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Merger Agreement and Plan of Reorganization

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Title:

Merger Agreement and Plan of Reorganization

Entities:

PainCare Holdings, Inc.

Date:

2004

Size:

141KB total

Price:

$63

ID:

#821498

► M&A ► Reorganization ► Plans ► Merger Agreements & Plans of Reorganization
► Healthcare ► Healthcare Facilities

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MERGER AGREEMENT AND PLAN OF REORGANIZATION

BY AND AMONG

PAINCARE HOLDINGS, INC.,

PAINCARE ACQUISITION COMPANY VII, INC.,

HEALTH CARE CENTER OF TAMPA, INC.

AND

SAQIB KHAN, M.D.

EXECUTION DATE: DECEMBER 22, 2003.

TABLE OF CONTENTS

DEFINITIONS			1

TRANSACTION			1

	2.1	Transaction	1

	2.2	Effect of the Merger	2

	2.3	Effective Time; Filing of Certificates of Merger	2

	2.4	Articles of Incorporation	2

	2.5	Bylaws	2

	2.6	Directors and Officers	2

	2.7	Tax Consequences	2

	2.8	Additional Actions	2

	2.9	No Dissenters Rights	2

	2.10	Surrender of Certificates	3

	2.11	Conversion of Shares	3

	2.12	Shareholder Consent and Release	3

	2.13	Piggyback Registration	3

TRANSACTION CONSIDERATION			4

	3.2	Potential Post Closing Adjustments	4

	3.3	Earn-out Payment	5

	3.4	Pledge Agreement	8

REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDER			8

	4.1	Organization, Qualification, and Corporate Power	8

	4.2	Capitalization	8

	4.3	Authorization	8

	4.4	Noncontravention	9

	4.5	Brokers Fees	9

	4.6	Title to Assets	9

	4.7	No Subsidiaries	9

	4.8	Financial Statements	9

	4.9	Events Subsequent to Most Recent Year End	10

4.10	Undisclosed Liabilities	12

4.11	Tax Matters	12

4.12	Real Property	14

4.13	Intellectual Property	15

4.14	Condition of Tangible Assets	15

4.15	Contracts	15

4.16	Powers of Attorney	16

4.17	Insurance; Malpractice	16

4.18	Litigation	17

4.19	Health Care Compliance	17

4.20	Fraud and Abuse	18

4.21	Legal Compliance	18

4.22	Rates and Reimbursement Policies	19

4.23	Medical Staff	19

4.24	Employees	19

4.25	Employee Benefits	19

4.26	Physicians and Other Providers	21

4.27	Guaranties	22

4.28	Environment, Health, and Safety	22

4.29	Certain Business Relationships with the Company and its Affiliates	23

4.30	Third-party Payors	23

4.31	Bank Accounts	23

4.32	Tax Status	23

4.33	Binding Obligation	23

4.34	No Corporate Practice or Fee Splitting	23

4.35	Staff Privileges	23

4.36	Intentions	23

4.37	Securities Representation	24

4.38	HIPAA	25

4.39	Improper and Other Payments	25

4.40	Accounts Receivable	25

4.41	Medical Waste	26

	4.42	No Untrue or Inaccurate Representation or Warranty	26

REPRESENTATIONS AND WARRANTIES OF THE ACQUIRING COMPANIES			26

	5.1	Organization of PainCare and Subsidiary	26

	5.2	Authorization of Transaction	26

CLOSING			26

CLOSING DELIVERIES			27

	7.1	Deliveries of the Company and the Shareholder	27

	7.2	Deliveries of PainCare	28

CONDITIONS TO THE OBLIGATIONS OF PAINCARE AND SUBSIDIARY			28

	8.1	Representations and Warranties; Covenants and Agreements	28

	8.2	Due Diligence	28

POST-CLOSING COVENANTS			28

	9.1	General	28

	9.2	Tax Returns	29

	9.3	Transition	29

	9.4	Litigation Support	29

	9.5	Consents	29

	9.6	Operational Covenants	29

SURVIVAL AND INDEMNIFICATION			30

	10.1	Survival of Representations and Warranties	30

	10.2	Indemnification Provisions for the Benefit of PainCare and Subsidiary	31

	10.3	Indemnification Provisions for the Benefit of the Shareholder	31

	10.4	Matters Involving Third Parties	31

RESTRICTIVE COVENANTS; CONFIDENTIALITY			33

	11.1	Shareholder Restrictive Covenants	33

	11.2	Defenses	34

	11.3	No Running of Covenant During Breach	35

	11.4	Blue Pencil Doctrine	35

	11.5	Confidentiality, Press Releases, and Public Announcements	35

	11.6	Conduct of Business	36

	11.7	No Third-Party Beneficiaries	38

iii

MISCELLANEOUS.			38

	12.1	Entire Agreement	38

	12.2	Succession and Assignment	38

	12.3	Counterparts	38

	12.4	Headings	38

	12.5	Notices	38

	12.6	Governing Law; Jurisdiction; Attorneys Fees	39

	12.7	Amendments and Waivers	39

	12.8	Severability	39

	12.9	Expenses	39

	12.10	Further Assurances	39

	12.11	Construction	40

	12.12	Survival	40

	12.13	Incorporation of Exhibits and Schedules	40

	12.14	Submission to Jurisdiction	40

	12.15	Notification of Certain Matters	40

MERGER AGREEMENT AND PLAN OF REORGANIZATION

THIS MERGER AGREEMENT AND PLAN OF REORGANIZATION (the Agreement) is made and entered into as of this 22^nd day of December, 2003 (the Execution Date) by and among PAINCARE HOLDINGS, INC., a Florida corporation (PainCare), PAINCARE ACQUISITION COMPANY VII, INC., a Florida corporation (Subsidiary, and together with PainCare, the Acquiring Companies), HEALTH CARE CENTER OF TAMPA, INC. a Florida corporation (the Company), and SAQIB KHAN, M.D., an individual (the Shareholder). PainCare, Subsidiary, the Company and the Shareholder are sometimes referred to herein individually as a Party and collectively as the Parties.

RECITALS

A. The Company operates a medical practice and the Shareholder is a licensed medical provider in the State of Florida and owns all of the issued and outstanding shares of the Company stock;

B. PainCare desires to enter into this Agreement in order for the Subsidiary, which is a wholly-owned subsidiary of PainCare, to acquire the business and assets of the Company;

C. All of the Parties hereto desire to enter into this Agreement to effectuate the Merger, as hereinafter defined, of the Company with and into Subsidiary pursuant to the terms and conditions of this Agreement; and

F. It is the intention of the Parties for the Merger contemplated herein to qualify as a tax-free reorganization pursuant to Sections 368(a)(1)(A) and 368(a)(2)(D) of the Code.

NOW, THEREFORE, in consideration of the premises and the actual promises herein made, and in consideration of the representations, warranties, and covenants herein contained, the receipt and adequacy of which are hereby conclusively acknowledged, the Parties, intending to become legally bound, hereby agree as follows:

TERMS AND CONDITIONS

1. DEFINITIONS. All capitalized words that are not capitalized for purposes of grammar and which are not defined in the text of this Agreement are defined terms with their definitions set forth on Exhibit 1.

2. TRANSACTION.

2.1 Transaction. Upon the terms and subject to the conditions hereof and in accordance with the provisions of the Florida Business Corporation Act (the Florida Act), the Company shall be merged with and into Subsidiary (the Merger) and the separate existence of the Company shall thereupon cease, and Subsidiary, as the surviving corporation (the Surviving Corporation), shall continue to exist under and be governed by the Florida Act (the Transaction).

2.2 Effect of the Merger. At and after the Effective Time, as defined in Section 2.3 below, the effect of the Merger shall, in all respects, be as provided in the Florida Act. From and after the Effective Time, the Surviving Corporation shall continue to be a Florida corporation.

2.3 Effective Time; Filing of Certificates of Merger. The Merger shall be effected by the filing at the time of the Closing or as soon as practicable thereafter, of the Articles of Merger (the Articles of Merger), substantially in the form of Exhibit 2.3 attached hereto, with the Secretary of the State of Florida in accordance with the provisions of the Florida Act. The Merger shall become effective as of 11:59 p.m. on the date of such filing (the Effective Time) and the Parties shall take any and all other lawful actions and do any and all other lawful things necessary to cause the Merger to become effective.

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