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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report: April 11, 1996
VIVRA INCORPORATED
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(Exact name of registrant as specified in its charter)
Delaware 1-10261 94-3096645
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Id. No.)
incorporation)
400 Primrose, Suite 200, Burlingame, California 94010
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(Address of principal executive offices)
Registrant's telephone number, including area code: (415) 348-8200
Item 7. Financial Statements and Exhibits.
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(c) Exhibits.
10.1 Master Merger Agreement among Asthma & Allergy CareAmerica,
Inc.; Vivra Incorporated; Pollard & Sublett, PSC; Stephen J.
Pollard, M.D.; James L. Sublett, M.D. and Allergy & Asthma
Research Institute, Inc.
10.2 Agreement and Plan of Merger among Asthma & Allergy
CareAmerica, Inc.; Vivra Incorporated; Pollard & Sublett, PSC;
Stephen J. Pollard, M.D. and James L. Sublett, M.D.
10.3 Agreement and Plan of Merger among Asthma & Allergy
CareAmerica, Inc.; Vivra Incorporated; Allergy & Asthma Research
Institute, Inc.; Stephen J. Pollard, M.D. and James L. Sublett,
M.D.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Dated: April 11, 1996
VIVRA INCORPORATED
By /s/ LEANNE M. ZUMWALT
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Leanne M. Zumwalt
Executive Vice President
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EXHIBIT 10.1
MASTER MERGER AGREEMENT
-----------------------
THIS MASTER MERGER AGREEMENT (this "Agreement") is made and entered into as
of March 30, 1996, by and among ASTHMA & ALLERGY CAREAMERICA, INC., a Delaware
corporation ("AACA"); its parent company, VIVRA INCORPORATED, a Delaware
corporation ("VIVRA"), POLLARD & SUBLETT, PSC, a Kentucky professional service
corporation ("P&S"); P&S's shareholders, STEPHEN J. POLLARD, M.D., an individual
resident of Kentucky ("Pollard") and JAMES L. SUBLETT, M.D., an individual
resident of Kentucky ("Sublett"), ALLERGY & ASTHMA RESEARCH INSTITUTE, INC., a
Kentucky corporation ("AARI"); AARI's shareholders, Pollard and Sublett (with
Pollard and Sublett being collectively referred to as the "Physicians").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, P&S owns and operates an allergy practice with its principal
office located at 9800 Shelbyville Road, Suite 220, Louisville, Kentucky 40223,
together with any satellite locations in the Louisville, Kentucky area including
those in New Albany and Madison, Indiana (collectively the "P&S Business");
WHEREAS, the Physicians own all of the outstanding stock of P&S and of AARI
on a 50/50 basis;
WHEREAS, the parties desire to effect two mergers (the "Mergers") to merge
simultaneously P&S and AARI (collectively, the "Businesses" and, individually, a
"Business") with and into AACA, with AACA being the surviving corporation in the
Mergers in exchange for VIVRA Common Stock;
WHEREAS, for federal income tax purposes, it is intended that each of said
Mergers shall qualify as a "reorganization" within the provisions of Section 368
of the Internal Revenue Code of 1986, as amended;
WHEREAS, for accounting purposes, it is intended that each of the Mergers
shall be accounted for as a pooling of interests;
NOW, THEREFORE, in consideration of these premises and the agreements
contained herein, the sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound, do hereby agree as follows:
SECTION 1 THE MERGERS.
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1.1 AGREEMENT TO MERGE. On the terms, subject to the
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conditions, and for the consideration stated herein and in that certain
Agreement and Plan of Merger of even date by and among AACA, P&S and the
Physicians (the "P&S Merger Agreement"), in that certain Agreement and Plan of
Merger of even date by and among AACA, AARI and the Physicians (the "AARI Merger
Agreement"), (with the P&S Merger Agreement, the AARI Merger Agreement being
collectively referred to herein as the "Merger Agreements"), each of the parties
hereto, insofar as applicable to such party, agrees that the Businesses shall be
merged with and into AACA, with AACA being the surviving corporation (the
"Surviving Corporation"). The merger of the Businesses with and into AACA (the
"Mergers") shall become effective as of the "Effective Time" (as hereinafter
defined).
1.2 EFFECTIVE TIME OF MERGERS. At the "Closing" (as hereinafter defined),
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AACA and each of the Businesses shall execute and deliver all agreements and
documents as contemplated in the Merger Agreement applicable to each Business to
effect its respective Merger in accordance with all appropriate legal
requirements as required by the Delaware General Corporation Law, the Kentucky
Professional Service Corporation Act and the Kentucky Business Corporation Act
at the time and date contemplated in the Merger Agreements (such time being
referred to as the "Effective Time").
SECTION 2. THE CLOSING.
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2.1 CLOSING AND CLOSING DATE. The Closing (the "Closing") of the Mergers
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and the execution and delivery of the agreements and documents contemplated by
each of the Merger Agreements and this Agreement shall take place on or before
March 30, 1996, at 1:00 p.m. E.S.T., at the offices of Hall, Render, Killian,
Heath & Lyman, P.S.C., Providian Center, Suite 1530, 400 West Market Street,
Louisville, Kentucky 40202, or at such other place and time as may be deemed
appropriate by the parties hereto. At the Closing, the parties will execute and
deliver all agreements and documents and take such action as contemplated in the
Merger Agreements and in this Agreement.
2.2 SIMULTANEOUS CLOSINGS. The parties acknowledge and agree that the
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closings of all of the transactions contemplated by each of the Merger
Agreements shall constitute conditions precedent to AACA's obligations to close
the transactions contemplated by each of the other Merger Agreements, such that
failure to close the transactions contemplated under any Merger Agreement shall
serve to automatically terminate all other Merger Agreements unless all parties
to the Merger Agreements and this Agreement shall agree otherwise.
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SECTION 3. CONDITIONS OF CLOSING.
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In addition to the conditions set forth in Section 2.2 above, all
obligations which are to be satisfied or performed under the Merger Agreements
at the Closing are subject to certain conditions set forth in the Merger
Agreements and are subject to the performance by the parties of the actions set
forth herein.
3.1 FORMATION OF NEW COMPANY. A new Kentucky professional corporation
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("Newco") shall have been formed.
3.2 PRACTICE OPERATING AGREEMENT. At the Closing, each of the Physicians,
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AACA, Newco and Newco's sole shareholder, Stephen J. Pollard, M.D., shall enter
into the Practice Operating Agreement by and among all of them as the parties
thereto.
3.3 EMPLOYMENT AGREEMENTS. At the Closing, each of the Physicians and
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Timothy A. Feger, M.D. and Newco shall enter into an Individual Employment
Agreement substantially in the form as attached to the Practice Operating
Agreement by and among the Physician or Feger, as the case may be, and Newco as
the parties thereto, which agreement shall supersede any prior employment
agreements of such Physician or Feger.
3.4 MANAGEMENT SERVICES AGREEMENT. At the Closing, Newco and AACA shall
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enter into a Management Services Agreement by and between Newco and AACA as the
parties thereto in form and substance acceptable to AACA.
3.5 LEGAL OPINION. Hall, Render, Killian, Heath & Lyman shall have
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rendered an opinion to AACA, in form and substance satisfactory to AACA, to the
effect that the Management Services Agreement is valid and enforceable under
Kentucky law.
SECTION 4. MISCELLANEOUS.
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4.1 EXPENSES. All expenses of the preparation of this Agreement and of
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the other agreements and transactions contemplated hereby, including, without
limitation, counsel fees, accounting fees, investment advisor's fees and
disbursements, shall be borne by the Physicians in the case of P&S or AARI, and
by AACA in the case of AACA and Newco.
4.2 NOTICES. All notices, demands and other communications hereunder
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shall be written and shall be deemed to have been duly given if delivered in
person or mailed by Federal Express (or other national air courier service),
charges prepaid, to the address set forth below:
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To AACA or VIVRA: Asthma & Allergy CareAmerica,
Inc.
Northridge Business Park
8601 Dunwoody Place, Suite 440
Atlanta, Georgia 30350
Attention: Mr. Thomas O. Usilton
with a copy to: Paul L. Hudson, Jr., Esq.
Parker, Hudson, Rainer & Dobbs
1500 Marquis Two Tower
285 Peachtree Center Avenue, N.E.
Atlanta, Georgia 30303
To the Physicians: Stephen J. Pollard, M.D.
James L. Sublett, M.D.
9800 Shelbyville Road, Suite 220
Louisville, Kentucky 40223
with a copy to: Ivan Schell, Esq.
Hirn, Doheny, Reed & Harper
2000 Medinger Tower
Louisville, Kentucky 40202
or to such other address as AACA or the Physicians may designate by notice to
the other. Notices delivered in person shall be deemed delivered on the date of
delivery and notices sent via air courier service, as aforesaid, shall be deemed
delivered on the date of delivery as indicated by the records of the courier
service. Rejection or other refusal to accept or inability to deliver because
of a changed address of which no notice was given shall be deemed to be a
receipt of the notice, request or other communication. Any notice, request or
other communication required or permitted to be given by any party may be given
by such party's legal counsel.
4.3 ENTIRE AGREEMENT. This Agreement and the Exhibits, and the other
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agreements and schedules and documents delivered pursuant hereto constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof and supersede all prior and contemporaneous agreements, understandings,
letters of intent negotiations and discussions, whether written or oral, of the
parties, and there are no representations, warranties or other agreements
between the parties in connection with the subject matter hereof, except as
specifically set forth herein. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the party or parties to
be bound thereby.
4.4 GOVERNING LAW. The validity and construction of this Agreement shall
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be governed by the laws of the Commonwealth of Kentucky, except insofar as this
Agreement may specify that the laws of Delaware may apply to the Merger.
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4.5 ARBITRATION.
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4.5.1 The parties will attempt through good faith negotiations to
resolve their disputes regarding this Agreement. The term "disputes" includes,
without limitation, any disagreements between the parties concerning the
existence, formation, interpretation and implementation of this Agreement. If
the parties are to resolve their disputes by negotiation, either party may
commence arbitration by sending a written notice of arbitration to the other
party. The notice will state the dispute with particularity.
4.5.2 There shall be three arbitrators. If the parties fail to
select mutually acceptable arbitrators within ten (10) days after the notice of
arbitration, a tribunal of arbitrators (one selected by P&S, one selected by
AACA, and one who shall be appointed by the first two arbitrators), who shall be
located in the Commonwealth of Kentucky, shall be appointed as soon as possible
on the request of either party. If any party fails to select an arbitrator
within ten (10) days after demand, such arbitrator shall be appointed by the
American Arbitration Association. The fee payable to the arbitrators shall be
based upon the then current fee schedule of the American Arbitration
Association.
4.5.3 The parties shall have reasonable rights of discovery.
4.5.4 Except as set forth in this Section, the tribunal shall conduct
the arbitration according to the Commercial Arbitration Rules of the American
Arbitration Association. Arbitration shall take place in Louisville, Kentucky,
unless the parties otherwise agree. The tribunal shall base the decision on the
express language of this Agreement. Within ten (10) days after the tribunal is
appointed, or as soon thereafter as shall be reasonably practicable, the
tribunal will conduct a hearing on the dispute. Each party may make written
submissions to the tribunal, and each party shall have a reasonable opportunity
for rebuttal, but no longer than ten (10) days. As soon as reasonably
practicable, but not later than ten (10) days after the hearing is completed,
the tribunal shall arrive at a final decision, which shall be reduced to
writing, signed by the tribunal and mailed to each party and its legal counsel.
4.5.5 All decisions of the tribunal shall be final, and binding on
all parties, and (except as provided below) shall constitute the only method of
resolving disputes. Judgment may be entered upon the decision in accordance
with applicable law in any court having jurisdiction.
4.5.6 This arbitration section and all decisions of the tribunal
shall be specifically enforceable in a court of law, or in the arbitral
tribunal.
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4.6 SECTION HEADINGS. The Section headings are for reference only and
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shall not limit or control the meaning of any provisions of this Agreement.
4.7 WAIVER. No delay or omission on the part of any party hereto in
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exercising any right hereunder shall operate as a waiver of such right or any
other right under this Agreement.
4.8 NATURE AND SURVIVAL OF REPRESENTATIONS. All statements contained in
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any certificate delivered by or on behalf of a party to this Agreement in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties made by such party hereunder. The covenants,
representations and warranties made by a party to another in such party's
respective Merger Agreement, this Agreement or pursuant thereto or hereto shall
survive the Closing for the applicable period stated in such Merger Agreement.
4.9 AMENDMENTS. This Agreement may be amended, but only in writing,
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signed by the parties hereto.
4.10 COUNTERPARTS. This Agreement may be executed in any number of
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counterparts, each of which shall be an original, but all of which together
shall comprise one and the same instrument.
4.11 ATTORNEYS' FEES. If any party institutes litigation or arbitration to
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interpret or enforce, or to recover damages for breach of, this Agreement,
including any Individual Employment Agreement, each party will bear its own
attorneys' fees and costs of litigation or arbitration.
4.12 RULES OF CONSTRUCTION. All references herein to the singular shall
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include the plural, and vice versa, and all references herein to the neuter
shall include the masculine or feminine, as the case may be, and vice versa.
When general words or terms are used herein followed by the word "including" (or
another form of the word "include") and words of particular and specific
meaning, the general words shall be construed in their widest extent, and shall
not be limited to persons or things of the same general kind or class as those
specifically mentioned in the words of particular and specific meaning. All
parties have participated in the drafting of this Agreement. No provision of
this Agreement shall be construed against or interpreted to the disadvantage of
a party by reason of such party having or being deemed to have drafted,
structured or dictated such provisions.
4.13 TIME. Time is of the essence of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
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ASTHMA & ALLERGY CAREAMERICA, INC.,
a Delaware corporation
By:
--------------------------------
Title:
--------------------------
VIVRA INCORPORATED, a Delaware
corporation ("VIVRA")
By:
--------------------------------
Title:
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POLLARD & SUBLETT, PSC, a
Kentucky professional service
corporation
By:
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Title:
--------------------------
[Signatures continued on following page]
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ALLERGY & ASTHMA RESEARCH INSTITUTE, INC., a
Kentucky corporation
By:
--------------------------------
Title:
--------------------------
-----------------------------------
STEPHEN J. POLLARD, M.D., an
individual resident of Kentucky, as
a fifty percent shareholder of each
of P&S and AARI
-----------------------------------
JAMES L. SUBLETT, M.D., an
individual resident of Kentucky, as
a fifty percent shareholder of each
of P&S and AARI
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EXHIBIT 10.2
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of March 30, 1996, by and among ASTHMA & ALLERGY CAREAMERICA, INC., a
Delaware corporation ("AACA"); its parent company, VIVRA INCORPORATED, a
Delaware corporation ("VIVRA") (VIVRA is entering into this Agreement solely for
the purposes set out in Section 6 hereof); POLLARD & SUBLETT, PSC, a Kentucky
professional service corporation ("P&S"); and P&S's shareholders, Stephen J.
Pollard, M.D., an individual resident of Kentucky ("Pollard") and James L.
Sublett, M.D., an individual resident of Kentucky ("Sublett") (with Pollard and
Sublett being collectively referred to herein as the "P&S Physicians").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, P&S owns and operates an allergy practice with its principal
office location located at 9800 Shelbyville Road, Suite 220, Louisville,
Kentucky 40223, together with its satellite locations in the Louisville,
Kentucky area including those in the New Albany and Madison, Indiana
(collectively the "Business");
WHEREAS, the P&S Physicians own all of the outstanding stock of P&S;
WHEREAS, the parties desire to merge P&S with and into AACA, with AACA
being the surviving corporation in the merger, in exchange for VIVRA Common
Stock;
WHEREAS, for federal income tax purposes, it is intended that the merger
shall qualify as a "reorganization" within the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended;
WHEREAS, for accounting purposes, it is intended that the merger shall be
accounted for as a pooling of interests;
WHEREAS, P&S and the P&S Physicians have entered into that certain Master
Merger Agreement of even date with AACA, P&S, Allergy & Asthma Research
Institute, Inc. ("AARI"), Pollard and Sublett which contemplates that AARI will
merge into AACA at the same time that P&S merges into AACA;
WHEREAS, the merger of P&S into AACA is subject to the simultaneous
consummation of the merger of AARI into AACA;
WHEREAS, AACA and the P&S Physicians wish for there to be formed a new
Kentucky professional service corporation ("Newco")
<PAGE>
through which the P&S Physicians and other physicians shall be employed to
practice medicine; and
WHEREAS, the parties wish for the P&S Physicians, Newco and AACA to enter
into certain agreements as conditions precedent to the consummation of the
merger of P&S into AACA as set forth in the Master Merger Agreement,
NOW, THEREFORE, in consideration of these premises and the agreements
contained herein, the sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound, do hereby agree as follows:
SECTION 1. THE MERGER.
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1.1 AGREEMENT TO MERGE. On the terms, subject to the conditions, and
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for the consideration hereinafter stated, the parties hereto agree that P&S
shall be merged with and into AACA, with AACA being the surviving corporation
(the "Surviving Corporation"). The merger of P&S with and into AACA (the
"Merger") shall become effective as of the "Effective Time" (as hereinafter
defined).
1.2 EFFECTIVE TIME OF MERGER. At or prior to the "Closing" (as
------------------------
hereinafter defined), AACA, on the one hand, and P&S on the other hand, shall
execute a certificate of merger in the form attached hereto on Exhibit 1.2(i)
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(the "Certificate of Merger") and Articles of Merger in the form attached hereto
as Exhibit 1.2(ii) (the "Articles of Merger") to effect the Merger in accordance
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with all appropriate legal requirements and shall deliver and file such
Certificate of Merger as required by the Delaware General Corporation Law and
such Articles of Merger as are required by the Kentucky Professional Service
Corporation Act. The Merger shall become effective upon the latter of the time
and date of filing with the Delaware Secretary of State or the time and date of
filing with the Kentucky Secretary of State, or at such later date and time as
may be specified by mutual agreement of the parties in the Certificate of Merger
and the Articles of Merger (the time and date of such filing or such later time
and date being referred to herein as the "Effective Time").
1.3 PLAN OF MERGER. In accordance with the requirements of the Kentucky
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Business Corporation Act, AACA and P&S hereby adopt the Plan of Merger set forth
as Exhibit A to the Articles of Merger (the "Plan of Merger"). If there are any
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inconsistencies between the provisions of the Plan of Merger and the provisions
of this Agreement, the provisions of this Agreement shall prevail.
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SECTION 2. TERMS OF THE MERGER.
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2.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
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AACA immediately prior to the consummation of the Merger shall be the
Certificate of Incorporation of the Surviving Corporation until otherwise
amended or repealed in accordance with law.
2.2 BYLAWS. The Bylaws of AACA immediately prior to the consummation of
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the merger shall be the Bylaws of the Surviving Corporation until otherwise
amended or repealed in accordance with law.
2.3 DIRECTORS AND OFFICERS. The directors and officers of AACA in
----------------------
office immediately prior to the consummation of the Merger shall be the
directors and officers of the Surviving Corporation. All such directors and
officers shall hold office in accordance with the Surviving Corporation's
Certificate of Incorporation, Bylaws and applicable law.
2.4 MANNER AND BASIS OF CONVERTING SHARES.
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(a) At the Effective Time of the Merger, all of the issued and
outstanding shares of common stock, without par value, of P&S (the "P&S Common
Stock") prior to the Effective Time of the Merger (other than such shares held
by P&S in its treasury) shall, by virtue of the Merger and without any action by
the holder thereof, automatically be converted into the "Determined Amount" of
the Common Stock, $ .01 par value per share, of VIVRA ("VIVRA Common Stock").
For purposes hereof, the term "Determined Amount" shall mean the number of
shares of VIVRA Common Stock calculated by dividing $2,421,420.50 (the "Merger
Consideration"), adjusted up or down by the amount of the "Closing Date
Adjustment" (as hereinafter defined in Section 2.5(c)), by the average closing
price (as quoted by the New York Stock Exchange) of VIVRA Common Stock for the
ten-day trading period immediately preceding the fifth day prior to the Closing
Date as defined in Section 6 hereof (said average price being referred to herein
as the "Closing Price"). Each share of P&S Common Stock held in the treasury of
P&S upon the Effective Time of the Merger shall be cancelled, and no
consideration shall be issued therefor. The Determined Amount of VIVRA Common
Stock less the number of shares and the cash equivalent of fractional shares to
be held in escrow as provided in the Escrow Agreement shall be distributed to
the P&S Physicians as set forth in Exhibit 2.4 hereof. Fractional shares may be
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paid in cash.
(b) Except as may be otherwise provided herein, in the event that
subsequent to the date of execution of this Agreement but prior to the Effective
Time of the Merger, the outstanding shares of VIVRA Common Stock or P&S Common
Stock shall have been increased,
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decreased, changed into or exchanged for a different number or kind of shares
through a recapitalization, reclassification, stock dividend, stock split or
reverse stock split, then an appropriate and proportionate adjustment shall be
made in the VIVRA Common Stock to be delivered hereunder.
(c) At the Closing, the P&S Physicians, jointly and severally,
shall surrender their certificates representing all of the P&S Common Stock,
duly endorsed for cancellation or marked canceled as may be required by AACA.
2.5 MERGER CONSIDERATION ADJUSTMENT.
-------------------------------
(a) The Merger Consideration deliverable as a number of shares of
VIVRA Common Stock hereunder is based on the assumption that P&S's "Net Assets"
(as hereinafter defined) as of the Effective Time shall be at least $189,695.40
(the "Agreed Amount"). To the extent that P&S's Net Assets as of the Effective
Time shall exceed the Agreed Amount, then the P&S Physicians, in the same
percentages as set forth in Exhibit 2.4, shall be entitled to receive additional
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shares of VIVRA Common Stock in an amount equal to that number of shares
determined by dividing such excess by the Closing Price, and to the extent that
P&S's Net Assets as of the Effective Time shall be less than the Agreed Amount,
then AACA shall be entitled to receive from the P&S Physicians a return of
shares of VIVRA Common Stock in an amount equal to that number of shares
determined by dividing such deficit by the Closing Price with such return to be
effected by each P&S Physician by a transfer to AACA as provided under the
Escrow Agreement.
(b) For purposes hereof, the term "Net Assets" shall mean the sum of
(i) the value of P&S's "Accounts Receivable" (as hereinafter defined) as of the
Effective Time, plus (ii) the value of P&S's fixed assets which, for purposes of
this calculation, shall be deemed to be $95,593.77, plus (iii) cash and cash
equivalents (including Federal income and Kentucky excise tax refunds applied
for prior to the Closing Date but unpaid as of the Effective Time, but solely to
the extent collected) minus the amount of all "Liabilities" (as hereinafter
-----
defined) of P&S which have not been paid as of the Effective Time. For purposes
hereof, the term "Accounts Receivable" shall mean (x) the sum of all receivables
P&S posted in accordance with historical practices with respect to the
operations of the Business prior to the Effective Time arising from the
rendering of services to patients up to the Effective Time, including, without
limitation, those from private pay patients, private insurance payers, third
party payers or from governmental programs, but not including accounts
previously written off by P&S, and not including any accounts receivable for
which there is an unposted cash receipt as of the Effective Time, (y)
multiplied times ninety percent (90%), which represents an agreed-upon
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allowance for bad debts and contractual allowances and payer discounts, (z)
multiplied times sixty percent (60%), which represents an agreed-upon after-tax
realization rate. For purposes hereof, the term "Liabilities" shall mean all
liabilities with respect to the operation of the Business and including, without
limitation, all liabilities of P&S as of the Effective Time for accrued sick
leave and vacation pay of employees of P&S as of the Effective Time and
including all liabilities for supplies, inventory and other goods ordered by P&S
prior to the Effective Time but not paid for as of the Effective Time, but not
including liabilities accruing in the ordinary course of business after the
Effective Time under the contracts and leases listed on Exhibit 2.5.
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(c) For purposes of establishing the Determined Amount on the
Closing Date, the Merger Consideration shall be adjusted initially on or prior
to the Closing Date using P&S's December 31, 1995 balance sheet (the "Interim
Balance Sheet"). Such initial calculation shall be set forth on a schedule
delivered by the P&S Physicians to AACA together with a copy of the Interim
Balance Sheet not less than 2 days prior to the Closing. Such initial
adjustment shall be deemed to be the "Closing Date Adjustment."
(d) Within ninety (90) days after the Effective Time (or as soon
thereafter as possible), the parties shall make final adjustments to the Merger
Consideration (the "Post-Closing Adjustments"). AACA shall furnish to the P&S
Physicians, within sixty (60) days after the Effective Time, a balance sheet of
P&S with respect to the Business as of the close of business at the Effective
Time (the "Closing Balance Sheet") and a statement of AACA's proposed
Post-Closing Adjustments. The Closing Balance Sheet will be used to determine
any final adjustments to the Merger Consideration. Should the P&S Physicians
dispute any of the Post-Closing Adjustments proposed by AACA or the accuracy of
the Closing Balance Sheet, the P&S Physicians shall promptly (and in no event
later than ten days after receipt of the Closing Balance Sheet and AACA's
proposed Post-Closing Adjustments) advise AACA in writing. If after thirty (30)
days after delivery of the Closing Balance Sheet, AACA and the P&S Physicians
are unable to agree on the amount of the Post-Closing Adjustments, the
Physicians and AACA shall engage Ernst & Young, Certified Public Accountants
(the "Accountants") to review the Closing Balance Sheet and the proposed
Post-Closing Adjustments and to determine the amount of Post-Closing
Adjustments, such determination to be made as soon as practicable. In making
such review and determination, the Accountants shall utilize the terms and
provisions of this Agreement. The decision of the Accountants shall be binding
on both the P&S Physicians and AACA. Each of AACA and the P&S Physicians
jointly shall pay one-half (1/2) of the reasonable fees and expenses of the
engagement of the Accountants.
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(e) If any further adjustments are required in the Determined
Amount consideration by virtue of the foregoing provisions, the adjusted number
of shares shall be delivered to the party entitled to them or added to the
amount to be transferred to AACA under the Escrow Agreement, as the case may be,
within 10 days after the adjustments are determined pursuant to the foregoing
provisions.
2.6 HOLDING PERIOD WITH RESPECT TO POOLING. The P&S Physicians will
--------------------------------------
hold their shares of VIVRA Common Stock for the required period from the date of
issuance until May 31, 1996 or until the date on which the combined financial
statements of AACA and P&S are reported, if it should occur earlier, in keeping
with the intent of the parties for AACA to account for the Merger as a pooling
of interests.
SECTION 3. CLOSING.
-------
3.1 CLOSING AND CLOSING DATE. The closing (the "Closing") of the Merger
------------------------
and the execution and delivery of the Certificate of Merger, the Articles of
Merger and the agreements and documents contemplated herein shall take place on
March 30, 1996, at 1:00 p.m. EST, at the offices of Hall, Render, Killian, Heath
& Lyman, P.S.C., Providian Center, Suite 1530, 400 West Market Street,
Louisville, Kentucky 40202, or at such other place and time as may be deemed
appropriate by the parties hereto. At or before the Closing, AACA, on the one
hand, and P&S, on the other hand, will execute and deliver the Certificate of
Merger and the Articles of Merger, and thereafter cause them to be filed as
provided in Section 1.2 hereof.
3.2 ACTION BY AACA. Upon the terms and subject to the conditions herein
--------------
contained, at the Closing on the Closing Date, AACA will deliver to the P&S
Physicians the following:
(i) The certificates referred to in Section 9.1 hereof;
(ii) The opinion of counsel for AACA in form and substance satisfactory
to P&S and the P&S Physicians;
(iii) Resolutions of the Board of Directors of AACA, certified by an
appropriate officer, authorizing the execution, delivery and
performance of this Agreement, the Certificate of Merger and the
other agreements to be delivered by AACA in connection with the
Closing hereunder (action of the Shareholder of AACA is not required
as provided by Section 252 of the Delaware General Corporation Law);
and
(iv) For each of the P&S Physicians, the Determined Amount
6
<PAGE>
of the VIVRA Common Stock which shall be represented by two (2)
share certificates (i) one, which shall be deposited (together with
an executed stock power) with the Escrow Agent as provided in the
Escrow Agreement, representing such P&S Physician's pro rata portion
--- ----
of the escrowed shares, and (2) one, which shall be delivered
directly to each P&S Physician, representing his pro rata
--- ----
portion of the Determined Amount less his pro rata portion of the
--- ----
escrowed shares.
3.3 ACTION BY P&S AND THE P&S PHYSICIANS. Upon the terms and subject to
------------------------------------
the conditions herein contained, at the Closing on the Closing Date, the P&S
Physicians and P&S will deliver to AACA the following:
(i) The certificate referred to in Section 10.1 hereof;
(ii) The opinion of counsel for the P&S Physicians and P&S in form and
substance satisfactory to AACA;
(iii) Resolutions of the shareholders and the Board of Directors of P&S
certified by an appropriate officer, authorizing the execution,
delivery and performance of this Agreement, the Certificate of
Merger and the other agreements to be delivered by P&S in connection
with the Closing hereunder; and
(iv) The schedule showing the Closing Date Adjustment referred to in
Section 2.5(c) hereof.
3.4 ACTION BY ALL PARTIES. Upon the terms and subject to the conditions
---------------------
herein contained, at the Closing on the Closing Date, the parties will, as
appropriate, execute and deliver to each other the following:
(i) the "Noncompetition Agreement" among Pollard, Sublett and AACA in
substantially the form attached hereto as Exhibit 3.4(i); and
--------------
(ii) the "Escrow Agreement" between the P&S Physicians and AACA in
substantially the form attached hereto as Exhibit 3.4(ii).
---------------
3.5 AUDIT. AACA shall have the right, either before or after the Closing,
-----
to cause its accounting firm to audit the financial statements of P&S for the
current year and for the three years prior to the current year. The P&S
Physicians shall cooperate reasonably in connection with any such audit or
audits and will execute management letters and other documents reasonably
requested in connection with any such audit or audits and any equity offering by
7
<PAGE>
AACA. AACA will pay the cost of the audits required by AACA under this
Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF P&S AND THE P&S PHYSICIANS.
------------------------------------------------------------
P&S and the P&S Physicians, jointly and severally, hereby represent,
warrant, covenant and agree to and with AACA, as follows.
4.1 P&S'S EXISTENCE AND POWER. P&S is a professional service
-------------------------
corporation duly organized, validly existing and in good standing under the laws
of the Commonwealth of Kentucky. Neither the nature of its business as now
conducted nor the character or location of its properties require qualification
by P&S to do business in any other jurisdiction except for the states listed on
Exhibit 4.1 in which P&S is duly qualified to do business. P&S has the
- -----------
corporate power to own its property and to carry on its business as now being
conducted. P&S is not subject to any noncompetition agreement.
4.2 ARTICLES OF INCORPORATION AND BYLAWS. True, correct and complete
------------------------------------
copies of the Articles of Incorporation and Bylaws of P&S are attached hereto
on Exhibit 4.2.
-----------
4.3 P&S STOCK. P&S's authorized capital stock consists solely of 2,000
---------
shares of common stock authorized, of which 10 shares are issued (and
outstanding) to Pollard and 10 shares are issued (and outstanding) to Sublett as
reflected on Exhibit 4.3 attached hereto. All such outstanding shares of
-----------
capital stock of P&S have been duly and validly authorized and issued and are
fully paid and nonassessable. There are no treasury shares of capital stock.
There are no outstanding options, contracts, preemptive rights, proxies, calls,
commitments, demands or rights of any character obligating P&S to issue any
shares of stock or other securities of P&S, or options or rights with respect
thereto, and there are no existing or outstanding securities convertible or
exchangeable into shares of stock or other securities of P&S. No shares of
P&S's capital stock have been issued in violation of any federal or state
securities law. There have been no transactions involving the equity interests
of P&S since July 3, 1979.
4.4 OWNERSHIP OF P&S. The P&S Physicians are, and will be at the Closing
----------------
and the Effective Time, owners of all of the issued and outstanding stock of
P&S, free and clear of all claims, security interests, pledges, options, rights
of first refusal, liens, financing statements, deeds of trust, mortgages,
charges, assessments, restrictions, leases and other encumbrances (all such
claims, security interests, pledges, options, rights of first refusal, liens,
financing statements, deeds of trust, mortgages, charges, assessments,
restrictions, leases and other encumbrances
8
<PAGE>
being referred to individually as an "Encumbrance" and collectively as
"Encumbrances") whatsoever. The P&S Physicians have the full legal right, power
and authority to enter into this Agreement and, except as identified on Exhibit
-------
4.4, the execution, delivery and performance of this Agreement by the
- ---
P&S Physicians will not violate any agreement to which either they or P&S is a
party or any agreement affecting the P&S Common Stock.
4.5 INSIDER TRANSACTIONS. Except as disclosed in Exhibit 4.5 hereto,
-------------------- -----------
P&S is not, directly or indirectly, a party to any contract, lease or commitment
with any officer or director of P&S or any affiliate of any such director or
officer. As used in this Section 4.5, the term "affiliate" shall mean any
member of the immediate family of such officer or director or any corporation,
partnership, trust or other entity in which such officer or director has a
substantial interest or is a director, officer, partner or trustee.
4.6 AUTONOMY; SUBSIDIARIES. P&S is autonomous and has not ever been a
----------------------
subsidiary of any other corporation. P&S has no subsidiaries nor does it own
any shares of stock or other securities of, or interest in, any other
corporation, joint venture, partnership or business.
4.7 ACCURACY OF FINANCIAL STATEMENTS. The P&S Physicians have delivered
--------------------------------
to AACA as Exhibit 4.7 a copy of the financial statements of P&S for the years
-----------
ended December 31, 1992, 1993 and 1994 and 1995 (the "P&S Financial
Statements"). The P&S Financial Statements have been prepared based upon cash
basis accounting, are complete and accurate and fairly present the financial
condition of and the income and expenses of P&S as of the respective dates
thereof, except as disclosed on Exhibit 4.7. P&S has no liabilities or
-----------
obligations known or unknown, accrued, absolute or contingent, whether or not
now due and payable (including, without limitation, any liability for federal,
state or local taxes of P&S), for any period ended on or prior to the respective
dates of the Financial Statements or any liability or obligation in connection
with any transaction or state of affairs entered into or existing on or before
the respective dates thereof, which are not either fully reflected on the
Financial Statements or otherwise disclosed to AACA in Exhibit 4.14 hereto.
------------
4.8 PROPERTIES.
----------
(i) Set forth on Exhibit 4.8(i) is an identification of the material
--------------
real and tangible personal properties presently owned by P&S and
used in the Business. All tangible personal property, equipment,
vehicles, furnishings, and fixtures included within the assets of
P&S or required to be used in the ordinary course of its business
are
9
<PAGE>
being conveyed as a result of the merger "AS IS, WHERE IS."
(ii) Set forth on Exhibit 4.8(ii) is an accurate and complete list of all
---------------
real or personal property which is used by P&S in the Business and
which is either not owned by P&S or is leased or rented by P&S.
4.9 TAXES AND TAX RETURNS. For all tax periods ended prior to the date
---------------------
of this Agreement, except as set forth on Exhibit 4.9, P&S has filed all
-----------
federal, state, local and other tax returns required by law to be filed and,
except as set forth on Exhibit 4.9, such returns were filed on or before the due
-----------
dates of such returns (as extended by any valid extensions of time) ("Tax
Returns") and has paid or will pay all taxes of every kind and description
(including, without limitation, all net income, gross income, gross receipts,
sales, use, lease, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, property
or other taxes, customs, duties, fees, assessments or charges, together with any
interest, penalties, additions to tax or additional amounts imposed by any
taxing authority, domestic, or foreign ("Taxes") which are due as of and for all
periods through the Effective Time. No claim has ever been made by an authority
in a jurisdiction where P&S does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. There are no liens or security
interests on any of P&S's assets that arose in connection with any failure (or
alleged failure) to pay any Taxes. P&S has withheld and paid all Taxes required
to have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other third party.
All Tax Returns filed by P&S correctly reflected all facts regarding the income,
business, assets, operations, activities and status of P&S and all other
information required to be shown thereon. P&S has complied in all respects with
all applicable laws, rules and regulations relating to the filing of Tax Returns
with respect to, and the payment of Taxes. The Tax Returns of P&S have not been
audited by the Internal Revenue Service or any state or local taxing authority.
No federal, state, local or foreign audits, administrative proceedings, court
proceedings or ruling requests are presently pending with respect to any Taxes
or Tax Returns with respect thereto. P&S has not filed a consent pursuant to
Section 341(f) of the Code, or agreed to have Section 341(f)(2) of the Code
apply to any disposition of a subsection (f) asset (as such term is defined in
Section 341 (f)(4) of the Code) owned by P&S. No property of P&S is property
that P&S is required to treat as being owned by another person pursuant to the
provisions of Section 168(f)(6) of the Code, or is "tax-exempt use property"
within the meaning of Section 168(h) of the Code, or is subject to a lease,
other than a "true" lease for federal income tax purposes. P&S is not required
to include in income any
10
<PAGE>
adjustment pursuant to Section 481(a) of the Code by reason of a voluntary
change in accounting method initiated by P&S, nor does P&S, nor any of the P&S
Physicians, have any knowledge that the Internal Revenue Service has proposed
any adjustment or change in accounting methods. Except as set forth on Exhibits
--------
4.9 and 4.10, with respect to P&S Real and Personal Property Leases P&S is not
- ------------
currently under any contractual obligation to indemnify any person with respect
to Taxes. No person who is not a United States citizen, and no corporation or
other entity which was not organized within the United States owns beneficially
more than five percent (5%) of the outstanding shares of P&S and therefore no
withholding of tax pursuant to Section 1445 of the Code is required. P&S is not
a United States Real Property Holding Corporation as defined in Section 897 of
the Code. P&S is not a party to any agreement that under certain circumstances
could obligate it to make any payments that will not be deductible under Code
Section 280(G). No consent extending the statute of limitations has been filed
by or on behalf of P&S with respect to any liability for Taxes for any year.
4.10 CONTRACTS.
---------
4.10.1. Exhibit 4.10(i) is a list of all agreements of P&S (the
---------------
"P&S Contracts") and Exhibit 4.10(ii) is a list of all agreements of each P&S
----------------
Physician with respect to P&S (the "P&S Physician Contracts"). Except as set
forth in Exhibits 4.10(i) and 4.10 (ii) hereto, neither P&S nor any of the P&S
------------------------------
Physicians with respect to P&S, respectively, is a party to any material
contract, agreement, lease, or power of attorney of any kind with respect to the
Business. As to P&S, except as noted on Exhibit 4.10(i), all P&S Contracts, and
---------------
as to the P&S Physicians, all P&S Physician Contracts, are valid and are in full
force and effect according to their material terms, and no material default by
P&S or the P&S Physician or Physicians, as the case may be, exists under any
such contract, lease or agreement and no condition or state of facts exists
which, with notice or the passage of time, or both, would constitute a default
under any such contract, lease or agreement. All P&S Contracts and all P&S
Physician Contracts are valid as to the other contracting parties thereto and
there is no material default by any such party existing under the contracts and
no condition or state of facts exists which, with notice or the passage of time,
or both would constitute a default by any such party thereunder. All P&S
Contracts and all P&S Physician Contracts are enforceable in accordance with
their respective terms by P&S or the P&S Physicians, as the case may be, against
all other parties thereto in all material respects (except as enforceability may
be restricted, limited or delayed by bankruptcy, insolvency, moratorium or
similar laws affecting or relating to the enforcement of creditors' rights in
general and except as enforceability is subject to general principles of equity,
regardless of whether enforceability is considered in a proceeding at law or in
equity).
11
<PAGE>
4.10.2. Neither the execution, the delivery, nor the performance of
this Agreement by P&S and the P&S Physicians will cause any default in or breach
of any provision of the P&S Articles of Incorporation, as amended, the P&S
bylaws or any agreement or commitment to which P&S is a party or by which P&S or
the P&S Physicians are bound, and none of such actions will result in either
acceleration, or any similar right of any other party, under any P&S Contract or
P&S Physician Contract, or constitute a default under any P&S Contract or P&S
Physician Contract, or result in the creation or imposition of any Encumbrance
against any of the assets of P&S. With respect to the P&S Physician Contracts,
all accounts receivable with respect to each P&S Physician's performance of each
such contract has been assigned to P&S and, with respect to future performances
by each such P&S Physician, the accounts receivable therefrom shall be assigned
to Newco pursuant to such P&S Physician's Individual Employment with Newco.
4.11 COMPLIANCE WITH LAWS. Except as described in Exhibit 4.11, P&S is in
-------------------- ------------
compliance with the laws, regulations, rules and decrees of all governmental
authorities whatsoever relating to the conduct of its business, including,
without limitation, the Fair Labor Standards Act.
4.12 LITIGATION. Except as described in Exhibit 4.12 hereof, there is no
---------- ------------
litigation, action, suit, proceeding or governmental investigation pending or
threatened against P&S or affecting P&S or the Business or any of its assets, at
law or in equity or before any federal, state, municipal, local or other
governmental authority, or before any arbitrator, nor is there any reasonable
basis for any such litigation, action, suit, proceeding or investigation. None
of the P&S Physicians nor P&S is subject to any order, writ or decree of any
court or other governmental authority.
4.13 EMPLOYEE BENEFITS.
-----------------
4.13.1 Except as identified on Exhibit 4.13.1, P&S is not a party to
--------------
any collective bargaining or labor agreement or to any written employment
agreement, profit sharing, deferred compensation, bonus, stock option, stock
purchase, pension, retainer, consulting, retirement, welfare, or incentive plan
or policy or increases in the rate of remuneration entered into with or for the
benefit of present or former employees, whether or not unionized, of P&S or any
other like agreement, plan or policy.
4.13.2 All P&S plans, funds, programs, agreements, arrangements,
commitments or policies (collectively, the "Plans") which: (i) are or have ever
been maintained or participated in by P&S and which are currently in effect or
as to which P&S has any ongoing liability or obligation whatsoever; and (ii)
constitute (A)
12
<PAGE>
"pension plans" (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) or (B) "welfare plans" (as defined
in ERISA Section 3(1)) are identified on Exhibit 4.13.2. P&S has provided
--------------
copies of all Plans to AACA.
4.13.3 Except as set forth on Exhibit 4.13.3, P&S has never
--------------
maintained, sponsored, contributed to or been required to contribute to a
defined benefit plan (within the meaning of Code Section 414(j)) and is not, and
has never been, a member of a controlled group of corporations (within the
meaning of Code Section 414(b)), a group of trades or businesses under common
control (within the meaning of Code Section 414(c)) or an affiliated service
group (within the meaning of Code Section 414 (m)).
4.14 LIABILITIES. All liabilities and obligations of P&S direct,
-----------
indirect or contingent, are either listed in the P&S Financial Statements or on
Exhibit 4.14 attached hereto.
- ------------
4.15 INSURANCE. All insurance maintained by P&S is listed and described
---------
on Exhibit 4.15 attached hereto. Except as identified on Exhibit 4.15, P&S has
------------ ------------
not in the past three years made any claims with respect to its insurance
coverage.
4.16 ABSENCE OF CERTAIN CHANGES. Except as described in Exhibit 4.16,
-------------------------- ------------
since December 31, 1995, P&S has not:
(i) incurred or suffered any obligations or liabilities (absolute or
contingent) except current liabilities incurred in the ordinary
course of business;
(ii) issued any stock or other corporate securities or granted any option
or right with respect to the acquisition of any of its corporate
securities;
(iii) declared or made (or become obligated for) any payment or
distribution or dividend to shareholders or purchased or redeemed
(or became obligated to purchase or redeem) any shares of its
capital stock;
(iv) mortgaged, pledged or subjected (whether or not voluntarily) to any
Encumbrance, any of its assets, other than Encumbrances incidental
to the conduct of its business or the ownership of its property and
assets which were not incurred in connection with the borrowing of
money, or the obtaining of advances or credit, and which do not in
the aggregate impair the use or value thereof in the operation of
its business;
(v) sold, assigned or transferred or agreed to sell, assign or transfer
any of its tangible assets or canceled any
13
<PAGE>
debts or claims, except in each case in the ordinary course of
business;
(vi) sold, assigned, or transferred or agreed to sell, assign or transfer
any trade names, or other intangible assets, or permitted existing
rights with respect thereto to lapse;
(vii) suffered any extraordinary loss or knowingly waived or permitted to
lapse any right of substantial value;
(viii) made any capital expenditures, or otherwise entered into any
executory transactions or commitments to make any capital
expenditures, in excess of $5,000 per item or $25,000 in the
aggregate;
(ix) failed to comply in any material respect with any applicable local,
state or federal law, rule or regulation; or
(x) suffered any event or condition of any character, materially and
adversely affecting its business, properties or prospects.
4.17 EMPLOYEES. Attached as Exhibit 4.17 is a listing of all current P&S
--------- ------------
employees and former P&S employees who are eligible to continue to receive
benefits by virtue of their former employment by P&S (including, as applicable,
their rates of pay, accrued sick leave, vacation and other benefits).
4.18 AUTHORITY. P&S has the corporate power to execute and deliver this
---------
Agreement and consummate the Merger and the other transactions contemplated
hereby and has taken (or by the Closing Date will have taken) all action
required by law, its Articles of Incorporation, bylaws or otherwise to authorize
such execution and delivery and the consummation of the Merger and the other
transactions contemplated hereby.
4.19 LICENSES. Exhibit 4.19 contains a copy of all governmental or other
-------- ------------
licenses held by (i) P&S relating to the operation of its business and (ii) the
P&S Physicians. Except for the licenses of P&S and the P&S Physicians listed in
Exhibit 4.19, there are no other licenses or permits required for P&S and the
- ------------
P&S Physicians to operate the Business. Except as disclosed in Exhibit 4.19,
------------
all such licenses are in full force and effect, and there have not been (and
there currently are not) any material default or deficiencies thereunder by any
party; and no event has occurred which (whether with or without notice, lapse of
time, or the happening or occurrence of any other event) would constitute a
material default or deficiency thereunder. None of the P&S
14
<PAGE>
Physicians nor P&S is aware of any proceeding or investigation by any
governmental agency (including, without limitation, the Health Care Financing
Administration or any Ethics Board) relating to the Business. Except as
disclosed in Exhibit 4.19, none of the P&S Physicians nor P&S have been the
------------
subject of a malpractice suit. To the knowledge of the P&S Physicians and P&S
there is not now, nor has there ever been, any investigation or proceeding by
any governmental agency or licensing board to restrict, suspend or revoke any
license of P&S.
4.20 NO FINDERS OR BROKERS. None of the P&S Physicians nor P&S, nor any
---------------------
officer or director thereof, has engaged any finder or broker in connection with
the transactions contemplated hereunder. The P&S Physicians will indemnify and
hold AACA harmless against claims (and attorneys' fees and expenses in the
defense thereof) of any person, firm or corporation for finder's fees, broker's
fees, brokerage commissions, sales commissions or the like alleged in connection
with the transactions contemplated hereunder due to acts of the P&S Physicians
or P&S.
4.21 DISCLOSURE. No representation or warranty by the P&S Physicians or
----------
P&S in this Agreement and no statement pertaining to the P&S Physicians or P&S
in this Agreement or any document, Exhibit or certificate furnished or to be
furnished to AACA pursuant hereto will contain any materially untrue statement
or omits or will omit to state a relevant fact necessary in order to make the
statements contained herein or therein not misleading. There are no facts known
to the P&S Physicians or P&S not described herein which would adversely affect
the future operations of P&S.
4.22 VALIDITY OF AGREEMENTS. Upon execution and delivery by all parties,
----------------------
this Agreement, the Articles of Merger, and all other agreements to be executed
by the P&S Physicians or P&S in connection herewith, will constitute the valid
and binding obligation of the P&S Physicians and P&S, as the case may be, and be
binding against them and enforceable in accordance with their respective terms
(except as enforceability may be restricted, limited, or delayed by bankruptcy,
insolvency, moratorium or similar laws affecting or relating to the enforcement
of creditors' rights in general and except as the enforceability is subject to
general principles of equity, regardless of whether enforceability is considered
in a proceeding at law or in equity).
4.23 TITLE TO ASSETS. Except as described in Exhibits 4.14 and 4.16
--------------- ------------- ----
hereto, P&S holds good and marketable title to its assets, free and clear of
restrictions on or conditions to transfer or assignment, and free and clear of
Encumbrances.
4.24 TRANSFER NOT SUBJECT TO ENCUMBRANCES OR THIRD-PARTY APPROVAL.
------------------------------------------------------------
Except as set forth on Exhibit 4.24, the execution and
------------
15
<PAGE>
delivery of this Agreement by the P&S Physicians and P&S, and the consummation
of the contemplated transactions, (i) will not result in the creation or
imposition of any Encumbrance on any of the assets of P&S and (ii) will not
require the authorization, consent, or approval of any third party, including
any governmental subdivision or regulatory agency.
4.25 ACCOUNTS RECEIVABLE. The accounts receivable of P&S (the "Accounts
-------------------
Receivable") as of the Effective Time of the Merger, to the extent uncollected
as of the Effective Time of the Merger, will be validly existing and represent
monies due for goods sold and delivered or services performed subject to
customary discounts or other adjustments by third parties. An aged listing of
the Accounts Receivable of P&S as of the Closing Date shall be delivered to AACA
on or before the Closing Date in connection with the Interim Balance Sheet and
the schedule calculating the Closing Date Adjustment as provided in Section
2.5(c) hereof.
4.26 SECURITIES LAWS.
---------------
4.26.1 RECEIPT OF INFORMATION. Since the commencement of
----------------------
negotiations, each P&S Physician has had access to and each P&S Physician has
received: (i) a copy of VIVRA's Prospectus dated February 9, 1995; (ii) a copy
of VIVRA's 1994 Annual Report to Stockholders; (iii) a copy of VIVRA's Annual
Report on Form 10-K for the fiscal years ended November 30, 1994, and November
30, 1995; (iv) a copy of VIVRA's Quarterly Reports on Form 10-Q for the quarters
ended February 28, May 31 and August 30, 1995; (v) a copy of VIVRA's Proxy
Statement for VIVRA's Annual Meeting; (vi) a copy of the Prospectus Supplements
to VIVRA's Prospectus dated February 9, 1995; (vii) a copy of VIVRA's Forms 8-K
dated August 16, 1995, December 21, 1995; and (viii) such other information as
the P&S Physicians have reasonably requested.
4.26.2 INVESTMENT EXPERIENCE. Each P&S Physician represents that
---------------------
such P&S Physician is experienced in evaluating and investing in securities and
acknowledges that such P&S Physician is able to fend for himself, can bear the
economic risk of such P&S Physician's investment, and has such knowledge and
experience in financial and business matters that such P&S Physician is capable
of evaluating the merits and risks of the investment in VIVRA stock.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF AACA.
--------------------------------------
AACA represents, warrants, covenants and agrees to and with P&S and the P&S
Physicians, as follows.
5.1 ORGANIZATION AND STANDING OF AACA. AACA is a corporation duly
---------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power
16
<PAGE>
and authority to conduct its business as now being conducted, and is duly
qualified to do business, in each jurisdiction in which the nature of the
property owned or leased or the nature of the businesses conducted, specifically
including the Commonwealth of Kentucky, so require.
5.2 AUTHORITY. AACA has corporate power to execute and deliver this
---------
Agreement and consummate the transactions contemplated hereby and has taken (or
by the Closing Date will have taken) all action required by law, its Certificate
of Incorporation, its bylaws or otherwise to authorize such execution and
delivery and the consummation of the transactions contemplated hereby.
5.3 NO FINDERS OR BROKERS. Neither AACA nor any officer or director
---------------------
thereof has engaged any finder or broker in connection with the transactions
contemplated hereunder. AACA will indemnify and hold the P&S Physicians
harmless against claims (and attorneys' fees and expenses in the defense
thereof) of any person, firm or corporation for finder's fees, broker's fees,
brokerage commissions, sales commissions or the like alleged in connection with
the transactions contemplated hereunder due to acts of AACA.
5.4 VALIDITY OF AGREEMENTS. Upon execution and delivery by all parties
----------------------
hereto, this Agreement, and all other agreements to be executed by AACA in
connection herewith will constitute the valid and binding obligation of AACA and
be binding against AACA and enforceable in accordance with their respective
terms (except as enforceability may be restricted, limited, or delayed by
bankruptcy, insolvency, moratorium or similar laws affecting or relating to the
enforcement of creditors' rights in general and except as the enforceability is
subject to general principles of equity, regardless of whether enforceability is
considered in a proceeding at law or in equity).
5.5 REQUIRED GOVERNMENTAL APPROVALS. AACA is in compliance in all
-------------------------------
material respects with the laws, rules, regulations and decrees of all
governmental authorities whatsoever relating to the conduct of its businesses,
and to the best of its knowledge no approval or consent of any governmental
authority or agency will be required at Closing for AACA to consummate the
transactions contemplated hereby.
5.6 LITIGATION. There is no litigation, action, suit, proceeding or
----------
governmental investigation pending or (to the best of AACA's knowledge)
threatened against AACA or affecting AACA or any of its businesses or any of its
assets, nor does AACA know of any reasonable basis for such litigation, action,
suit, proceeding or investigation. AACA is not subject to any order, writ or
decree of any court or governmental authority or agency.
17
<PAGE>
5.7 VIVRA COMMON STOCK. The issuance of the VIVRA Common Stock pursuant
------------------
to the Merger hereunder has been duly authorized by all necessary corporate
action and upon consummation of the Closing will be duly and validly issued and
fully paid and nonassessable, registered pursuant to VIVRA's currently effective
registration statement dated March 15, 1995, and freely tradeable subject to the
limitations set forth in Section 2.6.
5.8 CERTIFICATE OF INCORPORATION AND BYLAWS OF AACA. A true, correct
-----------------------------------------------
and complete copy of the Certificate of Incorporation of AACA is attached hereto
as Exhibit 5.8. AACA has provided a copy of its Bylaws to P&S and to the P&S
-----------
Physicians.
5.9 DISCLOSURE. No representation or warranty by AACA in this Agreement
----------
and no statement pertaining to AACA in this Agreement or any document, Exhibit
or certificate furnished or to be furnished to P&S Physicians or P&S pursuant
hereto will contain any material untrue statement or omits or will omit to state
a relevant fact necessary in order to make the statements contained herein or
therein not misleading.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF VIVRA.
---------------------------------------
VIVRA joins in this Agreement solely for the purpose of making the
following representations and warranties regarding VIVRA and the VIVRA Common
Stock. VIVRA hereby represents, warrants, covenants and agrees to and with P&S
and the P&S Physicians as follows.
6.1 ORGANIZATION AND STANDING OF VIVRA. VIVRA is a corporation duly
----------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware, and has full corporate power and authority to conduct its business as
now being conducted, and is duly qualified to do business, in each jurisdiction
in which the nature of the property owned or leased or the nature of the
businesses conducted so require.
6.2 AUTHORITY. VIVRA has corporate power to execute and deliver this
---------
Agreement and consummate the transactions contemplated hereby and has taken (or
by the Closing Date will have taken) all action required by law, its Certificate
of Incorporation, bylaws or otherwise to authorize such execution and delivery
and the consummation of the transactions contemplated hereby.
6.3 VALIDITY OF AGREEMENTS. Upon execution and delivery by all parties
----------------------
hereto, this Agreement, and all other agreements to be executed by VIVRA in
connection herewith to the extent that they relate to VIVRA, will constitute the
valid and binding obligation of VIVRA and be binding against VIVRA and
enforceable in accordance with their respective terms (except as enforceability
may be restricted, limited, or delayed by bankruptcy, insolvency,
18
<PAGE>
moratorium or similar laws affecting or relating to the enforcement of
creditors' rights in general and except as the enforceability is subject to
general principles of equity, regardless of whether enforceability is considered
in a proceeding at law or in equity).
6.4 LITIGATION. There is no material suit, action, proceeding or
----------
investigation against or involving VIVRA or any of the properties or rights,
pending or, to the knowledge of VIVRA, threatened. There is no material
judgment, decree, injunction, rule or order of any governmental entity
outstanding against VIVRA. VIVRA is not in violation of any term of any
judgment, decree, injunction or order outstanding against it.
6.5 FINANCIAL STATEMENTS. VIVRA's audited consolidated financial
--------------------
statements including a balance sheet, income statement and statement of cash
flow, for the year ended November 30, 1994, and VIVRA's unaudited consolidated
financial statements, including a balance sheet, income statement and statement
of cash flow, for the period ended November 30, 1995, which have been previously
delivered to P&S and the P&S Physicians, fairly present, subject to normal
year-end adjustments with respect to the unaudited interim financial statements,
in conformity with generally accepted accounting principles applied on a
consistent basis, the consolidated financial position of VIVRA and its
consolidated subsidiaries as of the date thereof and their consolidated results
of operation and cash flows for the period then ended.
6.6 VIVRA COMMON STOCK. All of the shares of VIVRA Common Stock issued
------------------
under the provisions of this Agreement are duly authorized, fully paid and
nonassessable, are registered pursuant to VIVRA's currently effective
registration statement dated March 15, 1995, and are freely tradeable subject to
the limitations set forth in Section 2.6.
6.7 NO UNTRUE STATEMENTS. No representation or warranty by VIVRA
--------------------
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained therein not misleading or
necessary in order to provide P&S and P&S Physicians with complete and accurate
information as to VIVRA and the VIVRA Common Stock. Except as described in the
S-4 Registration Statement and other materials delivered by VIVRA under cover
dated March 8, 1996, there are no facts known to VIVRA which would materially
and adversely affect the VIVRA Common Stock.
SECTION 7. COVENANTS OF AACA.
-----------------
7.1 BEST EFFORTS TO SECURE CONSENTS AND APPROVALS. AACA will take all
---------------------------------------------
necessary corporate and other action and will use its best efforts to obtain all
consents and approvals required of AACA to carry out the transactions
contemplated by this Agreement and to
19
<PAGE>
satisfy the conditions precedent specified herein.
7.2 HANDLING OF DOCUMENTS. Until the Closing, AACA shall keep
---------------------
confidential all information provided by P&S or the P&S Physicians pursuant to
this Agreement which is not in the public domain, and shall exercise the same
care in handling such information as it would exercise with similar information
of its own. If the Closing does not occur, AACA shall return all such
documentation and keep the same confidential.
7.3 EMPLOYMENT. AACA will offer employment to all of P&S's employees,
----------
except the P&S Physicians, but these employees shall, upon acceptance of
employment with AACA, be "employees terminable at will" and subject to all
employment policies of AACA. Subsequent to the date of this Agreement, no
termination bonuses or severance pay is owed to or will be paid to any P&S
employees terminated as a result of the merger of P&S into AACA.
7.4 COMPENSATION. AACA reserves the right in the future to raise
------------
salaries of P&S's former employees consistent with the policies and standards
governing AACA employees generally. AACA will credit each former P&S employee
hired by AACA with his or her service anniversary with P&S for purposes of
determining vacation, sick leave and holidays and other fringe benefits provided
by AACA to its employees. To the extent permitted by ERISA, former P&S
employees shall be entitled to participate in all health, disability, retirement
and other benefit plans of AACA in accordance with the terms of such plans;
provided, however, that with respect to such health plans, AACA shall ensure
that such employees are eligible for coverage at the Effective Time, are not
subject to a "waiting period" as a result of the Merger, and are not subject to
exclusion for pre-existing conditions unless they have been subject to such an
exclusion under their current coverage.
SECTION 8. COVENANTS OF THE P&S PHYSICIANS AND P&S.
---------------------------------------
8.1 ACCESS AND INFORMATION. The P&S Physicians and P&S shall give to
----------------------
AACA and AACA's lenders, underwriters, investors and representatives reasonable
access during normal business hours to their respective premises, books,
accounts and records and all other relevant documents and will make available,
and use their respective best efforts to cause their respective independent
accountants to make available, copies of all such documents and information with
respect to the business and properties of P&S as representatives of AACA may
from time to time request, including, without limitation, the working papers
used to prepare the Financial Statements, all in such manner as not unduly to
disrupt their normal business activities. The foregoing shall be subject to
federal and state laws regarding the privacy of medical records.
20
<PAGE>
8.2 CONDUCT OF BUSINESS. If there shall be a lapse of time between the
-------------------
date hereof and the Effective Time, except as otherwise approved by AACA, P&S
shall conduct its business only in the ordinary course consistent with past
practice and in such a manner that representations and warranties contained in
Section 4 shall be true and correct at and as of the Closing (except for changes
contemplated, permitted or required by this Agreement) and so that the
conditions to be satisfied by P&S and the P&S Physicians at the Closing shall
have been satisfied. P&S shall, consistent with conducting its business in
accordance with reasonable business judgment, preserve its business intact; use
its best efforts to keep available to P&S the services of its present employees
(except those dismissed by P&S or those who voluntarily discontinue their
employment); and preserve for AACA the goodwill of the suppliers, patients and
others having business relations with P&S.
8.3 BEST EFFORTS TO SECURE CONSENTS AND APPROVALS. The P&S Physicians
---------------------------------------------
and P&S shall take the necessary corporate or other action and shall each use
its or their, as the case may be, best efforts to secure before the Closing all
necessary consents, approvals and amendments of agreements required of the P&S
Physicians and P&S to carry out the transactions contemplated by this Agreement
and to satisfy the conditions precedent specified herein. Each P&S Physician
will use his best efforts to have all P&S Physician Contracts of such P&S
Physician continue in effect with respect to such P&S Physician as an employee
of Newco following the Effective Time.
SECTION 9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE P&S PHYSICIANS AND
-----------------------------------------------------------------
P&S.
- ---
All obligations of the P&S Physicians and P&S which are to be discharged
under this Agreement at the Closing are subject to the performance, at or prior
to the Closing, of all covenants and agreements contained herein which are to be
performed by AACA at or prior to the Closing and to the fulfillment at, or prior
to, the Closing, of each of the following conditions (unless expressly waived in
writing by the P&S Physicians at any time at or prior to the Closing).
9.1 REPRESENTATIONS AND WARRANTIES TRUE. All of the representations and
-----------------------------------
warranties made by AACA and VIVRA contained in Sections 5 and 6, respectively,
of this Agreement shall be true as of the date of this Agreement, and shall be
true at and as of the date of Closing in all material respects; AACA shall have
performed and complied with in all material respects all covenants and
conditions required by this Agreement to be performed or complied with by AACA
prior to or at the Closing; and the P&S Physicians shall have been furnished
with a certificate of the President or any Vice President of AACA and of VIVRA
dated as of the Closing,
21
<PAGE>
certifying to the truth of such representations and warranties as of the Closing
and to the fulfillment of such covenants and conditions.
9.2 AUTHORITY. All action required to be taken by or on the part of
---------
AACA or VIVRA to authorize the execution, delivery and performance of this
Agreement by AACA and the consummation of the transactions contemplated hereby
shall have been duly and validly taken by the Board of Directors of AACA and of
VIVRA.
9.3 NO OBSTRUCTIVE PROCEEDING. No action or proceedings shall have been
-------------------------
instituted against, and no order, decree or judgment of any court, agency,
commission or governmental authority shall be subsisting against the P&S
Physicians which seek to, or would, render it unlawful as of the Closing to
effect the transactions contemplated hereby, and no such action shall seek
damages in a material amount by reason of the transactions contemplated hereby.
Also, no substantive legal objection to the transactions contemplated by this
Agreement shall have been received from or threatened by any governmental
department or agency.
9.4 NO MATERIAL ADVERSE CHANGE. As of the date of this Agreement,
--------------------------
there shall have been no material adverse changes in the business or assets of
AACA.
9.5 MASTER MERGER AGREEMENT. All of the conditions precedent to the
-----------------------
obligations of the parties set forth in the Master Merger Agreement shall have
been met or waived, as the case maybe, by all parties to the Master Merger
Agreement except as otherwise specifically provided therein.
SECTION 10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF AACA.
-----------------------------------------------
All obligations of AACA which are to be discharged under this Agreement at
the Closing are subject to the performance, at or prior to the Closing, of all
covenants and agreements contained herein which are to be performed by the P&S
Physicians and P&S at or prior to the Closing and to the fulfillment at or prior
to the Closing of each of the following conditions (unless expressly waived in
writing by AACA at any time at or prior to the Closing):
10.1 REPRESENTATIONS AND WARRANTIES TRUE. All of the representations and
-----------------------------------
warranties of the P&S Physicians and P&S contained in Section 4 of this
Agreement shall be true as of the date of this Agreement, and shall be true at
and as of the date of Closing in all material respects; the P&S Physicians and
P&S shall have performed or complied with in all material respects all covenants
and conditions required by this Agreement to be performed or complied with by
the P&S Physicians and P&S prior to or at the Closing; and AACA shall be
furnished with a certificate of the P&S
22
<PAGE>
Physicians, dated the Closing, certifying to the truth of such representations
and warranties as of the time of the Closing and to the fulfillment of such
covenants and conditions.
10.2 NO OBSTRUCTIVE PROCEEDING. No action or proceedings shall have been
-------------------------
instituted against, and no order, decree or judgment of any court, agency,
commission or governmental authority shall be subsisting against AACA or its
affiliates which seeks to, or would, render it unlawful as of the Closing to
effect the Merger in accordance with the terms hereof, and no such action shall
seek damages in a material amount by reason of the transactions contemplated
hereby. Also, no substantive legal objection to the transactions contemplated
by this Agreement shall have been received from or threatened by any
governmental department or agency.
10.3 CONSENTS AND APPROVALS. Each of the parties to any P&S Contract
----------------------
under which the Merger contemplated hereby would constitute or result in a
default or acceleration of obligations shall have given such consent as may be
necessary to permit the consummation of the Merger contemplated hereby without
constituting or resulting in a default or acceleration under such agreement, and
any consents required from any public or regulatory agency or organization
having jurisdiction shall have been given.
10.4 NO ADVERSE CHANGE. As of the date of this Agreement, no event
-----------------
shall have occurred or have been threatened which has or would have a material
and adverse effect upon P&S; and P&S shall not have sustained any loss or damage
to its assets or property, whether or not insured, or union activity that
affects materially and adversely its ability to conduct its business.
10.5 RELEASE OF ENCUMBRANCES. All Encumbrances shall have been released
-----------------------
at or prior to the Closing.
10.6 LICENSES. AACA shall not have learned that there is any material
--------
impediment beyond its control to its ability to obtain all business licenses to
operate the Business. The P&S Physicians shall not have learned that there is
any material impediment beyond their control to their ability to transfer their
licenses to practice medicine to, and to practice medicine through, Newco.
10.7 POOLING. AACA shall be satisfied that the business combination to
-------
be effected by the Merger may be accounted for as a pooling of interests under
generally accepted accounting principles and all applicable SEC rules and
regulations.
10.8 MASTER MERGER AGREEMENT. All of the conditions precedent to the
-----------------------
obligations of the parties set forth in the Master Merger Agreement shall have
been met or waived by all parties to the Master Merger Agreement except as
otherwise specifically provided
23
<PAGE>
therein.
SECTION 11. TERMINATION.
-----------
AACA on the one hand, or P&S and the P&S Physicians on the other hand, by
giving written notice to the other at any time on or prior to the Closing Date
(unless extended by mutual agreement of the parties) may terminate this
Agreement if (a) a material default shall be made by the other in the observance
of or in the due and timely performance of the covenants and agreements herein
contained, which default cannot be cured on or prior to the Closing, or (b) if,
as of the Closing, the conditions precedent to the performance of the
obligations of the one, including those specified in the Master Merger
Agreement, shall not have been fulfilled and shall not have been waived by such
party.
SECTION 12. INDEMNIFICATION.
---------------
12.1 INDEMNITY BY THE P&S PHYSICIANS. The P&S Physicians, jointly and
-------------------------------
severally (except as otherwise provided in Section 12.3 below), shall indemnify,
defend and hold harmless AACA and each affiliate of AACA from and against the
following, any one of which shall be deemed to be an "AACA indemnifiable loss"
under this Agreement:
(a) all Undisclosed Liabilities;
(b) any and all losses, damages, costs or deficiencies resulting from
any and all misrepresentations or breaches of warranty or failures
to perform agreements or undertakings by the P&S Physicians or P&S
contained in or made pursuant to this Agreement or in other
agreements executed by the P&S Physicians or P&S in connection with
this Agreement; and
(c) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses (including, without
limitation, attorneys' fees, interest, penalties and amounts paid in
settlement of any such claim) incident to any of the foregoing.
12.2 UNDISCLOSED LIABILITIES. For purposes of Section 12.1 hereof, the
-----------------------
term "Undisclosed Liabilities" shall mean:
(i) any liability for any sales tax (or any interest or penalties with
respect thereto) payable as a result of the consummation of the
transactions contemplated hereby that is not reflected in Exhibit
-------
4.14;
- ----------------
(ii) except as stated in Exhibit 4.14 hereto, any liability
------------
24
<PAGE>
under any employee benefit or welfare plan or regarding withholding
taxes owed to or with respect to any employee or independent
contractor of P&S accruing prior to the date of Closing;
(iii) liabilities and obligations of the P&S Physicians or P&S for any
breach or violation, as of the date of Closing, of any P&S Physician
Contracts or P&S Contracts;
(iv) liabilities and obligations of the P&S Physicians or P&S for
environmental or ecological matters or conditions existing at or
before the Closing, including those relating to the use, transport,
disposal, handling or storage of hazardous or toxic materials,
pollutants, contaminants, petroleum products, or waste (including,
without limitation, medical waste);
(v) any liability or obligation of the P&S Physicians or P&S accruing at
or before the date of Closing for violations of law;
(vi) any liability of the P&S Physicians or P&S with respect to a breach
of this Agreement;
(vii) any liability or obligation to Medicare, Medicaid, Blue Cross/Blue
Shield (or any other third party payer) as a result of recapture of
amounts paid by any such payer to the P&S Physicians or P&S or any
overpayments made by such payer to the P&S Physicians or P&S or any
disallowance of any claim of the P&S Physicians or P&S;
(viii) any tort liability, products liability or malpractice liability
of the P&S Physicians or P&S accruing at or before the date of
Closing;
(ix) liabilities and obligations of the P&S Physicians or P&S incurred in
connection with the preparation of this Agreement and the
consummation of the transactions contemplated hereby, including,
without limitation, legal and accounting fees;
(x) any liability of P&S which is not reflected in the P&S Financial
Statements referred to in Section 4.7 hereof or in Exhibit 4.14
------------
hereto; and
(xi) any liability whatsoever, of P&S, the P&S Physicians, AACA, VIVRA,
or otherwise incurred in connection with the Qualified Plans
referred to in Section 10.9 hereof either before or after the
Effective Time.
25
<PAGE>
12.3 JOINT AND SEVERAL LIABILITY OF P&S PHYSICIANS. The P&S Physicians
---------------------------------------------
shall be jointly and severally liable for all AACA indemnifiable losses except
for any AACA indemnifiable losses arising from or connected with (i) each P&S
Physician's malpractice, (ii) each P&S Physician's violations of law or, (iii)
each P&S Physician's violation of any P&S Physician Contract, for which each P&S
Physician shall remain severally liable only.
12.4 PAYMENT FOR AACA INDEMNIFIABLE LOSSES. The P&S Physicians shall pay
-------------------------------------
to AACA or any affiliate of AACA, as the case may be, all amounts owed to AACA
pursuant to Section 12.1 within thirty (30) days after written demand therefor.
In the event that any third person, including, without limitation, any
governmental taxing authority, shall assert any claim or action against AACA or
an affiliate of AACA which, if successful, might result in an AACA indemnifiable
loss, AACA shall notify the P&S Physicians, in writing, of such claim or action,
and at the P&S Physicians' option, they may, at their sole expense, assume
control over the defense of such claim or action, but in any event AACA (and its
affiliate, as the case may be) shall have the right to participate in the
defense of any such claim or action. If, after notice thereof, the P&S
Physicians shall not assume the defense of, or if after so assuming such defense
they shall fail to continue to defend, any such claim or action, AACA (and its
affiliate, as the case may be) may defend any such claim or action and AACA (and
its affiliate, as the case may be) may then settle or compromise such claim or
action on terms it deems reasonable. The P&S Physicians shall promptly satisfy
and pay any final judgment rendered with respect to any such claim or action or
any compromise or settlement thereof and shall pay the reasonable expenses,
legal or otherwise of AACA (and its affiliate, as the case may be) in the
defense of any such claim or action. If the P&S Physicians do not pay any such
AACA indemnifiable loss pursuant to any such judgment, settlement or compromise
within thirty (30) days after written demand, AACA may pay the same and set off
the amount paid against any payments due the P&S Physicians. If AACA (or an
affiliate of AACA) suffers an AACA indemnifiable loss directly (not as a result
of a third party claim or action), AACA will first recover such AACA
indemnifiable loss pursuant to the terms of the Escrow Agreement, then, if the
remaining Escrowed Shares are insufficient to cover the AACA indemnifiable loss
or if the Escrow Agreement has expired, AACA may set off the amount of the same
against payments due the P&S Physicians or demand payment therefor from the P&S
Physicians. For purposes hereof, an "affiliate" of AACA shall mean any person
or entity directly or indirectly controlling, controlled by, or under common
control with AACA.
12.5 INDEMNITY BY AACA. AACA shall indemnify, defend and hold harmless
-----------------
the P&S Physicians from and against the following, any one of which shall be
defined to be a "P&S indemnifiable loss" under
26
<PAGE>
this Agreement:
(a) any and all losses, damages, costs or deficiencies resulting
from any and all misrepresentations or breaches of warranty or failures to
perform agreements or undertakings by AACA contained in or made pursuant to this
Agreement or in other agreements executed by AACA in connection with this
Agreement;
(b) any and all losses, damages, costs or deficiencies incurred by
the P&S Physicians arising from any failure by AACA to satisfy any obligation
under the P&S Contracts to be performed by AACA by their stated terms after the
Closing Date; and
(c) any and all actions, suits, proceedings, claims, demands
assessments, judgments, costs and expenses (including, without limitation,
attorneys' fees, interest, penalties and amounts paid in settlement of any such
claim) relating to any of the foregoing.
12.6 PAYMENT FOR P&S INDEMNIFIABLE LOSSES. AACA shall pay the P&S
------------------------------------
Physicians all amounts owed to them pursuant to Section 12.5 within thirty (30)
days after written demand therefor. In the event that any third person shall
assert any claim or action against the P&S Physicians which, if successful,
might result in a claim for a P&S indemnifiable loss, the P&S Physicians shall
notify AACA in writing of such claim or action, and at AACA's option, AACA may,
at its sole expense, assume control over the defense of such claim or action,
but in any event the P&S Physicians shall have the right to participate in the
defense of any such claim or action. If after notice thereof, AACA shall not
assume the defense of, or if after so assuming it fails to continue to defend,
any such claim or action, the P&S Physicians may defend any such claim or action
and the P&S Physicians may then settle or compromise such claim or action on
terms they deem reasonable. AACA shall promptly satisfy any final judgment
rendered with respect to any such claim or action or any compromise or
settlement thereof and shall pay the reasonable expenses, legal or otherwise, of
the P&S Physicians in the defense of any such claim or action.
If the P&S Physicians suffer a P&S indemnifiable loss directly (not as a
result of a third party claim or action), the P&S Physicians may set off the
amount of the same against payments due AACA or demand payment therefor from
AACA.
12.7 REMEDIES CUMULATIVE. The remedies provided herein shall be
-------------------
cumulative and shall not preclude any party from asserting any other rights or
seeking any other remedies to which such party is entitled by law.
12.8 SURVIVAL. The representations and warranties of the
--------
27
<PAGE>
parties set forth in this Agreement shall expire one (1) year after the
Effective Time.
SECTION 13. MISCELLANEOUS.
-------------
13.1 EXPENSES. All expenses of the preparation of this Agreement and of
--------
the other agreements and transactions contemplated hereby, including, without
limitation, counsel fees, accounting fees, investment advisor's fees and
disbursements, shall be borne by the P&S Physicians in the case of P&S or any of
the P&S Physicians and by AACA in the case of AACA.
13.2 NOTICES. All notices, demands and other communications hereunder
-------
shall be written and shall be deemed to have been duly given if delivered in
person or mailed by Federal Express (or other national air courier service),
charges prepaid, to the address set forth below:
To AACA or VIVRA: Asthma & Allergy CareAmerica, Inc.
8601 Dunwoody Place, Suite 440
Atlanta, Georgia 30350
Attention: Robert Prosek, President
with a copy to: Paul L. Hudson, Jr., Esq.
Parker, Hudson, Rainer & Dobbs
1500 Marquis Two Tower
285 Peachtree Center Avenue, N.E.
Atlanta, Georgia 30303
To P&S or the Pollard & Sublett, PSC
P&S Physicians: Stephen J. Pollard, M.D.
James L. Sublett, M.D.
9800 Shelbyville Road, Suite 220
Louisville, Kentucky 40223
with a copy to: Ivan Schell, Esq.
Hirn, Doheny, Reed, & Harper
2000 Medinger Tower
Louisville, Kentucky 40202
or to such other address as AACA or the P&S Physicians may designate by notice
to the other. Notices delivered in person shall be deemed delivered on the date
of delivery and notices sent via air courier service, as aforesaid, shall be
deemed delivered on the date of delivery as indicated by the records of the
courier service. Rejection or other refusal to accept or inability to deliver
because of a changed address of which no notice was given shall be deemed to be
a receipt of the notice, request or other communication. Any notice, request or
other communication required or permitted to be given by any party may be given
by such party's legal counsel.
28
<PAGE>
13.3 ENTIRE AGREEMENT. This Agreement and the Exhibits, and the other
----------------
agreements and schedules and documents delivered pursuant hereto constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof and supersede all prior and contemporaneous agreements, understandings,
letters of intent negotiations and discussions, whether written or oral, of the
parties, and there are no representations, warranties or other agreements
between the parties in connection with the subject matter hereof, except as
specifically set forth herein. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the parties to be bound
thereby.
13.4 GOVERNING LAW; TAX REPORTING; ACCOUNTING TREATMENT. The validity
--------------------------------------------------
and construction of this Agreement shall be governed by the laws of the
Commonwealth of Kentucky, except insofar as this Agreement may specify that the
laws of Delaware may apply to the Merger. With respect to tax reporting, the
parties agree and intend that the Merger will be treated for United States
income tax purposes as a tax-free reorganization described in the Internal
Revenue Code of 1986, as amended (the "Code"), Section 368, and all of the
parties shall report the Merger in accordance with the relevant tax regulations.
With respect to accounting treatment, any increase or decrease in tax required
by Section 481 of the Code to place the accounts of P&S on the accrual method of
accounting shall be taken into account by AACA and VIVRA and not by P&S or the
P&S Physicians.
13.5 ARBITRATION.
-----------
13.5.1 The parties will attempt through good faith negotiations to
resolve their disputes regarding this Agreement. The term "disputes" includes,
without limitation, any disagreements between the parties concerning the
existence, formation, interpretation and implementation of this Agreement. If
the parties are to resolve their disputes by negotiation, either party may
commence arbitration by sending a written notice of arbitration to the other
party. The notice will state the dispute with particularity.
13.5.2 There shall be three arbitrators. If the parties fail to
select mutually acceptable arbitrators within ten (10) days after the notice of
arbitration, a tribunal of arbitrators (one selected by P&S, one selected by
AACA, and one who shall be appointed by the first two arbitrators), who shall be
located in the Commonwealth of Kentucky, shall be appointed as soon as possible
on the request of either party. If any party fails to select an arbitrator
within ten (10) days after demand, such arbitrator shall be appointed by the
American Arbitration Association. The fee payable to the arbitrators shall be
based upon the then current fee schedule of the American Arbitration
Association.
13.5.3 The parties shall have reasonable rights of
29
<PAGE>
discovery.
13.5.4 Except as set forth in this Section, the tribunal shall
conduct the arbitration according to the Commercial Arbitration Rules of the
American Arbitration Association. Arbitration shall take place in Louisville,
Kentucky, unless the parties otherwise agree. The tribunal shall base the
decision on the express language of this Agreement. Within ten (10) days after
the tribunal is appointed, or as soon thereafter as shall be reasonably
practicable, the tribunal will conduct a hearing on the dispute. Each party may
make written submissions to the tribunal, and each party shall have a reasonable
opportunity for rebuttal, but no longer than ten (10) days. As soon as
reasonably practicable, but not later than ten (10) days after the hearing is
completed, the tribunal shall arrive at a final decision, which shall be reduced
to writing, signed by the tribunal and mailed to each party and its legal
counsel.
13.5.5 All decisions of the tribunal shall be final, and binding on
all parties, and (except as provided below) shall constitute the only method of
resolving disputes. Judgment may be entered upon the decision in accordance
with applicable law in any court having jurisdiction.
13.5.6 This arbitration section and all decisions of the tribunal
shall be specifically enforceable in a court of law, or in the arbitral
tribunal.
13.6 SECTION AND EXHIBIT HEADINGS. The Section and Exhibit headings are
----------------------------
for reference only and shall not limit or control the meaning of any provisions
of this Agreement.
13.7 WAIVER. No delay or omission on the part of any party hereto in
------
exercising any right hereunder shall operate as a waiver of such right or any
other right under this Agreement.
13.8 NATURE AND SURVIVAL OF REPRESENTATIONS. All statements contained in
--------------------------------------
any certificate delivered by or on behalf of a party to this Agreement in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties made by such party hereunder. The covenants,
representations and warranties made by the parties each to the other in this
Agreement or pursuant hereto shall survive the Effective Time as set forth in
Section 12.8 of this Agreement.
13.9 EXHIBITS. All Exhibits, schedules and documents referred to in, or
--------
attached to, this Agreement are integral parts of this Agreement as if fully set
forth herein and all statements appearing therein shall be deemed to be
representations. All items disclosed hereunder shall be deemed disclosed only
in connection with the specific representation to which they are explicitly
referenced.
30
<PAGE>
13.10 AMENDMENTS. This Agreement may be amended, but only in writing,
----------
signed by the parties hereto.
13.11 COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall comprise one and the same instrument. Any signature page to this
Agreement may be witnessed by a telecopy or other facsimile of any original
signature page and any signature page of any counterpart hereof may be appended
to any other counterpart hereof to form a completely executed counterpart
hereof.
13.12 ATTORNEYS' FEES. If any party institutes litigation or arbitration
---------------
to interpret or enforce, or to recover damages for breach of, this Agreement,
including any Individual Employment Agreement, each party will bear its own
attorneys' fees and costs of litigation or arbitration.
13.13 RULES OF CONSTRUCTION. All references herein to the singular shall
---------------------
include the plural, and vice versa, and all references herein to the neuter
shall include the masculine or feminine, as the case may be, and vice versa.
When general words or terms are used herein followed by the word "including" (or
another form of the word "include") and words of particular and specific
meaning, the general words shall be construed in their widest extent, and shall
not be limited to persons or things of the same general kind or class as those
specifically mentioned in the words of particular and specific meaning. All
parties have participated in the drafting of this Agreement. No provision of
this Agreement shall be construed against or interpreted to the disadvantage of
a party by reason of such party having or being deemed to have drafted,
structured or dictated such provisions.
13.14 TIME. Time is of the essence of this Agreement.
----
13.15 FURTHER ASSURANCES. Following the Closing, P&S Physicians and AACA
------------------
will, at the request of the other, execute and deliver such other instruments or
assignment, transfer and conveyance and take such other actions as a party may
reasonably request to more effectively effect the Merger and other transactions
contemplated by this Agreement. To the extent that P&S's rights under any P&S
Contract, by virtue of the Merger, require the consent of another person which
consent has not been obtained prior to, or concurrent with, the execution
hereof, P&S Physicians will cooperate with AACA in any reasonable arrangement
that is designed to provide for AACA the benefit of such asset.
31
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
ASTHMA & ALLERGY CAREAMERICA, INC.,
a Delaware corporation ("AACA")
By:
--------------------------------
Title:
--------------------------
VIVRA INCORPORATED, a Delaware
corporation ("VIVRA")
By:
--------------------------------
Title:
--------------------------
POLLARD & SUBLETT, PSC, a Kentucky
professional corporation ("P&S")
By:
--------------------------------
Title:
--------------------------
_____________________________________
STEPHEN J. POLLARD, M.D., an
individual resident of Kentucky
("Pollard")
_____________________________________
JAMES L. SUBLETT, M.D., an individual
resident of Kentucky ("Sublett")
<PAGE>
EXHIBIT 1.2(I)
CERTIFICATE OF MERGER
---------------------
(See Attached)
<PAGE>
EXHIBIT 1.2(II)
ARTICLES OF MERGER
------------------
(See Attached)
<PAGE>
EXHIBIT 2.4
DISTRIBUTION OF VIVRA STOCK
---------------------------
CASH FOR
NUMBER OF FRACTIONAL
NAME PERCENT SHARES SHARES
---- ------- --------- ----------
Pollard
Sublett
<PAGE>
EXHIBIT 2.5(B)
CALCULATION OF DETERMINED AMOUNT/CLOSING DATE ADJUSTMENT
--------------------------------------------------------
Reconciliation of Deal Consideration
Total Deal Consideration at _______
P&S % of Total Consideration
Net consideration to P&S at ________ =
Add/Subtract Increase <Decrease>
In Net Equity
Net Consideration to P&S at ________
Reconciliation of Net Equity Adjustment
Valuation of Net Equity at _______
Valuation of Net Equity at ________
Net Increase<Decrease> in Net Equity
<PAGE>
EXHIBIT 3.4(I)
NONCOMPETITION AGREEMENT
------------------------
(SEE ATTACHED)
<PAGE>
EXHIBIT 3.4(II)
ESCROW AGREEMENT
----------------
(See Attached)
<PAGE>
EXHIBIT 4.1
STATES REQUIRING QUALIFICATION OF P&S TO DO BUSINESS
----------------------------------------------------
1. Indiana
<PAGE>
EXHIBIT 4.2
ARTICLES OF INCORPORATION AND
BYLAWS OF P&S
-----------------------------
(See Attached)
<PAGE>
EXHIBIT 4.3
P&S'S CAPITAL STOCK/OWNERSHIP
-----------------------------
NAME NUMBER OF SHARES
---- ----------------
Stephen J. Pollard, M.D. 10
James L. Sublett, M.D. 10
<PAGE>
EXHIBIT 4.4
VIOLATED AGREEMENTS
-----------------
<PAGE>
EXHIBIT 4.5
TRANSACTIONS WITH AFFILIATES
----------------------------
<PAGE>
EXHIBIT 4.7
P&S FINANCIAL STATEMENTS
------------------------
(See Attached)
<PAGE>
EXHIBIT 4.8(I)
MATERIAL REAL AND PERSONAL PROPERTIES OF P&S
--------------------------------------------
Set forth below is an identification of the material real and tangible
personal property used in the Business:
Real Property
-------------
Tangible Personal Property
--------------------------
<PAGE>
EXHIBIT 4.8(II)
LEASED OR NON-OWNED REAL OR PERSONAL PROPERTY
---------------------------------------------
Set forth below is an identification of the material real or tangible
personal property which is used by P&S in the Business and which is either not
owned by P&S or is leased or rented by P&S:
Real Property
-------------
Leased Tangible Personal Property
---------------------------------
<PAGE>
EXHIBIT 4.9
TAX MATTERS
-----------
The Tax Returns for which P&S has not filed and/or has not paid the
applicable taxes are as follows:
1.
2.
3.
The real property leases and the tangible personal property leases
identified on Exhibit 4.8 set forth an identification of P&S's contractual
obligations to indemnify another person with respect to taxes.
<PAGE>
EXHIBIT 4.10(I)
P&S CONTRACTS
-------------
Advertising Agreements
----------------------
Maintenance Agreements
----------------------
Patient Billing Agreements
--------------------------
P&S Third Party Payer Agreements
--------------------------------
Tangible Personal Property Leases
---------------------------------
See Exhibit 4.8(ii)
Real Property Leases
--------------------
See Exhibit 4.8(ii)
<PAGE>
EXHIBIT 4.10(I) (CONTINUED)
P&S CONTRACTS
-------------
Employment Agreements
---------------------
Miscellaneous Agreements
------------------------
<PAGE>
EXHIBIT 4.10(II)
P&S PHYSICIAN CONTRACTS
-----------------------
<PAGE>
EXHIBIT 4.11
NONCOMPLIANCE WITH LAWS
-----------------------
<PAGE>
EXHIBIT 4.12
LITIGATION
----------
<PAGE>
EXHIBIT 4.13.1
EMPLOYEE AGREEMENTS
-------------------
The collective bargaining or labor agreements or written employment or
employee related agreements entered into with or for the benefit of present or
former employees of P&S areas are as follows:
<PAGE>
EXHIBIT 4.13.2
EMPLOYEE BENEFIT PLANS
----------------------
<PAGE>
EXHIBIT 4.13.3
DEFINED BENEFIT PLANS
---------------------
<PAGE>
EXHIBIT 4.14
LIABILITIES
-----------
<PAGE>
EXHIBIT 4.15
INSURANCE
---------
Business Owners Insurance
- -------------------------
Malpractice Insurance
- ---------------------
Health Insurance
- ----------------
<PAGE>
EXHIBIT 4.16
CHANGES SINCE DECEMBER 31, 1995
-------------------------------
Since December 31, 1995, P&S has not experienced any of the changes
identified in Section 4.16 except:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
<PAGE>
EXHIBIT 4.17
CURRENT AND FORMER EMPLOYEES
----------------------------
Names, pay rates and accrued sick leave and vacation benefits of all
current P&S employees and benefits of all former P&S employees who are entitled
to continue to receive benefits:
(See Attached)
<PAGE>
EXHIBIT 4.19
LICENSURE AND PERMITS
---------------------
Licenses of P&S
- ---------------
Licenses of Physicians of P&S
- -----------------------------
Controlled Substances Registration Certificate
- ----------------------------------------------
Business Licenses
- -----------------
Malpractice Suits
- -----------------
<PAGE>
EXHIBIT 4.24
ENCUMBRANCES AND THIRD PARTY APPROVALS
--------------------------------------
Encumbrances created by consummation of Agreement
-------------------------------------------------
Third Party Consents
--------------------
<PAGE>
EXHIBIT 4.25
PERSONAL PROPERTY
-----------------
<PAGE>
EXHIBIT 5.8
CERTIFICATE OF INCORPORATION OF AACA
------------------------------------
<PAGE>
EXHIBIT 10.3
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of March 30, 1996, by and among ASTHMA & ALLERGY CAREAMERICA, INC., a
Delaware corporation ("AACA"); its parent company, VIVRA INCORPORATED, a
Delaware corporation ("VIVRA") (VIVRA is entering into this Agreement solely for
the purposes set out in Section 6 hereof); ALLERGY & ASTHMA RESEARCH INSTITUTE,
INC., a Kentucky corporation ("AARI"); and AARI's shareholders, Stephen J.
Pollard, M.D., an individual resident of Kentucky ("Pollard") and James L.
Sublett, M.D., an individual resident of Kentucky ("Sublett") (with Pollard and
Sublett being collectively referred to herein as the "AARI Physicians").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, AARI owns and operates an asthma and allergy research institute
with its principal office location located at 9800 Shelbyville Road, Suite 220,
Louisville, Kentucky 40223, together with its satellite locations in the
Louisville, Kentucky area including those in the New Albany and Madison, Indiana
(collectively the "Business");
WHEREAS, the AARI Physicians own all of the outstanding stock of AARI;
WHEREAS, the parties desire to merge AARI with and into AACA, with AACA
being the surviving corporation in the merger, in exchange for VIVRA Common
Stock;
WHEREAS, for federal income tax purposes, it is intended that the merger
shall qualify as a "reorganization" within the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended;
WHEREAS, for accounting purposes, it is intended that the merger shall be
accounted for as a pooling of interests;
WHEREAS, AARI and the AARI Physicians have entered into that certain Master
Merger Agreement of even date with AACA, AARI, Pollard & Sublett, PSC ("P&S"),
Pollard and Sublett which contemplates that AARI will merge into AACA at the
same time that P&S merges into AACA;
WHEREAS, the merger of P&S into AACA is subject to the simultaneous
consummation of the merger of AARI into AACA;
WHEREAS, AACA and the AARI Physicians wish for there to be
<PAGE>
formed a new Kentucky professional service corporation ("Newco") through which
the AARI Physicians and other physicians shall be employed to practice medicine;
and
WHEREAS, the parties wish for the AARI Physicians, Newco and AACA to enter
into certain agreements as conditions precedent to the consummation of the
merger of AARI into AACA as set forth in the Master Merger Agreement,
NOW, THEREFORE, in consideration of these premises and the agreements
contained herein, the sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound, do hereby agree as follows:
SECTION 1. THE MERGER.
----------
1.1 AGREEMENT TO MERGE. On the terms, subject to the conditions, and
------------------
for the consideration hereinafter stated, the parties hereto agree that AARI
shall be merged with and into AACA, with AACA being the surviving corporation
(the "Surviving Corporation"). The merger of AARI with and into AACA (the
"Merger") shall become effective as of the "Effective Time" (as hereinafter
defined).
1.2 EFFECTIVE TIME OF MERGER. At or prior to the "Closing" (as
------------------------
hereinafter defined), AACA, on the one hand, and AARI on the other hand, shall
execute a certificate of merger in the form attached hereto on Exhibit 1.2(i)
--------------
(the "Certificate of Merger") and Articles of Merger in the form attached hereto
as Exhibit 1.2(ii) (the "Articles of Merger") to effect the Merger in accordance
---------------
with all appropriate legal requirements and shall deliver and file such
Certificate of Merger as required by the Delaware General Corporation Law and
such Articles of Merger as are required by the Kentucky Professional Service
Corporation Act. The Merger shall become effective upon the latter of the time
and date of filing with the Delaware Secretary of State or the time and date of
filing with the Kentucky Secretary of State, or at such later date and time as
may be specified by mutual agreement of the parties in the Certificate of Merger
and the Articles of Merger (the time and date of such filing or such later time
and date being referred to herein as the "Effective Time").
1.3 PLAN OF MERGER. In accordance with the requirements of the Kentucky
--------------
Business Corporation Act, AACA and AARI hereby adopt the Plan of Merger set
forth as Exhibit A to the Articles of Merger (the "Plan of Merger"). If there
---------
are any inconsistencies between the provisions of the Plan of Merger and the
provisions of this Agreement, the provisions of this Agreement shall prevail.
<PAGE>
SECTION 2. TERMS OF THE MERGER.
-------------------
2.1 CERTIFICATE OF INCORPORATION. The Certificate of Incorporation of
----------------------------
AACA immediately prior to the consummation of the Merger shall be the
Certificate of Incorporation of the Surviving Corporation until otherwise
amended or repealed in accordance with law.
2.2 BYLAWS. The Bylaws of AACA immediately prior to the consummation of
------
the merger shall be the Bylaws of the Surviving Corporation until otherwise
amended or repealed in accordance with law.
2.3 DIRECTORS AND OFFICERS. The directors and officers of AACA in
----------------------
office immediately prior to the consummation of the Merger shall be the
directors and officers of the Surviving Corporation. All such directors and
officers shall hold office in accordance with the Surviving Corporation's
Certificate of Incorporation, Bylaws and applicable law.
2.4 MANNER AND BASIS OF CONVERTING SHARES.
-------------------------------------
(a) At the Effective Time of the Merger, all of the issued and
outstanding shares of common stock, without par value, of AARI (the "AARI Common
Stock") prior to the Effective Time of the Merger (other than such shares held
by AARI in its treasury) shall, by virtue of the Merger and without any action
by the holder thereof, automatically be converted into the "Determined Amount"
of the Common Stock, $ .01 par value per share, of VIVRA ("VIVRA Common Stock").
For purposes hereof, the term "Determined Amount" shall mean the number of
shares of VIVRA Common Stock calculated by dividing $403,579.50 (the "Merger
Consideration"), adjusted up or down by the amount of the "Closing Date
Adjustment" (as hereinafter defined in Section 2.5(c)), by the average closing
price (as quoted by the New York Stock Exchange) of VIVRA Common Stock for the
ten-day trading period immediately preceding and including the fifth day prior
to the Closing Date as defined in Section 6 hereof (said average price being
referred to herein as the "Closing Price"). Each share of AARI Common Stock
held in the treasury of AARI upon the Effective Time of the Merger shall be
cancelled, and no consideration shall be issued therefor. The Determined Amount
of VIVRA Common Stock less the number of shares and the cash equivalent of
fractional shares to be held in escrow as provided in the Escrow Agreement shall
be distributed to the AARI Physicians as set forth in Exhibit 2.4 hereof.
-----------
Fractional shares may be paid in cash.
(b) Except as may be otherwise provided herein, in the event that
subsequent to the date of execution of this Agreement but prior to the Effective
Time of the Merger, the outstanding shares of VIVRA Common Stock or AARI Common
Stock shall have been increased,
<PAGE>
decreased, changed into or exchanged for a different number or kind of shares
through a recapitalization, reclassification, stock dividend, stock split or
reverse stock split, then an appropriate and proportionate adjustment shall be
made in the VIVRA Common Stock to be delivered hereunder.
(c) At the Closing, the AARI Physicians, jointly and severally,
shall surrender their certificates representing all of the AARI Common Stock,
duly endorsed for cancellation or marked canceled as may be required by AACA.
2.5 MERGER CONSIDERATION ADJUSTMENT.
-------------------------------
(a) The Merger Consideration deliverable as a number of shares of
VIVRA Common Stock hereunder is based on the assumption that AARI's "Net Assets"
(as hereinafter defined) as of the Effective Time shall be at least $35,974.76
(the "Agreed Amount"). To the extent that AARI's Net Assets as of the Effective
Time shall exceed the Agreed Amount, then the AARI Physicians, in the same
percentages as set forth in Exhibit 2.4, shall be entitled to receive additional
-----------
shares of VIVRA Common Stock in an amount equal to that number of shares
determined by dividing such excess by the Closing Price, and to the extent that
AARI's Net Assets as of the Effective Time shall be less than the Agreed Amount,
then AACA shall be entitled to receive from the AARI Physicians a return of
shares of VIVRA Common Stock in an amount equal to that number of shares
determined by dividing such deficit by the Closing Price with such return to be
effected by each AARI Physician by a transfer to AACA as provided under the
Escrow Agreement.
(b) For purposes hereof, the term "Net Assets" shall mean the sum of
(i) the value of AARI's "Accounts Receivable" (as hereinafter defined) as of the
Effective Time, plus (ii) the value of AARI's fixed assets which, for purposes
of this calculation, shall be deemed to be $13,942.96, plus (iii) cash and cash
equivalents (including Federal income and Kentucky excise tax refunds applied
for prior to the Closing Date but unpaid as of the Effective Time, but solely to
the extent collected) minus the amount of all "Liabilities" (as hereinafter
-----
defined) of AARI which have not been paid as of the Effective Time. For
purposes hereof, the term "Accounts Receivable" shall mean (x) the sum of all
receivables AARI posted in accordance with historical practices with respect to
the operations of the Business prior to the Effective Time arising from the
rendering of services to patients up to the Effective Time, including, without
limitation, those from private pay patients, private insurance payers, third
party payers or from governmental programs, but not including accounts
previously written off by AARI, and not including any accounts receivable for
which there is an unposted cash receipt as of the Effective Time, (y)
multiplied times ninety percent (90%), which represents an agreed-upon
<PAGE>
allowance for bad debts and contractual allowances and payer discounts, (z)
multiplied times sixty percent (60%), which represents an agreed-upon after-tax
realization rate. For purposes hereof, the term "Liabilities" shall mean all
liabilities with respect to the operation of the Business and including, without
limitation, all liabilities of AARI as of the Effective Time for accrued sick
leave and vacation pay of employees of AARI as of the Effective Time and
including all liabilities for supplies, inventory and other goods ordered by
AARI prior to the Effective Time but not paid for as of the Effective Time, but
not including liabilities accruing in the ordinary course of business after the
Effective Time under the contracts and leases listed on Exhibit 2.5.
-----------
(c) For purposes of establishing the Determined Amount on the
Closing Date, the Merger Consideration shall be adjusted initially on or prior
to the Closing Date using AARI's December 31, 1995 balance sheet (the "Interim
Balance Sheet"). Such initial calculation shall be set forth on a schedule
delivered by the AARI Physicians to AACA together with a copy of the Interim
Balance Sheet not less than 2 days prior to the Closing. Such initial
adjustment shall be deemed to be the "Closing Date Adjustment."
(d) Within ninety (90) days after the Effective Time (or as soon
thereafter as possible), the parties shall make final adjustments to the Merger
Consideration (the "Post-Closing Adjustments"). AACA shall furnish to the AARI
Physicians, within sixty (60) days after the Effective Time, a balance sheet of
AARI with respect to the Business as of the close of business at the Effective
Time (the "Closing Balance Sheet") and a statement of AACA's proposed
Post-Closing Adjustments. The Closing Balance Sheet will be used to determine
any final adjustments to the Merger Consideration. Should the AARI Physicians
dispute any of the Post-Closing Adjustments proposed by AACA or the accuracy of
the Closing Balance Sheet, the AARI Physicians shall promptly (and in no event
later than ten days after receipt of the Closing Balance Sheet and AACA's
proposed Post-Closing Adjustments) advise AACA in writing. If after thirty (30)
days after delivery of the Closing Balance Sheet, AACA and the AARI Physicians
are unable to agree on the amount of the Post-Closing Adjustments, the
Physicians and AACA shall engage Ernst & Young, Certified Public Accountants
(the "Accountants") to review the Closing Balance Sheet and the proposed
Post-Closing Adjustments and to determine the amount of Post-Closing
Adjustments, such determination to be made as soon as practicable. In making
such review and determination, the Accountants shall utilize the terms and
provisions of this Agreement. The decision of the Accountants shall be binding
on both the AARI Physicians and AACA. Each of AACA and the AARI Physicians
jointly shall pay one-half (1/2) of the reasonable fees and expenses of the
engagement of the Accountants.
<PAGE>
(e) If any further adjustments are required in the Determined
Amount consideration by virtue of the foregoing provisions, the adjusted number
of shares shall be delivered to the party entitled to them or added to the
amount to be transferred to AACA under the Escrow Agreement, as the case may be,
within 10 days after the adjustments are determined pursuant to the foregoing
provisions.
2.6 HOLDING PERIOD WITH RESPECT TO POOLING. The AARI Physicians will
--------------------------------------
hold their shares of VIVRA Common Stock for the required period from the date of
issuance until May 31, 1996 or until the date on which the combined financial
statements of AACA and AARI are reported, if it should occur earlier, in keeping
with the intent of the parties for AACA to account for the Merger as a pooling
of interests.
SECTION 3. CLOSING.
-------
3.1 CLOSING AND CLOSING DATE. The closing (the "Closing") of the Merger
------------------------
and the execution and delivery of the Certificate of Merger, the Articles of
Merger and the agreements and documents contemplated herein shall take place on
March 30, 1996, at 1:00 p.m. EST, at the offices of Hall, Render, Killian, Heath
& Lyman, P.S.C., Providian Center, Suite 1530, 400 West Market Street,
Louisville, Kentucky 40202, or at such other place and time as may be deemed
appropriate by the parties hereto. At or before the Closing, AACA, on the one
hand, and AARI, on the other hand, will execute and deliver the Certificate of
Merger and the Articles of Merger, and thereafter cause them to be filed as
provided in Section 1.2 hereof.
3.2 ACTION BY AACA. Upon the terms and subject to the conditions herein
--------------
contained, at the Closing on the Closing Date, AACA will deliver to the AARI
Physicians the following:
(i) The certificates referred to in Section 9.1 hereof;
(ii) The opinion of counsel for AACA in form and substance satisfactory
to AARI and the AARI Physicians;
(iii) Resolutions of the Board of Directors of AACA, certified by an
appropriate officer, authorizing the execution, delivery and
performance of this Agreement, the Certificate of Merger and the
other agreements to be delivered by AACA in connection with the
Closing hereunder (action of the Shareholder of AACA is not required
as provided by Section 252 of the Delaware General Corporation Law);
and
(iv) For each of the AARI Physicians, the Determined Amount
<PAGE>
of the VIVRA Common Stock which shall be represented by two (2)
share certificates (i) one, which shall be deposited (together with
an executed stock power) with the Escrow Agent as provided in the
Escrow Agreement, representing such AARI Physician's pro rata
--- ----
portion of the escrowed shares, and (2) one, which shall be
delivered directly to each AARI Physician, representing his pro
---
rata portion of the Determined Amount less his pro rata portion
---- --- ----
of the escrowed shares.
3.3 ACTION BY AARI AND THE AARI PHYSICIANS. Upon the terms and subject
--------------------------------------
to the conditions herein contained, at the Closing on the Closing Date, the AARI
Physicians and AARI will deliver to AACA the following:
(i) The certificate referred to in Section 10.1 hereof;
(ii) The opinion of counsel for the AARI Physicians and AARI in form and
substance satisfactory to AACA;
(iii) Resolutions of the shareholders and the Board of Directors of AARI
certified by an appropriate officer, authorizing the execution,
delivery and performance of this Agreement, the Certificate of
Merger and the other agreements to be delivered by AARI in
connection with the Closing hereunder; and
(iv) The schedule showing the Closing Date Adjustment referred to in
Section 2.5(c) hereof.
3.4 ACTION BY ALL PARTIES. Upon the terms and subject to the conditions
---------------------
herein contained, at the Closing on the Closing Date, the parties will, as
appropriate, execute and deliver to each other the following:
(i) the "Noncompetition Agreement" among Pollard, Sublett and AACA in
substantially the form attached hereto as Exhibit 3.4(i); and
--------------
(ii) the "Escrow Agreement" between the AARI Physicians and AACA in
substantially the form attached hereto as Exhibit 3.4(ii).
---------------
3.5 AUDIT. AACA shall have the right, either before or after the Closing,
-----
to cause its accounting firm to audit the financial statements of AARI for the
current year and for the three years prior to the current year. The AARI
Physicians shall cooperate reasonably in connection with any such audit or
audits and will execute management letters and other documents reasonably
requested in connection with any such audit or audits and any equity offering
<PAGE>
by AACA. AACA will pay the cost of the audits required by AACA under this
Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF AARI AND THE AARI PHYSICIANS.
--------------------------------------------------------------
AARI and the AARI Physicians, jointly and severally, hereby represent,
warrant, covenant and agree to and with AACA, as follows.
4.1 AARI'S EXISTENCE AND POWER. AARI is a corporation duly organized,
--------------------------
validly existing and in good standing under the laws of the Commonwealth of
Kentucky. Neither the nature of its business as now conducted nor the character
or location of its properties require qualification by AARI to do business in
any other jurisdiction except for the states listed on Exhibit 4.1 in which AARI
-----------
is duly qualified to do business. AARI has the corporate power to own its
property and to carry on its business as now being conducted. AARI is not
subject to any noncompetition agreement.
4.2 ARTICLES OF INCORPORATION AND BYLAWS. True, correct and complete
------------------------------------
copies of the Articles of Incorporation and Bylaws of AARI are attached hereto
on Exhibit 4.2.
-----------
4.3 AARI STOCK. AARI's authorized capital stock consists solely of
----------
1,000 shares of common stock authorized, of which 500 shares are issued (and
outstanding) to Pollard and 500 shares are issued (and outstanding) to Sublett
as reflected on Exhibit 4.3 attached hereto. All such outstanding shares of
-----------
capital stock of AARI have been duly and validly authorized and issued and are
fully paid and nonassessable. There are no treasury shares of capital stock.
There are no outstanding options, contracts, preemptive rights, proxies, calls,
commitments, demands or rights of any character obligating AARI to issue any
shares of stock or other securities of AARI, or options or rights with respect
thereto, and there are no existing or outstanding securities convertible or
exchangeable into shares of stock or other securities of AARI. No shares of
AARI's capital stock have been issued in violation of any federal or state
securities law. There have been no transactions involving the equity interests
of AARI since September 28, 1995.
4.4 OWNERSHIP OF AARI. The AARI Physicians are, and will be at the
-----------------
Closing and the Effective Time, owners of all of the issued and outstanding
stock of AARI, free and clear of all claims, security interests, pledges,
options, rights of first refusal, liens, financing statements, deeds of trust,
mortgages, charges, assessments, restrictions, leases and other encumbrances
(all such claims, security interests, pledges, options, rights of first refusal,
liens, financing statements, deeds of trust, mortgages, charges, assessments,
restrictions, leases and other encumbrances being referred to individually as an
"Encumbrance" and collectively
<PAGE>
as "Encumbrances") whatsoever. The AARI Physicians have the full legal right,
power and authority to enter into this Agreement and, except as identified on
Exhibit 4.4, the execution, delivery and performance of this Agreement by the
- -----------
AARI Physicians will not violate any agreement to which either they or AARI is a
party or any agreement affecting the AARI Common Stock.
4.5 INSIDER TRANSACTIONS. Except as disclosed in Exhibit 4.5 hereto,
-------------------- -----------
AARI is not, directly or indirectly, a party to any contract, lease or
commitment with any officer or director of AARI or any affiliate of any such
director or officer. As used in this Section 4.5, the term "affiliate" shall
mean any member of the immediate family of such officer or director or any
corporation, partnership, trust or other entity in which such officer or
director has a substantial interest or is a director, officer, partner or
trustee.
4.6 AUTONOMY; SUBSIDIARIES. AARI is autonomous and has not ever been a
----------------------
subsidiary of any other corporation. AARI has no subsidiaries nor does it own
any shares of stock or other securities of, or interest in, any other
corporation, joint venture, partnership or business.
4.7 ACCURACY OF FINANCIAL STATEMENTS. The AARI Physicians have delivered
--------------------------------
to AACA as Exhibit 4.7 a copy of the financial statements of AARI for the years
-----------
ended December 31, 1992, 1993 and 1994 and 1995 (the "AARI Financial
Statements"). The AARI Financial Statements have been prepared based upon cash
basis accounting, are complete and accurate and fairly present the financial
condition of and the income and expenses of AARI as of the respective dates
thereof, except as disclosed on Exhibit 4.7. AARI has no liabilities or
-----------
obligations known or unknown, accrued, absolute or contingent, whether or not
now due and payable (including, without limitation, any liability for federal,
state or local taxes of AARI), for any period ended on or prior to the
respective dates of the Financial Statements or any liability or obligation in
connection with any transaction or state of affairs entered into or existing on
or before the respective dates thereof, which are not either fully reflected on
the Financial Statements or otherwise disclosed to AACA in Exhibit 4.14 hereto.
------------
4.8 PROPERTIES.
----------
(i) Set forth on Exhibit 4.8(i) is an identification of the material
--------------
real and tangible personal properties presently owned by AARI and
used in the Business. All tangible personal property, equipment,
vehicles, furnishings, and fixtures included within the assets of
AARI or required to be used in the ordinary course of its business
are being conveyed as a result of the merger "AS IS, WHERE
<PAGE>
IS."
(ii) Set forth on Exhibit 4.8(ii) is an accurate and complete list of all
---------------
real or personal property which is used by AARI in the Business and
which is either not owned by AARI or is leased or rented by AARI.
4.9 TAXES AND TAX RETURNS. For all tax periods ended prior to the date
---------------------
of this Agreement, except as set forth on Exhibit 4.9, AARI has filed all
-----------
federal, state, local and other tax returns required by law to be filed and,
except as set forth on Exhibit 4.9, such returns were filed on or before the due
-----------
dates of such returns (as extended by any valid extensions of time) ("Tax
Returns") and has paid or will pay all taxes of every kind and description
(including, without limitation, all net income, gross income, gross receipts,
sales, use, lease, ad valorem, transfer, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, property
or other taxes, customs, duties, fees, assessments or charges, together with any
interest, penalties, additions to tax or additional amounts imposed by any
taxing authority, domestic, or foreign ("Taxes") which are due as of and for all
periods through the Effective Time. No claim has ever been made by an authority
in a jurisdiction where AARI does not file Tax Returns that it is or may be
subject to taxation by that jurisdiction. There are no liens or security
interests on any of AARI's assets that arose in connection with any failure (or
alleged failure) to pay any Taxes. AARI has withheld and paid all Taxes
required to have been withheld and paid in connection with amounts paid or owing
to any employee, independent contractor, creditor, stockholder or other third
party. All Tax Returns filed by AARI correctly reflected all facts regarding
the income, business, assets, operations, activities and status of AARI and all
other information required to be shown thereon. AARI has complied in all
respects with all applicable laws, rules and regulations relating to the filing
of Tax Returns with respect to, and the payment of Taxes. The Tax Returns of
AARI have not been audited by the Internal Revenue Service or any state or local
taxing authority. No federal, state, local or foreign audits, administrative
proceedings, court proceedings or ruling requests are presently pending with
respect to any Taxes or Tax Returns with respect thereto. AARI has not filed a
consent pursuant to Section 341(f) of the Code, or agreed to have Section
341(f)(2) of the Code apply to any disposition of a subsection (f) asset (as
such term is defined in Section 341 (f)(4) of the Code) owned by AARI. No
property of AARI is property that AARI is required to treat as being owned by
another person pursuant to the provisions of Section 168(f)(6) of the Code, or
is "tax-exempt use property" within the meaning of Section 168(h) of the Code,
or is subject to a lease, other than a "true" lease for federal income tax
purposes. AARI is not required to include in income any adjustment pursuant to
Section 481(a) of the Code by
<PAGE>
reason of a voluntary change in accounting method initiated by AARI, nor does
AARI, nor any of the AARI Physicians, have any knowledge that the Internal
Revenue Service has proposed any adjustment or change in accounting methods.
Except as set forth on Exhibits 4.9 and 4.10, with respect to AARI Real and
---------------------
Personal Property Leases AARI is not currently under any contractual obligation
to indemnify any person with respect to Taxes. No person who is not a United
States citizen, and no corporation or other entity which was not organized
within the United States owns beneficially more than five percent (5%) of the
outstanding shares of AARI and therefore no withholding of tax pursuant to
Section 1445 of the Code is required. AARI is not a United States Real Property
Holding Corporation as defined in Section 897 of the Code. AARI is not a party
to any agreement that under certain circumstances could obligate it to make any
payments that will not be deductible under Code Section 280(G). No consent
extending the statute of limitations has been filed by or on behalf of AARI with
respect to any liability for Taxes for any year.
4.10 CONTRACTS.
---------
4.10.1. Exhibit 4.10(i) is a list of all agreements of AARI (the
---------------
"AARI Contracts") and Exhibit 4.10(ii) is a list of all agreements of each AARI
----------------
Physician with respect to AARI (the "AARI Physician Contracts"). Except as set
forth in Exhibits 4.10(i) and 4.10 (ii) hereto, neither AARI nor any of the AARI
------------------------------
Physicians with respect to AARI, respectively, is a party to any material
contract, agreement, lease, or power of attorney of any kind with respect to the
Business. As to AARI, except as noted on Exhibit 4.10(i), all AARI Contracts,
---------------
and as to the AARI Physicians, all AARI Physician Contracts, are valid and are
in full force and effect according to their material terms, and no material
default by AARI or the AARI Physician or Physicians, as the case may be, exists
under any such contract, lease or agreement and no condition or state of facts
exists which, with notice or the passage of time, or both, would constitute a
default under any such contract, lease or agreement. All AARI Contracts and all
AARI Physician Contracts are valid as to the other contracting parties thereto
and there is no material default by any such party existing under the contracts
and no condition or state of facts exists which, with notice or the passage of
time, or both would constitute a default by any such party thereunder. All AARI
Contracts and all AARI Physician Contracts are enforceable in accordance with
their respective terms by AARI or the AARI Physicians, as the case may be,
against all other parties thereto in all material respects (except as
enforceability may be restricted, limited or delayed by bankruptcy, insolvency,
moratorium or similar laws affecting or relating to the enforcement of
creditors' rights in general and except as enforceability is subject to general
principles of equity, regardless of whether enforceability is considered in a
proceeding at law or in equity).
<PAGE>
4.10.2. Neither the execution, the delivery, nor the performance of
this Agreement by AARI and the AARI Physicians will cause any default in or
breach of any provision of the AARI Articles of Incorporation, as amended, the
AARI bylaws or any agreement or commitment to which AARI is a party or by which
AARI or the AARI Physicians are bound, and none of such actions will result in
either acceleration, or any similar right of any other party, under any AARI
Contract or AARI Physician Contract, or constitute a default under any AARI
Contract or AARI Physician Contract, or result in the creation or imposition of
any Encumbrance against any of the assets of AARI. With respect to the AARI
Physician Contracts, all accounts receivable with respect to each AARI
Physician's performance of each such contract has been assigned to AARI and,
with respect to future performances by each such AARI Physician, the accounts
receivable therefrom shall be assigned to Newco pursuant to such AARI
Physician's Individual Employment with Newco.
4.11 COMPLIANCE WITH LAWS. Except as described in Exhibit 4.11, AARI is
-------------------- ------------
in compliance with the laws, regulations, rules and decrees of all governmental
authorities whatsoever relating to the conduct of its business, including,
without limitation, the Fair Labor Standards Act.
4.12 LITIGATION. Except as described in Exhibit 4.12 hereof, there is no
---------- ------------
litigation, action, suit, proceeding or governmental investigation pending or
threatened against AARI or affecting AARI or the Business or any of its assets,
at law or in equity or before any federal, state, municipal, local or other
governmental authority, or before any arbitrator, nor is there any reasonable
basis for any such litigation, action, suit, proceeding or investigation. None
of the AARI Physicians nor AARI is subject to any order, writ or decree of any
court or other governmental authority.
4.13 EMPLOYEE BENEFITS.
-----------------
4.13.1 Except as identified on Exhibit 4.13.1, AARI is not a party
--------------
to any collective bargaining or labor agreement or to any written employment
agreement, profit sharing, deferred compensation, bonus, stock option, stock
purchase, pension, retainer, consulting, retirement, welfare, or incentive plan
or policy or increases in the rate of remuneration entered into with or for the
benefit of present or former employees, whether or not unionized, of AARI or any
other like agreement, plan or policy.
4.13.2 All AARI plans, funds, programs, agreements, arrangements,
commitments or policies (collectively, the "Plans") which: (i) are or have ever
been maintained or participated in by AARI and which are currently in effect or
as to which AARI has any
<PAGE>
ongoing liability or obligation whatsoever; and (ii) constitute (A) "pension
plans" (as defined in Section 3(2) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) or (B) "welfare plans" (as defined in ERISA
Section 3(1)) are identified on Exhibit 4.13.2. AARI has provided copies of all
--------------
Plans to AACA.
4.13.3 Except as set forth on Exhibit 4.13.3, AARI has never
--------------
maintained, sponsored, contributed to or been required to contribute to a
defined benefit plan (within the meaning of Code Section 414(j)) and is not, and
has never been, a member of a controlled group of corporations (within the
meaning of Code Section 414(b)), a group of trades or businesses under common
control (within the meaning of Code Section 414(c)) or an affiliated service
group (within the meaning of Code Section 414 (m)).
4.14 LIABILITIES. All liabilities and obligations of AARI direct,
-----------
indirect or contingent, are either listed in the AARI Financial Statements or on
Exhibit 4.14 attached hereto.
- ------------
4.15 INSURANCE. All insurance maintained by AARI is listed and described
---------
on Exhibit 4.15 attached hereto. Except as identified on Exhibit 4.15, AARI has
------------ ------------
not in the past three years made any claims with respect to its insurance
coverage.
4.16 ABSENCE OF CERTAIN CHANGES. Except as described in Exhibit 4.16,
-------------------------- ------------
since December 31, 1995, AARI has not:
(i) incurred or suffered any obligations or liabilities (absolute or
contingent) except current liabilities incurred in the ordinary
course of business;
(ii) issued any stock or other corporate securities or granted any option
or right with respect to the acquisition of any of its corporate
securities;
(iii) declared or made (or become obligated for) any payment or
distribution or dividend to shareholders or purchased or redeemed
(or became obligated to purchase or redeem) any shares of its
capital stock;
(iv) mortgaged, pledged or subjected (whether or not voluntarily) to any
Encumbrance, any of its assets, other than Encumbrances incidental
to the conduct of its business or the ownership of its property and
assets which were not incurred in connection with the borrowing of
money, or the obtaining of advances or credit, and which do not in
the aggregate impair the use or value thereof in the operation of
its business;
(v) sold, assigned or transferred or agreed to sell, assign
<PAGE>
or transfer any of its tangible assets or canceled any debts or
claims, except in each case in the ordinary course of business;
(vi) sold, assigned, or transferred or agreed to sell, assign or transfer
any trade names, or other intangible assets, or permitted existing
rights with respect thereto to lapse;
(vii) suffered any extraordinary loss or knowingly waived or permitted to
lapse any right of substantial value;
(viii) made any capital expenditures, or otherwise entered into any
executory transactions or commitments to make any capital
expenditures, in excess of $5,000 per item or $25,000 in the
aggregate;
(ix) failed to comply in any material respect with any applicable local,
state or federal law, rule or regulation; or
(x) suffered any event or condition of any character, materially and
adversely affecting its business, properties or prospects.
4.17 EMPLOYEES. Attached as Exhibit 4.17 is a listing of all current
--------- ------------
AARI employees and former AARI employees who are eligible to continue to receive
benefits by virtue of their former employment by AARI (including, as applicable,
their rates of pay, accrued sick leave, vacation and other benefits).
4.18 AUTHORITY. AARI has the corporate power to execute and deliver this
---------
Agreement and consummate the Merger and the other transactions contemplated
hereby and has taken (or by the Closing Date will have taken) all action
required by law, its Articles of Incorporation, bylaws or otherwise to authorize
such execution and delivery and the consummation of the Merger and the other
transactions contemplated hereby.
4.19 LICENSES. Exhibit 4.19 contains a copy of all governmental or other
-------- ------------
licenses held by (i) AARI relating to the operation of its business and (ii) the
AARI Physicians. Except for the licenses of AARI and the AARI Physicians listed
in Exhibit 4.19, there are no other licenses or permits required for AARI and
------------
the AARI Physicians to operate the Business. Except as disclosed in Exhibit
-------
4.19, all such licenses are in full force and effect, and there have not been
- ----
(and there currently are not) any material default or deficiencies thereunder by
any party; and no event has occurred which (whether with or without notice,
lapse of time, or the happening or occurrence of any other event) would
constitute a
<PAGE>
material default or deficiency thereunder. None of the AARI Physicians nor AARI
is aware of any proceeding or investigation by any governmental agency
(including, without limitation, the Health Care Financing Administration or any
Ethics Board) relating to the Business. Except as disclosed in Exhibit 4.19,
------------
none of the AARI Physicians nor AARI have been the subject of a malpractice
suit. To the knowledge of the AARI Physicians and AARI there is not now, nor
has there ever been, any investigation or proceeding by any governmental agency
or licensing board to restrict, suspend or revoke any license of AARI.
4.20 NO FINDERS OR BROKERS. None of the AARI Physicians nor AARI, nor
---------------------
any officer or director thereof, has engaged any finder or broker in connection
with the transactions contemplated hereunder. The AARI Physicians will
indemnify and hold AACA harmless against claims (and attorneys' fees and
expenses in the defense thereof) of any person, firm or corporation for finder's
fees, broker's fees, brokerage commissions, sales commissions or the like
alleged in connection with the transactions contemplated hereunder due to acts
of the AARI Physicians or AARI.
4.21 DISCLOSURE. No representation or warranty by the AARI Physicians or
----------
AARI in this Agreement and no statement pertaining to the AARI Physicians or
AARI in this Agreement or any document, Exhibit or certificate furnished or to
be furnished to AACA pursuant hereto will contain any materially untrue
statement or omits or will omit to state a relevant fact necessary in order to
make the statements contained herein or therein not misleading. There are no
facts known to the AARI Physicians or AARI not described herein which would
adversely affect the future operations of AARI.
4.22 VALIDITY OF AGREEMENTS. Upon execution and delivery by all parties,
----------------------
this Agreement, the Articles of Merger, and all other agreements to be executed
by the AARI Physicians or AARI in connection herewith, will constitute the valid
and binding obligation of the AARI Physicians and AARI, as the case may be, and
be binding against them and enforceable in accordance with their respective
terms (except as enforceability may be restricted, limited, or delayed by
bankruptcy, insolvency, moratorium or similar laws affecting or relating to the
enforcement of creditors' rights in general and except as the enforceability is
subject to general principles of equity, regardless of whether enforceability is
considered in a proceeding at law or in equity).
4.23 TITLE TO ASSETS. Except as described in Exhibits 4.14 and 4.16
--------------- ------------- ----
hereto, AARI holds good and marketable title to its assets, free and clear of
restrictions on or conditions to transfer or assignment, and free and clear of
Encumbrances.
4.24 TRANSFER NOT SUBJECT TO ENCUMBRANCES OR THIRD-PARTY
---------------------------------------------------
<PAGE>
APPROVAL. Except as set forth on Exhibit 4.24, the execution and delivery of
- -------- ------------
this Agreement by the AARI Physicians and AARI, and the consummation of the
contemplated transactions, (i) will not result in the creation or imposition of
any Encumbrance on any of the assets of AARI and (ii) will not require the
authorization, consent, or approval of any third party, including any
governmental subdivision or regulatory agency.
4.25 ACCOUNTS RECEIVABLE. The accounts receivable of AARI (the "Accounts
-------------------
Receivable") as of the Effective Time of the Merger, to the extent uncollected
as of the Effective Time of the Merger, will be validly existing and represent
monies due for goods sold and delivered or services performed subject to
customary discounts or other adjustments by third parties. An aged listing of
the Accounts Receivable of AARI as of the Closing Date shall be delivered to
AACA on or before the Closing Date in connection with the Interim Balance Sheet
and the schedule calculating the Closing Date Adjustment as provided in Section
2.5(c) hereof.
4.26 SECURITIES LAWS.
---------------
4.26.1 RECEIPT OF INFORMATION. Since the commencement of
----------------------
negotiations, each AARI Physician has had access to and each AARI Physician has
received: (i) a copy of VIVRA's Prospectus dated February 9, 1995; (ii) a copy
of VIVRA's 1994 Annual Report to Stockholders; (iii) a copy of VIVRA's Annual
Report on Form 10-K for the fiscal years ended November 30, 1994; and November
30, 1995; (iv) a copy of VIVRA's Quarterly Reports on Form 10-Q for the quarters
ended February 28, May 31 and August 30, 1995; (v) a copy of VIVRA's Proxy
Statement for VIVRA's Annual Meeting; (vi) a copy of the Prospectus Supplements
to VIVRA's Prospectus dated February 9, 1995; (vii) a copy of VIVRA's Forms 8-K
dated August 16, 1995, December 21, 1995; and (viii) such other information as
the AARI Physicians have reasonably requested.
4.26.2 INVESTMENT EXPERIENCE. Each AARI Physician represents that
---------------------
such AARI Physician is experienced in evaluating and investing in securities and
acknowledges that such AARI Physician is able to fend for himself, can bear the
economic risk of such AARI Physician's investment, and has such knowledge and
experience in financial and business matters that such AARI Physician is capable
of evaluating the merits and risks of the investment in VIVRA stock.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF AACA.
--------------------------------------
AACA represents, warrants, covenants and agrees to and with AARI and the
AARI Physicians, as follows.
5.1 ORGANIZATION AND STANDING OF AACA. AACA is a corporation duly
---------------------------------
organized, validly existing and in good standing under
<PAGE>
the laws of the State of Delaware and has full corporate power and authority to
conduct its business as now being conducted, and is duly qualified to do
business, in each jurisdiction in which the nature of the property owned or
leased or the nature of the businesses conducted, specifically including the
Commonwealth of Kentucky, so require.
5.2 AUTHORITY. AACA has corporate power to execute and deliver this
---------
Agreement and consummate the transactions contemplated hereby and has taken (or
by the Closing Date will have taken) all action required by law, its Certificate
of Incorporation, its bylaws or otherwise to authorize such execution and
delivery and the consummation of the transactions contemplated hereby.
5.3 NO FINDERS OR BROKERS. Neither AACA nor any officer or director
---------------------
thereof has engaged any finder or broker in connection with the transactions
contemplated hereunder. AACA will indemnify and hold the AARI Physicians
harmless against claims (and attorneys' fees and expenses in the defense
thereof) of any person, firm or corporation for finder's fees, broker's fees,
brokerage commissions, sales commissions or the like alleged in connection with
the transactions contemplated hereunder due to acts of AACA.
5.4 VALIDITY OF AGREEMENTS. Upon execution and delivery by all parties
----------------------
hereto, this Agreement, and all other agreements to be executed by AACA in
connection herewith will constitute the valid and binding obligation of AACA and
be binding against AACA and enforceable in accordance with their respective
terms (except as enforceability may be restricted, limited, or delayed by
bankruptcy, insolvency, moratorium or similar laws affecting or relating to the
enforcement of creditors' rights in general and except as the enforceability is
subject to general principles of equity, regardless of whether enforceability is
considered in a proceeding at law or in equity).
5.5 REQUIRED GOVERNMENTAL APPROVALS. AACA is in compliance in all
-------------------------------
material respects with the laws, rules, regulations and decrees of all
governmental authorities whatsoever relating to the conduct of its businesses,
and to the best of its knowledge no approval or consent of any governmental
authority or agency will be required at Closing for AACA to consummate the
transactions contemplated hereby.
5.6 LITIGATION. There is no litigation, action, suit, proceeding or
----------
governmental investigation pending or (to the best of AACA's knowledge)
threatened against AACA or affecting AACA or any of its businesses or any of its
assets, nor does AACA know of any reasonable basis for such litigation, action,
suit, proceeding or investigation. AACA is not subject to any order, writ or
decree of any court or governmental authority or agency.
<PAGE>
5.7 VIVRA COMMON STOCK. The issuance of the VIVRA Common Stock pursuant
------------------
to the Merger hereunder has been duly authorized by all necessary corporate
action and upon consummation of the Closing will be duly and validly issued and
fully paid and nonassessable, registered pursuant to VIVRA's currently effective
registration statement dated March 15, 1995, and freely tradeable subject to the
limitations set forth in Section 2.6.
5.8 CERTIFICATE OF INCORPORATION AND BYLAWS OF AACA. A true, correct
-----------------------------------------------
and complete copy of the Certificate of Incorporation of AACA is attached hereto
as Exhibit 5.8. AACA has provided a copy of its Bylaws to AARI and to the AARI
-----------
Physicians.
5.9 DISCLOSURE. No representation or warranty by AACA in this Agreement
----------
and no statement pertaining to AACA in this Agreement or any document, Exhibit
or certificate furnished or to be furnished to AARI Physicians or AARI pursuant
hereto will contain any material untrue statement or omits or will omit to state
a relevant fact necessary in order to make the statements contained herein or
therein not misleading.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF VIVRA.
---------------------------------------
VIVRA joins in this Agreement solely for the purpose of making the
following representations and warranties regarding VIVRA and the VIVRA Common
Stock. VIVRA hereby represents, warrants, covenants and agrees to and with AARI
and the AARI Physicians as follows.
6.1 ORGANIZATION AND STANDING OF VIVRA. VIVRA is a corporation duly
----------------------------------
organized, validly existing and in good standing under the laws of the State of
Delaware, and has full corporate power and authority to conduct its business as
now being conducted, and is duly qualified to do business, in each jurisdiction
in which the nature of the property owned or leased or the nature of the
businesses conducted so require.
6.2 AUTHORITY. VIVRA has corporate power to execute and deliver this
---------
Agreement and consummate the transactions contemplated hereby and has taken (or
by the Closing Date will have taken) all action required by law, its Certificate
of Incorporation, bylaws or otherwise to authorize such execution and delivery
and the consummation of the transactions contemplated hereby.
6.3 VALIDITY OF AGREEMENTS. Upon execution and delivery by all parties
----------------------
hereto, this Agreement, and all other agreements to be executed by VIVRA in
connection herewith to the extent that they relate to VIVRA, will constitute the
valid and binding obligation of VIVRA and be binding against VIVRA and
enforceable in accordance with their respective terms (except as enforceability
may be restricted, limited, or delayed by bankruptcy, insolvency,
<PAGE>
moratorium or similar laws affecting or relating to the enforcement of
creditors' rights in general and except as the enforceability is subject to
general principles of equity, regardless of whether enforceability is considered
in a proceeding at law or in equity).
6.4 LITIGATION. There is no material suit, action, proceeding or
----------
investigation against or involving VIVRA or any of the properties or rights,
pending or, to the knowledge of VIVRA, threatened. There is no material
judgment, decree, injunction, rule or order of any governmental entity
outstanding against VIVRA. VIVRA is not in violation of any term of any
judgment, decree, injunction or order outstanding against it.
6.5 FINANCIAL STATEMENTS. VIVRA's audited consolidated financial
--------------------
statements including a balance sheet, income statement and statement of cash
flow, for the year ended November 30, 1994, and VIVRA's unaudited consolidated
financial statements, including a balance sheet, income statement and statement
of cash flow, for the period ended November 30, 1995, which have been previously
delivered to AARI and the AARI Physicians, fairly present, subject to normal
year-end adjustments with respect to the unaudited interim financial statements,
in conformity with generally accepted accounting principles applied on a
consistent basis, the consolidated financial position of VIVRA and its
consolidated subsidiaries as of the date thereof and their consolidated results
of operation and cash flows for the period then ended.
6.6 VIVRA COMMON STOCK. All of the shares of VIVRA Common Stock issued
------------------
under the provisions of this Agreement are duly authorized, fully paid and
nonassessable, are registered pursuant to VIVRA's currently effective
registration statement dated March 15, 1995, and are freely tradeable subject to
the limitations set forth in Section 2.6.
6.7 NO UNTRUE STATEMENTS. No representation or warranty by VIVRA
--------------------
contains any untrue statement of a material fact or omits to state a material
fact necessary to make the statements contained therein not misleading or
necessary in order to provide AARI and AARI Physicians with complete and
accurate information as to VIVRA and the VIVRA Common Stock. Except as
described in the S-4 Registration Statement and other materials delivered by
VIVRA under cover dated March 8, 1996, there are no facts known to VIVRA which
would materially and adversely affect the VIVRA Common Stock.
SECTION 7. COVENANTS OF AACA.
-----------------
7.1 BEST EFFORTS TO SECURE CONSENTS AND APPROVALS. AACA will take all
---------------------------------------------
necessary corporate and other action and will use its best efforts to obtain all
consents and approvals required of AACA to carry out the transactions
contemplated by this Agreement and to
<PAGE>
satisfy the conditions precedent specified herein.
7.2 HANDLING OF DOCUMENTS. Until the Closing, AACA shall keep
---------------------
confidential all information provided by AARI or the AARI Physicians pursuant to
this Agreement which is not in the public domain, and shall exercise the same
care in handling such information as it would exercise with similar information
of its own. If the Closing does not occur, AACA shall return all such
documentation and keep the same confidential.
7.3 EMPLOYMENT. AACA will offer employment to all of AARI's employees,
----------
except the AARI Physicians, but these employees shall, upon acceptance of
employment with AACA, be "employees terminable at will" and subject to all
employment policies of AACA. Subsequent to the date of this Agreement, no
termination bonuses or severance pay is owed to or will be paid to any AARI
employees terminated as a result of the merger of AARI into AACA.
7.4 COMPENSATION. AACA reserves the right in the future to raise
------------
salaries of AARI's former employees consistent with the policies and standards
governing AACA employees generally. AACA will credit each former AARI employee
hired by AACA with his or her service anniversary with AARI for purposes of
determining vacation, sick leave and holidays and other fringe benefits provided
by AACA to its employees. To the extent permitted by ERISA, former AARI
employees shall be entitled to participate in all health, disability, retirement
and other benefit plans of AACA in accordance with the terms of such plans;
provided, however, that with respect to such health plans, AACA shall ensure
that such employees are eligible for coverage at the Effective Time, are not
subject to a "waiting period" as a result of the Merger, and are not subject to
exclusion for pre-existing conditions unless they have been subject to such an
exclusion under their current coverage.
SECTION 8. COVENANTS OF THE AARI PHYSICIANS AND AARI.
-----------------------------------------
8.1 ACCESS AND INFORMATION. The AARI Physicians and AARI shall give to
----------------------
AACA and AACA's lenders, underwriters, investors and representatives reasonable
access during normal business hours to their respective premises, books,
accounts and records and all other relevant documents and will make available,
and use their respective best efforts to cause their respective independent
accountants to make available, copies of all such documents and information with
respect to the business and properties of AARI as representatives of AACA may
from time to time request, including, without limitation, the working papers
used to prepare the Financial Statements, all in such manner as not unduly to
disrupt their normal business activities. The foregoing shall be subject to
federal and state laws regarding the privacy of medical records.
<PAGE>
8.2 CONDUCT OF BUSINESS. If there shall be a lapse of time between the
-------------------
date hereof and the Effective Time, except as otherwise approved by AACA, AARI
shall conduct its business only in the ordinary course consistent with past
practice and in such a manner that representations and warranties contained in
Section 4 shall be true and correct at and as of the Closing (except for changes
contemplated, permitted or required by this Agreement) and so that the
conditions to be satisfied by AARI and the AARI Physicians at the Closing shall
have been satisfied. AARI shall, consistent with conducting its business in
accordance with reasonable business judgment, preserve its business intact; use
its best efforts to keep available to AARI the services of its present employees
(except those dismissed by AARI or those who voluntarily discontinue their
employment); and preserve for AACA the goodwill of the suppliers, patients and
others having business relations with AARI.
8.3 BEST EFFORTS TO SECURE CONSENTS AND APPROVALS. The AARI Physicians
---------------------------------------------
and AARI shall take the necessary corporate or other action and shall each use
its or their, as the case may be, best efforts to secure before the Closing all
necessary consents, approvals and amendments of agreements required of the AARI
Physicians and AARI to carry out the transactions contemplated by this Agreement
and to satisfy the conditions precedent specified herein. Each AARI Physician
will use his best efforts to have all AARI Physician Contracts of such AARI
Physician continue in effect with respect to such AARI Physician as an employee
of Newco following the Effective Time.
SECTION 9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE AARI PHYSICIANS AND
------------------------------------------------------------------
AARI.
- ----
All obligations of the AARI Physicians and AARI which are to be discharged
under this Agreement at the Closing are subject to the performance, at or prior
to the Closing, of all covenants and agreements contained herein which are to be
performed by AACA at or prior to the Closing and to the fulfillment at, or prior
to, the Closing, of each of the following conditions (unless expressly waived in
writing by the AARI Physicians at any time at or prior to the Closing).
9.1 REPRESENTATIONS AND WARRANTIES TRUE. All of the representations and
-----------------------------------
warranties made by AACA and VIVRA contained in Sections 5 and 6, respectively,
of this Agreement shall be true as of the date of this Agreement, and shall be
true at and as of the date of Closing in all material respects; AACA shall have
performed and complied with in all material respects all covenants and
conditions required by this Agreement to be performed or complied with by AACA
prior to or at the Closing; and the AARI Physicians shall have been furnished
with a certificate of the President or any Vice President of AACA and of VIVRA
dated as of the Closing,
<PAGE>
certifying to the truth of such representations and warranties as of the Closing
and to the fulfillment of such covenants and conditions.
9.2 AUTHORITY. All action required to be taken by or on the part of
---------
AACA or VIVRA to authorize the execution, delivery and performance of this
Agreement by AACA and the consummation of the transactions contemplated hereby
shall have been duly and validly taken by the Board of Directors of AACA and of
VIVRA.
9.3 NO OBSTRUCTIVE PROCEEDING. No action or proceedings shall have been
-------------------------
instituted against, and no order, decree or judgment of any court, agency,
commission or governmental authority shall be subsisting against the AARI
Physicians which seek to, or would, render it unlawful as of the Closing to
effect the transactions contemplated hereby, and no such action shall seek
damages in a material amount by reason of the transactions contemplated hereby.
Also, no substantive legal objection to the transactions contemplated by this
Agreement shall have been received from or threatened by any governmental
department or agency.
9.4 NO MATERIAL ADVERSE CHANGE. As of the date of this Agreement,
--------------------------
there shall have been no material adverse changes in the business or assets of
AACA.
9.5 MASTER MERGER AGREEMENT. All of the conditions precedent to the
-----------------------
obligations of the parties set forth in the Master Merger Agreement shall have
been met or waived, as the case maybe, by all parties to the Master Merger
Agreement except as otherwise specifically provided therein.
SECTION 10. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF AACA.
-----------------------------------------------
All obligations of AACA which are to be discharged under this Agreement at
the Closing are subject to the performance, at or prior to the Closing, of all
covenants and agreements contained herein which are to be performed by the AARI
Physicians and AARI at or prior to the Closing and to the fulfillment at or
prior to the Closing of each of the following conditions (unless expressly
waived in writing by AACA at any time at or prior to the Closing):
10.1 REPRESENTATIONS AND WARRANTIES TRUE. All of the representations and
-----------------------------------
warranties of the AARI Physicians and AARI contained in Section 4 of this
Agreement shall be true as of the date of this Agreement, and shall be true at
and as of the date of Closing in all material respects; the AARI Physicians and
AARI shall have performed or complied with in all material respects all
covenants and conditions required by this Agreement to be performed or complied
with by the AARI Physicians and AARI prior to or at the Closing; and AACA shall
be furnished with a certificate of the AARI
<PAGE>
Physicians, dated the Closing, certifying to the truth of such representations
and warranties as of the time of the Closing and to the fulfillment of such
covenants and conditions.
10.2 NO OBSTRUCTIVE PROCEEDING. No action or proceedings shall have been
-------------------------
instituted against, and no order, decree or judgment of any court, agency,
commission or governmental authority shall be subsisting against AACA or its
affiliates which seeks to, or would, render it unlawful as of the Closing to
effect the Merger in accordance with the terms hereof, and no such action shall
seek damages in a material amount by reason of the transactions contemplated
hereby. Also, no substantive legal objection to the transactions contemplated
by this Agreement shall have been received from or threatened by any
governmental department or agency.
10.3 CONSENTS AND APPROVALS. Each of the parties to any AARI Contract
----------------------
under which the Merger contemplated hereby would constitute or result in a
default or acceleration of obligations shall have given such consent as may be
necessary to permit the consummation of the Merger contemplated hereby without
constituting or resulting in a default or acceleration under such agreement, and
any consents required from any public or regulatory agency or organization
having jurisdiction shall have been given.
10.4 NO ADVERSE CHANGE. As of the date of this Agreement, no event
-----------------
shall have occurred or have been threatened which has or would have a material
and adverse effect upon AARI; and AARI shall not have sustained any loss or
damage to its assets or property, whether or not insured, or union activity that
affects materially and adversely its ability to conduct its business.
10.5 RELEASE OF ENCUMBRANCES. All Encumbrances shall have been released
-----------------------
at or prior to the Closing.
10.6 LICENSES. AACA shall not have learned that there is any material
--------
impediment beyond its control to its ability to obtain all business licenses to
operate the Business. The AARI Physicians shall not have learned that there is
any material impediment beyond their control to their ability to transfer their
licenses to practice medicine to, and to practice medicine through, Newco.
10.7 POOLING. AACA shall be satisfied that the business combination to
-------
be effected by the Merger may be accounted for as a pooling of interests under
generally accepted accounting principles and all applicable SEC rules and
regulations.
10.8 MASTER MERGER AGREEMENT. All of the conditions precedent to the
-----------------------
obligations of the parties set forth in the Master Merger Agreement shall have
been met or waived by all parties to the Master Merger Agreement except as
otherwise specifically provided
<PAGE>
therein.
SECTION 11. TERMINATION.
-----------
AACA on the one hand, or AARI and the AARI Physicians on the other hand, by
giving written notice to the other at any time on or prior to the Closing Date
(unless extended by mutual agreement of the parties) may terminate this
Agreement if (a) a material default shall be made by the other in the observance
of or in the due and timely performance of the covenants and agreements herein
contained, which default cannot be cured on or prior to the Closing, or (b) if,
as of the Closing, the conditions precedent to the performance of the
obligations of the one, including those specified in the Master Merger
Agreement, shall not have been fulfilled and shall not have been waived by such
party.
SECTION 12. INDEMNIFICATION.
---------------
12.1 INDEMNITY BY THE AARI PHYSICIANS. The AARI Physicians, jointly and
--------------------------------
severally (except as otherwise provided in Section 12.3 below), shall indemnify,
defend and hold harmless AACA and each affiliate of AACA from and against the
following, any one of which shall be deemed to be an "AACA indemnifiable loss"
under this Agreement:
(a) all Undisclosed Liabilities;
(b) any and all losses, damages, costs or deficiencies resulting from
any and all misrepresentations or breaches of warranty or failures
to perform agreements or undertakings by the AARI Physicians or AARI
contained in or made pursuant to this Agreement or in other
agreements executed by the AARI Physicians or AARI in connection
with this Agreement; and
(c) any and all actions, suits, proceedings, claims, demands,
assessments, judgments, costs and expenses (including, without
limitation, attorneys' fees, interest, penalties and amounts paid in
settlement of any such claim) incident to any of the foregoing.
12.2 UNDISCLOSED LIABILITIES. For purposes of Section 12.1 hereof, the
-----------------------
term "Undisclosed Liabilities" shall mean:
(i) any liability for any sales tax (or any interest or penalties with
respect thereto) payable as a result of the consummation of the
transactions contemplated hereby that is not reflected in Exhibit
-------
4.14;
----
(ii) except as stated in Exhibit 4.14 hereto, any liability
------------
<PAGE>
under any employee benefit or welfare plan or regarding withholding
taxes owed to or with respect to any employee or independent
contractor of AARI accruing prior to the date of Closing;
(iii) liabilities and obligations of the AARI Physicians or AARI for any
breach or violation, as of the date of Closing, of any AARI
Physician Contracts or AARI Contracts;
(iv) liabilities and obligations of the AARI Physicians or AARI for
environmental or ecological matters or conditions existing at or
before the Closing, including those relating to the use, transport,
disposal, handling or storage of hazardous or toxic materials,
pollutants, contaminants, petroleum products, or waste (including,
without limitation, medical waste);
(v) any liability or obligation of the AARI Physicians or AARI accruing
at or before the date of Closing for violations of law;
(vi) any liability of the AARI Physicians or AARI with respect to a
breach of this Agreement;
(vii) any liability or obligation to Medicare, Medicaid, Blue Cross/Blue
Shield (or any other third party payer) as a result of recapture of
amounts paid by any such payer to the AARI Physicians or AARI or any
overpayments made by such payer to the AARI Physicians or AARI or
any disallowance of any claim of the AARI Physicians or AARI;
(viii) any tort liability, products liability or malpractice liability
of the AARI Physicians or AARI accruing at or before the date of
Closing;
(ix) liabilities and obligations of the AARI Physicians or AARI incurred
in connection with the preparation of this Agreement and the
consummation of the transactions contemplated hereby, including,
without limitation, legal and accounting fees;
(x) any liability of AARI which is not reflected in the AARI Financial
Statements referred to in Section 4.7 hereof or in Exhibit 4.14
------------
hereto; and
(xi) any liability whatsoever, of AARI, the AARI Physicians, AACA, VIVRA,
or otherwise incurred in connection with the Qualified Plans
referred to in Section 10.9 hereof
<PAGE>
either before or after the Effective Time.
12.3 JOINT AND SEVERAL LIABILITY OF AARI PHYSICIANS. The AARI Physicians
----------------------------------------------
shall be jointly and severally liable for all AACA indemnifiable losses except
for any AACA indemnifiable losses arising from or connected with (i) each AARI
Physician's malpractice, (ii) each AARI Physician's violations of law or, (iii)
each AARI Physician's violation of any AARI Physician Contract, for which each
AARI Physician shall remain severally liable only.
12.4 PAYMENT FOR AACA INDEMNIFIABLE LOSSES. The AARI Physicians shall
-------------------------------------
pay to AACA or any affiliate of AACA, as the case may be, all amounts owed to
AACA pursuant to Section 12.1 within thirty (30) days after written demand
therefor. In the event that any third person, including, without limitation,
any governmental taxing authority, shall assert any claim or action against AACA
or an affiliate of AACA which, if successful, might result in an AACA
indemnifiable loss, AACA shall notify the AARI Physicians, in writing, of such
claim or action, and at the AARI Physicians' option, they may, at their sole
expense, assume control over the defense of such claim or action, but in any
event AACA (and its affiliate, as the case may be) shall have the right to
participate in the defense of any such claim or action. If, after notice
thereof, the AARI Physicians shall not assume the defense of, or if after so
assuming such defense they shall fail to continue to defend, any such claim or
action, AACA (and its affiliate, as the case may be) may defend any such claim
or action and AACA (and its affiliate, as the case may be) may then settle or
compromise such claim or action on terms it deems reasonable. The AARI
Physicians shall promptly satisfy and pay any final judgment rendered with
respect to any such claim or action or any compromise or settlement thereof and
shall pay the reasonable expenses, legal or otherwise of AACA (and its
affiliate, as the case may be) in the defense of any such claim or action. If
the AARI Physicians do not pay any such AACA indemnifiable loss pursuant to any
such judgment, settlement or compromise within thirty (30) days after written
demand, AACA may pay the same and set off the amount paid against any payments
due the AARI Physicians. If AACA (or an affiliate of AACA) suffers an AACA
indemnifiable loss directly (not as a result of a third party claim or action),
AACA will first recover such AACA indemnifiable loss pursuant to the terms of
the Escrow Agreement, then, if the remaining Escrowed Shares are insufficient to
cover the AACA indemnifiable loss or if the Escrow Agreement has expired, AACA
may set off the amount of the same against payments due the AARI Physicians or
demand payment therefor from the AARI Physicians. For purposes hereof, an
"affiliate" of AACA shall mean any person or entity directly or indirectly
controlling, controlled by, or under common control with AACA.
12.5 INDEMNITY BY AACA. AACA shall indemnify, defend and
-----------------
<PAGE>
hold harmless the AARI Physicians from and against the following, any one of
which shall be defined to be a "AARI indemnifiable loss" under this Agreement:
(a) any and all losses, damages, costs or deficiencies resulting
from any and all misrepresentations or breaches of warranty or failures to
perform agreements or undertakings by AACA contained in or made pursuant to this
Agreement or in other agreements executed by AACA in connection with this
Agreement;
(b) any and all losses, damages, costs or deficiencies incurred by
the AARI Physicians arising from any failure by AACA to satisfy any obligation
under the AARI Contracts to be performed by AACA by their stated terms after the
Closing Date; and
(c) any and all actions, suits, proceedings, claims, demands
assessments, judgments, costs and expenses (including, without limitation,
attorneys' fees, interest, penalties and amounts paid in settlement of any such
claim) relating to any of the foregoing.
12.6 PAYMENT FOR AARI INDEMNIFIABLE LOSSES. AACA shall pay the AARI
-------------------------------------
Physicians all amounts owed to them pursuant to Section 12.5 within thirty (30)
days after written demand therefor. In the event that any third person shall
assert any claim or action against the AARI Physicians which, if successful,
might result in a claim for a AARI indemnifiable loss, the AARI Physicians shall
notify AACA in writing of such claim or action, and at AACA's option, AACA may,
at its sole expense, assume control over the defense of such claim or action,
but in any event the AARI Physicians shall have the right to participate in the
defense of any such claim or action. If after notice thereof, AACA shall not
assume the defense of, or if after so assuming it fails to continue to defend,
any such claim or action, the AARI Physicians may defend any such claim or
action and the AARI Physicians may then settle or compromise such claim or
action on terms they deem reasonable. AACA shall promptly satisfy any final
judgment rendered with respect to any such claim or action or any compromise or
settlement thereof and shall pay the reasonable expenses, legal or otherwise, of
the AARI Physicians in the defense of any such claim or action.
If the AARI Physicians suffer a AARI indemnifiable loss directly (not as a
result of a third party claim or action), the AARI Physicians may set off the
amount of the same against payments due AACA or demand payment therefor from
AACA.
12.7 REMEDIES CUMULATIVE. The remedies provided herein shall be
-------------------
cumulative and shall not preclude any party from asserting any other rights or
seeking any other remedies to which such party is entitled by law.
<PAGE>
12.8 SURVIVAL. The representations and warranties of the parties set
--------
forth in this Agreement shall expire one (1) year after the Effective Time.
SECTION 13. MISCELLANEOUS.
-------------
13.1 EXPENSES. All expenses of the preparation of this Agreement and of
--------
the other agreements and transactions contemplated hereby, including, without
limitation, counsel fees, accounting fees, investment advisor's fees and
disbursements, shall be borne by the AARI Physicians in the case of AARI or any
of the AARI Physicians and by AACA in the case of AACA.
13.2 NOTICES. All notices, demands and other communications hereunder
-------
shall be written and shall be deemed to have been duly given if delivered in
person or mailed by Federal Express (or other national air courier service),
charges prepaid, to the address set forth below:
To AACA or VIVRA: Asthma & Allergy CareAmerica, Inc.
8601 Dunwoody Place, Suite 440
Atlanta, Georgia 30350
Attention: Robert Prosek, President
with a copy to: Paul L. Hudson, Jr., Esq.
Parker, Hudson, Rainer & Dobbs
1500 Marquis Two Tower
285 Peachtree Center Avenue, N.E.
Atlanta, Georgia 30303
To AARI or the Allergy & Asthma Research Institute, Inc.
AARI Physicians: Stephen J. Pollard, M.D.
James L. Sublett, M.D.
9800 Shelbyville Road, Suite 220
Louisville, Kentucky 40223
with a copy to: Ivan Schell, Esq.
Hirn, Doheny, Reed, & Harper
2000 Medinger Tower
Louisville, Kentucky 40202
or to such other address as AACA or the AARI Physicians may designate by notice
to the other. Notices delivered in person shall be deemed delivered on the date
of delivery and notices sent via air courier service, as aforesaid, shall be
deemed delivered on the date of delivery as indicated by the records of the
courier service. Rejection or other refusal to accept or inability to deliver
because of a changed address of which no notice was given shall be deemed to be
a receipt of the notice, request or other communication. Any notice, request or
other communication required or permitted to be
<PAGE>
given by any party may be given by such party's legal counsel.
13.3 ENTIRE AGREEMENT. This Agreement and the Exhibits, and the other
----------------
agreements and schedules and documents delivered pursuant hereto constitute the
entire agreement between the parties hereto pertaining to the subject matter
hereof and supersede all prior and contemporaneous agreements, understandings,
letters of intent negotiations and discussions, whether written or oral, of the
parties, and there are no representations, warranties or other agreements
between the parties in connection with the subject matter hereof, except as
specifically set forth herein. No supplement, modification or waiver of this
Agreement shall be binding unless executed in writing by the parties to be bound
thereby.
13.4 GOVERNING LAW; TAX REPORTING; ACCOUNTING TREATMENT. The validity
--------------------------------------------------
and construction of this Agreement shall be governed by the laws of the
Commonwealth of Kentucky, except insofar as this Agreement may specify that the
laws of Delaware may apply to the Merger. With respect to tax reporting, the
parties agree and intend that the Merger will be treated for United States
income tax purposes as a tax-free reorganization described in the Internal
Revenue Code of 1986, as amended (the "Code"), Section 368, and all of the
parties shall report the Merger in accordance with the relevant tax regulations.
With respect to accounting treatment, any increase or decrease in tax required
by Section 481 of the Code to place the accounts of AARI on the accrual method
of accounting shall be taken into account by AACA and VIVRA and not by AARI or
the AARI Physicians.
13.5 ARBITRATION.
-----------
13.5.1 The parties will attempt through good faith negotiations to
resolve their disputes regarding this Agreement. The term "disputes" includes,
without limitation, any disagreements between the parties concerning the
existence, formation, interpretation and implementation of this Agreement. If
the parties are to resolve their disputes by negotiation, either party may
commence arbitration by sending a written notice of arbitration to the other
party. The notice will state the dispute with particularity.
13.5.2 There shall be three arbitrators. If the parties fail to
select mutually acceptable arbitrators within ten (10) days after the notice of
arbitration, a tribunal of arbitrators (one selected by AARI, one selected by
AACA, and one who shall be appointed by the first two arbitrators), who shall be
located in the Commonwealth of Kentucky, shall be appointed as soon as possible
on the request of either party. If any party fails to select an arbitrator
within ten (10) days after demand, such arbitrator shall be appointed by the
American Arbitration Association. The fee payable to the arbitrators shall be
based upon the then current fee schedule of the American Arbitration
Association.
<PAGE>
13.5.3 The parties shall have reasonable rights of discovery.
13.5.4 Except as set forth in this Section, the tribunal shall
conduct the arbitration according to the Commercial Arbitration Rules of the
American Arbitration Association. Arbitration shall take place in Louisville,
Kentucky, unless the parties otherwise agree. The tribunal shall base the
decision on the express language of this Agreement. Within ten (10) days after
the tribunal is appointed, or as soon thereafter as shall be reasonably
practicable, the tribunal will conduct a hearing on the dispute. Each party may
make written submissions to the tribunal, and each party shall have a reasonable
opportunity for rebuttal, but no longer than ten (10) days. As soon as
reasonably practicable, but not later than ten (10) days after the hearing is
completed, the tribunal shall arrive at a final decision, which shall be reduced
to writing, signed by the tribunal and mailed to each party and its legal
counsel.
13.5.5 All decisions of the tribunal shall be final, and binding on
all parties, and (except as provided below) shall constitute the only method of
resolving disputes. Judgment may be entered upon the decision in accordance
with applicable law in any court having jurisdiction.
13.5.6 This arbitration section and all decisions of the tribunal
shall be specifically enforceable in a court of law, or in the arbitral
tribunal.
13.6 SECTION AND EXHIBIT HEADINGS. The Section and Exhibit headings are
----------------------------
for reference only and shall not limit or control the meaning of any provisions
of this Agreement.
13.7 WAIVER. No delay or omission on the part of any party hereto in
------
exercising any right hereunder shall operate as a waiver of such right or any
other right under this Agreement.
13.8 NATURE AND SURVIVAL OF REPRESENTATIONS. All statements contained in
--------------------------------------
any certificate delivered by or on behalf of a party to this Agreement in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties made by such party hereunder. The covenants,
representations and warranties made by the parties each to the other in this
Agreement or pursuant hereto shall survive the Effective Time as set forth in
Section 12.8 of this Agreement.
13.9 EXHIBITS. All Exhibits, schedules and documents referred to in, or
--------
attached to, this Agreement are integral parts of this Agreement as if fully set
forth herein and all statements appearing therein shall be deemed to be
representations. All items disclosed hereunder shall be deemed disclosed only
in connection with the specific representation to which they are explicitly
<PAGE>
referenced.
13.10 AMENDMENTS. This Agreement may be amended, but only in writing,
----------
signed by the parties hereto.
13.11 COUNTERPARTS. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original, but all of which together
shall comprise one and the same instrument. Any signature page to this
Agreement may be witnessed by a telecopy or other facsimile of any original
signature page and any signature page of any counterpart hereof may be appended
to any other counterpart hereof to form a completely executed counterpart
hereof.
13.12 ATTORNEYS' FEES. If any party institutes litigation or arbitration
---------------
to interpret or enforce, or to recover damages for breach of, this Agreement,
including any Individual Employment Agreement, each party will bear its own
attorneys' fees and costs of litigation or arbitration.
13.13 RULES OF CONSTRUCTION. All references herein to the singular shall
---------------------
include the plural, and vice versa, and all references herein to the neuter
shall include the masculine or feminine, as the case may be, and vice versa.
When general words or terms are used herein followed by the word "including" (or
another form of the word "include") and words of particular and specific
meaning, the general words shall be construed in their widest extent, and shall
not be limited to persons or things of the same general kind or class as those
specifically mentioned in the words of particular and specific meaning. All
parties have participated in the drafting of this Agreement. No provision of
this Agreement shall be construed against or interpreted to the disadvantage of
a party by reason of such party having or being deemed to have drafted,
structured or dictated such provisions.
13.14 TIME. Time is of the essence of this Agreement.
----
13.15 FURTHER ASSURANCES. Following the Closing, AARI Physicians and AACA
------------------
will, at the request of the other, execute and deliver such other instruments or
assignment, transfer and conveyance and take such other actions as a party may
reasonably request to more effectively effect the Merger and other transactions
contemplated by this Agreement. To the extent that AARI's rights under any AARI
Contract, by virtue of the Merger, require the consent of another person which
consent has not been obtained prior to, or concurrent with, the execution
hereof, AARI Physicians will cooperate with AACA in any reasonable arrangement
that is designed to provide for AACA the benefit of such asset.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
ASTHMA & ALLERGY CAREAMERICA, INC.,
a Delaware corporation ("AACA")
By:
--------------------------------
Title:
--------------------------
VIVRA INCORPORATED, a Delaware
corporation ("VIVRA")
By:
--------------------------------
Title:
--------------------------
ALLERGY & ASTHMA RESEARCH INSTITUTE, INC., a
Kentucky corporation ("AARI")
By:
--------------------------------
Title:
--------------------------
_____________________________________
STEPHEN J. POLLARD, M.D., an
individual resident of Kentucky
("Pollard")
_____________________________________
JAMES L. SUBLETT, M.D., an individual
resident of Kentucky ("Sublett")
<PAGE>
EXHIBIT 1.2(I)
CERTIFICATE OF MERGER
---------------------
(See Attached)
<PAGE>
EXHIBIT 1.2(II)
ARTICLES OF MERGER
------------------
(See Attached)
<PAGE>
EXHIBIT 2.4
DISTRIBUTION OF VIVRA STOCK
---------------------------
CASH FOR
NUMBER OF FRACTIONAL
NAME PERCENT SHARES SHARES
---- ------- --------- ----------
Pollard
Sublett
<PAGE>
EXHIBIT 2.5(B)
CALCULATION OF DETERMINED AMOUNT/CLOSING DATE ADJUSTMENT
--------------------------------------------------------
Reconciliation of Deal Consideration
Total Deal Consideration at _______
AARI % of Total Consideration
Net consideration to AARI at ________ =
Add/Subtract Increase<Decrease>
In Net Equity
Net Consideration to AARI at ________
Reconciliation of Net Equity Adjustment
Valuation of Net Equity at _______
Valuation of Net Equity at ________
Net Increase<Decrease> in Net Equity
<PAGE>
EXHIBIT 3.4(I)
NONCOMPETITION AGREEMENT
------------------------
(SEE ATTACHED)
<PAGE>
EXHIBIT 3.4(II)
ESCROW AGREEMENT
----------------
(See Attached)
<PAGE>
EXHIBIT 4.1
STATES REQUIRING QUALIFICATION OF AARI TO DO BUSINESS
-----------------------------------------------------
1. Indiana
<PAGE>
EXHIBIT 4.2
ARTICLES OF INCORPORATION AND
BYLAWS OF AARI
-----------------------------
(See Attached)
<PAGE>
EXHIBIT 4.3
AARI'S CAPITAL STOCK/OWNERSHIP
------------------------------
NAME NUMBER OF SHARES
---- ----------------
Stephen J. Pollard, M.D. 500
James L. Sublett, M.D. 500
<PAGE>
EXHIBIT 4.4
VIOLATED AGREEMENTS
-------------------
<PAGE>
EXHIBIT 4.5
TRANSACTIONS WITH AFFILIATES
----------------------------
<PAGE>
EXHIBIT 4.7
AARI FINANCIAL STATEMENTS
-------------------------
(See Attached)
<PAGE>
EXHIBIT 4.8(I)
MATERIAL REAL AND PERSONAL PROPERTIES OF AARI
---------------------------------------------
Set forth below is an identification of the material real and tangible
personal property used in the Business:
Real Property
-------------
Tangible Personal Property
--------------------------
<PAGE>
EXHIBIT 4.8(II)
LEASED OR NON-OWNED REAL OR PERSONAL PROPERTY
---------------------------------------------
Set forth below is an identification of the material real or tangible
personal property which is used by AARI in the Business and which is either not
owned by AARI or is leased or rented by AARI:
Real Property
-------------
Leased Tangible Personal Property
---------------------------------
<PAGE>
EXHIBIT 4.9
TAX MATTERS
-----------
The Tax Returns for which AARI has not filed and/or has not paid the
applicable taxes are as follows:
1.
2.
3.
The real property leases and the tangible personal property leases
identified on Exhibit 4.8 set forth an identification of AARI's contractual
obligations to indemnify another person with respect to taxes.
<PAGE>
EXHIBIT 4.10(I)
AARI CONTRACTS
--------------
Advertising Agreements
----------------------
Maintenance Agreements
----------------------
Patient Billing Agreements
--------------------------
AARI Third Party Payer Agreements
---------------------------------
Tangible Personal Property Leases
---------------------------------
See Exhibit 4.8(ii)
Real Property Leases
--------------------
See Exhibit 4.8(ii)
<PAGE>
EXHIBIT 4.10(I) (CONTINUED)
AARI CONTRACTS
--------------
Employment Agreements
---------------------
Miscellaneous Agreements
------------------------
<PAGE>
EXHIBIT 4.10(II)
AARI PHYSICIAN CONTRACTS
------------------------
<PAGE>
EXHIBIT 4.11
NONCOMPLIANCE WITH LAWS
-----------------------
<PAGE>
EXHIBIT 4.12
LITIGATION
----------
<PAGE>
EXHIBIT 4.13.1
EMPLOYEE AGREEMENTS
-------------------
The collective bargaining or labor agreements or written employment or
employee related agreements entered into with or for the benefit of present or
former employees of AARI areas are as follows:
<PAGE>
EXHIBIT 4.13.2
EMPLOYEE BENEFIT PLANS
----------------------
<PAGE>
EXHIBIT 4.13.3
DEFINED BENEFIT PLANS
---------------------
<PAGE>
EXHIBIT 4.14
LIABILITIES
-----------
<PAGE>
EXHIBIT 4.15
INSURANCE
---------
Business Owners Insurance
- -------------------------
Malpractice Insurance
- ---------------------
Health Insurance
- ----------------
<PAGE>
EXHIBIT 4.16
CHANGES SINCE DECEMBER 31, 1995
-------------------------------
Since December 31, 1995, AARI has not experienced any of the changes
identified in Section 4.16 except:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
<PAGE>
EXHIBIT 4.17
CURRENT AND FORMER EMPLOYEES
----------------------------
Names, pay rates and accrued sick leave and vacation benefits of all
current AARI employees and benefits of all former AARI employees who are
entitled to continue to receive benefits:
(See Attached)
<PAGE>
EXHIBIT 4.19
LICENSURE AND PERMITS
---------------------
Licenses of AARI
- ----------------
Licenses of Physicians of AARI
- ------------------------------
Controlled Substances Registration Certificate
- ----------------------------------------------
Business Licenses
- -----------------
Malpractice Suits
- -----------------
<PAGE>
EXHIBIT 4.24
ENCUMBRANCES AND THIRD PARTY APPROVALS
--------------------------------------
Encumbrances created by consummation of Agreement
-------------------------------------------------
Third Party Consents
--------------------
<PAGE>
EXHIBIT 4.25
PERSONAL PROPERTY
-----------------
<PAGE>
EXHIBIT 5.8
CERTIFICATE OF INCORPORATION OF AACA
------------------------------------
