<PAGE>
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: January 26, 1996
VIVRA INCORPORATED
---------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 1-10261 94-3096645
---------------- ------------- --------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Id. No.)
incorporation)
400 Primrose, Suite 200, Burlingame, California 94010
-----------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (415) 348-8200
Item 7. Financial Statements and Exhibits.
---------------------------------
(c) Exhibits.
10.1 Master Merger Agreement among Asthma & Allergy CareAmerica, Inc.;
Vivra Incorporated; Pediatric Allergy Group, a Professional
Association; Jerald M. Duncan, M.D.; Fred T. Grogan, Jr., M.D.;
Jourdan A. Roane, M.D.; Phillip L. Lieberman, M.D., P.C.; Phillip
L. Lieberman, M.D.; George H. Treadwell, III, M.D., P.C.; and
George H. Treadwell, III, M.D.
10.2 Agreement and Plan of Merger among Asthma & Allergy CareAmerica,
Inc.; Vivra Incorporated; and Pediatric Allergy Group, a
Professional Association.
10.3 Agreement and Plan of Merger among Asthma & Allergy CareAmerica,
Inc.; Vivra Incorporated;
-1-
<PAGE>
Phillip L. Lieberman, M.D., P.C.; and Phillip L. Lieberman.
10.4 Agreement and Plan of Merger among Asthma & Allergy CareAmerica,
Inc.; Vivra Incorporated; George H Treadwell, III, M.D., P.C.;
and George H. Treadwell, III.
10.5 Stock Exchange Agreement among Vivra Incorporated; Raj & Jay,
Inc.; Vadakkipalayam Devarajan, M.D.; Chemmale Jayakrishnan,
M.D.; David J. Vial, M.D.; and Martin Ballenger, M.D.
-2-
<PAGE>
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: January 26, 1996
VIVRA INCORPORATED
By /s/ LEANNE M. ZUMWALT
----------------------------------------------
Leanne M. Zumwalt
Executive Vice President
-3-
<PAGE>
EXHIBIT 10.1
MASTER MERGER AGREEMENT
-----------------------
THIS MASTER MERGER AGREEMENT (this "Agreement") is made and entered into as
of January 6, 1996, by and among ASTHMA & ALLERGY CAREAMERICA, INC., a Delaware
corporation ("AACA"); its parent company, VIVRA INCORPORATED, a Delaware
corporation ("VIVRA"), PEDIATRIC ALLERGY GROUP, A PROFESSIONAL ASSOCIATION, a
Tennessee professional corporation ("PAG"); PAG's shareholders, JERALD M.
DUNCAN, M.D., an individual resident of Tennessee ("Duncan"), FRED T. GROGAN,
JR., M.D., an individual resident of Tennessee ("Grogan") and JOURDAN A. ROANE,
M.D., an individual resident of Tennessee ("Roane") (with Duncan, Grogan and
Roane being collectively referred to herein as the "PAG Physicians"), PHILLIP
L. LIEBERMAN, M.D., P.C., a Tennessee professional corporation ("PLL"); PLL's
shareholder, PHILLIP L. LIEBERMAN, M.D., an individual resident of Tennessee
("Lieberman"); GEORGE H. TREADWELL, III, M.D., P.C., a Tennessee professional
corporation ("GHT"); and GHT's shareholder, GEORGE H. TREADWELL, III, M.D., an
individual resident of Tennessee ("Treadwell") (with the PAG Physicians,
Lieberman and Treadwell being collectively referred to as the "Physicians").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, PAG owns and operates a pediatric allergy practice with its
principal office located at Suite Seven, 300 South Walnut Bend, Cordova,
Tennessee 28018-7211, together with any satellite locations in the Memphis,
Tennessee area (collectively the "PAG Business");
WHEREAS, the PAG Physicians own all of the outstanding stock of PAG;
WHEREAS, PLL owns and operates an allergy practice with its principal
office located at Suite Six, 300 South Walnut Bend Road, Cordova, Tennessee
28018-7211, together with any satellite locations in the Memphis, Tennessee area
(collectively the "PLL Business");
WHEREAS, Lieberman owns all of the outstanding stock of PLL;
WHEREAS, GHT owns and operates an allergy practice with its principal
office located at Suite Six, 300 South Walnut Bend Road, Cordova, Tennessee
28018-7211, together with any satellite locations in the Memphis, Tennessee area
(collectively the "GHT Business");
<PAGE>
WHEREAS, Treadwell owns all of the outstanding stock of GHT;
WHEREAS, the parties desire to effect three mergers (the "Mergers") to
merge simultaneously PAG, PLL and GHT (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.
-----------
1.1 AGREEMENT TO MERGE. On the terms, subject to the conditions, and for
------------------
the consideration stated herein and in that certain Agreement and Plan of Merger
of even date by and among AACA, PAG and the PAG Physicians (the "PAG Merger
Agreement"), in that certain Agreement and Plan of Merger of even date by and
among AACA, PLL, and Lieberman (the "PLL Merger Agreement"), and in that certain
Agreement and Plan of Merger of even date by and among AACA, GHT and Treadwell
(the "GHT Merger Agreement") (with the PAG Merger Agreement, the PLL Merger
Agreement, and the GHT 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),
-------------------------
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 Tennessee
Professional Corporation Act and the Tennessee Business Corporation Act at the
time and date contemplated in the
-2-
<PAGE>
Merger Agreements (such time being referred to as the "Effective Time").
SECTION 2. THE CLOSING.
-----------
2.1 CLOSING AND CLOSING DATE. The Closing (the "Closing") of the Mergers
------------------------
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
January 5, 1996, at 11:00 a.m. C.S.T., at the offices of The Bogatin Law Firm,
860 Ridge Lake Boulevard, Suite 360, Memphis, Tennessee, 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
---------------------
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.
SECTION 3. CONDITIONS OF CLOSING.
---------------------
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 Tennessee professional corporation
------------------------
("Newco") shall have been formed.
3.2 PRACTICE OPERATING AGREEMENT. At the Closing, each of the Physicians,
----------------------------
AACA, Newco and Newco's sole shareholder 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
---------------------
Newco shall enter into an Individual Employment Agreement by and among the
Physician and Newco as the parties thereto, which agreement shall supersede any
prior employment agreements of such Physician.
-3-
<PAGE>
3.4 MANAGEMENT SERVICES AGREEMENT. At the Closing, Newco and AACA shall
-----------------------------
enter into a Management Services Agreement by and between Newco and AACA as the
parties thereto.
3.5 LEGAL OPINION. Bass, Berry & Sims shall have 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 Tennessee law.
SECTION 4. MISCELLANEOUS.
-------------
4.1 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 PAG Shareholders in the case of PAG or any
of the PAG Shareholders, by Lieberman in the case of PLL or Lieberman, by
Treadwell in the case of GHT or Treadwell, and by AACA in the case of AACA and
Newco.
4.2 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.
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: Phillip L. Lieberman, M.D.
George Treadwell, III, M.D.
Suite 6, 300 Walnut Bend Road
Cordova, Tennessee 38018
Jerald M. Duncan, M.D.
Fred T. Grogan, Jr., M.D.
Jourdan A. Roane, M.D.
Suite 7, 300 Walnut Bend Road
Cordova, Tennessee 38018
-4-
<PAGE>
with a copy to: Susan Callison, Esq.
The Bogatin Law Firm
860 Ridge Lake Boulevard
Suite 360
Memphis, Tennessee 38120
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
----------------
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
-------------
be governed by the laws of the State of Tennessee, except insofar as this
Agreement may specify that the laws of Delaware may apply to the Merger.
4.5 ARBITRATION.
-----------
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
-5-
<PAGE>
selected by PAG, one selected by AACA, and one who shall be appointed by the
first two arbitrators), who shall be located in the State of Tennessee, 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 the State of Tennessee
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.
4.5.7 This arbitration section and all decisions of the arbitrator
shall be specifically enforceable in a court of law, or in the arbitral
tribunal.
4.6 SECTION HEADINGS. The Section headings are for reference only and
----------------
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
------
exercising any right hereunder shall operate as a waiver of such right or any
other right under this Agreement.
-6-
<PAGE>
4.8 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 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,
----------
signed by the parties hereto.
4.10 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.
4.11 ATTORNEYS' FEES. In the event that a suit, action, arbitration, or
---------------
other proceeding of any nature whatsoever, including, without limitation, any
proceeding under the U.S. Bankruptcy Code and involving issues peculiar to
federal bankruptcy law, any action seeking a declaration of rights or any action
for rescission, is instituted to interpret or enforce this Agreement or any
provision of this Agreement, the prevailing party shall be entitled to recover
from the losing party the prevailing party's reasonable attorneys', paralegals',
accountants', and other experts' professional fees and all other fees, costs,
and expenses actually incurred and reasonably necessary in connection therewith,
as determined by the judge or arbitrator at trial or other proceeding, or on any
appeal or review, in addition to all other amounts provided by law.
4.12 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.
4.13 TIME. Time is of the essence of this Agreement.
----
-7-
<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
By:
--------------------------------
Title:
--------------------------
VIVRA INCORPORATED, a Delaware
corporation ("VIVRA")
By:
--------------------------------
Title:
--------------------------
PEDIATRIC ALLERGY GROUP, A PROFESSIONAL
ASSOCIATION, a
Tennessee professional corporation
By:
--------------------------------
Title:
--------------------------
_____________________________________
JERALD M. DUNCAN, M.D., an individual
resident of Tennessee
_____________________________________
FRED T. GROGAN, JR., M.D., an
individual resident of Tennessee
_____________________________________
JOURDAN A. ROANE, M.D., an individual
resident of Tennessee
[Signatures continued on following page]
<PAGE>
PHILLIP L. LIEBERMAN, M.D., P.C., a
Tennessee professional corporation
By:
--------------------------------
Title:
--------------------------
_____________________________________
PHILLIP L. LIEBERMAN, M.D., an
individual resident of Tennessee
[Signatures continued on following page]
<PAGE>
GEORGE H. TREADWELL, III, M.D., P.C.,
a Tennessee professional corporation
By:
--------------------------------
Title:
--------------------------
___________________________________
GEORGE H. TREADWELL, III, M.D., an
individual resident of Tennessee
<PAGE>
EXHIBIT 10.2
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of January ____, 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); PEDIATRIC ALLERGY GROUP, A
PROFESSIONAL ASSOCIATION, a Tennessee professional corporation ("PAG"); and
PAG's shareholders, Fred T. Grogan, Jr., M.D., an individual resident of
Tennessee ("Grogan"), Jourdan A. Roane, M.D., an individual resident of
Tennessee ("Roane"), and Jerald M. Duncan, M.D., an individual resident of
Tennessee ("Duncan") (with Grogan, Roane and Duncan being collectively referred
to herein as the "PAG Physicians").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, PAG owns and operates a pediatric allergy practice with its
principal office location located at Suite 7, 300 South Walnut Bend, Cordova,
Tennessee 28018-7211, together with its satellite locations in the Memphis,
Tennessee area (collectively the "Business");
WHEREAS, the PAG Physicians own all of the outstanding stock of PAG;
WHEREAS, the parties desire to merge PAG 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, PAG and the PAG Physicians have entered into that certain Master
Merger Agreement of even date with AACA, Phillip L. Lieberman, M.D., P.C.
("PLL"), Phillip L. Lieberman, M.D. ("Lieberman"), George H. Treadwell, III,
M.D., P.C. ("GHT") and George H. Treadwell, III, M.D. ("Treadwell") which
contemplates that PLL and GHT will merge into AACA at the same time that PAG
merges into AACA;
<PAGE>
WHEREAS, the merger of PAG into AACA is subject to the simultaneous
consummation of the mergers of PLL and GHT into AACA;
WHEREAS, the PAG Physicians, Lieberman and Treadwell wish for there to be
formed a new Tennessee professional corporation "Newco") through which to
practice medicine; and
WHEREAS, the parties wish for the PAG Physicians, Lieberman, Treadwell,
Newco and AACA to enter into certain agreements as conditions precedent to the
consummation of the merger of PAG 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 PAG
shall be merged with and into AACA, with AACA being the surviving corporation
(the "Surviving Corporation"). The merger of PAG 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 PAG 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 Tennessee Professional
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 Tennessee 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
--------------
Tennessee Business Corporation Act, AACA and PAG 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
-2-
<PAGE>
the provisions of the Plan of Merger and the provisions of this Agreement, the
provisions of this Agreement shall prevail.
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 PAG (the "PAG Common
Stock") prior to the Effective Time of the Merger (other than such shares held
by PAG 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 $1,813,116 (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 January 3, 1995 (said
average price being referred to herein as the "Closing Price"). Each share of
PAG Common Stock held in the treasury of PAG 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 PAG Physicians as set forth in Exhibit 2.4
-----------
hereof. Fractional shares may be paid in cash.
-3-
<PAGE>
(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 PAG Common
Stock shall have been increased, decreased, changed into or exchanged for a
different number or kind of shares through a recapitalization, reclassifi-
cation, 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 PAG Physicians, jointly and severally,
shall surrender their certificates representing all of the PAG 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 PAG's "Net Assets"
(as hereinafter defined) as of the Effective Time shall be at least $197,195
(the "Agreed Amount"). To the extent that PAG's Net Assets as of the Effective
Time shall exceed the Agreed Amount, then the PAG 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
PAG's Net Assets as of the Effective Time shall be less than the Agreed Amount,
then AACA shall be entitled to receive from the PAG 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 PAG 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 PAG's "Accounts Receivable" (as hereinafter defined) as of the
Effective Time, plus (ii) the value of PAG's fixed assets which, for purposes of
this calculation, shall be deemed to be $133,691.00, plus (iii) cash and cash
equivalents (including Federal income and Tennessee 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 PAG 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
PAG 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
-4-
<PAGE>
pay patients, private insurance payers, third party payers or from governmental
programs, but not including accounts previously written off by PAG, and not
including any accounts receivable for which there is an unposted cash receipt as
of the Effective Time, (y) multiplied times seventy-five percent (75%), which
represents an agreed-upon 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 PAG as of the
Effective Time for accrued sick leave and vacation pay of employees of PAG as of
the Effective Time and including all liabilities for supplies, inventory and
other goods ordered by PAG 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 PAG's December 31 balance sheet (the "Interim Balance
Sheet"). Such initial calculation shall be set forth on a schedule delivered by
the PAG 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 PAG
Physicians, within sixty (60) days after the Effective Time, a balance sheet of
PAG 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 PAG Physicians
dispute any of the Post-Closing Adjustments proposed by AACA or the accuracy of
the Closing Balance Sheet, the PAG 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 PAG 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
-5-
<PAGE>
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 PAG Physicians and AACA. Each of AACA
and the PAG Physicians jointly shall pay one-half (1/2) of the reasonable fees
and expenses of the engagement of the Accountants.
(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 PAG Physicians will
--------------------------------------
hold their shares of VIVRA Common Stock for the required period from the date of
issuance until April 1, 1996, or until the date on which the combined financial
statements of AACA and PAG 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 interest.
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
or before January 6, 1996, at 11:00 a.m. EST, at the offices of The Bogatin Law
Firm, 860 Ridge lake Blvd., Suite 360, Memphis, Tennessee 38120, 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 PAG, 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 PAG
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 PAG and the PAG Physicians;
(iii) Resolutions of the Board of Directors of AACA, certified by an
appropriate officer, authorizing the execution, delivery and
performance of this Agreement,
-6-
<PAGE>
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 PAG Physicians, the Determined Amount 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 PAG Physician's pro rata portion
--- ----
of the escrowed shares, and (2) one, which shall be delivered
directly to each PAG Physician, representing his pro rata portion of
--- ----
the Determined Amount less his pro rata portion of the escrowed
--- ----
shares.
3.3 ACTION BY PAG AND THE PAG PHYSICIANS. Upon the terms and subject to
------------------------------------
the conditions herein contained, at the Closing on the Closing Date, the PAG
Physicians and PAG will deliver to AACA the following:
(i) The certificate referred to in Section 10.1 hereof;
(ii) The opinion of counsel for the PAG Physicians and PAG in form and
substance satisfactory to AACA;
(iii) Resolutions of the shareholders and the Board of Directors of PAG
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 PAG 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 Roane, Duncan, Grogan and AACA
in substantially the form attached hereto as Exhibit 3.4(i); and
--------------
-7-
<PAGE>
(ii) the "Escrow Agreement" between the PAG 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 PAG for the
current year and for the three years prior to the current year. The PAG
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
AACA. AACA will pay the cost of the audits required by AACA under this
Agreement.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PAG AND THE PAG PHYSICIANS.
------------------------------------------------------------
PAG and the PAG Physicians, jointly and severally, hereby represent,
warrant, covenant and agree to and with AACA, as follows.
4.1 PAG'S EXISTENCE AND POWER. PAG is a professional association duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Tennessee. Neither the nature of its business as now conducted nor the
character or location of its properties require qualification by PAG to do
business in any other jurisdiction except for the states listed on Exhibit 4.1
-----------
in which PAG is duly qualified to do business. PAG has the corporate power to
own its property and to carry on its business as now being conducted. PAG 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 PAG are attached hereto
on Exhibit 4.2.
-----------
4.3 PAG STOCK. PAG's authorized capital stock consists solely of 2,000
---------
shares of common stock authorized, of which 100 shares are issued (and
outstanding) to Grogan, 100 shares are issued (and outstanding) to Roane, and
100 shares are issued (and outstanding) to Duncan, as reflected on Exhibit 4.3
-----------
attached hereto. All such outstanding shares of capital stock of PAG 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 PAG to issue any shares of stock or other
securities of PAG, 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 PAG. No shares of PAG's
-8-
<PAGE>
capital stock have been issued in violation of any federal or state securities
law. There have been no transactions involving the equity interests of PAG
since October 31, 1995.
4.4 OWNERSHIP OF PAG. The PAG Physicians are, and will be at the Closing
----------------
and the Effective Time, owners of all of the issued and outstanding stock of
PAG, 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 as "Encumbrances") whatsoever. The PAG
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 PAG Physicians will not violate any
agreement to which either they or PAG is a party or any agreement affecting the
PAG Common Stock.
4.5 INSIDER TRANSACTIONS. Except as disclosed in Exhibit 4.5 hereto,
-------------------- -----------
PAG is not, directly or indirectly, a party to any contract, lease or commitment
with any officer or director of PAG 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. PAG is autonomous and has not ever been a
----------------------
subsidiary of any other corporation. PAG 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 PAG Physicians have delivered
--------------------------------
to AACA as Exhibit 4.7 a copy of the financial statements of PAG for the years
-----------
ended December 31, 1992, 1993 and 1994 and for the ten-month period ended
October 31, 1995 (the "PAG Financial Statements"). The PAG 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
PAG as of the respective dates thereof, except as disclosed on Exhibit 4.7. PAG
-----------
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 PAG), for any
-9-
<PAGE>
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 PAG and
used in the Business. All tangible personal property, equipment,
vehicles, furnishings, and fixtures included within the assets of
PAG or required to be used in the ordinary course of its business
are 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 PAG in the Business and
which is either not owned by PAG or is leased or rented by PAG.
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, PAG 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 PAG 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 PAG's assets that arose in connection with any failure (or
alleged failure) to pay any Taxes. PAG 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 PAG correctly reflected all facts regarding the income,
business, assets, operations, activities and status of PAG and all other
information required to be shown thereon. PAG has complied
-10-
<PAGE>
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 PAG 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. PAG 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 PAG. No
property of PAG is property that PAG 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. PAG is not required to include in income any adjustment pursuant to
Section 481(a) of the Code by reason of a voluntary change in accounting method
initiated by PAG, nor does PAG, nor any of the PAG 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 PAG Real and Personal Property Leases PAG 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 PAG and therefore no withholding
of tax pursuant to Section 1445 of the Code is required. PAG is not a United
States Real Property Holding Corporation as defined in Section 897 of the Code.
PAG 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 PAG with respect to any liability for Taxes for any year.
4.10 CONTRACTS.
---------
4.10.1. PAG contracts and PAG Physicians Contracts. Exhibit 4.10(i)
------------------------------------------ ---------------
is a list of all agreements of PAG (the "PAG Contracts") and Exhibit 4.10(ii) is
----------------
a list of all agreements of each PAG Physician with respect to PAG (the "PAG
Physician Contracts"). Except as set forth in Exhibits 4.10(i) and 4.10 (ii)
------------------------------
hereto, neither PAG nor any of the PAG Physicians with respect to PAG,
respectively, is a party to any material contract, agreement, lease, or power of
attorney of any kind with respect to the Business. As to PAG, except as noted
on Exhibit 4.10(i), all PAG Contracts, and as to the PAG Physicians, all PAG
---------------
Physician Contracts, are valid and are in full force and effect according to
-11-
<PAGE>
their material terms, and no material default by PAG or the PAG Physician or
Physicians, as the case may be, exists under any such contract, lease or
agreement and (to the best of the PAG Physicians' and PAG's knowledge) 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.
To the knowledge of PAG, with respect to all PAG Contracts and, to the knowledge
of the PAG Physicians, with respect to the PAG Physician Contracts, all PAG
Contracts and all PAG 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 PAG Contracts and all PAG Physician Contracts are enforceable
in accordance with their respective terms by PAG or the PAG 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).
4.10.2. Neither the execution, the delivery, nor the performance of
this Agreement by PAG and the PAG Physicians will cause any default in or breach
of any provision of the PAG Charter, as amended, the PAG bylaws or any agreement
or commitment to which PAG is a party or by which PAG or the PAG Physicians are
bound, and none of such actions will result in either acceleration, or any
similar right of any other party, under any PAG Contract or PAG Physician
Contract, or constitute a default under any PAG Contract or PAG Physician
Contract, or result in the creation or imposition of any Encumbrance against any
of the assets of PAG. With respect to the PAG Physician Contracts, all accounts
receivable with respect to each PAG Physician's performance of each such
contract has been assigned to PAG and, with respect to future performances by
each such PAG Physician, the accounts receivable therefrom shall be assigned to
Newco pursuant to such PAG Physician's Individual Employment with Newco.
4.11 COMPLIANCE WITH LAWS. Except as described in Exhibit 4.11, to the
-------------------- ------------
best of each of the PAG Physician's knowledge, PAG 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.
-12-
<PAGE>
4.12 LITIGATION. Except as described in Exhibit 4.12 hereof, there is no
---------- ------------
litigation, action, suit, proceeding or governmental investigation pending or
(to the best of the PAG Physicians' or PAG's knowledge) threatened against PAG
or affecting PAG 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 does any PAG Physician nor PAG know of any reasonable
basis for any such litigation, action, suit, proceeding or investigation. None
of the PAG Physicians nor PAG 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, PAG 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 PAG or any
other like agreement, plan or policy.
4.13.2 All PAG plans, funds, programs, agreements, arrangements,
commitments or policies (collectively, the "Plans") which: (i) are or have ever
been maintained or participated in by PAG and which are currently in effect or
as to which PAG has any 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. PAG
--------------
has provided copies of all Plans to AACA.
4.13.3 Except as set forth on Exhibit 4.13.3, PAG 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)).
4.13.4 WITH RESPECT TO EACH PLAN:
(i) Such Plan is, and at all times has been, operated and
administered substantially in compliance with the requirements of all applicable
statutes, orders or governmental rules or regulations currently in effect
including, without limitation, ERISA and the Code.
-13-
<PAGE>
(ii) No prohibited transaction (as defined in ERISA Section 406 or
Code Section 4975) has occurred in connection with which PAG or any fiduciary of
such Plan is or could be subject to a civil penalty pursuant to ERISA Section
502, a tax imposed by Code Section 4975 or liability for a breach of fiduciary
responsibility under ERISA.
(iii) No action, suit, grievance, arbitration or other manner of
litigation or claim with respect to such Plan or its assets (other than routine
claims for benefits made in the ordinary course of administration of such Plan)
is pending or, to the knowledge of PAG or any of the PAG Physicians, threatened
against or with respect to such Plan, PAG or any fiduciary (as defined in ERISA
Section 3(21)) of such Plan. To the knowledge of PAG and the PAG Physicians,
there is no basis for any such claim.
(iv) If such Plan provides medical benefits to any present or
former employee of PAG, such Plan has been operated in compliance with ERISA
Sections 601 through 609 and either Code Section 162(i)(2) and (k) and the
regulations promulgated thereunder (prior to 1989) or Code Section 4980B and the
regulations promulgated thereunder (after 1988).
(v) There has been no failure to file on a timely basis any
report or return required to be filed by law with respect to such Plan. All
disclosures required by law to be made to participants in such Plan have been
made on a timely basis.
(vi) No representation or communication with respect to
participation, eligibility for benefits, vesting, benefit accrual or coverage
under such Plan has been made by PAG or any trustee, fiduciary, officer,
director, employee or other agent of PAG to any of its employees or their
beneficiaries which (A) is not in accordance with the terms of such Plan and (B)
could have material adverse economic consequences to PAG or such Plan.
(vii) Such Plan has been operated in accordance with such
provisions, if any, of the Code as may be applicable to obtain the federal
income tax consequences intended for such Plan.
4.13.5 Each Plan which is a "pension plan" (as defined in ERISA
Section 3(2)) and its related trust, if any, are qualified under Code Section
401(a) and exempt from tax under Code Section 501(a) and have been determined by
the Internal Revenue Service to be so qualified. Nothing has occurred since the
most recent such determination which has or could adversely affect the qualified
status of such Plan or the tax exempt status of its related trust.
-14-
<PAGE>
4.14 LIABILITIES. All liabilities and obligations of PAG direct,
-----------
indirect or contingent, are either listed in the PAG Financial Statements or on
Exhibit 4.14 attached hereto.
- ------------
4.15 INSURANCE. All insurance maintained by PAG is listed and described
---------
on Exhibit 4.15 attached hereto. Except as identified on Exhibit 4.15, PAG 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 October 31, 1995, PAG 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 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
-15-
<PAGE>
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 PAG
--------- ------------
employees and former PAG employees who are eligible to continue to receive
benefits by virtue of their former employment by PAG (including, as applicable,
their rates of pay, accrued sick leave, vacation and other benefits).
4.18 AUTHORITY. PAG 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) PAG relating to the operation of its business and (ii) the
PAG Physicians. Except for the licenses of PAG and the PAG Physicians listed in
Exhibit 4.19, there are no other licenses or permits required for PAG and the
- ------------
PAG 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 PAG Physicians nor PAG
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 PAG Physicians nor PAG have been the subject of a malpractice suit.
To the knowledge of the PAG Physicians and PAG 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 PAG.
4.20 NO FINDERS OR BROKERS. None of the PAG Physicians nor PAG, nor any
---------------------
officer or director thereof, has engaged any finder or
-16-
<PAGE>
broker in connection with the transactions contemplated hereunder. The PAG
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 PAG Physicians or PAG.
4.21 DISCLOSURE. No representation or warranty by the PAG Physicians or
----------
PAG in this Agreement and no statement pertaining to the PAG Physicians or PAG
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 PAG Physicians or PAG not described herein which would adversely affect
the future operations of PAG.
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 PAG Physicians or PAG in connection herewith, will constitute the valid
and binding obligation of the PAG Physicians and PAG, 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, PAG 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 delivery of this
------------
Agreement by the PAG Physicians and PAG, 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 PAG 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 PAG (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
-17-
<PAGE>
and delivered or services performed subject to customary discounts or other
adjustments by third parties. An aged listing of the Accounts Receivable of PAG
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 PAG Physician has had access to and each PAG 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 year ended November 30, 1994; (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 Form 8-K dated August 16, 1995 and
December 21, 1995; and (viii) such other information as the PAG Physicians have
reasonably requested.
4.26.2 INVESTMENT EXPERIENCE. Each PAG Physician represents that
---------------------
such PAG Physician is experienced in evaluating and investing in securities and
acknowledges that such PAG Physician is able to fend for himself, can bear the
economic risk of such PAG Physician's investment, and has such knowledge and
experience in financial and business matters that such PAG 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 PAG and the PAG
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 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 State of Tennessee, 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
-18-
<PAGE>
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 PAG 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.
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.
-19-
<PAGE>
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 PAG and to the PAG
-----------
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 PAG Physicians or PAG 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.
-20-
<PAGE>
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 PAG
and the PAG 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, 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
-21-
<PAGE>
delivered to PAG and the PAG 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 PAG and PAG Physicians with complete and accurate
information as to VIVRA and the VIVRA Common Stock. Except as described in the
5.4 Registration Statement and other materials delivered by VIVRA under cover
dated December 13, 1995, and December 30, 1995, 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 satisfy the conditions precedent specified
herein.
7.2 HANDLING OF DOCUMENTS. Until the Closing, AACA shall keep
---------------------
confidential all information provided by PAG or the PAG 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 PAG's employees,
----------
except the PAG 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 PAG
employees terminated as a result of the merger of PAG into AACA.
-22-
<PAGE>
7.4 COMPENSATION. AACA reserves the right in the future to raise
------------
salaries of PAG's former employees consistent with the policies and standards
governing AACA employees generally. AACA will credit each former PAG employee
hired by AACA with his or her service anniversary with PAG 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 PAG
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 PAG PHYSICIANS AND PAG.
---------------------------------------
8.1 ACCESS AND INFORMATION. The PAG Physicians and PAG 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 PAG 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.
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, PAG
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 PAG and the PAG Physicians at the Closing shall
have been satisfied. PAG shall, consistent with conducting its business in
accordance with reasonable business judgment, preserve its business intact; use
its best efforts to keep available to PAG the services of its present employees
(except those dismissed by PAG or those who voluntarily discontinue their
employment); and preserve for AACA the goodwill of the suppliers, patients and
others having business relations with PAG.
-23-
<PAGE>
8.3 BEST EFFORTS TO SECURE CONSENTS AND APPROVALS. The PAG Physicians
---------------------------------------------
and PAG 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 PAG
Physicians and PAG to carry out the transactions contemplated by this Agreement
and to satisfy the conditions precedent specified herein. Each PAG Physician
will use his best efforts to have all PAG Physician Contracts of such PAG
Physician continue in effect with respect to such PAG Physician as an employee
of Newco following the Effective Time.
SECTION 9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PAG PHYSICIANS AND
-----------------------------------------------------------------
PAG.
- ---
All obligations of the PAG Physicians and PAG 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 PAG 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 PAG 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, 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 PAG
Physicians which seek to, or would, render it unlawful as of the Closing to
effect the
-24-
<PAGE>
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 PAG
Physicians and PAG 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 PAG Physicians and PAG 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 PAG Physicians and
PAG 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 PAG Physicians and PAG prior to or at the Closing; and AACA shall be
furnished with a certificate of the PAG 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
-25-
<PAGE>
received from or threatened by any governmental department or agency.
10.3 CONSENTS AND APPROVALS. Each of the parties to any PAG 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 PAG; and PAG 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 PAG 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 therein.
10.9 TERMINATION OF PLANS. As of the Closing Date, PAG shall have
--------------------
terminated all of its Plans by action of its board of directors and, where
required by law, by notice to the participants in the Plans. However, as of the
Closing Date, PAG as the Plan Sponsor of the "Pediatric Allergy Group Employees'
Retirement Plan and Trust" and of the "Pediatric Allergy Group Employees' Money
Purchase Pension Plan and Trust (the "Qualified Plans"), remains responsible for
the following matters with respect to the Qualified Plan, which responsibilities
will devolve upon AACA, and the costs
-26-
<PAGE>
of carrying out such responsibilities shall be Physician Expenses as defined in
the Management Services Agreement:
(i) filing with respect to each Qualified Plan on or before July 31,
1996 a federal information return (form 5500C/R) for the plan year
ended December 31, 1995;
(ii) effecting terminating distributions to all participants of the
Qualified Plans from their trusts;
(iii) filing with respect to each Qualified Plan on or before the last day
of the seventh month following the terminating distributions a final
federal information return (Form 5500 C/R) for the final short plan
year; and
(iv) reporting all distributions to the Internal Revenue Service and to
the participants under forms 1099-R on or before January 31, 1997.
Notwithstanding the foregoing, the PAG Physicians, acknowledging that it is
their intent to remain solely liable for the Qualified Plans, shall remain and
continue to be liable for any and all claims, losses and damages that are
connected with or result or arise from the Qualified Plans.
SECTION 11. TERMINATION.
-----------
AACA on the one hand, or PAG and the PAG Physicians on the other hand, may
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) 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 PAG PHYSICIANS. The PAG 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:
-27-
<PAGE>
(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 PAG Physicians or PAG
contained in or made pursuant to this Agreement or in other
agreements executed by the PAG Physicians or PAG 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 under any
------------
employee benefit or welfare plan or regarding withholding taxes owed
to or with respect to any employee or independent contractor of PAG
accruing prior to the date of Closing;
(iii) liabilities and obligations of the PAG Physicians or PAG for any
breach or violation, as of the date of Closing, of any PAG Physician
Contracts or PAG Contracts;
(iv) liabilities and obligations of the PAG Physicians or PAG 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 PAG Physicians or PAG accruing at
or before the date of Closing for violations of law;
(vi) any liability of the PAG Physicians or PAG with respect to a breach
of this Agreement;
-28-
<PAGE>
(vii) any liability or obligation to Medicare, Medicaid, Blue Cross/Blue
Shield (or any other third party payor) as a result of recapture of
amounts paid by any such payor to the PAG Physicians or PAG or any
overpayments made by such payor to the PAG Physicians or PAG or any
disallowance of any claim of the PAG Physicians or Seller;
(viii) any tort liability, products liability or malpractice liability of
the PAG Physicians or PAG accruing at or before the date of Closing;
(ix) liabilities and obligations of the PAG Physicians or PAG incurred in
connection with the preparation of this Agreement and the
consummation of transaction contemplated hereby, including, without
limitation, legal and accounting fees;
(x) any liability of PAG which is not reflected in the PAG Financial
Statements referred to in Section 4.7 hereof or in Exhibit 4.14
------------
hereto (other than liabilities arising in the ordinary course of
business prior to the Effective Time of the Merger under the PAG
Contracts); and
(xi) any liability whatsoever, of PAG, the PAG 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.
12.3 JOINT AND SEVERAL LIABILITY OF PAG PHYSICIANS. The PAG 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 PAG
Physician's malpractice, (ii) each PAG Physician's violations of law or, (iii)
each PAG physician's violation of any PAG Physician Contract, for which each PAG
Physician shall remain severally liable only.
12.4 PAYMENT FOR AACA INDEMNIFIABLE LOSSES. The PAG 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 PAG Physicians, in writing, of such claim or action,
and at the PAG 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
-29-
<PAGE>
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 PAG
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 PAG 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 PAG 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 PAG 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 PAG Physicians or demand payment therefor from the PAG
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 PAG Physicians from and against the following, any one of which shall be
defined to be a "PAG 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 PAG Physicians arising from any failure by AACA to satisfy any obligation
under the non-PAG Physician PAG 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
-30-
<PAGE>
amounts paid in settlement of any such claim) relating to any of the foregoing.
12.6 PAYMENT FOR PAG INDEMNIFIABLE LOSSES. AACA shall pay the PAG
------------------------------------
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 PAG Physicians which, if successful,
might result in a claim for a PAG indemnifiable loss, the PAG 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 PAG 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 PAG Physicians may defend any such claim or action
and the PAG 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 PAG Physicians in the defense of any such claim or action.
If the PAG Physicians suffer a PAG indemnifiable loss directly (not as a
result of a third party claim or action) the PAG 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 parties set
--------
forth in this Agreement shall expire three (3) years after the Effective Time
except that the representations and warranties of the PAG Physicians as to tax
and ERISA matters shall survive for seven (7) years after the Effective Time and
except that there shall be no limitation as to the survival of the
representations and warranties of the parties contained in Sections 4.3, 4.4,
4.18. 4.22, 5.2, 5.4, 6.2, and 6.3.
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
-31-
<PAGE>
by the PAG Physicians in the case of PAG or any of the PAG 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 PAG or the Pediatric Allergy Group, P.A.
PAG Physicians: Fred T. Grogan, Jr., M.D.
Jourdan A. Roane, M.D.
Jerald M. Duncan, M.D.
300 South Walnut Bend
Cordova, Tennessee 28018-7211
with a copy to: Susan Callison, Esq.
The Bogatin Law Firm
860 Ridge Lake Boulevard
Suite 360
Memphis, Tennessee 38120
or to such other address as AACA or the PAG 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.
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
-32-
<PAGE>
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 State of
Tennessee, 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 PAG on the accrual method of accounting shall
be taken into account by AACA and VIVRA and not by PAG or the PAG 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 PAG, one selected by
AACA, and one who shall be appointed by the first two arbitrators), who shall be
located in the State of Tennessee, 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 discovery.
-33-
<PAGE>
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 the State of
Tennessee 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.
13.5.7 This arbitration section and all decisions of the arbitrator
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
-34-
<PAGE>
disclosed hereunder shall be deemed disclosed only in connection with the
specific representation to which they are explicitly 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. In the event that a suit, action, arbitration, or
---------------
other proceeding of any nature whatsoever, including, without limitation, any
proceeding under the U.S. Bankruptcy Code and involving issues peculiar to
federal bankruptcy law, any action seeking a declaration of rights or any action
for rescission, is instituted to interpret or enforce this Agreement or any
provision of this Agreement, the prevailing party shall be entitled to recover
from the losing party the prevailing party's reasonable attorneys', paralegals',
accountants', and other experts' professional fees and all other fees, costs,
and expenses actually incurred and reasonably necessary in connection therewith,
as determined by the judge or arbitrator at trial or other proceeding, or on any
appeal or review, in addition to all other amounts provided by law.
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, PAG Physicians and AACA
------------------
will, at the request of the other, execute and deliver such other instruments or
assignment, transfer and
-35-
<PAGE>
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 PAG's rights under any PAG 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, PAG Physicians will
cooperate with AACA in any reasonable arrangement that is designed to provide
for AACA the benefit of such asset, but PAG Physicians will not be obligated to
replace such asset with one of equal value or otherwise assume additional
material liability not contemplated in this Agreement.
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:
--------------------------
PEDIATRIC ALLERGY GROUP, A
PROFESSIONAL ASSOCIATION, a Tennessee
professional corporation ("PAG")
By:
--------------------------------
Title:
--------------------------
_____________________________________
FRED T. GROGAN, JR., M.D., an
individual resident of Tennessee
("Grogan")
_____________________________________
JOURDAN A. ROANE, M.D., an individual
resident of Tennessee ("Roane")
_____________________________________
JERALD M. DUNCAN, M.D., an individual
resident of Tennessee ("Duncan")
-36-
<PAGE>
EXHIBIT 10.3
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of January ____, 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); PHILLIP L. LIEBERMAN, M.D., P.C., a
Tennessee professional corporation ("PLL") and PHILLIP L. LIEBERMAN
("Lieberman").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, PLL owns and operates a pediatric allergy practice with its
principal office location located at ______________________ together with its
satellite locations in the Memphis, Tennessee area (collectively the
"Business");
WHEREAS, Lieberman owns all of the outstanding stock of PLL;
WHEREAS, the parties desire to merge PLL 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, PLL and Lieberman have entered into that certain Master Merger
Agreement of even date with AACA; Lieberman; PLL; George H. Treadwell, M.D.,
P.C. ("GHT"); George H. Treadwell, M.D. ("Treadwell"); Pediatric Allergy Group,
a Professional Association, a Tennessee professional corporation ("PAG"); PAG's
shareholders, Jerald M. Duncan, M.D., an individual resident of Tennessee
<PAGE>
("Duncan"), Fred T. Grogan, Jr., M.D., an individual resident of Tennessee
("Grogan") and Jourdan A. Roane, M.D., an individual resident of Tennessee
("Roane") (with Duncan, Grogan and Roane being collectively referred to herein
as the "PAG Physicians"), which contemplates that GHT and PAG will merge into
AACA at the same time that PLL merges into AACA;
WHEREAS, the merger of PLL into AACA is subject to the simultaneous
consummation of the mergers of PLL and PAG into AACA;
WHEREAS, the PAG Physicians, Lieberman and Lieberman wish for there to be
formed a new Tennessee professional corporation "Newco") through which to
practice medicine; and
WHEREAS, the parties wish for the PAG Physicians, Lieberman, Lieberman,
Newco and AACA to enter into certain agreements as conditions precedent to the
consummation of the merger of PLL 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 PLL
shall be merged with and into AACA, with AACA being the surviving corporation
(the "Surviving Corporation"). The merger of PLL 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 PLL 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 Tennessee Professional
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 Tennessee 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
-2-
<PAGE>
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
--------------
Tennessee Business Corporation Act, AACA and PLL 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.
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 PLL (the "PLL Common
Stock") prior to the Effective Time of the Merger (other than such shares held
by PLL 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 $1,765,330 (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 January 3, 1995 (said
average price being referred to herein as the "Closing Price"). Each share of
PLL Common Stock held in the treasury of PLL upon the Effective Time of the
Merger shall be cancelled, and
-3-
<PAGE>
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 Lieberman 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 PLL Common
Stock shall have been increased, decreased, changed into or exchanged for a
different number or kind of shares through a recapitalization, reclassifi-
cation, 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, Lieberman shall surrender his certificates
representing all of the PLL 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 PLL's "Net Assets"
(as hereinafter defined) as of the Effective Time shall be at least $124,044
(the "Agreed Amount"). To the extent that PLL's Net Assets as of the Effective
Time shall exceed the Agreed Amount, then Lieberman, 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 PLL's Net
Assets as of the Effective Time shall be less than the Agreed Amount, then AACA
shall be entitled to receive from Lieberman 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 Lieberman 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 PLL's "Accounts Receivable" (as hereinafter defined) as of the
Effective Time, plus (ii) the value of PLL's fixed assets which, for purposes of
this calculation, shall be deemed to be $102,364, plus (iii) cash, minus the
-----
amount of all "Liabilities" (as hereinafter defined) of PLL 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 PLL posted in accordance
with historical practices with respect to the
-4-
<PAGE>
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 PLL, and not including any accounts receivable for
which there is an unposted cash receipt as of the Effective Time, (y)
multiplied times seventy-five percent (75%), which represents an agreed-upon
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 PLL as of the Effective Time for accrued sick
leave and vacation pay of employees of PLL as of the Effective Time and
including all liabilities for supplies, inventory and other goods ordered by PLL
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 PLL's December 31 balance sheet (the "Interim Balance
Sheet"). Such initial calculation shall be set forth on a schedule delivered by
Lieberman 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
Lieberman, within sixty (60) days after the Effective Time, a balance sheet of
PLL 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 Lieberman dispute any
of the Post-Closing Adjustments proposed by AACA or the accuracy of the Closing
Balance Sheet, Lieberman 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 Lieberman are unable to agree on
the amount of the Post-Closing Adjustments, Lieberman and AACA shall engage
Ernst & Young, Certified Public Accountants (the "Accountants") to review the
-5-
<PAGE>
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 Lieberman and AACA. Each of AACA and
Lieberman jointly shall pay one-half (1/2) of the reasonable fees and expenses
of the engagement of the Accountants.
(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. Lieberman will hold his
--------------------------------------
shares of VIVRA Common Stock for the required period from the date of issuance
until April 1, 1996, or until the date on which the combined financial
statements of AACA and PLL 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 interest.
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
or before January 6, 1996, at 11:00 a.m. EST, at the offices of The Bogatin Law
Firm, 860 Ridge lake Blvd., Suite 360, Memphis, Tennessee 38120, 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 PLL, 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 Lieberman
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 PLL and Lieberman;
-6-
<PAGE>
(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 Lieberman, the Determined Amount 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 and (2) one, which
shall be delivered directly to Lieberman.
3.3 ACTION BY PLL AND LIEBERMAN. Upon the terms and subject to the
---------------------------
conditions herein contained, at the Closing on the Closing Date, PLL and
Lieberman will deliver to AACA the following:
(i) The certificate referred to in Section 10.1 hereof;
(ii) The opinion of counsel for PLL and Lieberman in form and substance
satisfactory to AACA;
(iii) Resolutions of the shareholders and the Board of Directors of PLL
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 PLL 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 "Lieberman Noncompetition Agreement" between Lieberman and AACA
in substantially the form attached hereto as Exhibit 3.4(i); and
--------------
(ii) the "Escrow Agreement" between Lieberman and AACA in substantially
the form attached hereto as Exhibit 3.4(ii).
---------------
-7-
<PAGE>
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 PLL for the
current year and for the three years prior to the current year. Lieberman 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 AACA. AACA
will pay the cost of the audits required by AACA under this Agreement.
-8-
<PAGE>
SECTION 4. REPRESENTATIONS AND WARRANTIES OF PLL AND LIEBERMAN.
---------------------------------------------------
PLL and Lieberman hereby represent, warrant, covenant and agree to and with
AACA, as follows.
4.1 PLL'S EXISTENCE AND POWER. PLL is a professional association duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Tennessee. Neither the nature of its business as now conducted nor the
character or location of its properties require qualification by PLL to do
business in any other jurisdiction except for the states listed on Exhibit 4.1
-----------
in which PLL is duly qualified to do business. PLL has the corporate power to
own its property and to carry on its business as now being conducted. PLL 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 PLL are attached hereto
on Exhibit 4.2.
-----------
4.3 PLL STOCK. PLL's authorized capital stock consists solely of _____
---------
shares of common stock authorized, of which ____ shares are issued (and
outstanding) to Lieberman, as reflected on Exhibit 4.3 attached hereto. All
-----------
such outstanding shares of capital stock of PLL 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 PLL to issue any shares of stock or other securities of
PLL, 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 PLL. No shares of PLL'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 PLL since October 31, 1995.
4.4 OWNERSHIP OF PLL. Lieberman is, and will be at the Closing and the
----------------
Effective Time, owner of all of the issued and outstanding stock of PLL, 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 as "Encumbrances") whatsoever. Lieberman has 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
-----------
-9-
<PAGE>
of this Agreement by Lieberman will not violate any agreement to which either he
or PLL is a party or any agreement affecting the PLL Common Stock.
4.5 INSIDER TRANSACTIONS. Except as disclosed in Exhibit 4.5 hereto,
-------------------- -----------
PLL is not, directly or indirectly, a party to any contract, lease or commitment
with any officer or director of PLL 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. PLL is autonomous and has not ever been a
----------------------
subsidiary of any other corporation. PLL 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. Lieberman has delivered to AACA as
--------------------------------
Exhibit 4.7 a copy of the financial statements of PLL for the years ended
- -----------
December 31, 1992, 1993 and 1994 and for the ten-month period ended October 31,
1995 (the "PLL Financial Statements"). The PLL 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 PLL as of the
respective dates thereof, except as disclosed on Exhibit 4.7. PLL 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 PLL), 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 PLL and
used in the Business. All tangible personal property, equipment,
vehicles, furnishings, and fixtures included within the assets of
PLL or required to be used in the ordinary course of its business
are being conveyed as a result of the merger "AS IS, WHERE IS."
-10-
<PAGE>
(ii) Set forth on Exhibit 4.8(ii) is an accurate and complete list of all
---------------
real or personal property which is used by PLL in the Business and
which is either not owned by PLL or is leased or rented by PLL.
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, PLL 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 PLL 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 PLL's assets that arose in connection with any failure (or
alleged failure) to pay any Taxes. PLL 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 PLL correctly reflected all facts regarding the income,
business, assets, operations, activities and status of PLL and all other
information required to be shown thereon. PLL 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 PLL 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. PLL 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 PLL. No property of PLL is property
that PLL 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. PLL is not required
to include in income any adjustment pursuant to Section 481(a) of the Code by
reason of a voluntary change in
-11-
<PAGE>
accounting method initiated by PLL, nor does PLL, 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 PLL Real
---------------------
and Personal Property Leases PLL 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 PLL and therefore no withholding of tax pursuant to
Section 1445 of the Code is required. PLL is not a United States Real Property
Holding Corporation as defined in Section 897 of the Code. PLL 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 PLL with
respect to any liability for Taxes for any year.
4.10 CONTRACTS.
---------
4.10.1. PLL Contracts. Exhibit 4.10(i) is a list of all agreements
------------- ---------------
of PLL (the "PLL Contracts") and Exhibit 4.10(ii) is a list of all agreements
----------------
with respect to Lieberman (the "Lieberman Contracts"). Except as set forth in
Exhibits 4.10(i) and 4.10 (ii) hereto, neither PLL nor Lieberman is a party to
- ------------------------------
any material contract, agreement, lease, or power of attorney of any kind with
respect to the Business. As to PLL, except as noted on Exhibit 4.10(i), all PLL
---------------
Contracts, and as to Lieberman, all the Lieberman Contracts, are valid and are
in full force and effect according to their material terms, and no material
default by PLL or Lieberman, as the case may be, exists under any such contract,
lease or agreement and (to the best of Lieberman's and PLL's knowledge) 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.
To the knowledge of PLL, with respect to all PLL Contracts and, to the knowledge
of Lieberman, with respect to the Lieberman Contracts, all PLL Contracts and
Lieberman 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 PLL
Contracts and all Lieberman Contracts are enforceable in accordance with their
respective terms by PLL or Lieberman, 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,
-12-
<PAGE>
regardless of whether enforceability is considered in a proceeding at law or in
equity).
4.10.2. Neither the execution, the delivery, nor the performance of
this Agreement by PLL and Lieberman will cause any default in or breach of any
provision of the PLL Charter, as amended, the PLL bylaws or any agreement or
commitment to which PLL or Lieberman is a party or by which PLL or Lieberman are
bound, and none of such actions will result in either acceleration, or any
similar right of any other party, under any PLL Contract or Lieberman Contract,
or constitute a default under any PLL Contract or Lieberman Contract, or result
in the creation or imposition of any Encumbrance against any of the assets of
PLL. With respect to the Lieberman Contracts, all accounts receivable with
respect to Lieberman's performance of each such contract has been assigned to
PLL and, with respect to future performances by Lieberman, the accounts
receivable therefrom shall be assigned to Newco pursuant to Lieberman's
Individual Employment with Newco.
4.11 COMPLIANCE WITH LAWS. Except as described in Exhibit 4.11, to the
-------------------- ------------
best of Lieberman's knowledge, PLL 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
(to the best of Lieberman's or PLL's knowledge) threatened against PLL or
affecting PLL 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 does Lieberman nor PLL know of any reasonable basis
for any such litigation, action, suit, proceeding or investigation. Neither
Lieberman nor PLL 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, PLL 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 PLL or any
other like agreement, plan or policy.
4.13.2 All PLL plans, funds, programs, agreements, arrangements,
commitments or policies (collectively, the "Plans")
-13-
<PAGE>
which: (i) are or have ever been maintained or participated in by PLL and which
are currently in effect or as to which PLL has any 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. PLL has provided copies of all Plans to AACA.
--------------
4.13.3 Except as set forth on Exhibit 4.13.3, PLL 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)).
4.13.4 WITH RESPECT TO EACH PLAN:
(i) Such Plan is, and at all times has been, operated and
administered substantially in compliance with the requirements of all applicable
statutes, orders or governmental rules or regulations currently in effect
including, without limitation, ERISA and the Code.
(ii) No prohibited transaction (as defined in ERISA Section 406 or
Code Section 4975) has occurred in connection with which PLL or any fiduciary of
such Plan is or could be subject to a civil penalty pursuant to ERISA Section
502, a tax imposed by Code Section 4975 or liability for a breach of fiduciary
responsibility under ERISA.
(iii) No action, suit, grievance, arbitration or other manner of
litigation or claim with respect to such Plan or its assets (other than routine
claims for benefits made in the ordinary course of administration of such Plan)
is pending or, to the knowledge of PLL or Lieberman, threatened against or with
respect to such Plan, PLL or any fiduciary (as defined in ERISA Section 3(21))
of such Plan. To the knowledge of PLL and Lieberman, there is no basis for any
such claim.
(iv) If such Plan provides medical benefits to any present or
former employee of PLL, such Plan has been operated in compliance with ERISA
Sections 601 through 609 and either Code Section 162(i)(2) and (k) and the
regulations promulgated thereunder (prior to 1989) or Code Section 4980B and the
regulations promulgated thereunder (after 1988).
(v) There has been no failure to file on a timely basis any
report or return required to be filed by law with respect
-14-
<PAGE>
to such Plan. All disclosures required by law to be made to participants in
such Plan have been made on a timely basis.
(vi) No representation or communication with respect to
participation, eligibility for benefits, vesting, benefit accrual or coverage
under such Plan has been made by PLL or any trustee, fiduciary, officer,
director, employee or other agent of PLL to any of its employees or their
beneficiaries which (A) is not in accordance with the terms of such Plan and (B)
could have material adverse economic consequences to PLL or such Plan.
(vii) Such Plan has been operated in accordance with such
provisions, if any, of the Code as may be applicable to obtain the federal
income tax consequences intended for such Plan.
4.13.5 Each Plan which is a "pension plan" (as defined in ERISA
Section 3(2)) and its related trust, if any, are qualified under Code Section
401(a) and exempt from tax under Code Section 501(a) and have been determined by
the Internal Revenue Service to be so qualified. Nothing has occurred since the
most recent such determination which has or could adversely affect the qualified
status of such Plan or the tax exempt status of its related trust.
4.14 LIABILITIES. All liabilities and obligations of PLL direct,
-----------
indirect or contingent, are either listed in the PLL Financial Statements or on
Exhibit 4.14 attached hereto.
- ------------
4.15 INSURANCE. All insurance maintained by PLL is listed and described
---------
on Exhibit 4.15 attached hereto. Except as identified on Exhibit 4.15, PLL 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 October 31, 1995, PLL 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;
-15-
<PAGE>
(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 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 PLL
--------- ------------
employees and former PLL employees who are eligible to continue to receive
benefits by virtue of their former employment by PLL (including, as applicable,
their rates of pay, accrued sick leave, vacation and other benefits).
4.18 AUTHORITY. PLL 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.
-16-
<PAGE>
4.19 LICENSES. Exhibit 4.19 contains a copy of all governmental or other
-------- ------------
licenses held by PLL relating to the operation of its business. Except for the
licenses of PLL and Lieberman listed in Exhibit 4.19, there are no other
------------
licenses or permits required for PLL and Lieberman 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. Neither Lieberman nor PLL 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, neither Lieberman nor PLL has
------------
been the subject of a malpractice suit. To the knowledge of PLL 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 PLL.
4.20 NO FINDERS OR BROKERS. Neither Lieberman nor PLL, nor any officer
---------------------
or director thereof, has engaged any finder or broker in connection with the
transactions contemplated hereunder. Lieberman 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 Lieberman or PLL.
4.21 DISCLOSURE. No representation or warranty by Lieberman or PLL in
----------
this Agreement and no statement pertaining to PLL or Lieberman 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
Lieberman or PLL not described herein which would adversely affect the future
operations of PLL.
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 Lieberman or PLL in connection herewith, will constitute the valid and
binding obligation of Lieberman and PLL, 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
-17-
<PAGE>
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, PLL 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 delivery of this
------------
Agreement by Lieberman and PLL, 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 PLL 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 PLL (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 PLL 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, Lieberman has had access to and Lieberman 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 year ended November 30, 1994; (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 Form 8-K dated August 16, 1995 and December 21, 1995;
and (viii) such other information as Lieberman has reasonably requested.
4.26.2 INVESTMENT EXPERIENCE. Lieberman represents that he is
---------------------
experienced in evaluating and investing in securities and acknowledges that
Lieberman is able to fend for himself, can bear the economic risk of such
investment, and has such knowledge
-18-
<PAGE>
and experience in financial and business matters that Lieberman 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 Lieberman and
PLL, 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 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 State of Tennessee, 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 Lieberman 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
-19-
<PAGE>
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.
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 PLL and to Lieberman.
-----------
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 Lieberman or PLL 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 PLL
and Lieberman 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.
-20-
<PAGE>
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, 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 PLL and Lieberman, 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.
-21-
<PAGE>
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 PLL and Lieberman with complete and accurate
information as to VIVRA and the VIVRA Common Stock. [Except as described in the
5.4 Registration Statement and other materials delivered by VIVRA under cover
dated December 13, 1995, and December 30, 1995, there are no facts known to
VIVRA which would materially and adversely affect the VIVRA Common Stock.
-22-
<PAGE>
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 satisfy the conditions precedent specified
herein.
7.2 HANDLING OF DOCUMENTS. Until the Closing, AACA shall keep
---------------------
confidential all information provided by PLL or Lieberman 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 PLL's employees,
----------
except Lieberman, 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 PLL employees terminated as a
result of the merger of PLL into AACA.
7.4 COMPENSATION. AACA reserves the right in the future to raise
------------
salaries of PLL's former employees consistent with the policies and standards
governing AACA employees generally. AACA will credit each former PLL employee
hired by AACA with his or her service anniversary with PLL 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 PLL
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 LIEBERMAN AND PLL.
------------------------------
8.1 ACCESS AND INFORMATION. Lieberman and PLL 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
-23-
<PAGE>
accountants to make available, copies of all such documents and information with
respect to the business and properties of PLL 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.
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, PLL
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 PLL and Lieberman at the Closing shall have been
satisfied. PLL shall, consistent with conducting its business in accordance
with reasonable business judgment, preserve its business intact; use its best
efforts to keep available to PLL the services of its present employees (except
those dismissed by PLL or those who voluntarily discontinue their employment);
and preserve for AACA the goodwill of the suppliers, patients and others having
business relations with PLL.
8.3 BEST EFFORTS TO SECURE CONSENTS AND APPROVALS. Lieberman and PLL
---------------------------------------------
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 Lieberman
and PLL to carry out the transactions contemplated by this Agreement and to
satisfy the conditions precedent specified herein. Lieberman will use his best
efforts to have all PLL Physician Contracts of such PLL Physician continue in
effect with respect to such PLL Physician as an employee of Newco following the
Effective Time.
SECTION 9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF LIEBERMAN AND PLL.
-------------------------------------------------------------
All obligations of Lieberman and PLL 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 Lieberman at any time at or prior to the Closing).
-24-
<PAGE>
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 Lieberman shall have been furnished with a
certificate of the President or any Vice President of AACA and of VIVRA dated as
of the Closing, 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 Lieberman 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 Lieberman
and PLL 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):
-25-
<PAGE>
10.1 REPRESENTATIONS AND WARRANTIES TRUE. All of the representations and
-----------------------------------
warranties of Lieberman and PLL 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; Lieberman and PLL 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 Lieberman and PLL prior to
or at the Closing; and AACA shall be furnished with a certificate of Lieberman,
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 PLL 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 PLL; and PLL 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. Lieberman shall not have learned that there is any
material impediment beyond his
-26-
<PAGE>
control to their ability to transfer his 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 therein.
10.9 TERMINATION OF PLANS. As of the Closing Date, PLL shall have
--------------------
terminated all of its Plans by action of its board of directors and, where
required by law, by notice to the participants in the Plans. However, as of the
Closing Date, PLL as the Plan Sponsor of the "Phillip L. Lieberman, M.D. Profit
Sharing Plan" (the "Qualified Plan"), remains responsible for the following
matters with respect to the Qualified Plan, which responsibilities will devolve
upon AACA, and the costs of carrying out such responsibilities shall be
Physician Expenses as defined in the Management Services Agreement:
(i) filing with respect to the Qualified Plan on or before July 31, 1996
a federal information return (form 5500C/R) for the plan year ended
December 31, 1995;
(ii) effecting terminating distributions to all participants of the
Qualified Plan from their trusts;
(iii) filing with respect to the Qualified Plan on or before the last day
of the seventh month following the terminating distributions a final
federal information return (Form 5500 C/R) for the final short plan
year; and
(iv) reporting all distributions to the Internal Revenue Service and to
the participants under forms 1099-R on or before January 31, 1997.
Notwithstanding the foregoing, Lieberman, acknowledging that it is his intent to
remain solely liable for the Qualified Plan, shall remain and continue to be
liable for any and all claims, losses and damages that are connected with or
result or arise from the Qualified Plan.
SECTION 11. TERMINATION.
-----------
-27-
<PAGE>
AACA on the one hand, or PLL and Lieberman on the other hand, may 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) 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 LIEBERMAN. Lieberman 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 Lieberman or PLL contained
in or made pursuant to this Agreement or in other agreements
executed by Lieberman or PLL 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 under any
------------
employee benefit or welfare plan or regarding withholding taxes owed
to or with respect to any employee or independent contractor of PLL
accruing prior to the date of Closing;
-28-
<PAGE>
(iii) liabilities and obligations of Lieberman or PLL for any breach or
violation, as of the date of Closing, of any PLL Physician Contracts
or PLL Contracts;
(iv) liabilities and obligations of Lieberman or PLL 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 Lieberman or PLL accruing at or
before the date of Closing for violations of law;
(vi) any liability of Lieberman or PLL 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 payor) as a result of recapture of
amounts paid by any such payor to Lieberman or PLL or any
overpayments made by such payor to Lieberman or PLL or any
disallowance of any claim of Lieberman or Seller;
(viii) any tort liability, products liability or malpractice liability of
Lieberman or PLL accruing at or before the date of Closing;
(ix) liabilities and obligations of Lieberman or PLL incurred in
connection with the preparation of this Agreement and the
consummation of transaction contemplated hereby, including, without
limitation, legal and accounting fees;
(x) any liability of PLL which is not reflected in the PLL Financial
Statements referred to in Section 4.7 hereof or in Exhibit 4.14
------------
hereto (other than liabilities arising in the ordinary course of
business prior to the Effective Time of the Merger under the PLL
Contracts); and
(xi) any liability whatsoever, of PAG, the PAG Physicians, AACA, VIVRA,
or otherwise incurred in connection with the Qualified Plan referred
to in Section 10.9 hereof either before or after the Effective Time.
12.3 [Intentionally Deleted]
-29-
<PAGE>
12.4 PAYMENT FOR AACA INDEMNIFIABLE LOSSES. Lieberman 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 Lieberman, in writing, of such claim or action, and at
Lieberman's 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, Lieberman 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. Lieberman 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 Lieberman does 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 Lieberman. 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 Lieberman or demand
payment therefor from Lieberman. 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
-----------------
Lieberman from and against the following, any one of which shall be defined to
be a "Lieberman 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;
-30-
<PAGE>
(b) any and all losses, damages, costs or deficiencies incurred by
Lieberman arising from any failure by AACA to satisfy any obligation under the
PLL 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 LIEBERMAN INDEMNIFIABLE LOSSES. AACA shall pay
------------------------------------------
Lieberman all amounts owed to him 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 Lieberman which, if successful, might result
in a claim for a Lieberman indemnifiable loss, Lieberman 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 Lieberman 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, Lieberman may defend any such claim or action and Lieberman 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 Lieberman in the defense of any such
claim or action.
If Lieberman suffers a Lieberman indemnifiable loss directly (not as a
result of a third party claim or action), Lieberman 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 parties set
--------
forth in this Agreement shall expire three (3) years after the Effective Time
except that the representations and warranties of Lieberman as to tax and ERISA
matters shall survive for seven (7) years after the Effective Time and except
that there shall be no limitation as to the survival of the representations and
warranties of the parties contained in Sections 4.3, 4.4, 4.18. 4.22, 5.2, 5.4,
6.2, and 6.3.
-31-
<PAGE>
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 Lieberman in the case of PLL or Lieberman 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 PLL or Lieberman ___________________________________
___________________________________
___________________________________
___________________________________
with a copy to: Susan Callison, Esq.
The Bogatin Law Firm
860 Ridge Lake Boulevard
Suite 360
Memphis, Tennessee 38120
or to such other address as AACA or Lieberman 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.
-32-
<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. The validity and construction of this Agreement
-------------
shall be governed by the laws of the State of Tennessee, 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 PAG
on the accrual method of accounting shall be taken into account by AACA and
VIVRA and not by PAG or the PAG 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 PLL, one selected by
AACA, and one who shall be appointed by the first two arbitrators), who shall be
located in the State of Tennessee, 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.
-33-
<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 the State of
Tennessee 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.
13.5.7 This arbitration section and all decisions of the arbitrator
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.
-34-
<PAGE>
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.
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. In the event that a suit, action, arbitration, or
---------------
other proceeding of any nature whatsoever, including, without limitation, any
proceeding under the U.S. Bankruptcy Code and involving issues peculiar to
federal bankruptcy law, any action seeking a declaration of rights or any action
for rescission, is instituted to interpret or enforce this Agreement or any
provision of this Agreement, the prevailing party shall be entitled to recover
from the losing party the prevailing party's reasonable attorneys', paralegals',
accountants', and other experts' professional fees and all other fees, costs,
and expenses actually incurred and reasonably necessary in connection therewith,
as determined by the judge or arbitrator at trial or other proceeding, or on any
appeal or review, in addition to all other amounts provided by law.
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.
----
-35-
<PAGE>
13.15 FURTHER ASSURANCES. Following the Closing, Lieberman 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 PLL's rights under any PLL
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, Lieberman will cooperate with AACA in any reasonable arrangement that is
designed to provide for AACA the benefit of such asset, but Lieberman will not
be obligated to replace such asset with one of equal value or otherwise assume
additional material liability not contemplated in this Agreement.
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:
--------------------------
PHILLIP L. LIEBERMAN, M.D., P.C., a Tennessee
professional corporation ("PLL")
By:
--------------------------------
Title:
--------------------------
PHILLIP L. LIEBERMAN
_____________________________________
-36-
<PAGE>
EXHIBIT 10.4
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and entered
into as of January ____, 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); GEORGE H. TREADWELL, III, M.D., P.C.,
a Tennessee professional corporation ("GHT") and GEORGE H. TREADWELL, III
("Treadwell").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, GHT owns and operates a pediatric allergy practice with its
principal office location located at ________________________ together with its
satellite locations in the Memphis, Tennessee area (collectively the
"Business");
WHEREAS, Treadwell owns all of the outstanding stock of GHT;
WHEREAS, the parties desire to merge GHT 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, GHT and Treadwell have entered into that certain Master Merger
Agreement of even date with AACA; Phillip L. Lieberman, M.D., P.C. ("PLL");
Phillip L. Lieberman, M.D. ("Lieberman"); Pediatric Allergy Group, a
Professional Association, a Tennessee professional corporation ("PAG"); PAG's
shareholders, Jerald M. Duncan, M.D., an individual resident of Tennessee
<PAGE>
("Duncan"), Fred T. Grogan, Jr., M.D., an individual resident of Tennessee
("Grogan") and Jourdan A. Roane, M.D., an individual resident of Tennessee
("Roane") (with Duncan, Grogan and Roane being collectively referred to herein
as the "PAG Physicians"), which contemplates that PLL and PAG will merge into
AACA at the same time that GHT merges into AACA;
WHEREAS, the merger of GHT into AACA is subject to the simultaneous
consummation of the mergers of PLL and PAG into AACA;
WHEREAS, the PAG Physicians, Lieberman and Treadwell wish for there to be
formed a new Tennessee professional corporation "Newco") through which to
practice medicine; and
WHEREAS, the parties wish for the PAG Physicians, Lieberman, Treadwell,
Newco and AACA to enter into certain agreements as conditions precedent to the
consummation of the merger of GHT 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 GHT
shall be merged with and into AACA, with AACA being the surviving corporation
(the "Surviving Corporation"). The merger of GHT 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 GHT 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 Tennessee Professional
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 Tennessee 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
-2-
<PAGE>
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
--------------
Tennessee Business Corporation Act, AACA and GHT 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.
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 GHT (the "GHT Common
Stock") prior to the Effective Time of the Merger (other than such shares held
by GHT 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 $726,985 (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 January 3, 1995 (said
average price being referred to herein as the "Closing Price"). Each share of
GHT Common Stock held in the treasury of GHT upon the Effective Time of the
Merger shall be cancelled, and
-3-
<PAGE>
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 Treadwell 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 GHT Common
Stock shall have been increased, decreased, changed into or exchanged for a
different number or kind of shares through a recapitalization, reclassifi-
cation, 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, Treadwell shall surrender his certificates
representing all of the GHT 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 GHT's "Net Assets"
(as hereinafter defined) as of the Effective Time shall be at least $12,969 (the
"Agreed Amount"). To the extent that GHT's Net Assets as of the Effective Time
shall exceed the Agreed Amount, then Treadwell, 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 GHT's Net Assets as of
the Effective Time shall be less than the Agreed Amount, then AACA shall be
entitled to receive from Treadwell 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 Treadwell 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 GHT's "Accounts Receivable" (as hereinafter defined) as of the
Effective Time, plus (ii) the value of GHT's fixed assets which, for purposes of
this calculation, shall be deemed to be zero, plus (iii) cash, minus the amount
-----
of all "Liabilities" (as hereinafter defined) of GHT 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 GHT posted in accordance with
historical practices with respect to the
-4-
<PAGE>
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 GHT, and not including any accounts receivable for
which there is an unposted cash receipt as of the Effective Time, (y)
multiplied times seventy-five percent (75%), which represents an agreed-upon
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 GHT as of the Effective Time for accrued sick
leave and vacation pay of employees of GHT as of the Effective Time and
including all liabilities for supplies, inventory and other goods ordered by GHT
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 GHT's December 31 balance sheet (the "Interim Balance
Sheet"). Such initial calculation shall be set forth on a schedule delivered by
Treadwell 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
Treadwell, within sixty (60) days after the Effective Time, a balance sheet of
GHT 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 Treadwell dispute any
of the Post-Closing Adjustments proposed by AACA or the accuracy of the Closing
Balance Sheet, Treadwell 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 Treadwell are unable to agree on
the amount of the Post-Closing Adjustments, Treadwell and AACA shall engage
Ernst & Young, Certified Public Accountants (the "Accountants") to review the
-5-
<PAGE>
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 Treadwell and AACA. Each of AACA and
Treadwell jointly shall pay one-half (1/2) of the reasonable fees and expenses
of the engagement of the Accountants.
(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. Treadwell will hold his
--------------------------------------
shares of VIVRA Common Stock for the required period from the date of issuance
until April 1, 1996, or until the date on which the combined financial
statements of AACA and GHT 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 interest.
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
or before January 6, 1996, at 11:00 a.m. EST, at the offices of The Bogatin Law
Firm, 860 Ridge lake Blvd., Suite 360, Memphis, Tennessee 38120, 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 GHT, 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 Treadwell
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 GHT and Treadwell;
-6-
<PAGE>
(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 Treadwell, the Determined Amount 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 and (2) one, which
shall be delivered directly to Treadwell.
3.3 ACTION BY GHT AND TREADWELL. Upon the terms and subject to the
---------------------------
conditions herein contained, at the Closing on the Closing Date, GHT and
Treadwell will deliver to AACA the following:
(i) The certificate referred to in Section 10.1 hereof;
(ii) The opinion of counsel for GHT and Treadwell in form and substance
satisfactory to AACA;
(iii) Resolutions of the shareholders and the Board of Directors of GHT
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 GHT 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 "Treadwell Noncompetition Agreement" between Treadwell and AACA
in substantially the form attached hereto as Exhibit 3.4(i); and
--------------
(ii) the "Escrow Agreement" between Treadwell and AACA in substantially
the form attached hereto as Exhibit 3.4(ii).
---------------
-7-
<PAGE>
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 GHT for the
current year and for the three years prior to the current year. Treadwell 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 AACA. AACA
will pay the cost of the audits required by AACA under this Agreement.
-8-
<PAGE>
SECTION 4. REPRESENTATIONS AND WARRANTIES OF GHT AND TREADWELL.
---------------------------------------------------
GHT and Treadwell hereby represent, warrant, covenant and agree to and with
AACA, as follows.
4.1 GHT'S EXISTENCE AND POWER. GHT is a professional association duly
-------------------------
organized, validly existing and in good standing under the laws of the State of
Tennessee. Neither the nature of its business as now conducted nor the
character or location of its properties require qualification by GHT to do
business in any other jurisdiction except for the states listed on Exhibit 4.1
-----------
in which GHT is duly qualified to do business. GHT has the corporate power to
own its property and to carry on its business as now being conducted. GHT 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 GHT are attached hereto
on Exhibit 4.2.
-----------
4.3 GHT STOCK. GHT's authorized capital stock consists solely of _____
---------
shares of common stock authorized, of which ____ shares are issued (and
outstanding) to Treadwell, as reflected on Exhibit 4.3 attached hereto. All
-----------
such outstanding shares of capital stock of GHT 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 GHT to issue any shares of stock or other securities of
GHT, 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 GHT. No shares of GHT'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 GHT since October 31, 1995.
4.4 OWNERSHIP OF GHT. Treadwell is, and will be at the Closing and the
----------------
Effective Time, owner of all of the issued and outstanding stock of GHT, 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 as "Encumbrances") whatsoever. Treadwell has 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
-----------
-9-
<PAGE>
of this Agreement by Treadwell will not violate any agreement to which either he
or GHT is a party or any agreement affecting the GHT Common Stock.
4.5 INSIDER TRANSACTIONS. Except as disclosed in Exhibit 4.5 hereto,
-------------------- -----------
GHT is not, directly or indirectly, a party to any contract, lease or commitment
with any officer or director of GHT 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. GHT is autonomous and has not ever been a
----------------------
subsidiary of any other corporation. GHT 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. Treadwell has delivered to AACA as
--------------------------------
Exhibit 4.7 a copy of the financial statements of GHT for the years ended
- -----------
December 31, 1992, 1993 and 1994 and for the ten-month period ended October 31,
1995 (the "GHT Financial Statements"). The GHT 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 GHT as of the
respective dates thereof, except as disclosed on Exhibit 4.7. GHT 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 GHT), 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 GHT and
used in the Business. All tangible personal property, equipment,
vehicles, furnishings, and fixtures included within the assets of
GHT or required to be used in the ordinary course of its business
are being conveyed as a result of the merger "AS IS, WHERE IS."
-10-
<PAGE>
(ii) Set forth on Exhibit 4.8(ii) is an accurate and complete list of all
---------------
real or personal property which is used by GHT in the Business and
which is either not owned by GHT or is leased or rented by GHT.
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, GHT 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 GHT 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 GHT's assets that arose in connection with any failure (or
alleged failure) to pay any Taxes. GHT 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 GHT correctly reflected all facts regarding the income,
business, assets, operations, activities and status of GHT and all other
information required to be shown thereon. GHT 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 GHT 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. GHT 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 GHT. No property of GHT is property
that GHT 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. GHT is not required
to include in income any adjustment pursuant to Section 481(a) of the Code by
reason of a voluntary change in
-11-
<PAGE>
accounting method initiated by GHT, nor does GHT, 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 GHT Real
---------------------
and Personal Property Leases GHT 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 GHT and therefore no withholding of tax pursuant to
Section 1445 of the Code is required. GHT is not a United States Real Property
Holding Corporation as defined in Section 897 of the Code. GHT 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 GHT with
respect to any liability for Taxes for any year.
4.10 CONTRACTS.
---------
4.10.1. GHT Contracts. Exhibit 4.10(i) is a list of all agreements
------------- ---------------
of GHT (the "GHT Contracts") and Exhibit 4.10(ii) is a list of all agreements
----------------
with respect to Treadwell (the "Treadwell Contracts"). Except as set forth in
Exhibits 4.10(i) and 4.10 (ii) hereto, neither GHT nor Treadwell is a party to
- ------------------------------
any material contract, agreement, lease, or power of attorney of any kind with
respect to the Business. As to GHT, except as noted on Exhibit 4.10(i), all GHT
---------------
Contracts, and as to Treadwell, all the Treadwell Contracts, are valid and are
in full force and effect according to their material terms, and no material
default by GHT or Treadwell, as the case may be, exists under any such contract,
lease or agreement and (to the best of Treadwell's and GHT's knowledge) 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.
To the knowledge of GHT, with respect to all GHT Contracts and, to the knowledge
of Treadwell, with respect to the Treadwell Contracts, all GHT Contracts and
Treadwell 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 GHT
Contracts and all Treadwell Contracts are enforceable in accordance with their
respective terms by GHT or Treadwell, 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,
-12-
<PAGE>
regardless of whether enforceability is considered in a proceeding at law or in
equity).
4.10.2. Neither the execution, the delivery, nor the performance of
this Agreement by GHT and Treadwell will cause any default in or breach of any
provision of the GHT Charter, as amended, the GHT bylaws or any agreement or
commitment to which GHT or Treadwell is a party or by which GHT or Treadwell are
bound, and none of such actions will result in either acceleration, or any
similar right of any other party, under any GHT Contract or Treadwell Contract,
or constitute a default under any GHT Contract or Treadwell Contract, or result
in the creation or imposition of any Encumbrance against any of the assets of
GHT. With respect to the Treadwell Contracts, all accounts receivable with
respect to Treadwell's performance of each such contract has been assigned to
GHT and, with respect to future performances by Treadwell, the accounts
receivable therefrom shall be assigned to Newco pursuant to Treadwell's
Individual Employment with Newco.
4.11 COMPLIANCE WITH LAWS. Except as described in Exhibit 4.11, to the
-------------------- ------------
best of Treadwell's knowledge, GHT 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
(to the best of Treadwell's or GHT's knowledge) threatened against GHT or
affecting GHT 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 does Treadwell nor GHT know of any reasonable basis
for any such litigation, action, suit, proceeding or investigation. Neither
Treadwell nor GHT 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, GHT 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 GHT or any
other like agreement, plan or policy.
4.13.2 All GHT plans, funds, programs, agreements, arrangements,
commitments or policies (collectively, the "Plans")
-13-
<PAGE>
which: (i) are or have ever been maintained or participated in by GHT and which
are currently in effect or as to which GHT has any 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. GHT has provided copies of all Plans to AACA.
--------------
4.13.3 Except as set forth on Exhibit 4.13.3, GHT 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)).
4.13.4 WITH RESPECT TO EACH PLAN:
(i) Such Plan is, and at all times has been, operated and
administered substantially in compliance with the requirements of all applicable
statutes, orders or governmental rules or regulations currently in effect
including, without limitation, ERISA and the Code.
(ii) No prohibited transaction (as defined in ERISA Section 406 or
Code Section 4975) has occurred in connection with which GHT or any fiduciary of
such Plan is or could be subject to a civil penalty pursuant to ERISA Section
502, a tax imposed by Code Section 4975 or liability for a breach of fiduciary
responsibility under ERISA.
(iii) No action, suit, grievance, arbitration or other manner of
litigation or claim with respect to such Plan or its assets (other than routine
claims for benefits made in the ordinary course of administration of such Plan)
is pending or, to the knowledge of GHT or Treadwell, threatened against or with
respect to such Plan, GHT or any fiduciary (as defined in ERISA Section 3(21))
of such Plan. To the knowledge of GHT and Treadwell, there is no basis for any
such claim.
(iv) If such Plan provides medical benefits to any present or
former employee of GHT, such Plan has been operated in compliance with ERISA
Sections 601 through 609 and either Code Section 162(i)(2) and (k) and the
regulations promulgated thereunder (prior to 1989) or Code Section 4980B and the
regulations promulgated thereunder (after 1988).
(v) There has been no failure to file on a timely basis any
report or return required to be filed by law with respect
-14-
<PAGE>
to such Plan. All disclosures required by law to be made to participants in
such Plan have been made on a timely basis.
(vi) No representation or communication with respect to
participation, eligibility for benefits, vesting, benefit accrual or coverage
under such Plan has been made by GHT or any trustee, fiduciary, officer,
director, employee or other agent of GHT to any of its employees or their
beneficiaries which (A) is not in accordance with the terms of such Plan and (B)
could have material adverse economic consequences to GHT or such Plan.
(vii) Such Plan has been operated in accordance with such
provisions, if any, of the Code as may be applicable to obtain the federal
income tax consequences intended for such Plan.
4.13.5 Each Plan which is a "pension plan" (as defined in ERISA
Section 3(2)) and its related trust, if any, are qualified under Code Section
401(a) and exempt from tax under Code Section 501(a) and have been determined by
the Internal Revenue Service to be so qualified. Nothing has occurred since the
most recent such determination which has or could adversely affect the qualified
status of such Plan or the tax exempt status of its related trust.
4.14 LIABILITIES. All liabilities and obligations of GHT direct,
-----------
indirect or contingent, are either listed in the GHT Financial Statements or on
Exhibit 4.14 attached hereto.
- ------------
4.15 INSURANCE. All insurance maintained by GHT is listed and described
---------
on Exhibit 4.15 attached hereto. Except as identified on Exhibit 4.15, GHT 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 October 31, 1995, GHT 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;
-15-
<PAGE>
(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 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 GHT
--------- ------------
employees and former GHT employees who are eligible to continue to receive
benefits by virtue of their former employment by GHT (including, as applicable,
their rates of pay, accrued sick leave, vacation and other benefits).
4.18 AUTHORITY. GHT 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.
-16-
<PAGE>
4.19 LICENSES. Exhibit 4.19 contains a copy of all governmental or other
-------- ------------
licenses held by GHT relating to the operation of its business. Except for the
licenses of GHT and Treadwell listed in Exhibit 4.19, there are no other
------------
licenses or permits required for GHT and Treadwell 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. Neither Treadwell nor GHT 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, neither Treadwell nor GHT has
------------
been the subject of a malpractice suit. To the knowledge of GHT 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 GHT.
4.20 NO FINDERS OR BROKERS. Neither Treadwell nor GHT, nor any officer
---------------------
or director thereof, has engaged any finder or broker in connection with the
transactions contemplated hereunder. Treadwell 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 Treadwell or GHT.
4.21 DISCLOSURE. No representation or warranty by Treadwell or GHT in
----------
this Agreement and no statement pertaining to GHT or Treadwell 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
Treadwell or GHT not described herein which would adversely affect the future
operations of GHT.
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 Treadwell or GHT in connection herewith, will constitute the valid and
binding obligation of Treadwell and GHT, 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
-17-
<PAGE>
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, GHT 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 delivery of this
------------
Agreement by Treadwell and GHT, 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 GHT 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 GHT (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 GHT 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, Treadwell has had access to and Treadwell 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 year ended November 30, 1994; (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 Form 8-K dated August 16, 1995 and December 21, 1995;
and (viii) such other information as Treadwell has reasonably requested.
4.26.2 INVESTMENT EXPERIENCE. Treadwell represents that he is
---------------------
experienced in evaluating and investing in securities and acknowledges that
Treadwell is able to fend for himself, can bear the economic risk of such
investment, and has such knowledge
-18-
<PAGE>
and experience in financial and business matters that Treadwell 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 Treadwell and
GHT, 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 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 State of Tennessee, 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 Treadwell 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
-19-
<PAGE>
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.
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 GHT and to Treadwell.
-----------
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 Treadwell or GHT 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 GHT
and Treadwell 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.
-20-
<PAGE>
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, 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 GHT and Treadwell, 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.
-21-
<PAGE>
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 GHT and Treadwell with complete and accurate
information as to VIVRA and the VIVRA Common Stock. [Except as described in the
5.4 Registration Statement and other materials delivered by VIVRA under cover
dated December 13, 1995, and December 30, 1995, there are no facts known to
VIVRA which would materially and adversely affect the VIVRA Common Stock.
-22-
<PAGE>
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 satisfy the conditions precedent specified
herein.
7.2 HANDLING OF DOCUMENTS. Until the Closing, AACA shall keep
---------------------
confidential all information provided by GHT or Treadwell 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 GHT's employees,
----------
except Treadwell, 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 GHT employees terminated as a
result of the merger of GHT into AACA.
7.4 COMPENSATION. AACA reserves the right in the future to raise
------------
salaries of GHT's former employees consistent with the policies and standards
governing AACA employees generally. AACA will credit each former GHT employee
hired by AACA with his or her service anniversary with GHT 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 GHT
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 TREADWELL AND GHT.
------------------------------
8.1 ACCESS AND INFORMATION. Treadwell and GHT 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
-23-
<PAGE>
accountants to make available, copies of all such documents and information with
respect to the business and properties of GHT 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.
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, GHT
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 GHT and Treadwell at the Closing shall have been
satisfied. GHT shall, consistent with conducting its business in accordance
with reasonable business judgment, preserve its business intact; use its best
efforts to keep available to GHT the services of its present employees (except
those dismissed by GHT or those who voluntarily discontinue their employment);
and preserve for AACA the goodwill of the suppliers, patients and others having
business relations with GHT.
8.3 BEST EFFORTS TO SECURE CONSENTS AND APPROVALS. Treadwell and GHT
---------------------------------------------
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 Treadwell
and GHT to carry out the transactions contemplated by this Agreement and to
satisfy the conditions precedent specified herein. Treadwell will use his best
efforts to have all GHT Physician Contracts of such GHT Physician continue in
effect with respect to such GHT Physician as an employee of Newco following the
Effective Time.
SECTION 9. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF TREADWELL AND GHT.
-------------------------------------------------------------
All obligations of Treadwell and GHT 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 Treadwell at any time at or prior to the Closing).
-24-
<PAGE>
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 Treadwell shall have been furnished with a
certificate of the President or any Vice President of AACA and of VIVRA dated as
of the Closing, 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 Treadwell 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 Treadwell
and GHT 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):
-25-
<PAGE>
10.1 REPRESENTATIONS AND WARRANTIES TRUE. All of the representations and
-----------------------------------
warranties of Treadwell and GHT 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; Treadwell and GHT 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 Treadwell and GHT prior to
or at the Closing; and AACA shall be furnished with a certificate of Treadwell,
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 GHT 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 GHT; and GHT 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. Treadwell shall not have learned that there is any
material impediment beyond his
-26-
<PAGE>
control to their ability to transfer his 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 therein.
SECTION 11. TERMINATION.
-----------
AACA on the one hand, or GHT and Treadwell on the other hand, may 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) 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 TREADWELL. Treadwell 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 Treadwell or GHT contained
in or made pursuant to this Agreement or in other agreements
executed by Treadwell or GHT 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,
-27-
<PAGE>
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 under any
------------
employee benefit or welfare plan or regarding withholding taxes owed
to or with respect to any employee or independent contractor of GHT
accruing prior to the date of Closing;
(iii) liabilities and obligations of Treadwell or GHT for any breach or
violation, as of the date of Closing, of any GHT Physician Contracts
or GHT Contracts;
(iv) liabilities and obligations of Treadwell or GHT 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 Treadwell or GHT accruing at or
before the date of Closing for violations of law;
(vi) any liability of Treadwell or GHT 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 payor) as a result of recapture of
amounts paid by any such payor to Treadwell or GHT or any
overpayments made by such payor to Treadwell or GHT or any
disallowance of any claim of Treadwell or Seller;
(viii) any tort liability, products liability or malpractice liability of
Treadwell or GHT accruing at or before the date of Closing;
(ix) liabilities and obligations of Treadwell or GHT incurred in
connection with the preparation of this
-28-
<PAGE>
Agreement and the consummation of transaction contemplated hereby, including,
without limitation, legal and accounting fees; and
(x) any liability of GHT which is not reflected in the GHT Financial
Statements referred to in Section 4.7 hereof or in Exhibit 4.14
------------
hereto (other than liabilities arising in the ordinary course of
business prior to the Effective Time of the Merger under the GHT
Contracts).
12.3 [Intentionally Deleted]
12.4 PAYMENT FOR AACA INDEMNIFIABLE LOSSES. Treadwell 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 Treadwell, in writing, of such claim or action, and at
Treadwell's 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, Treadwell 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. Treadwell 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 Treadwell does 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 Treadwell. 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 Treadwell or demand
payment therefor from Treadwell. 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.
-29-
<PAGE>
12.5 INDEMNITY BY AACA. AACA shall indemnify, defend and hold harmless
-----------------
Treadwell from and against the following, any one of which shall be defined to
be a "Treadwell 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
Treadwell arising from any failure by AACA to satisfy any obligation under the
GHT 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 TREADWELL INDEMNIFIABLE LOSSES. AACA shall pay
------------------------------------------
Treadwell all amounts owed to him 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 Treadwell which, if successful, might result
in a claim for a Treadwell indemnifiable loss, Treadwell 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 Treadwell 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, Treadwell may defend any such claim or action and Treadwell 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 Treadwell in the defense of any such
claim or action.
If Treadwell suffers a Treadwell indemnifiable loss directly (not as a
result of a third party claim or action), Treadwell 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
-30-
<PAGE>
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 parties set
--------
forth in this Agreement shall expire three (3) years after the Effective Time
except that the representations and warranties of Treadwell as to tax and ERISA
matters shall survive for seven (7) years after the Effective Time and except
that there shall be no limitation as to the survival of the representations and
warranties of the parties contained in Sections 4.3, 4.4, 4.18. 4.22, 5.2, 5.4,
6.2, and 6.3.
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 Treadwell in the case of GHT or Treadwell 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 GHT or Treadwell ___________________________________
___________________________________
___________________________________
___________________________________
with a copy to: Susan Callison, Esq.
The Bogatin Law Firm
860 Ridge Lake Boulevard
Suite 360
Memphis, Tennessee 38120
-31-
<PAGE>
or to such other address as AACA or Treadwell 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.
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. The validity and construction of this Agreement
-------------
shall be governed by the laws of the State of Tennessee, 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 PAG
on the accrual method of accounting shall be taken into account by AACA and
VIVRA and not by PAG or the PAG 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.
-32-
<PAGE>
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 GHT, one selected by
AACA, and one who shall be appointed by the first two arbitrators), who shall be
located in the State of Tennessee, 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 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 the State of
Tennessee 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.
13.5.7 This arbitration section and all decisions of the arbitrator
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.
-33-
<PAGE>
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.
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. In the event that a suit, action, arbitration, or
---------------
other proceeding of any nature whatsoever, including, without limitation, any
proceeding under the U.S. Bankruptcy Code and involving issues peculiar to
federal bankruptcy law, any action seeking a declaration of rights or any action
for rescission, is instituted to interpret or enforce this Agreement or any
provision of this Agreement, the prevailing party shall be entitled to recover
from the losing party the prevailing party's reasonable attorneys', paralegals',
accountants', and other experts' professional fees and all other fees, costs,
and expenses actually incurred and reasonably necessary in connection therewith,
as determined by the judge or arbitrator at trial or other proceeding, or on any
appeal or review, in addition to all other amounts provided by law.
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
-34-
<PAGE>
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, Treadwell 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 GHT's rights under any GHT
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, Treadwell will cooperate with AACA in any reasonable arrangement that is
designed to provide for AACA the benefit of such asset, but Treadwell will not
be obligated to replace such asset with one of equal value or otherwise assume
additional material liability not contemplated in this Agreement.
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:
--------------------------
GEORGE H. TREADWELL, III, M.D., P.C.,
a Tennessee professional corporation ("GHT")
By:
--------------------------------
Title:
--------------------------
GEORGE H. TREADWELL, III
_____________________________________
-35-
<PAGE>
EXHIBIT 10.5
STOCK EXCHANGE AGREEMENT
------------------------
THIS STOCK EXCHANGE AGREEMENT (the "Agreement") is made as of July 31, 1995
by and among VIVRA INCORPORATED, a Delaware corporation ("Vivra" or "Buyer"),
------------------
and RAJ & JAY, INC., VADAKKIPALAYAM DEVARAJAN, M.D., CHEMMALE JAYAKRISHNAN,
--------------- ------------------------------ ----------------------
M.D., DAVID J. VIAL, M.D. and MARTIN BALLENGER, M.D. (collectively, "Sellers").
- ---- ------------------ ----------------------
RECITALS:
A. St. Charles Parish Dialysis Center, Inc., a Louisiana corporation, (the
"Company" or "SCDC"), owns and operates a facility (the "Facility") located at
853 Mulling Avenue, Luling, Louisiana 70080. SCDC provides (i) continuous
ambulatory peritoneal dialysis and hemodialysis services, treatments,
counselling and instruction at the Facility, in the home and on an out-patient
basis to persons with kidney diseases or conditions and (ii) acute care services
to patients at hospitals (collectively, the "Dialysis Business").
B. Sellers each own the number of shares of common stock, no par value per
share, of the Company set forth opposite their name on Exhibit A (collectively,
all such shares are referred to as the "SCDC Shares").
C. Vadakkipalayam Devarajan, M.D. and Chemmale Jayakrishnan, M.D. each own
50% of the common stock of Raj & Jay, Inc.
D. It is the intention of the parties to exchange the SCDC Shares pursuant
to the requirements of section 368(a)(1)(B) of the Internal Revenue Code (the
"Code").
E. Buyer desires to acquire from Sellers and Sellers desire to sell to
Buyer all of the SCDC Shares in exchange for capital stock of Buyer.
NOW, THEREFORE, it is agreed:
1. The Transaction.
---------------
1.1 Exchange of Stock. Subject to the terms and conditions contained
-----------------
herein, at the Closing (as hereinafter defined) Sellers shall sell, transfer and
assign to Buyer, and Buyer shall purchase, accept and receive all right, title
and interest in and to all of the SCDC Shares, free and clear of all options,
pledges, security interests, liens, charges or other encumbrances or
restrictions on transfer of any kind ("Encumbrances"), solely in exchange for
common stock of Vivra as required by section 368(a)(1)(B) of the Code.
-1-
<PAGE>
1.2 Consideration.
-------------
(a) Upon the terms and subject to the conditions hereof, and in
consideration of the transfer and delivery of the SCDC Shares, Vivra shall
deliver to each Seller (i) on or before August 15, 1995, that number of shares
of common stock, $.01 par value per share of Vivra ("Vivra Common Stock") equal
to (A) $700,000 divided by the Average Closing Price (as defined below)
multiplied by (B) the percentage set forth opposite the name of such Seller on
Exhibit A hereto under the heading "Percentage Ownership" (the "Seller's
Percentage Ownership"), and (ii) on the date set forth below in paragraph 1.3,
that number of shares of Vivra Common Stock equal to (A) the Purchase Price less
$700,000 divided by the Average Closing Price, multiplied by (B) the Seller's
Percentage Ownership, if such number is greater than zero (the "Post Closing
Payment").
(b) For purposes of this Agreement "Average Closing Price" shall mean the
average closing price of Vivra Common Stock on the New York Stock Exchange for
the twenty (20) consecutive trading days ending on the tenth (10th) trading day
prior to the Closing Date.
(c) All references in this Agreement to Vivra Common Stock shall be deemed
to include the associated right to purchase a share of Vivra Series A Junior
Participating Preferred Stock pursuant to the Rights Agreement between Vivra and
Bank of America National Trust and Savings Association. The shares of Vivra
Common Stock to be issued to the Sellers (including any Post Closing Payment (as
hereinafter defined)) are referred to in this Agreement as the "Vivra Shares."
The Vivra Shares shall initially be delivered to the Escrow Holder pursuant to
paragraph 4.2 of this Agreement.
1.3 Determination of Purchase Price. (a) The Purchase Price for the SCDC
-------------------------------
Shares (the "Purchase Price") shall be equal to (i) $1,120,000, plus (ii) an
amount (which may be a negative amount) equal to the sum of the accounts
receivable, cash and cash equivalents of the Company less the liabilities of the
Company (each as reflected on the Final Closing Balance Sheet) and shall be
determined in accordance with the provisions of this paragraph 1.3. Within
forty-five (45) days after the Closing, Vivra shall have prepared and delivered
to the Sellers a balance sheet for the Company as of the date of the Closing,
along with a statement setting forth in reasonable detail the computation of the
Purchase Price (the "Closing Balance Sheet"). The Closing Balance Sheet shall
be prepared in accordance with generally accepted accounting principles and
procedures used in, and on a basis consistent with, those applied by the Company
in preparing the December 31, 1994 balance sheet included within the Financials
(as hereinafter defined); provided, however, that for purposes of the Closing
Balance Sheet the following provisions shall govern:
-2-
<PAGE>
to an accrual basis of accounting.
(b) Vivra shall promptly provide the Sellers with access to all
information which the Sellers shall reasonably request to verify the Closing
Balance Sheet. The Closing Balance Sheet as delivered to the Sellers shall be
final for purposes of determining the Purchase Price unless Vivra is given
written notice that the Sellers dispute the calculation of the Purchase Price
(the "Dispute Notice") within ten (10) business days after the Closing Balance
Sheet has been given to the Sellers. Any Dispute Notice shall set forth in
reasonable detail the items in dispute. In the event a Dispute Notice is timely
given to Vivra, Vivra and the Sellers shall have thirty (30) days to resolve the
dispute and if not resolved, the dispute shall be submitted to a "Big Six"
accounting firm chosen by lot (the "Arbitrator") which shall be instructed to
arbitrate such dispute and determine the Purchase Price within thirty (30) days.
Each party shall pay its own fees and expenses in connection with resolving a
Dispute Notice. Buyer and Sellers shall each pay half of the fees and expenses
of such Arbitrator. The resolution of the dispute by the Arbitrator shall be
set forth in writing and shall be conclusive and binding upon and non-appealable
by the parties, and the determination of the Purchase Price shall become final
upon the date of such resolution and may be entered as a final judgment in any
court of proper jurisdiction. The Closing Balance Sheet as (i) delivered by
Vivra if a Dispute Notice is not properly delivered, (ii) determined by mutual
agreement of Vivra and the Sellers or (iii) determined by the written resolution
of the Arbitrator shall be the Final Balance Sheet. Vivra shall pay the Post
Closing Payment, if any, to the Sellers by delivery of the required number of
shares of Vivra Common Stock to the Escrow Holder within fifteen (15) business
days after the Final Closing Balance Sheet is determined.
(c) In the event that the Purchase Price as finally determined is less
than $700,000, then the Sellers shall pay to Vivra such deficiency within
fifteen (15) business days after the Final Closing Balance Sheet is determined.
Such deficiency shall be paid by delivering (or instructing the Escrow Holder to
deliver) that number of shares of Vivra Common Stock equal to the deficiency
divided by the Average Closing Price.
1.4 Transfer of Custody of Patient Records. Sellers agree to turn over to
--------------------------------------
Vivra on the Closing Date custody of all existing records, files, charts, x-ray
files and similar data pertaining to each Patient, as hereinafter defined, and
in Sellers' possession as of the Closing Date (collectively the "Patient
Records"). "Patient" shall mean any past or current patient treated at the
Facility and for whom Sellers keep, maintain or have custody of any records,
files, charts, x-ray files or any similar data. Vivra agrees to accept custody
of the Patient Records and to hold, utilize and deliver them pursuant to the
instructions of the Patient to whom they
-3-
<PAGE>
pertain. The parties agree to use their best efforts to comply with all laws
and regulations with respect to the handling and storage of the Patient Records.
1.5 Noncompetition, Nonsolicitation and Nondisclosure Covenants.
-----------------------------------------------------------
1.5.1 Covenants.
---------
(a) Noncompetition Covenant. The Sellers agree that for a period (the
-----------------------
"Restricted Period") beginning on the Closing and ending on the tenth (10th)
anniversary thereof, no Sellers nor any affiliate of the Sellers will, either
jointly or individually, directly or indirectly, compete with Vivra or its
affiliates or own, manage, operate, join, control, advise, consult with or
participate in the ownership, operation, management or control (other than as a
shareholder owning less than five percent (5%) of the capital stock of a company
whose stock is publicly traded on a national exchange) of any business engaged
in the provision of chronic in-patient, outpatient or home hemodialysis,
continuous ambulatory peritoneal dialysis, acute care dialysis services,
intradialytic parenteral nutrition, nerve conduction testing and bone
densitometry services (individually and collectively, a "Competing Business")
within a fifty (50) mile radius of the Facility (the "Restricted Area"), nor
will they advise, assist, consult with, lease or sell real property to (or
permit their successors or assigns to do so) or aid in the establishment or
operation of a Competing Business in the Restricted Area during the Restricted
Period; provided, however, that Sellers will not be prevented from (a)
practicing medicine, including the treatment of patients at any facility, within
the Restricted Area or from engaging in teaching, research or other academically
oriented activities or (b) operating one dialysis facility in Plaquemines
Parish, Louisiana.
(b) Nonsolicitation Covenant. Each Seller agrees that during the
------------------------
Restricted Period, he will not, either jointly or individually, directly or
indirectly, solicit any employees of Vivra, its affiliates or the Company for or
on behalf of any business similar to the Dialysis Business within the Restricted
Area.
(c) Nondisclosure Covenant By Sellers. In the operation and development
---------------------------------
of Vivra's existing businesses and the planning and development of their
proposed businesses, Vivra and its affiliates (including the Company) generate
information and data which is and will be proprietary and confidential (the
"Confidential Information") the disclosure of which would be extremely
detrimental to their business and of great assistance to their competitors. The
Confidential Information includes, but is not limited to:
-4-
<PAGE>
(i) Development. Data, plans and projections regarding the location,
-----------
development and expansion of existing and proposed facilities;
(ii) Marketing. Market surveys, studies and analyses;
---------
(iii) Services. Information concerning the identities,
--------
locations and qualifications of professionals and other persons
presently, or prospectively to be, retained or employed by Vivra or
any of its affiliates;
(iv) Suppliers, etc. Information concerning: the identities,
---------------
locations, prices, costs and other terms of dealings with referral and
reimbursement sources, suppliers, providers and supplier and provider
organizations and entities; administrative and accounting procedures
and policies of the U.S. Department of Health and Human Services and
the Health Care Finance Administration, the Medicare Program
("Medicare"), the End Stage Renal Disease Program ("ESRD"), the
Medicaid Program ("Medicaid"), comparable state offices and programs,
insurers and other third-party payers and information about
contractual and other arrangements, and affiliations with any of the
foregoing;
(v) Regulatory Matters. Information concerning legislative,
------------------
administrative, regulatory and zoning requirements, bodies and
officials;
(vi) Records. Medical, patient and personnel records;
-------
(vii) Data. Statistical, financial, cost and accounting data;
----
(viii) Patients. Existing and prospective patient lists, names
--------
and addresses;
(ix) Manuals. Administrative, accounting, operations and
-------
procedures manuals; and
(x) This Transaction. All writings, conversations and
----------------
information regarding the transactions contemplated by this Agreement.
Sellers understand and agree that, due to the highly competitive nature of
the health care industry and the Dialysis Business, disclosure of any of the
Confidential Information would be extremely damaging to Vivra and its
affiliates. To the extent that any such Confidential Information becomes
available to Sellers each Seller agrees that he will not use or divulge
-5-
<PAGE>
such information without the prior written consent of Vivra and that he holds
such information in a fiduciary capacity for the sole benefit of Vivra. Sellers
also agree that the Confidential Information includes but is not limited to
trade secrets within the meaning of any and all applicable state and federal
statutes, rules and regulations, and that if any Seller breaches this covenant,
Vivra shall in addition to all other remedies, have available the remedies
provided by all such state and federal statutes, rules and regulations as well
as such remedies as may otherwise be available. The restrictions set forth in
this paragraph 1.5.1(c) shall not apply to any part of the Confidential
Information: (i) which is or becomes generally available to the public or
publicly known other than as a result of disclosure by Sellers; (ii) which
becomes available to Sellers on a nonconfidential basis from a source other than
Vivra or its or affiliates who is not bound by a non-disclosure obligation; or
(iii) to the extent it is disclosed by Sellers pursuant to the requirement of a
governmental agency or court of competent jurisdiction or as otherwise required
under applicable law.
(d) Buyer's Nondisclosure Covenant. Prior to the Closing Date, Buyer
------------------------------
agrees to (i) keep all writings, conversations and information regarding the
transactions contemplated by this Agreement strictly confidential and not to
disclose them to any third parties, except its officers, attorneys, accountants,
and other consultants, and (ii) keep in the strictest confidence all financial
and other information and data provided to it by the Sellers with respect to the
Company, and not to divulge or discuss any such information, or provide copies
or extracts thereof to any third parties.
1.5.2 Transferability. Sellers agree that the covenants contained in
---------------
paragraph 1.5.1 (the "Covenants") may be assigned by Vivra to any person, firm
or business entity to whom the ownership and operation of the Facility may be
transferred, it being the intention of the parties that the Covenants shall be
binding on or inure to the benefit of, as the case may be, any of their
successors with the same force and effect as if the Covenants had been made by
and with such successors.
1.5.3 Severability. It is further understood and agreed that the scope of
------------
the Covenants is reasonable in activities, time and area, and the Covenants are
fairly necessary to protect the investment of Vivra hereunder. Nevertheless, it
is further agreed that the Covenants shall be regarded as severable and shall be
operative as to activities, time and area to the extent that they may be made so
operative, and if any part of them is declared invalid or unenforceable as to
activities, time or area, the validity and enforceability of the remainder shall
not be affected.
1.5.4 Injunction. It is further understood and agreed that Vivra will
----------
suffer irreparable injury for which it may have
-6-
<PAGE>
no adequate remedy at law as a result of the breach of these Covenants, and that
Vivra shall be entitled to appropriate remedies of specific performance and
injunctive relief in the event of such breach.
2. Representations and Warranties of Sellers. Each of the Sellers,
-----------------------------------------
jointly and severally, represents and warrants to Buyer as of the date hereof,
and as of the Closing Date, as follows:
2.1 Organization and Capitalization.
-------------------------------
(a) The Company is, and on the Closing Date will be, a Louisiana
corporation duly organized, validly existing and in good standing under the laws
of the State of Louisiana, and has full power and authority to carry on the
Dialysis Business.
(b) The authorized capital stock of the Company consists of one hundred
(100) shares of common stock, no par value, of which one hundred (100) shares
are issued and outstanding on the date hereof. All of the SCDC Shares have been
duly authorized and validly issued and are fully paid and nonassessable and were
not issued in violation of any preemptive or other right of any person. There
are no outstanding options, rights, warrants, conversion rights or other
agreements or commitments to which any Seller or the Company is a party or
binding upon any Seller or the Company providing for the issuance or transfer by
any Seller or the Company of any of the capital stock of the Company. Each
Seller is the sole record and beneficial owner of the SCDC Shares set forth
opposite his name on Exhibit A, and has good and marketable title to such SCDC
Shares and the absolute right, power and capacity to sell, assign, transfer and
deliver such SCDC Shares to Buyer free and clear of any liens, encumbrances,
pledges, security interests, restrictive agreements, options, rights of first
refusal, transfer restrictions, conditional sales agreements, voting trust
arrangements, voting agreements or claims of any nature whatsoever. Each Seller
is conveying to Buyer good and marketable title to such SCDC Shares free of any
interest whatsoever of third parties.
2.2 Authority. All actions required to be taken by any Seller to
---------
authorize and approve the execution, delivery and performance of this Agreement
and the other agreements to be delivered at Closing, and the consummation of the
transactions described herein have been duly taken. Sellers have the power and
authority (without the consent of any other person) to enter into, deliver, and
perform this Agreement and the other agreements to be delivered at Closing.
This Agreement, and the other agreements to be delivered at Closing, when
executed and delivered by each Seller, will be the valid and binding obligations
of Sellers enforceable against each such Seller according to their terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws, regulations and authorities from time to time in effect
affecting creditors' rights generally and to general principles
-7-
<PAGE>
of equity, whether considered in a proceeding in equity or at law.
2.3 Financial Statements.
--------------------
2.3.1 Statements Delivered. Sellers have delivered or will deliver to
--------------------
Buyer the following statements:
(a) Balance Sheet and Income Statement. Balance sheets and statements of
----------------------------------
profit and loss for the Dialysis Business at and for the years ended December
31, 1993 and December 31, 1994 and at and for the six (6) months ended June 30,
1995 (Schedule 2.3.1(a)) (the "Financials").
(b) Treatment Report. A report showing all treatments provided by the
----------------
Dialysis Business from January 1, 1993 through June 30, 1995 (Schedule 2.3.1(b))
(the "Treatment Report").
2.3.2 Representation. All of the Financials have been prepared on the
--------------
cash basis of accounting according to generally accepted accounting principles
consistently applied and fairly present the financial position and results of
operations of the Dialysis Business as of the dates and for the periods
indicated. The Company is not subject to any liability or obligation (whether
absolute, accrued, contingent or otherwise) which is not shown or provided for
on the Financials or otherwise described in narrative form on Schedule 2.3 1(a).
The Treatment Report accurately presents the number of treatments provided at or
by the Facility on the dates thereof and for the period covered thereby.
2.4 Assets. Schedule 2.4 contains a complete and correct list of all
------
material items of personal property used in connection with the Dialysis
Business or owned by the Company (the "Personal Property");
2.4.1 Extent. The Personal Property constitutes all material items of
------
personal property used in or necessary for the operation of the Dialysis
Business as presently operated; and the inventory on the Closing Date will be of
quality, quantity and variety customary for facilities of size and utilization
and with storage capacity comparable to the Facility;
2.4.2 Condition. There are no material defects or unsafe conditions with
---------
respect to the Assets (as defined below) and the Sellers do not know of any
facts which would make the Assets unsuitable for the uses for which they are
intended. All of the Personal Property is in good operating condition and
repair, ordinary wear and tear excepted. The Assets will furnish Buyer with all
of the capacity and rights to operate the Dialysis Business in the same manner
as presently and historically operated by the Company and Sellers.
-8-
<PAGE>
2.4.3 Title. Except as set forth on Schedule 2.4, the Company has all
-----
right, title and interest in, and good and marketable title to, all of the
assets, properties and rights used in the Dialysis Business (the "Assets") free
and clear of any Encumbrance.
2.5 Effect of Agreement. The execution and delivery of this Agreement by
-------------------
Sellers and the consummation of the transactions described herein, do not and
will not:
2.5.1 Articles of Incorporation. Violate the Company's Articles of
-------------------------
Incorporation or Bylaws;
2.5.2 Breach of Agreements. Violate, constitute a breach of, cause a
--------------------
default under, or permit the termination of any agreement, obligation, or give
rise to any liability, penalty, mortgage or deed of trust, security agreement or
other lien, charge or encumbrance, to which the Company is a party or to which
the Assets are subject or for which the Company or Buyer might become liable;
2.5.3 Acceleration of Indebtedness. Accelerate or constitute an event
----------------------------
entitling the holder of any indebtedness of the Company to accelerate the
maturity of any such indebtedness or to increase the rate of interest presently
in effect thereon; or
2.5.4 Judgments, etc. Violate, conflict with or result in the breach of
---------------
any judgment, order, writ, injunction, decree or any rule or regulation of any
court, governmental agency or instrumentality affecting the Sellers, the
Company, the Dialysis Business or the Assets.
2.6 Compliance with Law. The Dialysis Business has been conducted in
-------------------
conformity, and Sellers and the Company are in compliance with all federal,
state and local laws, regulations or orders, including without limitation,
employment, insurance, zoning, occupancy, building, occupational and licensure
laws, regulations and orders which affect the Dialysis Business and all laws
relating to Medicare and/or Medicaid, including, but not limited to, 42 U.S.C.
Section 1320(a)-7(a) et seq., 42 U.S.C. Section 1320(a)-7(b) et seq., 31 U.S.C.
Section 3729, and any other federal or state provision relating to the filing of
false claims or payments for referrals. Sellers have not received any notice
asserting a failure to comply with any such law, regulation or order which
notice has not prior hereto been fully and completely resolved to the
satisfaction of, or abandoned by, the noticing party. Without limitation of
paragraph 2.6:
2.6.1 Licenses etc. The Company holds all rights, permits, authority,
-------------
consents, licenses, certificates of need, exemptions, accreditations and the
like, including zoning approvals, variances and use or occupancy permits
necessary to enable it to (i) conduct the Dialysis Business as heretofore
conducted and (ii) obtain reimbursement under the Medicare,
-9-
<PAGE>
Medicaid and ESRD Programs and under all contracts, programs and other
arrangements with third-party payors, insurers or fiscal intermediaries
(collectively, the "Licenses"). Schedule 2.6.1 contains a complete and correct
list of the Licenses, showing their dates of expiration where applicable. The
Licenses are valid and in full force and effect and no violations exist in
respect thereof. There are no pending, or, to the knowledge of Sellers,
threatened, investigations or proceedings with respect to the Licenses. The
Facility has an existing Medicare Provider Agreement with the Health Care
Finance Administration of the Department of Health and Human Services and is
certified for participation in the Medicare, Medicaid and ESRD Programs, all of
which licenses, agreements, certifications, contracts and instruments are in
full force and effect. No defaults have occurred thereunder, and, to the best
knowledge of each Seller, no event has occurred which, with the giving of notice
or passage of time or both, would constitute a material default thereunder.
2.6.2 Hazardous Materials. Except as disclosed in Schedule 2.6.2, no
-------------------
hazardous or toxic material of any type has ever been generated, treated,
produced, stored, transported, released or disposed of on, around or beneath the
Facility (as hereinafter defined). No written notification has been received
with respect to the space occupied by the Facility (the "Premises") and there
are no proceedings or inquiries, pending or, to the knowledge of Sellers,
threatened, before any court, agency, authority or tribunal, involving,
concerning, or affecting the Premises, in which is in issue the violation of any
federal, state or local law or regulation pertaining to hazardous or toxic
materials. For purposes of this section, the phrase "hazardous or toxic
materials" includes substances defined as "hazardous substances," "hazardous
materials," "toxic substances," "hazardous waste," "extremely hazardous waste,"
or "restricted hazardous wastes," under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. section
9601, et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. section
1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. section
6901, et seq.; the Federal Water Pollution Control Act, 33 U.S.C. section 1251,
et seq.; and comparable provisions of state and local county and city
ordinances, or any substances so defined or stated in any of the regulations
adopted and publications promulgated pursuant to those laws as they may have
been amended from time to time.
2.6.3 Filing of Reports. Other than claims or reports pertaining to
-----------------
individual patients, Sellers will cause to be timely filed, all cost reports of
every kind whatsoever required by law or by written or oral contract or
otherwise to have been filed or made on or prior to the Closing Date with
respect to the purchase of services by third-party purchasers, including, but
not limited to, Medicare and Medicaid, insurance carriers and other fiscal
intermediaries. The Company and each Seller
-10-
<PAGE>
has timely filed, in a complete and correct manner, all requisite claims and
other reports required to be filed in connection with all state and federal
Medicare and Medicaid programs due on or before the date hereof. There are no
claims, actions, payment reviews or appeals pending or threatened before any
commission, board or agency, including, without limitation, any intermediary or
carrier, the Administrator of the Health Care Financing Administration, or the
Louisiana Department of Health and Rehabilitative Services or any other state or
federal agency with respect to any Medicare or Medicaid claims filed by Seller
on or before the date hereof or program compliance matters, which would
adversely affect the Company, any Seller, the Assets, the operation or utility
thereof, or the consummation of the transactions contemplated hereby. No
validation review or program integrity review related to any Seller or the
Company has been conducted by any commission, board or agency in connection with
the Medicare or Medicaid program, and no such reviews are scheduled, pending or,
to any Seller's knowledge, threatened against or affecting any Seller, the
Company, any of the Assets or the consummation of the transactions contemplated
hereby.
2.6.4 Occupational Safety. The Company has complied in all material
-------------------
respects with all requirements of the Occupational Safety and Health Act and its
state equivalents and regulations promulgated under any such legislation, the
consequences of a violation of which could have material adverse effect on the
Dialysis Business, and with all orders, judgments and decrees of any tribunal
under such legislation that apply to the Dialysis Business or the Assets.
2.6.5 Zoning. The operation and current use of the Premises are permitted
------
under existing zoning and other land use laws and regulations applicable to the
Premises, and there are no plans, studies or efforts of any governmental or
nongovernmental authority, association, agency, person or entity which would
affect Buyer's proposed use or operation of the Premises.
2.7 Litigation.
----------
2.7.1 Claims Actions, etc. Except as set forth in Schedule 2.7, there are
--------------------
no claims, actions, suits, arbitrations, legal or other proceedings pending or,
to the best knowledge of Sellers, threatened before any court or governmental or
administrative body or agency, or arbitration tribunal, nor are there any
outstanding orders, writs, judgments, injunctions or decrees of any court,
arbitrator or governmental agency to which any Seller or the Company is a party
related to the Dialysis Business;
2.7.2 Governmental Investigation. Except as shown on Schedule 2.7, no
--------------------------
investigations for claims against (i) the Company, any Seller, the Dialysis
Business or the Facility or (ii) to the best knowledge of any Seller, any of the
medical
-11-
<PAGE>
staff members or employees of the Facility, are pending or threatened by any
governmental agency or instrumentality; and
2.7.3 Judgments. Except as shown on Schedule 3.7, none of the Sellers or
---------
the Company is party to, nor are they the subject of, any judgment, order, writ,
injunction, or decree of any court or governmental agency or instrumentality
which relates to the Assets, the Company, the Dialysis Business, the condition
or operation of the Facility or the consummation of any of the transactions
described in this Agreement.
2.8 Improper Payments. None of the Sellers, the Company or any of the
-----------------
Sellers' or the Company's affiliates, employees, representatives or agents has,
directly or indirectly, within the past four (4) years, given or made or agreed
to give or make any illegal commission, payment, gratuity, gift, political
contribution or similar benefit to any customer, supplier, governmental employee
or other person who may be in a position to help or hinder the Dialysis
Business. None of the Sellers or the Company has filed any reports with any
governmental agency which disclose that it has participated in any of the
foregoing practices or acts giving rise to such practices.
2.9 Eminent Domain. There are no pending or, to the best knowledge of any
--------------
Seller, threatened proceedings in eminent domain or otherwise, affecting any of
the Assets or the Facility.
2.10 Insurance. Schedule 2.10 sets forth a complete and correct list and
---------
a brief description of all policies of fire, extended coverage, liability
(including, without limitation, medical malpractice and professional liability)
and all other kinds of insurance held by the Company covering the Assets, the
Facility and the Dialysis Business. These policies are and will be maintained,
in full force and effect, until the Closing Date. Schedule 2.10 also contains a
list of all claims made on such policies since January 1, 1993. There are no
pending or asserted claims against any insurance as to which any insurer has
denied liability.
2.11 Labor Arrangements. Except as shown on Schedule 2.11, the Company is
------------------
not a party to, bound by or obligated to contribute to, any collective
bargaining agreement or other similar contract with any labor organization, nor
is it a member of or affiliated with any organization, group or association as a
result of which it is bound as to the terms and conditions of employment or its
hiring or termination policies at the Facility with respect to any of its
employees. Except as disclosed in Schedule 2.11, the Company has not
experienced, and there is not pending or, to the best knowledge of any Seller,
threatened, any labor dispute, strike, work stoppage or slowdown or labor
disturbance affecting the Facility, nor has there been any labor union
organizing activity at the Facility within the last three (3) years. There is
no unfair labor practice or other charge or
-12-
<PAGE>
complaint pending, or, to the best knowledge of any Seller, threatened against
the Company, before any court, the National Labor Relations Board or any other
governmental agency.
2.12 Personnel; Compensation. Schedule 2.12 is a complete and correct
-----------------------
list of the names and addresses of all employees of the Company showing the
compensation payable to each and all accrued vacation time, sick leave and
holiday time through [July 31, 1995]. The Company has not increased the
compensation payable to any employee of the Company since May 26, 1995, without
the prior written consent of Vivra.
2.13 Employment Contracts and Employee Benefit Plans. Schedule 2.13
-----------------------------------------------
contains a complete and correct list and description of all employment contracts
to which the Company is a party or by which it is bound and of all pension,
bonus, profit sharing, retirement, stock option, medical expense, dental
expense, hospitalization, life insurance or other death benefit, severance, and
other benefit plans, agreements, arrangements or other programs providing
remuneration or benefits for employees at the Facility, including without
limitation any employee benefit plan defined in section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), whether or not
funded and whether or not reflected in any plan documents. There have been no
material defaults, breaches, omissions or other failings by the Company or, to
the best knowledge of any Seller, any fiduciary under any of these contracts or
programs.
2.13.1 Employee Benefit Plans. Without limitation of paragraph 2.13, as
----------------------
to each employee benefit plan, as defined in section 3(3) of ERISA sponsored by
the Company:
(a) Compliance. The Company is in compliance in all material respects
----------
with, and has taken all steps necessary to satisfy the requirements which are
prescribed by, any and all statutes, orders or governmental rules or regulations
currently in effect.
(b) Qualification. Where applicable, each such plan is qualified under
-------------
section 401 of the Internal Revenue Code of 1986, as amended (the "Code"), and
the plan sponsor has received a determination letter as to the continued
qualification of each such plan under the Code.
(c) Contributions. The Company has made all contributions to each such
-------------
plan required by the terms of the plan or any related collective bargaining
agreement as well as, where applicable, all contributions required to be made in
order to satisfy the minimum funding standards of section 302 of ERISA to the
extent such standards are applicable.
(d) Funding. With respect to any such plan subject to the minimum funding
-------
standards of section 302 of ERISA, if any, there
-13-
<PAGE>
is no accumulated funding deficiency within the meaning of such section and
there are no unfunded past service liabilities.
(e) Prohibited Transactions. The Company has not engaged in or been a
-----------------------
party to any prohibited transaction in connection with which the Company or the
Sellers or their successors could be subject to either a civil penalty assessed
pursuant to section 502(i) of ERISA or a tax imposed by section 4975 of the
Code.
(f) Reporting. The Company has complied with and prior to Closing will
---------
comply with reporting requirement as to any event which has occurred and any
condition which exists which would be deemed a reportable event with respect to
such plans within the meaning of section 404 of ERISA.
(g) Pension Benefit Guaranty Corporation. The Company has not incurred,
------------------------------------
and will not incur, any financial liability to the Pension Benefit Guaranty
Corporation except for premiums due, all of which have been or will be paid.
(h) Terminations. The Company has not terminated any such plan or any
------------
trust related thereto.
2.14 Brokers. Neither the Company nor any of the Sellers has employed,
-------
contracted for the services of, or authorized any broker or finder with respect
to the negotiations leading up to the execution of this Agreement or the
consummation of the transactions contemplated hereby.
2.15 Liabilities. Buyer will not be obligated for, nor will the Assets
-----------
secure or be subject to any liabilities or obligations of Sellers of any kind or
nature whether absolute, accrued, contingent, known, unknown or otherwise, and
whether normally set forth or reflected in a financial statement in connection
with, as result of or following the consummation of the transactions
contemplated hereby.
2.16 Material Contracts. Schedule 2.16 contains a correct and complete
------------------
list of all contracts, agreements, commitments, instruments, leases and
arrangements, including all amendments or supplements thereto, to which the
Company is a party or by which it is bound, or by which any of the Assets or the
Dialysis Business is subject or bound which: (a) are material to the Dialysis
Business or (b) meet any of the following descriptions: (i) any contracts,
agreements or arrangements with insurance companies, managed care plans,
hospitals, employers or other third parties pursuant to which health care
services are provided to patients; (ii) any contract or agreement not entered
into in the normal course of business; (iii) any contract or agreement which
involves future payments or receipts in excess of $ 5,000; (iv) any contract or
agreement not terminable without penalty or cause on 30 days or less notice; and
(v) any contracts or agreements with physicians or other providers of
-14-
<PAGE>
medical services on behalf of the Company (collectively, the "Material
Contracts"). Sellers have delivered accurate and complete copies of each
Material Contract to Buyer. All Material Contracts are valid, binding and
enforceable in accordance with their terms and are in full force and effect.
Neither Sellers nor the Company nor to the best of any Seller's knowledge, any
other party to any Material Contract is in breach of any provision of, in
violation of, or in default under the terms of any Material Contract. Except as
indicated on Schedule 2.16, no Material Contract will be effected by the
transactions contemplated by this Agreement.
2.17 Pooling of Interests. Except as contemplated or required under this
--------------------
Agreement:
(a) the Company has not been a division or subsidiary of another
corporation for the two (2) years preceding the Closing;
(b) the Company has not held more than 10% of the stock of any other
company or of Vivra at the date of initiation of the transactions contemplated
by this Agreement;
(c) the transactions contemplated by this Agreement shall be completed in
a single transaction or within one (1) year after the plan is initiated;
(d) the transactions contemplated by this Agreement shall be substantially
voting common stock in exchange for voting common stock;
(e) the Company has not, in order to consummate this transaction, changed
its voting common stock structure during the two years immediately preceding the
Closing;
(f) during the two years preceding the Closing, the Company has not
purchased treasury stock to consummate or avoid a business combination
transaction;
(g) the Company has not rearranged the relative ownership of shares among
its existing voting shareholders as a part of this transaction;
(h) none of the Vivra Shares shall be restricted as to voting rights as
part of this transaction;
(i) there is no "earnout" contingency as part of this transaction;
(j) no financial arrangements have been made with the Sellers which negate
the exchange of equity securities (such as loans made against stock issued); and
(k) to the best of the knowledge of the Sellers, neither the Company, nor
any of its affiliates, officers, or directors
-15-
<PAGE>
has taken any action or failed to take action which action or failure to take
action would jeopardize the treatment of Buyer's acquisition of the Company as a
"pooling of interests" for accounting purposes.
2.18 Receipt of Information. Seller 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
year ended November 30, 1994; (iv) a copy of Vivra's Quarterly Reports on Form
10-Q for the quarters ended February 28 and May 31, 1995; (v) a copy of Vivra's
Proxy Statement for Vivra's annual meeting held on April __, 1995.
2.19 Accounts Receivable. Schedule 2.19 sets forth an accurate and
-------------------
complete aging of all outstanding accounts and notes receivables as of June 30,
1995. All outstanding accounts and notes receivable reflected on the Financials
are due and valid claims against account debtors for services rendered, and are
not subject to any defenses, offsets or counterclaims. All receivables arose in
the ordinary course of business. No receivables are subject to any prior
assignments, claim, lien or security interest. The Company has no liability for
any discounts, refunds or otherwise except as set forth on the Financial
Statements.
2.20 Taxes. The Company has filed all returns, declarations and reports
-----
and all information returns and statements (collectively, "Returns") required to
be filed or sent by or on behalf of the Company with respect to all foreign,
federal, state, county, local and other taxes of every kind, including income,
gross receipts, excise, franchise, property, value added, import duties,
employment, transfer, payroll, sales and use taxes and any additions to tax and
any interest or penalties thereon (collectively, "Taxes") for any period ending
on or before the Closing Date. As of the time of filing, the Returns accurately
and correctly reflected, the income, business, assets, operations, activities
and status of the Business and any other information required to be shown
thereon. No extension of time in which to file a Return is currently in effect.
The Company has timely paid all Taxes required to be paid prior to the date
hereof. All Taxes which the Company is required by law to withhold or to
collect for payment have been duly withheld and collected, and have been paid to
the proper governmental entity or are being withheld by the Company for such
payment. All taxes which have not been paid on the date hereof have been
properly accrued for on the Financial Statements. Since its incorporation, the
Company has been taxable as an "S" corporation under the Internal Revenue Code
of 1986, as amended.
2.21 Bank Accounts. Schedule 2.21 sets forth the names and locations of
-------------
all banks, trust companies, savings and loan associations and other financial
institutions at which the
-16-
<PAGE>
Company maintains an account, deposit, safe deposit box, lock box or line of
credit or other loan facility relationship or account of any nature and the
names of all persons authorized to draw thereon, make withdrawals therefrom or
have access thereto. Schedule 2.21 sets forth an accurate and complete list of
all certificates of deposit, debt or equity securities and other investments
owned, beneficially or of record, by the Company ("Investments"). The Company
has good and marketable title to all of the Investments.
2.22 Transactions with Affiliates. Except as otherwise set forth on
----------------------------
Schedule 2.22, none of the Sellers nor any Affiliate (as hereinafter defined) of
any Seller, directly or indirectly: (a) owns any debt, equity or other interest
in any corporation, association or other entity which is a competitor, lessor,
lessee, customer or supplier of the Company, (b) has any cause of action or
other claim against or owes any amount to, or is owed any amount by, the
Company; (c) has any interest in or owns any property or right used in the
conduct of the Dialysis Business; (d) is a party to any contract, lease,
agreement, arrangement or commitment of which the Company is a party or which is
used in the conduct of the Dialysis Business; or (e) received from or furnished
to the Company any goods or services. For purposes of this Agreement, the term
"Affiliate" means any corporation, partnership, trust or other entity controlled
by the Sellers, individually or collectively, or any member of any Seller's
immediate family.
2.23 Interim Change. Except as set forth in Schedule 2.23 or in the
--------------
Financials, since December 31, 1994 there has not been:
(a) any material adverse change in the financial condition, assets,
liabilities, personnel or business of the Company or in its relationships with
suppliers, patients, lessors, lessees or regulators;
(b) any damage, destruction or loss of property, whether or not covered by
insurance, materially and adversely affecting the Company;
(c) any increase in the compensation or benefits payable or to become
payable by the Company to any of its officers or to employees;
(d) any extension of credit by the Company other than in the ordinary
course of business;
(e) any redemption, purchase or other acquisition by the Company of any of
its Shares;
(f) any sale, transfer or disposal by the Company or purchase, or
agreement therefor by the Company of any properties
-17-
<PAGE>
or assets or provision of services except in the ordinary course of business and
consistent with past practices;
(g) any declaration or payment of any dividends or other distributions in
respect of the capital stock of the Company; or
(h) any transaction not in the ordinary course of business.
Except as disclosed on Schedule 2.23, since December 31, 1994 the Company has
not incurred or become subject to, or agreed to incur or become subject to, any
liability or obligation, contingent or otherwise, except current liabilities and
contractual obligations which are disclosed on Schedule 2.16 or not required to
be so disclosed in the ordinary course of business.
2.24 Disclosure by Seller. Set forth on Schedule 2.24 is a description of
--------------------
any of the following events:
(a) any disciplinary, peer review or professional review investigation,
proceeding or action instituted against any Seller by any licensure board,
hospital, medical school, health care facility or entity, professional society
or association, third party payor, peer review or professional review committee
or body, or governmental agency;
(b) any investigation or proceeding, whether administrative, civil or
criminal, relating to an allegation against any Seller of filing false health
care claims, violating anti-kickback laws or engaging in other billing
improprieties;
(c) any allegation, or any investigation or proceeding based on any
allegation or proceeding based on any allegation, against any Seller of
violating professional ethics or standards, or engaging in illegal, immoral or
other misconduct (of any nature or degree), relating to the practice of
medicine; and
(d) any denial or withdrawal of an application of any Seller in any state
for licensure as a physician, for medical staff privileges at any hospital or
other health care entity, for board certification or recertification, for
participation in any third party payment program, for state or federal
controlled substances registration, or for malpractice insurance.
2.25 No Untrue Representation or Warranty. No representation or warranty
------------------------------------
by Sellers in this Agreement, and no statement, schedule, certificate furnished
or to be furnished to Buyer pursuant to this Agreement, or in connection with
the transactions described it, contains or will contain any untrue statement of
a material fact, or omits or will omit to state a material fact necessary to
make the statements contained therein not misleading.
-18-
<PAGE>
3. Representations and Warranties of Buyer. Buyer represents and warrants
---------------------------------------
to Sellers that:
3.1 Organization and Good Standing. Buyer is, and on the Closing Date,
------------------------------
will be, a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware.
3.2 Authority. The execution, delivery and performance of this Agreement
---------
and the consummation of the transactions described in it by Buyer have been duly
authorized and approved by Buyer's Board of Directors (either specifically or by
appropriate grant of general authority), and by all other necessary corporate
action on its part, and no stockholder approval is required of such actions.
The person who has executed this Agreement on behalf of Buyer has been duly
authorized to do so by all necessary corporate action by Buyer. Buyer has the
corporate power and authority to enter into, deliver, and perform this
Agreement, and this Agreement, when executed and delivered by Buyer, will be a
valid and binding obligation of Buyer enforceable against Buyer according to its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and other similar laws, regulations and authorities from time to time in effect
affecting creditors' rights generally and to general principles of equity,
whether considered in a proceeding in equity or at law.
3.3 Brokers. Buyer has not employed, contracted for the services of, or
-------
authorized any broker or finder with respect to the negotiations, execution or
performance of this Agreement or the consummation of the transactions
contemplated hereby.
3.4 Effect of Agreement. Neither the execution and delivery of this
-------------------
Agreement by Buyer nor the consummation of the transactions described in it at
the Closing will:
3.4.1 Articles and Bylaws. Violate Buyer's Certificate of Incorporation
-------------------
or Restated Bylaws;
3.4.2 Breach of Agreements. Violate, constitute a breach of, cause a
--------------------
default under, or permit the termination of any agreement, obligation,
liability, mortgage or deed of trust, security agreement or other lien, charge
or encumbrance, to which Buyer is subject or for which Sellers might become
liable;
3.4.3 Acceleration of Indebtedness. Accelerate or constitute an event
----------------------------
entitling the holder of any indebtedness of Buyer to accelerate the maturity of
any such indebtedness or to increase the rate of interest presently in effect
thereon; or
3.4.4 Judgments, etc. Violate, conflict with or result in the breach of
---------------
any judgment, order, writ, injunction, decree, or, to the best knowledge of
Buyer, any rule or regulation of any court, governmental agency or
instrumentality affecting Buyer.
-19-
<PAGE>
3.5 Litigation. There is no material litigation, governmental
----------
investigation or other proceeding pending or, to the best knowledge of Buyer,
threatened to which Buyer is a party that would adversely affect the ability of
Buyer to consummate the transactions described in this Agreement.
3.6 Vivra Stock. The Vivra Shares have been duly authorized by all
-----------
necessary corporate action of Vivra and when delivered hereunder will be validly
issued, fully paid and nonassessable.
4. Covenants of Sellers. Sellers jointly and severally covenant and agree
--------------------
that:
4.1 Conduct of Business Pending the Closing. From the date of this
---------------------------------------
Agreement to the Closing Date, Sellers will or will cause the Company to:
4.1.1 Conduct of Dialysis Business: Operation of Facility. Conduct the
---------------------------------------------------
Dialysis Business and operate the Facility as presently conducted and operated
and only in the ordinary course of business and will comply in all material
respects with all applicable legal and contractual obligations;
4.1.2 Preservation of Organization. Use best efforts to preserve the
----------------------------
Dialysis Business and the Facility intact and to preserve the goodwill of all
suppliers, customers, patients, physicians, providers and others with whom
Sellers or the Company have business relationships;
4.1.3 Maintenance of Premises. Use best efforts to preserve and maintain
-----------------------
the Premises in good condition, ordinary wear and tear excepted, and repair any
damage to the Premises;
4.1.4 Employees. Take no action which would interfere with Vivra's
---------
relations with employees at the Facility and not increase the compensation
payable to any of such employees;
4.1.5 Liabilities. Not incur any obligation or liability other than
-----------
current liabilities incurred in the ordinary course of business consistent with
past practices; and
4.1.6 Alienation of Assets. Not sell, transfer, distribute or encumber
--------------------
any of the Assets, except for Inventory expended or sold in the ordinary course
of business.
4.1.7 Certain Payments. Not (a) declare or pay any dividend or make any
----------------
other distribution with respect to its securities or redeem or purchase any
securities, or (b) perform, pay or otherwise discharge, any obligation or
liability except for current liabilities paid in the ordinary course of business
consistent with past practices.
-20-
<PAGE>
4.1.8 Material Contracts. Not enter into, amend or terminate any Material
------------------
Contracts.
4.2 Restrictions on Transfer. Each Seller agrees that he will not
------------------------
directly or indirectly sell, assign, transfer, give, pledge, encumber or
otherwise dispose of any interest in his SCDC Shares, prior to the Closing and
will not directly or indirectly sell, assign, transfer, give, pledge, encumber
or otherwise dispose of any interest in the Vivra Shares acquired by such Seller
(including any Vivra Shares issued as part of the Post Closing Payments) until
an earnings report including at least 30 days of the combined operations of
Vivra and the Dialysis Business has been published (the "Combined Earnings
Report"). Legal counsel for the Sellers (the "Escrow Holder") shall hold the
Vivra Shares in escrow until the Combined Earnings Report has been published and
thereafter the Escrow Holder shall deliver the Vivra Shares to Sellers and upon
such delivery, the provisions of this paragraph 4.3 shall be no longer
effective. Escrow Holder shall be entitled to deposit such shares with a court
of law in the event of a dispute and Vivra shall not seek to have Escrow Holder
disqualified from representing Sellers in such dispute. Vivra and Sellers shall
jointly indemnify, defend and hold Escrow Holder harmless from any and all
reasonable expenses and fees, costs, damages and liabilities arising or incurred
by reason of it serving as Escrow Holder.
4.3 Facility Lease. Sellers shall cause the owner of the Premises to
--------------
enter into the Facility Leases (as hereinafter defined).
4.4 Insurance.
---------
4.4.1 Maintenance of Existing Insurance. Sellers shall cause the Company
---------------------------------
to maintain in full force and effect to the Closing Date all policies of
insurance relating to the Assets and the Facility now in effect and will give
all notices and present all claims under such policies of insurance in a timely
fashion up to the Closing Date.
4.4.2 Tail Coverage. Sellers shall, at Sellers' expense, obtain liability
-------------
insurance coverage for all occurrences prior to the Closing Date and shall list
Vivra as an additional insured under such policy.
4.5 Audited Financial Statements. On and after Closing, Sellers shall
----------------------------
cooperate with Vivra in the preparation of such audited financial statements in
respect of the Assets and results of operations of the Dialysis Business prior
to Closing as Vivra reasonably deems appropriate for Vivra's financial and tax
reporting purposes. Vivra shall pay the reasonable accounting fees incurred by
Sellers in connection with the preparation of such audited financial statements
but only to the
-21-
<PAGE>
extent that such fees would not otherwise have been incurred by Seller.
4.6 Satisfaction of Conditions Precedent. Sellers, in addition to
------------------------------------
specific obligations set forth elsewhere in this paragraph 4, shall (i) upon
satisfaction of the conditions precedent set forth in paragraph 7, execute and
deliver the documents required to be delivered by Sellers pursuant to paragraph
8 and (ii) use their best efforts to consummate the transaction contemplated by
this Agreement and to satisfy or cause to be satisfied all of the conditions
precedent set forth in paragraph 6.
4.7 Supplements. If any representation, warranty or statement of Sellers
-----------
or any schedule delivered to Buyer shall become incorrect, Sellers shall
promptly deliver to Buyer a supplement in order that said representation,
warranty, statement, or schedule, as so supplemented, shall be true and correct,
provided, however, that no such supplement or amendment shall be considered in
determining the satisfaction of the conditions set forth in paragraph 6.1 and no
such supplement or amendment shall affect Sellers' obligations under paragraph
9.
5. Covenants of Buyer. Buyer covenants and agrees that:
------------------
5.1 Maintenance of Records; Access by Sellers. Subject to the applicable
-----------------------------------------
law of confidentiality and privacy, Buyer shall for a period of 7 years maintain
all business records of the Facility and make such records available for use by
Sellers as needed. Access to any such records shall be during normal business
hours, with prior notice to Buyer of the time when such access shall be needed.
Sellers' employees, representatives and agents shall conduct themselves in such
a manner as to not unnecessarily or unreasonably disrupt Buyer's normal business
activities.
5.2 Audited Financial Statements. On and after the Closing Date (and
----------------------------
after Closing), Buyer shall cooperate with Sellers in the preparation of such
audited financial statements in respect of the Assets and the results of
operations of the Dialysis Business prior to Closing as Sellers reasonably deem
appropriate for Sellers' financial and tax reporting purposes.
5.3 Satisfaction of Conditions Precedent. Buyer shall upon satisfaction
------------------------------------
of the conditions precedent set forth in paragraph 6, execute and deliver the
documents required to be delivered by Buyer pursuant to paragraph 8, use its
best efforts to consummate the transactions contemplated by this Agreement and
to satisfy or cause to be satisfied all of the conditions precedent which are
set forth in paragraph 7.
5.4 Public Announcement. Vivra agrees to assist the Sellers in announcing
-------------------
this transaction to the public in such a way that the Company's goodwill will be
preserved and the
-22-
<PAGE>
public's perception of the transaction will be that of a continuation of the
Company's business and not a disposition of assets.
6. Buyer's Conditions Precedent to Closing. Buyer's obligations to
---------------------------------------
purchase the SCDC Shares, deliver the Vivra Shares and perform its other
obligations under this Agreement are subject to the occurrence of or compliance
with each of the following conditions, all of which are for the sole benefit of
Buyer and may be waived by Buyer:
6.1 Warranties True and Correct. Each of the representations and
---------------------------
warranties of Sellers set forth in this Agreement shall be true and correct in
all material respects at and as of the Closing Date, and the covenants,
agreements and conditions required by this Agreement to be performed and
complied with by Sellers by such date shall have been performed and complied
with in all material respects.
6.2 Deliveries. Sellers shall have executed and delivered all of the
----------
documents required to be delivered by Sellers pursuant to paragraph 8.
6.3 Approval. The form and substance of all certificates, instruments,
--------
opinions and other documents delivered to Buyer pursuant to this Agreement shall
be reasonably satisfactory to Vivra and its counsel.
6.4 Litigation. No litigation or governmental investigation, proposed or
----------
pending, shall have been commenced or threatened by persons other than Buyer or
its affiliates with regard to the transactions described in this Agreement,
which if successful, would have a material adverse effect on the operations or
financial condition of the Dialysis Business, the Facility or the Assets or any
party's ability to consummate the transactions contemplated by this Agreement.
6.5 Condition of Assets. The Dialysis Business and the Assets shall not
-------------------
have been adversely affected in any material way by any act of God, fire, flood,
accident, labor disturbance, legislation (proposed or enacted) or other event or
condition.
6.6 Registration of Vivra Shares. The registration statement covering the
----------------------------
sale of Vivra Shares to Sellers shall have remained effective and shall not be
the subject of any stop order or proceeding seeking a stop order and the Vivra
Shares shall have been authorized for listing on the New York Stock Exchange,
upon official notice of issuance.
6.7 Consents. All consents by third parties that are required for the
--------
transfer of the SCDC Shares or are required for the consummation of the
transactions contemplated hereby, or that are required in order to prevent a
breach of or a default under or a termination of any agreement to which the
Company is a party or to which any portion of the property of the Company
-23-
<PAGE>
is subject, shall have been obtained or provided for and shall remain in effect.
The Environmental Report shall be satisfactory to Vivra in its sole but good
faith discretion.
6.8 Due Diligence. Vivra shall have investigated the ownership,
-------------
conditions and nature of the business conducted by the Company and its financial
condition and results of operations in a due diligence investigation, the
results of which are satisfactory to Vivra in its sole but good faith
discretion. The Environmental Report shall be satisfactory to Vivra in its sole
but good faith discretion.
7. Seller's Conditions Precedent to Closing. Sellers' obligation to sell
----------------------------------------
the SCDC Shares is subject to the occurrence of or compliance with each of the
following conditions, all of which are for the sole benefit of Sellers and may
be waived by Sellers:
7.1 Warranties True and Correct. Each of the representations and
---------------------------
warranties of Buyer set forth in this Agreement shall be true and correct in all
material respects at and as of the Closing Date, and the covenants, agreements,
and conditions required by this Agreement to be performed and complied with by
Buyer by such dates shall have been performed and complied with in all material
respects.
7.2 Deliveries. Vivra shall have executed and delivered all of the
----------
documents required to be delivered by Vivra pursuant to paragraph 8.
7.3 Approval. The form and substance of all certificates, instruments,
--------
opinions and other documents delivered to Sellers pursuant to this Agreement
shall be satisfactory in all reasonable respects to Sellers and their counsel.
7.4 Litigation. No litigation or governmental investigation, proposed or
----------
pending, shall have been commenced or threatened by persons other than Sellers
or its affiliates with regard to the transactions described in this Agreement
which, if successful, would have a material adverse effect on any party's
ability to consummate the transactions contemplated by this Agreement.
7.5 Registration of Vivra Shares. The registration statement covering the
----------------------------
sale of the Vivra Shares to the Sellers shall have remained effective and shall
not be the subject of any stop order or proceeding seeking a stop order and the
Vivra Shares shall have been authorized for listing on the New York Stock
Exchange upon official notice of issuance.
8. Closing. The Closing of the transactions hereunder shall be effected
-------
as set forth in paragraph 8.
-24-
<PAGE>
8.1 Closing. "Closing" means the transfer of all of the SCDC Shares from
-------
Sellers to Buyer. The Closing shall occur on July 31, 1995 (the "Closing Date")
at the offices of McDermott, Will & Emery, Chicago, Illinois.
8.2 Deliveries. On the Closing Date, deliveries shall be made by Sellers
----------
as set forth in paragraph 8.2.1 and by Buyer as set forth in paragraph 8.2.2.
8.2.1 Deliveries by Sellers. Sellers shall deliver to Buyer the following
---------------------
documents and instruments, in form and substance reasonably satisfactory to
Buyer and its counsel, against delivery by Buyer of the items specified in
paragraph 8.2.2:
(a) Certificates. Certificate(s) evidencing all of the SCDC Shares,
------------
endorsed for transfer to the Buyer;
(b) Good Standing. A Certificate of good standing of the Company as of a
-------------
recent date from the Secretary of State of Louisiana;
(c) Corporate Documents. The minute books, by-laws and stock records of
-------------------
the Company, certified by the Secretary of the Company; and
(d) Resignations. Resignations of each member of the Board of Directors
------------
of the Company and each officer of the Company.
(e) Facility Lease. A lease for the premises currently occupied by the
--------------
Facility (the "Facility Leases") substantially in the form attached as Exhibit B
hereto, duly executed by the owner of the Premises;
(f) Investment Letter. A letter substantially in the form attached hereto
-----------------
as Exhibit C, executed by each of the Sellers.
(g) Sellers' Certificate. Certificates ("Sellers' Certificate") signed by
--------------------
each of the Sellers, dated the Closing Date, to the effect that each of the
representations and warranties made by Sellers in this Agreement are true and
correct at and as of the Closing Date and that each of the covenants, conditions
and agreements to be performed or complied with by Sellers by such date have
been so performed or complied with in all material respects, and that, to the
best knowledge of such signatory, there is no fact or condition which would
cause Sellers to be in breach of any of the covenants or representations and
warranties hereunder as of the Closing Date. The execution and delivery of the
Sellers' Certificate by Sellers shall not limit their liability and obligations
following the Closing Date.
-25-
<PAGE>
(h) Tail Insurance. Evidence that the insurance required by paragraph
--------------
4.4.2 of this Agreement has been obtained.
(i) Other. At the Closing, the Sellers shall take such other steps as may
-----
be necessary or appropriate to place the Buyer in actual possession and
operating control of the Dialysis Business and the Assets.
8.2.2 Deliveries by Buyer. Buyer shall deliver to Sellers (or, in the
-------------------
case of subparagraph (a), to the Escrow Holder) the following items against
delivery by Sellers of the items specified in paragraph 8.2.1:
(a) Vivra Shares. A certificate evidencing the number of Vivra Shares to
------------
be issued to each Seller at Closing.
(b) Resolutions. Copies of resolutions of the Board of Directors of
-----------
Vivra, duly certified by its Secretaries in form reasonably satisfactory to
counsel for Sellers, authorizing and approving the execution, delivery and
performance of this Agreement by Vivra and all actions to be taken by Vivra
hereunder.
(c) Buyer's Certificate. A certificate ("Buyer's Certificate") signed by
-------------------
an authorized officer of Buyer, dated the Closing Date to the effect that each
of the representations and warranties made by the Buyer in this Agreement are
true and correct at and as of the Closing Date and that each of the covenants,
conditions and agreements to be performed or complied with by Buyer by such date
have been so performed or complied with by Buyer by such date in all material
respects, and that, to the best knowledge of such signatory, there is no fact or
condition which would cause Buyer to be in breach of any of its representations
and warranties hereunder as of the Closing Date. The execution and delivery of
the Buyer's Certificate by Buyer shall not serve to limit any of Buyer's
liabilities and obligations following the Closing Date.
8.3 Closing Agreements. At the Closing, the parties shall execute,
------------------
acknowledge and deliver the following:
8.3.1 Medical Director Contract. A Medical Director Contract between
-------------------------
Community Dialysis Centers, Inc. and V.N. Devarajan, M.D., with a term of no
less than ten (10) years, substantially in the form attached hereto as Exhibit
D.
8.4 Termination. This Agreement may be terminated at any time prior to
-----------
the Closing:
8.4.1 by mutual consent of Sellers and Buyer;
8.4.2 by either Sellers or Buyer if there has been a material
misrepresentation or material breach of warranty on the part of the other party
in the representations and warranties set forth in this Agreement, or if events
have occurred which
-26-
<PAGE>
have made it impossible to satisfy a condition precedent to the terminating
party's obligations to consummate the transactions contemplated hereby; or
8.4.3 by either Buyer or Sellers if the Closing has not occurred by
September 1, 1995.
Termination of this Agreement shall not serve to relieve any party of any
responsibility or obligation for any breach of this Agreement occurring prior to
such termination.
9. Indemnification.
---------------
9.1 Indemnification.
---------------
9.1.1 By Sellers. Sellers jointly and severally shall, on demand,
----------
indemnify, defend and hold Buyer and its employees, agents, representatives,
successors and assigns (and, after the Closing, the Company), harmless from,
against and in respect of any and all claims, losses, costs, expenses,
liabilities and damages, including interest, penalties and reasonable attorneys'
fees and costs (collectively, "Claims"), that any of them shall incur or suffer
in connection with (i) the claims of any third party, including but not limited
to the Company's employees, against any of them for alleged obligations or
liabilities of the Company arising out of Sellers' operation of the Dialysis
Business prior to the Closing Date; or (ii) the breach by any Seller of any
covenant or agreement or the inaccuracy of any representation or warranty made
by any Seller herein. Notwithstanding anything contained herein, it is
expressly agreed that each of David J. Vial, M.D. and Martin Ballenger, M.D.
shall not be liable for the inaccuracy of the representations contained in
Sections 2.3, 2.4, 2.5, 2.6, 2.7, 2.9, 2.10, 2.11, 2.12, 2.13, 2.15, 2.16, 2.17,
2.19, 2.20, 2.21 and 2.23 which to their respective knowledge was true and
correct at the time of this Agreement and further provided that each of their
liability for breach of the representations contained in Sections 2.3, 2.4, 2.5,
2.6, 2.7, 2.9, 2.10, 2.11, 2.12, 2.13, 2.15, 2.16, 2.17, 2.19, 2.20, 2.21 and
2.23 shall not exceed 12.5% of the Purchase Price.
9.1.2 By Buyer. Vivra shall, on demand, indemnify, defend and hold
--------
Sellers and their successors and assigns harmless from, against and in respect
of any Claims, that any of them shall incur or suffer in connection with (i) the
Claims of any third party for alleged liabilities or obligations of Sellers
arising out of Buyer's operation of the Dialysis Business after the Closing
Date; or (ii) 9.1.1 or 9.1.2, the indemnitee shall notify the indemnitor within
a reasonable time after the indemnitee receives written notice of any Claim, and
shall give the indemnitor a reasonable opportunity to settle or defend any such
Claim; provided, however, that the indemnitee's failure to give such notice or
opportunity shall not impair or otherwise affect the indemnitor's obligation to
indemnify against such
-27-
<PAGE>
Claim except to the extent that the indemnitor demonstrates actual damage caused
by such failure; and, provided further, that the indemnitee may commence to
settle or defend the Claim as circumstances warrant, but any settlement shall
require the prior written consent of the indemnitor. The expenses of all
proceedings, contests or lawsuits with respect to Claims shall be borne by the
indemnitor. If an indemnitor wishes to assume the defense of a Claim, it shall
give written notice to the indemnitee within ten (10) days after notice from the
indemnitee of such Claim, and the indemnitor shall thereafter defend the Claim,
employing counsel reasonably satisfactory to the indemnitee, provided that the
indemnitee may participate in the defense at its own expense.
If the indemnitor does not assume the defense of, or if after so assuming
it fails to defend, any such claim, the indemnitee may defend it in such manner
as it may reasonably deem appropriate, and the indemnitee may settle such Claim
on such terms as it may reasonably deem appropriate so long as such settlement
only requires the payment of cash. The indemnitor shall promptly reimburse the
indemnitee for all reasonable expenses, legal and otherwise, as incurred by the
indemnitee in connection with the defense, appeal and settlement of such Claim.
If no settlement of such a Claim is made, the indemnitor shall satisfy any
judgment rendered with respect to it before the indemnitee is required to do so.
If a judgment is rendered against the indemnitee on any Claim, or any lien
attaches to any of the assets of any indemnitee, the indemnitor shall
immediately upon such entry or attachment pay such judgment in full or discharge
such lien unless, at the expense and direction of the indemnitor, an appeal is
taken under which the execution of the judgment or satisfaction of the lien is
stayed. If and when a final judgment is rendered in any such action, the
indemnitor shall forthwith pay such judgment or discharge such lien before any
indemnitee is compelled to do so.
10. Miscellaneous.
-------------
10.1 Notices. Any notice provided for in this Agreement and any other
-------
notice, demand or communication required or permitted to be given hereunder or
which any party may wish to send to another ("Notice" or "Notices") shall be in
writing and shall be deemed to have been properly given if served by (i)
personal delivery or (ii) registered or certified U.S. mail, or by comparable
private carrier, First Class, return receipt requested in a sealed envelope,
postage or other charges prepaid, or (iii) telegram, telecopy, facsimile, telex
or other similar form of communication, if followed by other physical delivery
in writing, addressed to the party for whom the Notice is intended as follows:
-28-
<PAGE>
If to Buyer:
Mr. David P. Barry
Vice President
Vivra Incorporated
2 Mareblu
P.O. Box 31059
Laguna Hills, CA 92654
FAX: (714) 831-6538
with a copy to:
Helen R. Friedli, Esq.
McDermott, Will & Emery
227 W. Monroe Street, Suite 3100
Chicago, IL 60606
FAX: (312) 984-3669
If to Sellers:
Vadakkipalayam Devarajan, M.D.
Chemmale Jayakrishnan, M.D.
David J. Vial, M.D.
Martin Ballenger, M.D.
853 Milling Avenue
Luling, Louisiana 70070
with a copy to:
Norman Pitre, Esq.
P.O. Box 34
Luling, Louisiana 70070
or such other address as any person may request by notice given as aforesaid.
10.1.1 Chance of Address. Any party to this Agreement may change its
-----------------
address for Notice from time to time by notice given in accordance with the
foregoing provisions.
10.1.2 Effective Time. All notice given pursuant to this paragraph shall
--------------
be deemed given and effective when received if personally delivered or sent by
telegram telecopy, telex or similar form of communication or, if mailed on the
date shown on the return receipt or if a receipt has not then been received,
five (5) days after mailing.
10.2 Payment of Expenses. The Sellers and Buyer shall each pay their or
-------------------
its own expenses, including without limitation, the disbursements and fees of
all their respective attorneys, accountants, advisors, agents and other
representatives, incidental to the preparation and carrying out of this Agree-
ment, whether or not the transactions contemplated hereby are consummated.
-29-
<PAGE>
10.3 Sales Tax. Sellers shall pay any and all sales or use taxes arising
---------
as a result of the transactions hereunder.
10.4 Schedules. Sellers agree to provide at Closing such materials,
---------
documents, and information as may be necessary to update the information
contained in any Schedule attached to this Agreement.
10.5 Termination. If the transactions contemplated hereby are not
-----------
consummated, Buyer will return to Sellers, and Sellers will return to Buyer,
upon request, the respective materials, information, documents, instruments and
records supplied by the other party in respect to such party's business
operations and shall keep confidential all information which that party has
gathered with respect to the business of the other.
10.6 Risk of Loss. Risk of loss or damage by fire or other casualty to
------------
the Assets or their taking by eminent domain before Closing is assumed by
Sellers. In the event of a material loss, damage to or taking of the Facility,
Buyer shall have the option of either (i) terminating this Agreement or (ii)
continuing this Agreement, in which event Sellers shall assign to Buyer all of
Sellers' rights against third persons and under any applicable insurance policy
and any condemnation awards and pay over to Buyer any sums received as a result
of such loss, damage or taking.
10.7 Waiver. The failure of any party to insist, in any one or more
------
instances, on performances of any of the terms and conditions of this Agreement
shall not be construed as a waiver or relinquishment of any rights granted
hereunder or of the future performance of any such term, covenant (or condition,
but the obligations of the parties with respect thereto shall continue in full
force and effect.
10.8 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.9 Entire Agreement. This Agreement (including the Schedules hereto)
----------------
and all other agreements and documents executed in connection herewith
constitute the entire agreement between the parties hereto with respect to the
subject hereof and supersede all prior agreements, understandings, negotiations
and discussions of the parties, whether oral or written, and there are no
warranties, representations or other agreements between the parties in
connection with the subject matter hereof, except as specifically set forth
herein or therein. No amendment, alteration or modification of this Agreement
shall be valid unless in each instance such amendment, alteration or
modification is expressed in a written instrument duly executed by the parties.
-30-
<PAGE>
10.10 Successors and Assigns. All the terms and provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto. Vivra may
assign any of its rights or obligations under this Agreement to any of its
wholly owned subsidiaries without the consent of any Seller. The Sellers may
not assign any of their rights or obligations under this Agreement without the
prior written consent of Vivra.
10.11 Further Assurances. Both before and after the Closing Date, the
------------------
parties will exercise good faith with the others and will take all appropriate
action and execute any documents, instruments or conveyances of any kind which
may be reasonably necessary or advisable to carry out any of the transactions
contemplated hereunder.
10.12 Survival of Representations and Warranties. All of the
------------------------------------------
representations, warranties, covenants and agreements contained in this
Agreement and in any certificate delivered pursuant hereto shall survive the
Closing and shall continue to be fully effective and enforceable.
10.13 Interpretation. Unless the context requires otherwise, all words
--------------
used in this Agreement in the singular number shall extend to and include the
plural, all words in the plural number shall extend to and include the singular
and all words in any gender shall extend to and include all genders.
10.14 Severability. If any provision, clause or part of this Agreement,
------------
or the application thereof under certain circumstances, is held invalid, the
remainder of this Agreement, or the application of such provision, clause or
part under other circumstances, shall not be affected thereby.
10.15 Release. Sellers hereby irrevocably and unconditionally release and
-------
discharge the Company and its officers, directors, successors and assigns (the
"Released Parties") from any and all actions, claims, causes of action, suits,
charges, complaints, contracts, agreements, liabilities or obligations of any
kind whatsoever in law or in equity, which Sellers or his affiliates, heirs,
executors, successors and assigns, can, shall or may have against the Released
Parties.
-31-
<PAGE>
10.16 Governing Law. This Agreement is to be governed by, and interpreted
-------------
under, the laws of the State of Delaware.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed as of the date first written above.
VIVRA INCORPORATED, a Delaware corporation
By
----------------------------------------------
David P. Barry
Vice President
SELLERS:
RAJ & JAY, INC.
By
----------------------------------------------
Vadakkipalayam Devarajan, M.D.
-------------------------------------------------
Vadakkipalayam Devarajan, M.D.
-------------------------------------------------
Chemmale Jayakrishnan, M.D.
-------------------------------------------------
David J. Vial, M.D.
-------------------------------------------------
Martin Ballenger, M.D.
