the Corporations at the Closing Date (the "Assets"). Each Corporation
has and at the Closing Date will have good title, unencumbered by any Lien, to
all of the Assets. The Assets will be updated at the Closing Date, and cash,
accounts receivables, accounts payable, and debt at the Closing Date will be
substantially similar to the amounts of such items existing as of November 30,
1996.
3.17 ACCOUNTS RECEIVABLE. Attached hereto as SCHEDULE 3.17.1 is a true and
complete list as of March 31, 1997, of all accounts receivable of the
Corporations and the amount of Corporations' reserve for bad debts at the
Closing Date. Prior to the Closing there shall be no material adverse change in
the accounts receivable or the reserve, except for transactions in the normal
course of the Corporations' business. In addition, attached as SCHEDULE 3.17.2
is a list of all accounts receivable that have been written off as
"uncollectible" or as "bad debt," since May 1, 1995. The accounts receivable are
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each exclusively owned by the Corporations free and clear of any liens, security
interest claims and encumbrances of any kind; are payable in an amount not less
than their face amount, and are based on an actual and bona fide rendition of
services or sale of goods in the ordinary course of business, and are not
subject to any action, suit, proceeding or pursuit (pending or threatened)
set-off, counter claim, defense, abatement, suspension, deferment, deductible,
reduction or termination by the account debtor other than routine adjustments
made in the ordinary course of business and each account receivable requires no
further act or circumstances on the part of the Corporations to make the account
receivable payable by the account debtor. Neither the Corporations, Xx. Xxxxx,
nor Xx. Xxxx have actual knowledge of any bankruptcy or other payment disability
of any account debtor.
3.18 FINANCIAL STATEMENTS. Attached hereto as collective SCHEDULE 3.18.1
are audited financial statements of PEN at April 30, 1994, April 30, 1995, April
30, 1996 and the seven (7) months ended November 30, 1996, including balance
sheets and income statements for the periods then ended. Attached hereto as
Schedule 3.18.2 are unaudited financial statements of PEN Resources at December
31, 1995 and 1996, including balance sheets and income statements for the
periods then ended. Such financial statements accurately reflect the condition
and results of operations of the Corporations at such dates and for such
periods. Since November 30, 1996 there has not been, and prior to the Closing
Date there will not be, any material adverse change in the Assets or business or
financial condition of the Corporations.
3.19 UNDISCLOSEDLIABILITIES. To the knowledge of the Corporations, except
as set forth in SCHEDULE 3.19, the Corporations have no debt, liability or
obligation except for (i) debts, liabilities or obligations set forth on,
accrued or reserved against in, the March 31, 1997 balance sheet of the
Corporations or included in any notes thereto, (ii) debts, liabilities or
obligations that have arisen in the ordinary course of business, or (iii) debts,
liabilities or obligations disclosed in the audited financial statements of the
Corporations for the period ended November 30, 1996.
3.20 GOVERNMENTAL APPROVALS. The Corporations have all permits and
licenses required by all applicable laws and regulations and are not in
violation of any such applicable laws or regulations. The Corporations are duly
licensed, and the Corporations, their offices and facilities are lawfully
operated in all material respects in accordance with the requirements of all
applicable laws, including any federal or state antitrust, price discrimination,
or illegal brokerage laws, and have all necessary authorizations, all of which
are in full force and effect in all material respects. There are no outstanding
notices of deficiencies relating to the Corporations issued by any governmental
authority requiring conformity or compliance with any applicable law or
condition, and the Corporations and Stockholder have no knowledge that such
necessary authorizations may be revoked or not renewed in the ordinary course of
business.
3.21 THIRD-PARTY RELATIONS. Neither Xx. Xxxxx nor Xx. Xxxx is aware
of any problem or disagreement with any third parties with which the
Corporations do business, which problem or disagreement has had a material
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adverse effect on the Corporation's businesses or is reasonably likely to
have a material adverse effect on the Corporation's businesses. Xx. Xxxxx
and Xx. Xxxx will use their best efforts from the date of this Agreement to
operate the business in such a manner so as not to materially adversely
affect the goodwill of its Members, Vendors, suppliers, employees, and other
such persons or third parties with which the Corporations do business.
3.22 TRADE RELATIONS. There exists no actual or threatened limitation of
the business relationship of Corporations with any Member, Vendor or landlord,
with any Member Application or Other Agreements, which actual or threatened
limitations to such contracts or projected contracts with Corporations would be
material to the operations of Corporations. There exists no condition or state
of facts or circumstances which could result in the occurrence of a material
adverse effect with respect to the Assets, financial condition, or business of
the Corporations or prevent Omega from conducting the Corporations' business
after the consummation of the transactions contemplated by this Agreement as
such business is currently conducted.
3.23 EMPLOYEE BENEFIT PLANS. (a) LIST OF PLANS. Set forth on SCHEDULE 3.23
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 Corporations (including all employers
(whether or not incorporated) which by reason of common control are treated
together with Corporations and/or Stockholder as a single employer within the
meaning of Section 414 of the Code) since September 2, 1974.
(b) STATUS OF PLANS. Corporations have 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 of the Code 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. Corporations have not incurred any
liability to the Pension Benefit Guaranty Corporations ("PBGC") in connection
with any Employee Benefit Plan covering any employees of Corporations 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
Stockholder knows of no facts or circumstances which might give rise to any
liability of Corporations to the PBGC under Title IV of ERISA which could
reasonably be anticipated to result in any claims being made against the Omega
by the PBGC. Corporations have 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.
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(c) CONTRIBUTIONS. Full payment has been made of all amounts which
Corporations are required, under applicable law or under any Employee Benefit
Plan or any agreement relating to any Employee Benefit Plan to which
Corporations are 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. Corporations have made adequate provision for reserves to meet
contributions that have not been made because they are not yet due under the
terms of any Employee Benefit Plan or related agreements. Benefits under all
Employee Benefit Plans are as represented and have not been increased subsequent
to the date as of which documents have been provided.
(d) TAX QUALIFICATION. Each Employee Benefit Plan intended to be qualified
under Section 401(a) of the Code has been determined to be so qualified by the
Internal Revenue Service and 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. Corporations have 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. Corporations presently does not maintain any employee
benefit plans or any other foreign pension, welfare or retirement benefit plans
other than those listed on EXHIBIT 3.23.
(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.
3.24 INVESTMENT INTENT. Stockholder acknowledges that the OHSI Stock has
not been registered under the Securities Act, and that the OHSI Stock, except as
provided for in SECTION 2.2, AND SECTION 2.3 , may not be sold, pledged or
otherwise transferred absent such registration, or unless an exemption from
registration is available. Stockholder is acquiring the OHSI Stock for its 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 Securities Act.
Stockholder qualifies as an "accredited investor", as defined in Rule 501(a)
pursuant to the Securities Act. Stockholder has received from OHSI a copy of
OHSI's Form 10-K for 1994, 1995, and 1996, OHSI's 10-Q for the quarter ended
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September 30, 1996, and OHSI's 1994 and 1995 Annual Report to Shareholders.
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 Stockholder. Stockholder has had the opportunity to obtain other
additional information concerning OHSI from OHSI senior management. This
representation by Stockholder does not limit or qualify in any respect any of
the representations or warranties made by OHSI in this Agreement.
3.25 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 each of
the Corporations enforceable in accordance with its terms (subject as to
enforcement of remedies to the discretion of the courts in awarding equitable
relief, and to applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium and similar laws effecting the rights of creditors
generally). Attached hereto as SCHEDULE 3.25 is a listing of all third-party
consents in connection with the Merger which must be obtained prior to the
Effective Time.
(b) To the knowledge of Stockholder and Xx. Xxxxx, the execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby, and/or compliance by the Corporations and Stockholder with any of the
provisions hereof, will not:
(i) violate or conflict with, or result in a breach of any provision
of, or constitute a default (or an event which, with notice or lapse of
time or both, would constitute a default) under, or result in the creation
of, any lien, security interest, charge or encumbrance upon any of the
assets of the Corporations 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 either the
Corporations, Stockholder or Xx. Xxxxx is a party, or by which either the
Corporations, Stockholder, Xx. Xxxxx or any of the assets of the
Corporations is bound; or
(ii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable either to the Corporations, Stockholder, or Xx.
Xxxxx or any of the assets to be conveyed hereunder; or
(iii) conflict with or constitute a breach, violation, or
termination of any provision of any Vendor Contract, any Member
Application, any Other Agreement, or any contract with the persons listed
on Schedule 3.8.1.
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SECTION 4. REPRESENTATIONS AND WARRANTIES OF OMEGA AND OHSI.
Omega and OHSI represent and warrant to the Stockholder that:
4.1 CORPORATE STATUS. Each of Omega and OHSI is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation with full corporate power and authority to
carry on its business as now conducted and to own or lease and operate its
properties as, and in the places where, such business is now conducted and such
properties are owned, leased and operated.
4.2 CAPITALIZATION. OHSI has an authorized capitalization of 25,000,000
shares of common stock ("OHSI Comon Stock"), par value $.06 per share, of which
6,879,978 shares are issued and outstanding. All of the issued and outstanding
shares of OHSI Common Stock have been duly and validly issued and are fully paid
and nonassessable. Except as described on SCHEDULE 4.2, there are no options,
warrants or similar rights granted by OHSI or any other agreements to which OHSI
is a party providing for the issuance or sale by it of any additional
securities. There is no liability for dividends declared or accumulated but
unpaid with respect to any shares of OHSI Common Stock. Omega is a wholly-owned
subsidiary of OHSI.
4.3 CONTRACTS OR OTHER AGREEMENTS. Neither the execution or delivery of
this Agreement nor the consummation of this transaction will: (i) conflict with,
constitute a breach, violation or termination of any provision of any contract
or other agreement to which Omega is a party or by which it is bound; or (ii)
violate any law, regulation, judgment, rule, order or any other restriction of
any kind or character applicable to Omega.
4.4 REVIEW AND CONSULTATION. Omega has had access to and reviewed such
information and has consulted with all legal counsel, tax counsel, accountants
and other experts and advisors deemed necessary by Omega in connection with the
transactions contemplated herein.
4.5 AUTHORITY TO EXECUTE AND PERFORM AGREEMENT. Omega has the full legal
right, power and capacity, and all authority and approval, including approval by
Omega's Board of Directors, required to enter into, execute and deliver this
Agreement and to perform and observe fully Omega's obligations hereunder and to
perform the transactions contemplated hereby. This Agreement has been fully
executed and delivered by Omega and is the valid and binding obligation of Omega
enforceable in accordance with its terms. To the knowledge of Omega and OHSI,
the execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, and compliance by Omega and OHSI 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 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
either Omega or OHSI is a party, or by which either Omega or OHSI or any
of their assets are bound; or
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(ii) violate any order, writ, injunction, decree, statute, rule or
regulation applicable either to Omega or OHSI.
4.6 OHSI STOCK. The shares of OHSI Stock to be issued to the Stockholder
pursuant to this Agreement, when so issued and delivered, will be duly and
validly authorized and issued, fully paid and nonassessable, free and clear of
any and all Liens, and free of restrictions on transfer other than restrictions
on transfer under this Agreement and under applicable state and federal
securities laws, with no personal liability attaching to the ownership thereof.
4.7 CONSENTS AND APPROVALS. No notice to, declaration, filing or
registration with, or authorization, consent or approval of, or license or
permit from, any domestic or foreign governmental or regulatory body or
authority, or any other person or entity, is necessary in connection with the
execution and delivery of this Agreement by Omega or OHSI and the Merger as
contemplated by this Agreement.
4.8 SEC REPORTS AND FINANCIAL STATEMENTS.
(a) OHSI has previously furnished to Stockholder complete and
correct copies of: (i) its Annual Reports on Form 10-K for the periods ended
December 31, 1994, 1995, and 1996, (ii) its proxy materials for the two (2) most
recently held meetings of stockholders, and (iii) its 1994 and 1995 Annual
Reports to Shareholders (collectively, the "SEC Filings").
(b) As of their respective filing dates or the date of any amendment
thereto, none of the SEC Filings contains any untrue statement of a material
fact or omits to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, except to the extent corrected by a
subsequently filed SEC filing.
(c) Since December 31, 1996, OHSI has filed with the Securities and
Exchange Commission ("SEC") all reports and registration statements and all
other filings required to be filed with the SEC.
(d) The audited consolidated financial statements and unaudited
interim financial statements included in the reports or other filings referred
to in SECTION 4.8(A) hereof were prepared in conformity with generally accepted
accounting principles applied on a consistent basis (except as may be indicated
therein or in the notes thereto) and fairly present the consolidated financial
position of OHSI and its subsidiaries as of the dates thereof and the
consolidated results of operations and changes in cash flows and stockholders'
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equity of OHSI and its subsidiaries for the periods shown therein, subject, in
the case of unaudited interim financial statements, to normal year-end
adjustments and the absence of certain footnote disclosures.
(e) For three (3) years following the Closing Date, Omega and OHSI
will supply to Stockholder all SEC Filings made after the Closing Date and
copies of all press releases issued by OHSI.
4.9 UNDISCLOSED LIABILITIES. Except as disclosed on SCHEDULE 4.9, neither
OHSI nor any of its subsidiaries has any liability or obligation, secured or
unsecured (whether absolute, accrued, contingent or otherwise, and whether due
or to become due) which is material to the business of OHSI and its
subsidiaries, taken as a whole, except for any such liability and obligation
which (i) is accrued or reserved against in the consolidated balance sheet as of
December 31, 1996 contained in OHSI's report on Form 10-K for the period then
ended, or (ii) is of a normally recurring nature and was incurred after November
30 , 1996 in the ordinary course of business and consistent with past practice.
4.10 ABSENCE OF CERTAIN CHANGES. Since December 31, 1996 to the date
hereof, there has not occurred or arisen any events having individually or in
the aggregate a material adverse effect on the business, financial condition,
operation, prospects, net worth, assets or liabilities of OHSI and its
subsidiaries, taken as a whole, except any such events described in the SEC
Filings filed by OHSI since December 31, 1996 to the date hereof and which were
provided to the Stockholder by OHSI.
4.11 TAXES. (a) Each of OHSI and Omega has filed all federal, state,
local, municipal or other tax returns ("Tax Returns") that it was required to
file, on or before the Closing Date. All such Tax Returns were correct and
complete in all material respects. All federal, state, local, municipal, or
other income, employment, and other taxes ("Taxes") owed by Omega or OHSI
(whether or not shown on any Tax Return) through the Closing Date have been duly
paid or accrued. Neither OHSI nor Omega is the beneficiary of any extension of
time within which to file any Tax Return. Neither OHSI nor Omega has received
notice of any claim made by an authority in a jurisdiction where Omega does not
file Tax Returns that it is or may be subject to taxation by that jurisdiction.
There are no Liens on any of the assets of Omega that arose in connection with
any failure (or alleged failure) to pay any Tax.
(b) Each of Omega and OHSI has withheld and paid all Taxes, if any,
required to have been withheld and paid, on or before the Closing Date, in
connection with amounts paid or owing to any employee.
4.12 LITIGATION. Except as set forth on SCHEDULE 4.12 hereto, there are no
judgments unsatisfied against either Omega or OHSI. Neither Omega nor OHSI is a
party to any pending action, suit, proceeding or investigation, at law or in
equity, or otherwise in, for or by any court or governmental board, commission,
agency, department or officer arising from the acts of either Omega or OHSI or
initiation thereof by Omega or OHSI that relates to the business or operations
of either Omega or OHSI. Neither Omega nor OHSI is subject to any order,
judgment, decree or governmental restriction which adversely affects the OHSI
Stock or which would prevent the consummation of the transactions contemplated
by this Agreement. Neither Omega nor OHSI is in material violation of any law,
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order, writ, injunction or decree, injunction of any court, governmental
department or instrumentality (including, without limitation, applicable
environmental protection legislation and regulations) that relates to the
business or operations of either Omega or OHSI. There is no claim, action or
proceeding now pending or, to the knowledge of either Omega or OHSI, threatened
against either Omega or OHSI which will, or could, prevent or delay consummation
of the transactions contemplated by this Agreement.
4.13 FRAUD AND ABUSE. Neither Omega nor OHSI, nor persons and entities
providing professional services for Omega or OHSI have, to the knowledge of
Omega or OHSI engaged in any activities which are prohibited under 42 U.S.C.
(beta) 1320a-7b, or the regulations promulgated thereundER pursuant to such
statutes, or related state or local statues or regulations, or which are
prohibited by rules of professional conduct.
4.14 THIRD-PARTY RELATIONS. Neither Omega nor OHSI is aware of any problem
or disagreement with any third parties with which the they do business, which
problem or disagreement has had a material adverse effect on their businesses or
is reasonably likely to have a material adverse effect on their businesses.
Omega and OHSI will use their best efforts from the date of this Agreement to
operate the business in such a manner so as not to materially adversely affect
the goodwill of its Members, Vendors, suppliers, employees, and other such
persons or third parties with which the Corporations do business.
4.15 BROKER FEES. Neither OHSI nor Omega has utilized the services of a
broker in connection with this transaction, and neither has any liability or
obligation to pay any fee or commission to any broker, finder, or agent with
respect to the transactions contemplated by this Agreement.
4.16 GOVERNMENTAL APPROVALS. Omega and OHSI have all permits and licenses
required by all applicable laws and regulations and are not in violation of any
such applicable laws or regulations. Each of OHSI and Omega is duly licensed,
and Omega, OHSI and their offices and facilities are lawfully operated in all
material respects in accordance with the requirements of all applicable laws,
including any federal or state antitrust, price discrimination, or illegal
brokerage laws, and has all necessary authorizations, all of which are in full
force and effect in all material respects. There are no outstanding notices of
deficiencies relating to Omega or OHSI issued by any governmental authority
requiring conformity or compliance with any applicable law or condition, and
neither OHSI nor Omega have any knowledge that such necessary authorizations may
be revoked or not renewed in the ordinary course of business.
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4.17 EMPLOYEE BENEFIT PLANS. (a) LIST OF PLANS. Set forth on EXHIBIT 4.16
is an accurate and complete list of all employee benefit plans ("Employee
Benefit Plans") within the meaning of Section 3(3) of ERISA, whether or not any
Employee Benefit Plans are otherwise exempt from the provisions of ERISA,
established, maintained or contributed to by Omega or OHSI (including all
employers (whether or not incorporated) which by reason of common control are
treated together with Omega or OHSI as a single employer within the meaning of
Section 414 of the Code) since September 2, 1974.
(b) STATUS OF PLANS. Neither Omega nor OHSI has maintained and does not
now maintain or contribute to any Employee Benefit Plan subject to ERISA which
is not in substantial compliance with ERISA, or which has incurred any
accumulated funding deficiency within the meaning of either Section 412 of the
Code or 418B of ERISA, or which has applied for or obtained a waiver from the
Internal Revenue Service of any minimum funding requirement under Section 412 of
the Code or which is subject to Title IV of ERISA. Neither Omega or OHSI has
incurred any liability to the PBGC in connection with any Employee Benefit Plan
covering any employees of Omega or OHSI 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 neither Omega nor OHSI knows
of any facts or circumstances which might give rise to any liability of Omega or
OHSI to the PBGC under Title IV of ERISA which could reasonably be anticipated
to result in any claims being made against Omega or OHSI by the PBGC. Neither
Omega nor OHSI has incurred any withdrawal liability (including any contingent
or secondary withdrawal liability) within the meaning of Sections 4201 and 4202
of ERISA, to any Employee Benefit Plan which is a Multiemployer Plan (as defined
in Section 4001 of ERISA), and no event has occurred, and there exists no
condition or set of circumstances, which represent a material risk of the
occurrence of any withdrawal from or the partition, termination, reorganization
or insolvency of any Multiemployer Plan which would result in any liability to a
Multiemployer Plan.
(c) CONTRIBUTIONS. Full payment has been made of all amounts which Omega
or OHSI is required, under applicable law or under any Employee Benefit Plan or
any agreement relating to any Employee Benefit Plan to which Omega or OHSI 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.
Omega or OHSI 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.
(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.
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(e) TRANSACTIONS. Neither Omega nor OHSI has engaged in any transaction
with respect to the Employee Benefit Plans which would subject it to a tax,
penalty or liability for prohibited transactions under ERISA or the Code nor
have any of its directors, officers or employees to the extent they or any of
them are fiduciaries with respect to such plans, breached any of their
responsibilities or obligations imposed upon fiduciaries under Title I of ERISA
or would result in any claim being made under or by or on behalf of any such
plans by any party with standing to make such claim.
(f) OTHER PLANS. Neither Omega nor OHSI presently maintains any employee
benefit plans or any other foreign pension, welfare or retirement benefit plans
other than those listed on SCHEDULE 4.16.
4.18 ACCURACY AND MATERIALITY. No representation or warranty of Omega or
OHSI contained in this Agreement or any other document prepared by Omega or OHSI
and delivered to Stockholder, the Corporations or Xxxx in connection with this
Agreement contains any untrue statement of a material fact, or fails to state
any material fact necessary in order to make the statements made in this
Agreement or such document not misleading. Each of the representations and
warranties contained in this SECTION 4 shall be deemed to be material to and
have been relied upon by Stockholder.
4.19 OFFERING. Subject to the truth and accuracy of Stockholder's
representations set forth in SECTION 3 of this Agreement, the offer, sale and
issuance of the shares of OHSI Stock as contemplated by this Agreement are
exempt from the registration requirements of the Securities Act of 1933, as
amended, and neither Omega, OHSI, nor any authorized agent acting on its behalf
will take any action hereafter that would cause the loss of such exemption.
SECTION 5. CONDITIONS AND ADDITIONAL AGREEMENTS.
5.1 CONDITIONS PRECEDENT TO OMEGA'S AND OHSI OBLIGATIONS. The Closing and
all obligations of Omega and OHSI pursuant to this Agreement shall be
conditioned upon the following:
(a) All representations and warranties contained in SECTION 3 shall
be true and correct as of the date of this Agreement and as of the Closing
Date;
(b) There shall have been no material adverse change in the accounts
receivable, assets, liabilities, financial condition or business of the
Corporations from November 30, 1996, through the Closing Date;
(c) Stockholder shall have executed and delivered to Omega the stock
certificates representing the Shares pursuant to SECTION 1.3 of this
Agreement;
(d) Stockholder shall have performed all of its obligations under
this Agreement required to be performed as of the Closing Date;
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(e) Xx. Xxxxx shall have executed and delivered to Omega a
Noncompetition and Nonsolicitation Agreement, dated as of May 1, 1997, by
and among Xx. Xxxxx, the Corporations and OHSI, and substantially in the
form of EXHIBIT 5.1.1, attached hereto (the "Noncompete Agreement");
(f) Xx. Xxxx shall have executed and delivered to Omega a
Contractor's Agreement and Confidentiality Agreement, dated as of May 1,
1997, by and among, Xx. Xxxx, the Corporations, and OHSI, and
substantially in the form of EXHIBIT 5.1.2 attached hereto (the
"Contractor's Agreement");
(g) Xx. Xxxx shall have executed and delivered to OHSI the
Employment Agreement, substantially in the form of EXHIBIT 5.1.3, attached
hereto;
(h) Xx. Xxxxx shall have executed and delivered to OHSI the
Consulting Agreement, substantially in the form of EXHIBIT 5.1.4, attached
hereto;
(i) Stockholder shall have executed and delivered to OHSI the Stock
Pledge and Escrow Agreement in the form of EXHIBIT 5.1.5 attached hereto;
and
(j) Any licenses required by law for the operation of the
Corporations shall be in good standing and all regulatory requirements
shall have been met in connection with the Merger to ensure the continued
operation of the surviving Corporation in the Merger.
In the event Omega reasonably believes prior to the Closing Date
that any of the foregoing conditions is not satisfied, then OHSI shall
notify Stockholder in writing and Stockholder shall cure such to the
reasonable satisfaction of OHSI. If Stockholder does not cure in thirty
(30) days, then OHSI may, at its option, terminate this Agreement, in
which event Omega and OHSI shall be relieved of all obligations hereunder
and this Agreement shall be deemed null, void and of no force or effect;
except that SECTION 12.7 shall survive termination of this Agreement
pursuant to this SECTION 5.1.
5.2 CONDITIONS PRECEDENT TO STOCKHOLDER'S OBLIGATIONS. The Closing and all
obligations of Stockholder, the Corporations and Xxxx pursuant to this Agreement
shall be conditioned upon the following:
(a) All representations and warranties contained in SECTION 4 shall
be true and correct as of the date of this Agreement and as of the Closing
Date;
(b) OHSI shall have delivered the Purchase Price set forth in
SECTION 2 hereof and the documents set forth in SECTION 5.3;
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(c) Omega and OHSI shall have performed all of its obligations under
this Agreement required to be performed as of the Closing Date;
(d) OHSI shall have executed and delivered to Xx. Xxxxx the
Noncompete Agreement, substantially in the form of EXHIBITS 5.1.1,
attached hereto;
(e) OHSI shall have executed and delivered to Xx. Xxxx the
Contractor's Agreement, substantially in the form of EXHIBIT 5.1.2,
attached hereto;
(f) OHSI shall have executed and delivered to Xx. Xxxx the
Employment Agreement, substantially in the form of EXHIBIT 5.1.3, attached
hereto;
(g) OHSI shall have executed and delivered to Xx. Xxxxx the
Consulting Agreement, substantially in the form of EXHIBIT 5.1.4, attached
hereto;
(h) Omega and OHSI shall have executed and delivered to Xx. Xxxx the
promissory note in the form of Schedule 2.1.2 hereof.
(i) There shall have been no material adverse change in the
financial condition or business of OHSI since December 31, 1996; and
(j) There shall not be in effect (i) any judgment, decree or order
issued by any federal, state or local court of competent jurisdiction, or
(ii) any statute, rule or regulation enacted or promulgated by any
federal, state or local or legislative, administrative or regulatory body
of competent jurisdiction, that in either of cases (i) or (ii) challenges
the consummation of the proposed transactions under this Agreement.
In the event Stockholder reasonably believes prior to the Closing Date
that any of the foregoing conditions is not satisfied, then Stockholder shall
notify OHSI in writing and OHSI shall cure such to the reasonable satisfaction
of Stockholder. If OHSI does not cure in thirty (30) days then Stockholder may,
at its option, terminate this Agreement in which event Stockholder shall be
relieved of all obligations hereunder and this Agreement shall be deemed null,
void and of no force or effect, except that SECTION 12.14 and SECTION 12.7 shall
survive termination of this Agreement pursuant to this Section 5.2.
5.3 OMEGA'S AND OHSI DELIVERIES. At or prior to the Closing, Omega and
OHSI shall deliver to Stockholder the following documents:
(a) CORPORATE RESOLUTIONS. A copy of directors' resolutions of Omega and
OHSI, certified by its respective corporate secretary or assistant secretary as
having been duly and validly adopted and as being in full force and effect on
the Closing Date, authorizing the execution and delivery by Omega and OHSI of
this Agreement, the other instruments to be executed and delivered by Omega and
OHSI as provided herein, and the performance by Omega and OHSI of the
transactions contemplated hereby;
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(b) CONSIDERATION. The Consideration described in SECTION 2;
(c) NONCOMPETE AND NONSOLICITATION AGREEMENTS. The Noncompete Agreement
among Xx. Xxxxx, the Corporations and OHSI and the Contractor's Agreement among
Xx. Xxxx, the Corporations and Omega;
(d) EMPLOYMENT AGREEMENT. The Employment Agreement between Xx. Xxxx and
PEN;
(e) CONSULTING AGREEMENT. The Consulting Agreement between Xx. Xxxxx and
PEN;
(f) OPINION OF COUNSEL FOR OMEGA AND OHSI. An opinion of counsel for Omega
and OHSI dated as of the Closing Date, in form and substance reasonably
satisfactory to Stockholders' counsel, and where appropriate with reliance upon
a certificate from Omega and OHSI to the effect that:
(1) Each of OHSI and Omega is (i) duly incorporated and validly
existing as a business corporation under the jurisdiction of its
incorporation, (ii) in good standing as a business corporation under the
laws of the jurisdiction of its incorporation, and (iii) duly empowered
and authorized to hold and own its properties and carry on its business as
now conducted and as proposed to be conducted.
(2) Each of OHSI and Omega has the full power and authority to
execute, deliver, and perform this Agreement and all other agreements and
documents contemplated hereby to which OHSI or Omega, as applicable, is a
party and which are necessary to consummate the contemplated transaction
to which OHSI or Omega, as applicable, is a party, and all corporate
actions of OHSI and Omega necessary for such execution, delivery and
performance will have been duly taken.
(3) This Agreement and all agreements related to this Agreement to
which either OHSI or Omega is a party have been duly executed and
delivered by each of OHSI and Omega, as applicable, and constitute the
legal, valid, and binding agreement of each of OHSI and 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 affecting the rights of creditors generally). The execution and
delivery by each of OHSI and Omega of this Agreement, and the performance
of their respective obligations hereunder, do not require any action or
consent of any party other than Omega or OHSI pursuant to any contract,
agreement or other understanding of Omega, or pursuant to any order or
decree to which Omega or OHSI is a party or to which its properties or
assets are subject and will not violate any provision of, the articles of
incorporation or bylaws of Omega or OHSI or any order of any court or
other agency of the government.
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(4) To the best of such counsel's knowledge, with respect to Omega
or OHSI there are no actions, suits, claims, proceedings or investigations
pending or, to such counsel's knowledge, 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 any party's right to enter into this Agreement.
(5) Neither OHSI nor Omega 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 OHSI and Omega to enter into and perform this Agreement;
(6) The shares of OHSI Stock issued to Stockholder have been duly
and validly issued by OHSI, with the authorization and approval of OHSI
Board of Directors, and such OHSI Stock is duly paid and non-assessable
free and clear of all liens and free of all restrictions, including
transfer restrictions other than those imposed under this Agreement or
under applicable federal and state securities laws.
(g) OFFICER'S CERTIFICATE. A Certificate of each of OHSI's and Omega's
President and Secretary confirming the matters in SECTION 5.2(A); and
(h) OTHER MERGER DOCUMENTS. All such documents and instruments Stockholder
and its counsel may reasonably request in connection with the consummation of
the transactions contemplated by this Agreement.
5.4 STOCKHOLDERS' DELIVERIES. At or prior to the Closing, Stockholder
shall deliver to the Corporations and Xxxx, Omega and OHSI, as applicable, the
following documents:
(a) CORPORATE AND SHAREHOLDER RESOLUTIONS. A copy of director's
resolutions of PEN and PEN resources and a copy of the Shareholder's resolution
certified by its respective corporate secretary or assistant secretary as having
been duly and validly adopted and as being in full force and effect on the
closing date, authorizing the execution and delivery by PEN and PEN Resources of
this Agreement, the other instruments to be executed and delivered by PEN and
PEN Resources as provided herein, and the performance by PEN and PEN Resources
of the transactions contemplated hereby;
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(b) STOCK CERTIFICATES. Stock certificates, representing the shares of
each Corporation, duly endorsed by Stockholder for transfer or accompanied by
appropriate stock powers;
(c) EXECUTED CONTRACTS. Copies of all executed contracts or other
material agreements entered into by or on behalf of the Corporations in excess
of $10,000;
(d) COPY OF LEASES. Copies of all real estate and equipment leases
pertaining to the Corporations in excess of $10,000;
(e) NONCOMPETE AND NONSOLICITATION AGREEMENTS. The Noncompete Agreement
among Xx. Xxxxx, the Corporations and OHSI; and the Contractor's Agreement among
Xx. Xxxx, the Corporations and Omega;
(f) EMPLOYMENT AGREEMENT. The Employment Agreement between Xx. Xxxx and
PEN;
(g) CONSULTING AGREEMENT. The Consulting Agreement between Xx. Xxxxx,
PEN and OHSI;
(h) STOCK PLEDGE AGREEMENT. The Stock Pledge and Escrow Agreement
between the Stockholder and OHSI;
(i) OPINION OF COUNSEL FOR CORPORATIONS AND STOCKHOLDER . An opinion of
counsel for the Corporations and Stockholder dated as of the Closing Date, in
form and substance reasonably satisfactory to Omega's counsel.
(j) OPINION OF COUNSEL FOR XX. XXXX. An opinion of counsel for Xx. Xxxx
confirming the enforceability of the Contractor's Agreement and the Employment
Agreement.
(k) OFFICER'S CERTIFICATE. A certificate from officers of the
Corporations confirming the matters in SECTION 5.1(A) hereof; and
(l) OTHER MERGER DOCUMENTS. All such documents and instruments Omega and
its counsel may reasonably request in connection with the consummation of the
transactions contemplated by this Agreement.
SECTION 6. INDEMNIFICATION; SET-OFF.
6.1 INDEMNIFICATION OF OMEGA. Stockholder shall indemnify, defend and hold
Omega and its 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
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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 Stockholder contained herein, which has not been waived
in writing by Omega;
(b) Any liabilities or obligations of Corporations existing as of the
Closing Date and not disclosed on the November 30, 1996 balance sheet or on the
disclosure schedule;
(c) Claims, actions or suits by former employees of Corporations arising
out of events that took place on or before the Closing Date; or
(d) Corporations' 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 6.1. 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 6.1
for any settlement effected without Stockholder's consent of any claim, suit,
action, proceeding or other matter in respect of which indemnity may be sought
under this SECTION 6.1, which consent shall not be unreasonably withheld.
6.2 INDEMNIFICATION OF STOCKHOLDER. Omega shall indemnify, defend and hold
Stockholder and its respective agents, representatives, heirs, 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-names persons,
resulting from or in connection with misrepresentations, breach of warranties or
failure to perform any covenant or Agreement of Omega contained herein.
Stockholder agree 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 6.2. Omega may
participate in the defense of any such suit, action, proceeding or other matter
at Omega's expense. Omega shall not be liable under this SECTION 6.2 for any
settlement effected without Omega's consent of any claim, suit, action,
proceeding or other matter in respect of which indemnity may be sought under
this SECTION 6.2, which consent shall not be unreasonably withheld.
6.3 SECURITY FOR INDEMNITY. To secure the indemnity under this Agreement
and certain other agreements, Omega and OHSI are entitled to exercise their
rights set forth in that certain Stock Pledge and Escrow Agreement, dated as of
the Closing Date, to which OHSI, Omega and Stockholder are parties.
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6.4 LIMITATION ON INDEMNITY. Neither Stockholder nor Corporations shall
have the obligation to indemnify Omega and its affiliates under this Agreement
for any amount until the aggregate indemnification amount which Omega and its
affiliates are entitled to exceeds Ten Thousand Dollars ($10,000). Once that
threshold has been exceeded, the indemnification obligation in favor of Omega
and its affiliates shall apply as to all amounts in excess of the $10,000
threshold; but such amounts shall not exceed Six Hundred Fifty Thousand
($650,000) Dollars; provided, however that with regard to the types of claims
specified in (ii), (iii), and (iv) of Section 6.5 hereof, there shall be no
dollar limitation. While OHSI Stock owned by the Xxxxx Trust is pledged pursuant
to the Stock Pledge and Escrow Agreement, then during such time Omega and OHSI
agree that any claim hereunder shall be limited to the value of such pledged
stock.
6.5 The indemnity obligations provided for in Sections 6.1 and 6.2 hereof
shall terminate May 1, 1998, except for (i) any matters noticed prior to such
date, in accordance with the Stock Pledge and Escrow Agreement and the
provisions of Section 6.1 or 6.2 hereof, (ii) any matters involving fraud which
shall have no time limitation, (iii) any matters involving tax claims which
shall terminate on the expiration of the applicable statute of limitations of
the taxing authority, and (iv) any matters involving environmental or ERISA
matters, which shall terminate May 1, 2000.
SECTION 7. 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 and 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, or 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.
SECTION 8. TERMINATION AND ABANDONMENT.
8.1 METHODS OF TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned at any time prior to the
Closing:
(a) by the mutual written consent of Stockholder and OHSI;
(b) by OHSI, if all of the conditions set forth in SECTION 5.1 of
this Agreement shall not have been satisfied or waived on or prior to the
Closing; or
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(c) by Stockholder if all of the conditions set forth in SECTION
5.2 of this Agreement shall not have been satisfied or waived on or prior
to the Closing.
The following provisions notwithstanding, this Agreement will terminate after
May 15, 1997, unless an extension of time is mutually agreed to, as evidenced by
written consent of Stockholder and OHSI. If this Agreement is terminated
pursuant to this SECTION 8.1, it shall become null and void and of no further
force or effect, except as provided in SECTION 8.2.
8.2 PROCEDURE UPON TERMINATION. In the event of termination and
abandonment of this Agreement by Stockholder or Omega pursuant to SECTION 8.1
hereof, written notice thereof shall forthwith be given to the other party or
parties as provided herein and this Agreement shall terminate and the
transactions contemplated hereby shall be abandoned, without further action by
Stockholder or Omega, and Stockholder and Omega shall each return to the other
party any documents or copies thereof in possession of such party furnished by
such other party in connection with the transaction contemplated by this
Agreement. If this Agreement is terminated as provided herein, no party to this
Agreement shall have any liability or further obligation to any other party to
this Agreement with respect to this Agreement or the transactions contemplated
hereby except as provided in this SECTION 8.2; provided, however, that no
termination of this Agreement pursuant to the provisions of this SECTION 8 shall
relieve any party of liability for breach of any provision of this Agreement
occurring prior to such termination; and provided, further, that any and all
confidential or proprietary information obtained from either party must be
returned to that party, and each party hereto agrees to maintain any and all
confidential or proprietary information obtained from the other party in
strictest confidence and not to divulge such information to any third party,
except as may be permitted or required by law as set forth in SECTION 12.7; and
no termination shall release any party from its responsibility to pay expenses
as set forth in SECTION 12.14 herein.
SECTION 9. BOARD OF DIRECTORS MEETINGS.
For a period of two (2) years following the Closing Date, Xx. Xxxx and one
(1) representative member of the Corporations (the "Representative") will be
invited to attend all of OHSI's Board of Directors meetings, as guests of the
Board of Directors. The Representative will be designated by Xx. Xxxxx, subject
to the approval of OHSI, which approval shall not be unreasonably withheld. Xx.
Xxxx and the Representative shall be subject to the same xxxxxxx xxxxxxx,
confidentiality and disclosure requirements as other of OHSI's Board Members. In
addition, if an opening becomes available for an OHSI board seat held by an
optometrist, which opening results either from a vacancy or an expansion of the
Board, then Xx. Xxxxx has a one-time right to nominate a PEN member to fill such
board seat. The nomination is subject to the approval of OHSI's Board of
Directors, which approval shall not be unreasonably withheld.
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SECTION 10. 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 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 practicable after submission of a demand for binding
arbitration, OHSI and Stockholder shall select one arbitrator, agreeable to both
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.
SECTION 11. EMPLOYEES; EMPLOYEE BENEFITS.
11.1 AFFECTED EMPLOYEES. "Affected Employees" shall mean employees, a list
of which is attached hereto as EXHIBIT 11.1, of Corporations on the Closing
Date.
11.2 RESPONSIBILITIES. Prior to the Closing Date Corporations agree 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 Corporations' employee benefit plans brought by, or in respect
of, Affected Employees and former employees of Corporations prior to the Closing
Date.
11.3 TERMINATION BENEFITS. Corporations 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 Corporations prior to the Closing, or if the transactions
contemplated in this Agreement shall result in any liability or claim of
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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 Omega from any
losses resulting directly or indirectly from such liability or claim.
11.4 EMPLOYEE BENEFIT PLANS. Within 90 days of Closing Date, Stockholder
and the Surviving Corporation shall use their respective best efforts to cause
Corporations to either terminate any employee benefit plans maintained by
Corporations or cause another entity to assume their sponsorship through merger,
consolidation or transfer of plan assets as described in (beta)414(i) of the
Internal Revenue Code of 1986, as amended.
SECTION 12. GENERAL PROVISIONS.
12.1 PARTIES IN INTEREST AND ASSIGNMENT.
(a) This Agreement is binding upon, and is for the benefit of, the
parties hereto and their respective successors and authorized assigns.
Except as otherwise expressly provided, nothing in this Agreement, express
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.
(b) 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 reserves the right to assign this Agreement to any affiliate or
successor of itself provided, however, that in such event OHSI shall
guarantee the payment and performance of any obligations of such
affiliate.
12.2 CHOICE OF LAW; VENUE. This Agreement shall be governed by and
construed, interpreted and enforced in accordance with the laws of the State of
California. Any mediation or binding arbitration brought with respect to this
Agreement shall be conducted in Contra Costa County, California.
12.3 ENTIRE AGREEMENT. This Agreement shall embody the entire agreement
between the parties hereto with respect to the Merger and cancels and supersedes
all other previous agreements and understandings relating to the subject matter
of this Agreement, written or oral, between the parties hereto. There are no
agreements, representations or warranties between the parties hereto as to the
subject matter hereof other than those set forth or provided herein. All
Exhibits and Schedules called for by this Agreement and delivered to the parties
shall be considered a part hereof with the same force and effect as if the same
had been specifically set forth in this Agreement.
12.4 SURVIVAL. The covenants, representations and warranties contained in
this Agreement shall survive the Closing Date for a period of one (1) year
following the Closing Date, except that for matters relating to (ii), (iii) and
(iv) of Section 6.5, such covenants, representations, and warranties shall
extend for the respective periods specified in Section 6.5 hereof.
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12.5 SECTION HEADINGS. The subject headings contained in this Agreement
are included for purposes of convenience only, and shall not affect the
construction or interpretation of its provisions.
12.6 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.
12.7 CONFIDENTIALITY. The parties agree to maintain confidential the terms
and conditions of this Agreement and not to disclose any of such terms and
conditions to any third-party without the prior written consent of the other
party. Omega and OHSI will keep confidential any information (except as required
to be discussed by law and/or unless ascertainable from public sources) obtained
from Corporations in connection herewith and in the event this agreement is
terminated, will return to PEN all documents, work papers and other written
material obtained from or relating to Corporations.
12.8 GENDER. Masculine pronouns used in this Agreement shall be construed
to include feminine and neuter pronouns, and words in the singular shall include
the plural, unless the context requires otherwise.
12.9 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 either case addressed as follows:
If to Omega or OHSI: Omega Health Systems, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxx
With a copy to: Baker, Donelson, Bearman & Xxxxxxxx
0000 Xxxxx Xxxxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxx Xxxxxx
If to Stockholder or the Corporations:
Xxxxxxx and Xxxxx Xxxxx
00 Xxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
And to: Xxxxx Xxxx
Primary EyeCare Network
000 Xxxx Xxxxxxxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
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With a copy to: Allen, Matkins, Xxxx, Xxxxxx & Xxxxxxx, LLP
000 Xxxx Xxxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxxxxxx 00000
Attn: Xxx X. Xxxxxxxx
And to: Xx. Xxxxxxxx X'Xxxxxxx
The Xxxxxxxxx Law Firm
0000 Xxxxxxxxxx Xxxx Xx., Xxxxx 000
Xxxxxxxxxx, Xxxxxxxxxx 00000
or to such other address as the parties shall have previously designated by
notice to the serving party, given in accordance with this SECTION 12.9. Notices
shall be deemed to have been given on the date of delivery if delivered
personally, or on the third day after mailing 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.
12.10 SEVERABILITY. Any term or provision of this Agreement that is
invalid or unenforceable in any jurisdiction shall not affect the validity or
enforceability of the remaining terms and provisions hereof or the validity or
enforceability of the offering term in any other situation or in any other
jurisdiction.
12.11 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.
12.12 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.
12.13 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 arbitration shall award, to reimbursement of reasonable attorneys' fees,
costs and other expenses incurred in the prosecution or defense of such Dispute
Resolution.
12.14 EXPENSES. Except as otherwise provided herein, each of the parties
shall pay its own costs and expenses incurred or to be incurred by it in
negotiating and preparing this Agreement and in consummating the transactions
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contemplated by this Agreement, except that the Corporations will pay the fees
and expenses incurred by Stockholder, the Corporations and Xxxxx Xxxx in
connection with the transactions contemplated in this Agreement, up to a maximum
of Eighty Thousand Dollars ($80,000).
IN WITNESS THEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
OMEGA:
OMEGA ACQUISITION SUBSIDIARY, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------------ -----------------------------------------
Xxxx Xxxxx, Assistant Secretary Xxxxxx X. Xxxxxxx, Executive Vice President
OMEGA HEALTH SYSTEMS, INC.
By: /s/ Xxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxx
------------------------------ -----------------------------------------
Xxxx Xxxxx, Assistant Secretary Xxxxxx X. Xxxxxxx, Executive Vice President
STOCKHOLDER:
XXXXX FAMILY TRUST
DATED AUGUST 18, 1988
By: /s/ XXXXXXX XXXXX
-----------------------------------------
XXXXXXX XXXXX, O.D., TRUSTEE
By: /s/ XXXXX XXXXX
-----------------------------------------
XXXXX XXXXX, TRUSTEE
CORPORATIONS:
PRIMARY EYECARE NETWORK
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxx Xxxx
------------------------------ ----------------------------------------
Xxxxx Xxxxx, Secretary Xxxxx Xxxx, President
P.E.N. RESOURCES, INC.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxxx Xxxx
------------------------------ -----------------------------------------
Xxxxx Xxxxx, Secretary Xxxxx Xxxx, President
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JOINDER
XXXXXXX XXXXX, O.D., joins in this Agreement for the purpose of (i)
guaranteeing the representations and warranties of the Corporations set forth in
SECTION 3 hereof and (ii) personally guaranteeing the payment of any sums owed
under SECTION 6.1 or SECTION 6.3 hereof, subject to the limitations of Section
6.4 and 6.5 hereof.
April 30, 1997
XXXXXXX XXXXX, O.D.
JOINDER
XXXXX XXXX joins in this Agreement for the purpose of (i) acknowledging
the payment to him recited in SECTION 2.1 of this Agreement is in satisfaction
of Xx. Xxxxx' obligation to him under the employment agreement by and between
Xx. Xxxx and Xx. Xxxxx, attached hereto as SCHEDULE 2.1.1, (ii) acknowledging
that the employment agreement attached as SCHEDULE 2.1.1 to this Agreement has
been terminated and is of no further force or effect, (iii) acknowledging
receipt of the original Promissory Note delivered by Omega pursuant to Section
2.1 hereof, and (iv) confirming those representations and warranties in SECTION
3 in which he is specifically named.
April 30, 1997
XXXXX XXXX
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