EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
AMONG
CENTER HEALTHCARE, INC.
CHMS, INC.
CLC HEALTHCARE, INC.
DATED AS OF OCTOBER 6, 2003
00000X000
(CUSIP Number)
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement") is entered into as
of October 6, 2003, by and among Center Healthcare, Inc., a Nevada corporation
("Purchaser"), CHMS, Inc., a Nevada corporation and direct, wholly owned
subsidiary of Purchaser ("Merger Sub"), and CLC Healthcare, Inc., a Nevada
corporation ("CLC" or the "Company").
WHEREAS, Purchaser desires that the Company become a wholly owned
subsidiary of Purchaser through a Merger of Merger Sub with and into the
Company, with the Company as the surviving corporation, on the terms and subject
to the conditions set forth in this Agreement and Chapters 78 and 92A of the
Nevada Revised Statutes ("NRS");
WHEREAS, a committee consisting of independent members of the Board of
Directors of the Company (the "Special Committee") has (i) declared the
advisability of this Agreement, (ii) determined that the Merger is fair to the
holders of Common Shares, (ii) has determined that this Agreement, the Merger
and the other transactions contemplated by this Agreement are in the best
interests of the Company and its stockholders, and (iii) has recommended to the
Board of Directors of the Company that the Board of Directors declare the
advisability of this Agreement and approve and adopt this Agreement, the Merger
and the other transactions contemplated by this Agreement;
WHEREAS, based on the recommendation of the Special Committee, the
Board of Directors of the Company has adopted resolutions declaring the
advisability of this Agreement and has determined that this Agreement and the
Merger and the other transactions contemplated by this Agreement are in the best
interests of the Company and its stockholders and has approved and adopted this
Agreement, the Merger and the other transactions contemplated by this Agreement;
and
WHEREAS, Purchaser, Merger Sub and the Company desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and the other transactions contemplated by this Agreement and also to
prescribe various conditions to such transactions;
WHEREAS, Purchaser has been managing the Company and has had the
opportunity to conduct sufficient due diligence and is relying on his own
investigation of the Company and not on any information provided or to be
provided by CLC or its affiliates, except as expressly set forth herein.
WHEREAS, capitalized terms not otherwise defined herein shall have the
respective meanings given to them in Article XI hereof.
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(CUSIP Number)
Now, Therefore, in consideration of the premises and the
representations, warranties and agreements contained herein, the parties hereto
agree as follows:
THE MERGER
THE MERGER
(a) Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with Chapter 92A of the
NRS, Merger Sub shall be merged with and into the Company at
the Effective Time (the "Merger"). From and after the
Effective Time, the separate corporate existence of Merger
Sub shall cease and the Company shall be the surviving
corporation (the "Surviving Corporation"). The Surviving
Corporation shall continue to be governed by the laws of the
State of Nevada and the separate corporate existence of the
Company with all its rights, privileges, immunities, powers,
franchises, restrictions, disabilities and duties, shall
continue unaffected by the Merger except as set forth in
this Agreement.
(b) The closing of the Merger (the "Closing") will take place at
10:00 a.m., local time, at a location to be agreed by the
Company and Purchaser on a date to be agreed upon by the
parties (the "Closing Date"), which shall be no later than
the second business day after the first date that all of the
conditions set forth in Article VIII (other than those
conditions that by their nature are to be fulfilled at the
Closing, but subject to the fulfillment or waiver of such
conditions) have been satisfied or waived, unless another
place, time or date is agreed to by the parties.
(c) Subject to the provisions of this Agreement, on the Closing
Date, the parties shall cause to be filed with the Nevada
Secretary of State a certificate of merger (the "Certificate
of Merger") in accordance with the NRS and make all other
filings or recordings required under the NRS as are
necessary or advisable to effect the Merger. The Merger
shall become effective at the time of the filing of the
Certificate of Merger with the Nevada Secretary of State in
accordance with the NRS or at such subsequent date or time
as Purchaser and the Company shall agree and specify in the
Certificate of Merger (the time the Merger becomes effective
being hereinafter referred to as the "Effective Time").
(d) The Merger shall have the effects specified in Chapter 92A
of the NRS.
CONVERSION OF SHARES
(a) At the Effective Time, by virtue of the Merger and without any
action on the part of the Purchaser, the Company, Merger Sub or any holder of
Common Shares, each Common Share issued and outstanding immediately prior to the
Effective Time, including any shares of restricted stock issued pursuant to the
Stock Plans (other than (1) any Common Shares held in the treasury of the
Company or by any wholly-owned Subsidiary of the Company and (2) the Dissenting
Shares), shall be cancelled and retired and shall be converted into the right to
receive $1.00 in cash per share in accordance with the terms of Section 1.3,
without interest thereon (the "Merger Consideration"), payable to the holder
thereof upon surrender of the certificate formerly representing such Common
Share or any replacement certificates representing such Common Shares as may be
obtained from the transfer agent of the Company. At the Effective Time, by
virtue of the Merger and without any action on the part of the Purchaser, the
Company, Merger Sub
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(CUSIP Number)
or any holder of Common Shares, (i) all of the Common Shares held in the
treasury of the Company or by any wholly-owned Subsidiary of the Company shall
be cancelled and retired and no payment shall be made with respect thereto and
(ii) all of the Dissenting Shares shall be cancelled and retired and, so long as
such holders of Dissenting Shares comply with the provisions of Section 92A.420
of the NRS, the Dissenting Shares shall be converted into the right to receive
such consideration as may be determined to be due with respect to such
Dissenting Shares pursuant to Chapter 92A of the NRS.
(b) At the Effective Time, each share of common stock, par value $0.001
per share, of Merger Sub issued and outstanding immediately prior to the
Effective Time shall automatically be converted into and become one fully paid
and nonassessable share of common stock, par value $0.01 per share, of the
Surviving Corporation, and shall, after the Merger, be the only shares of
Surviving Corporation issued and outstanding.
(c) Dissenting Shares shall not be converted into the right to receive
the Merger Consideration as provided in Section 1.2(a) hereof, unless and until
such holder fails to perfect or effectively withdraws or otherwise loses such
holder's right to appraisal under Chapter 92A of the NRS. Such holder of
Dissenting Shares shall be entitled to receive payment of the fair value of such
Dissenting Shares in accordance with the provisions Chapter 92A of the NRS,
provided that such holder complies with the provisions of Section 92A.420 of the
NRS. If, after the Effective Time, any such holder fails to perfect or
effectively withdraws or otherwise loses such holder's right to appraisal, such
Dissenting Shares shall be treated as if they had been converted as of the
Effective Time into a right to receive the Merger Consideration. Prior to the
Effective Time, the Company shall give Purchaser prompt notice of any demands
received by the Company for appraisal of Common Shares, and Purchaser shall have
the right to participate in all negotiations and proceedings with respect to
such demands. The Company shall not, except with the prior written consent of
Purchaser, make any payment prior to the Effective Time with respect to, or
settle or offer to settle, or otherwise negotiate, any such demands.
SURRENDER AND PAYMENT
(a) No later than fifteen (15) Business Days following the execution of
this Agreement, Purchaser shall (i) designate a bank or other agent reasonably
acceptable to the Company to act as escrow and paying agent (the "Paying Agent")
for the payment of the Merger Consideration and (ii) shall deposit, or cause to
be deposited, in trust with the Paying Agent in cash the aggregate amount of the
Merger Consideration that would be payable if the Closing were to occur on such
date. Such amount being hereinafter referred to as the "Payment Fund."
(b) Promptly after the Effective Time, the Paying Agent shall mail to
each record holder of certificates that, immediately prior to the Effective
Time, represent Common Shares (the "Certificates"), the following: (i) a form of
letter of transmittal, which shall specify that delivery shall be effected, and
risk of loss and title to the Certificates shall pass, only upon proper delivery
of the Certificates to the Paying Agent and (ii) instructions for use in
surrendering such Certificates and receiving the Merger Consideration in respect
thereof. Upon the surrender of each such Certificate, together with a duly
executed letter of transmittal and any other required documents, the Paying
Agent shall, as soon as practicable, pay the holder of such Certificate an
amount equal to the product of (x) the Merger Consideration multiplied by (y)
the number of Common Shares formerly represented by such Certificate, less any
required withholding taxes, in consideration therefor, and such Certificate
shall be cancelled.
(c) Until surrendered pursuant to paragraph (b) above, each Certificate
(other than Certificates representing Common Shares held in the treasury of the
Company or by any wholly-owned Subsidiary of the Company or Dissenting Shares)
shall represent solely the right to receive the aggregate Merger Consideration
relating thereto, without any interest or other income thereon. The Paying Agent
shall invest the Payment Fund as directed by Purchaser (so long as such
directions do not impair the rights of the holders of Common Shares) in direct
obligations of, or money market funds, substantially all the assets of which are
invested in direct obligations of, the United States of America, or of any
agency the obligations of which are backed by the full faith and credit of the
United States of America. Any interest and other income resulting from such
investments shall be paid to Purchaser, and no interest or other income shall be
paid or accrued on the Payment Fund to the holders of Common Shares. Subject to
Section 1.3(d), the Paying Agent shall, pursuant to irrevocable instructions,
pay the Merger Consideration as set forth in this Section 1.3 out of the Payment
Fund. The Payment Fund shall not be used for any purpose other than as provided
herein. If the Merger Consideration (or any portion thereof) is to be delivered
to any Person, other than the Person in whose name the Certificate surrendered
is registered, it shall be a condition to such right to receive such Merger
Consideration that the Certificate so
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(CUSIP Number)
surrendered shall be properly endorsed or otherwise be in proper form for
transfer, that the signatures on the Certificate, shall be properly guaranteed,
and that the Person surrendering such Common Shares shall pay to the Paying
Agent any transfer or other taxes required by reason of the payment of the
Merger Consideration to a Person other than the registered holder of the
Certificate surrendered, or shall establish to the satisfaction of the Paying
Agent that such taxes have been paid or are not applicable. In the event any
Certificate shall have been lost, stolen or destroyed, the Paying Agent shall be
required to pay the full Merger Consideration in respect of any Common Shares
represented by such Certificate; provided, however, that Purchaser may require
the owner of such lost, stolen or destroyed Certificate to execute and deliver
to the Paying Agent a form of affidavit claiming such Certificate to be lost,
stolen or destroyed in form and substance reasonably satisfactory to Purchaser,
and the posting by such owner of a bond in such amount as Purchaser may
determine is reasonably necessary as indemnity against any claim that may be
made against Purchaser or the Paying Agent.
(d) At any time following the date which is 135 days after the
Effective Time, Surviving Corporation may require that the Paying Agent shall
deliver to Surviving Corporation all cash, Certificates and other documents in
its possession relating to the transactions contemplated by this Agreement.
Thereafter, each holder of a Certificate (other than Certificates representing
Common Shares held in the treasury of the Company or by any wholly-owned
Subsidiary of the Company or Dissenting Shares) may surrender such certificates
to the Surviving Corporation and (subject to applicable abandoned property,
escheat and similar Laws) receive in consideration therefor the aggregate Merger
Consideration relating thereto, without any interest or other income thereon.
Notwithstanding the foregoing, none of Purchaser, Merger Sub, the Surviving
Corporation, the Company or the Paying Agent shall be liable to any Person in
respect of any cash properly delivered to a public official pursuant to any
applicable abandoned property, escheat or similar Law. If any such Certificates
shall not have been surrendered immediately prior to such date on which any
payment pursuant to this Section 1.3 would otherwise escheat to or become the
property of any Governmental Authority, the cash payment in respect of such
Certificate shall, to the extent permitted by applicable Law, become the
property of the Surviving Corporation, free and clear of all claims or interests
of any Person previously entitled thereto.
(e) Immediately prior to the Effective Time, the stock transfer books
of the Company shall be closed, and, after the Effective Time, there shall be no
transfers on the stock transfer books of the Surviving Corporation of any Common
Shares which were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving Corporation or
the Paying Agent, they shall be surrendered and cancelled in return for the
payment of the aggregate Merger Consideration relating thereto, as provided in
this Section 1.3.
(f) From and after the Effective Time, all holders of certificates
evidencing ownership of Common Shares outstanding immediately prior to the
Effective Time shall cease to have any rights with respect to such Common Shares
except (i) holders of Common Shares that are not Dissenting Shares may surrender
their Certificates in exchange for the Merger Consideration pursuant to this
Agreement, (ii) holders of Dissenting Shares may perfect any rights of appraisal
as a holder of Dissenting Shares that such holders may have pursuant to Chapter
92A of the NRS, and (iii) holders of Dissenting Shares who fail to perfect or
withdraw or otherwise lose the right to appraisal may surrender their
Certificates in exchange for the Merger Consideration pursuant to this
Agreement.
STOCK OPTIONS
All options (the "Stock Options") to acquire Common Shares outstanding
immediately prior to the Effective Time under any stock option or similar plan
or agreement of the Company (such stock option or similar plans or agreements
being collectively referred to herein as the "Stock Plans"), whether or not then
exercisable, shall (by all necessary and appropriate action which shall be taken
by the Board of Directors of the Company or such appropriate committee or
committees thereof) be cancelled at the Effective Time, and (i) Purchaser shall
use commercially reasonable efforts so that each holder of a Stock Option shall
at the Effective Time, but in any event not more than two business days after
the Effective Time, receive from the Surviving Corporation (and if necessary
Purchaser will provide funds to the Surviving Corporation so that it is able to
make such payment), for each Common Share subject to a Stock Option, an amount
in cash equal to the excess, if any, of the Merger Consideration over the per
share exercise price of such Stock Option, without interest, in full settlement
of the Company's (and the Surviving Corporation's) obligations under each such
Stock Option, or (ii) to the extent that the per share exercise price of any
Stock Option equals or exceeds the Merger Consideration, at the Effective Time
such Stock Option shall be cancelled and the holder of such Stock Option shall
not receive or be entitled to receive any consideration from Purchaser, Merger
Sub or the Surviving Corporation in respect of such Stock Option. At least ten
days prior to the Closing Date, the Company shall deliver to Purchaser a list of
the holders of Stock Options, indicating the number of Stock Options held by
each holder of Stock Options, the exercise price and expiration date of such
Stock Options, and whether the Stock Options are exercisable. Notwithstanding
the foregoing, the amounts payable pursuant to this Section 1.4 shall be subject
to all applicable withholding taxes. The Company shall use commercially
reasonable efforts to approve the disposition of the Stock
00000X000
(CUSIP Number)
Options in accordance with the foregoing to the extent necessary to exempt such
dispositions under Rule 16b-3 of the Exchange Act.
ADJUSTMENTS
If at any time during the period between the date of this Agreement and
the Effective Time, any change in the outstanding shares of capital stock of the
Company shall occur by reason of any reclassification, recapitalization, stock
split or combination, exchange or readjustment of shares, or any similar
transaction, or any stock dividend thereon with a record date during such
period, the Merger Consideration shall be appropriately adjusted to provide the
holders of shares of Common Stock the same economic effect as contemplated by
this Agreement prior to such event.
WITHHOLDING TAXES
Each of the Paying Agent and the Surviving Corporation shall be
entitled to deduct and withhold from the Merger Consideration otherwise payable
pursuant to this Agreement to any holder or former holder of Common Shares such
amounts as may be required to be deducted or withheld therefrom under the Code,
or any provision of state, local or foreign Tax Law or under any other
applicable Law. To the extent that such amounts are so deducted or withheld,
such amounts shall be treated for all purposes under this Agreement as having
been paid to the Person to whom such amounts otherwise would have been paid.
THE SURVIVING CORPORATION
ARTICLES OF INCORPORATION
The amended and restated articles of incorporation of CLC in effect
immediately prior to the Effective Time shall be the articles of incorporation
of the Surviving Corporation at and after the Effective Time until thereafter
amended, in accordance with the terms thereof and the NRS.
BYLAWS
The bylaws of CLC as in effect immediately prior to the Effective Time
shall be the bylaws of the Surviving Corporation at and after the Effective
Time, and thereafter may be amended in accordance with their terms and as
provided by the articles of incorporation of the Surviving Corporation and the
NRS.
DIRECTORS AND OFFICERS
At and after the Effective Time, the directors and officers of the
Surviving Corporation shall be the directors and officers of Merger Sub
immediately prior to the Effective Time, until their respective successors have
been duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the articles of incorporation and
bylaws of the Surviving Corporation.
REPRESENTATIONS AND WARRANTIES OF CLC
CLC represents and warrants to Purchaser that the statements contained
in this Article III are true and correct to the best of CLC's knowledge or known
to Purchaser or except as set forth herein or disclosed in the CLC Disclosure
Letter or the CLC SEC Reports.
ORGANIZATION AND QUALIFICATION
(a) CLC is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada, is duly qualified to do business
as a foreign corporation and is in good standing in each jurisdiction in which
the character of CLC's properties or the nature of its business makes such
qualification necessary, except in jurisdictions, if any, where the failure to
be so qualified would not result in a CLC Material Adverse Effect. CLC has all
requisite corporate or other power and authority to own, use or lease its
properties and to carry on
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(CUSIP Number)
its business as it is now being conducted. CLC has made available to Purchaser a
complete and correct copy of its articles of incorporation and bylaws, each as
amended to date, and CLC's articles of incorporation and bylaws as so delivered
are in full force and effect. CLC is not in material default in any respect in
the performance, observation or fulfillment of any provision of its articles of
incorporation or bylaws.
(b) CLC has no Subsidiaries other than those listed on the attached
Schedule 3.1(b).
(c) Each of CLC's Subsidiaries that is a corporation has been duly
organized, is validly existing and in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the character
of such Subsidiary's properties or the nature of its business makes such
qualification necessary, except in jurisdictions, if any, where the failure to
be so qualified would not result in a CLC Material Adverse Effect. Each of CLC's
Subsidiaries that is not a corporation has been duly organized, is validly
existing and in good standing under the laws of its jurisdiction of
organization, is duly qualified to do business as a foreign entity and is in
good standing in the jurisdictions in which the character of such Subsidiary's
properties or the nature of its business makes such qualification necessary,
except in jurisdictions, if any, where the failure to be so qualified would not
result in a CLC Material Adverse Effect. Each of CLC's Subsidiaries has the
requisite corporate or other power and authority to own, use or lease its
properties and to carry on its business as it is now being conducted and as it
is now proposed to be conducted. No Subsidiary of CLC is in default in any
respect in the performance, observation or fulfillment of any provision of its
articles of incorporation or bylaws (or similar organizational documents).
CAPITALIZATION
The authorized capital stock of CLC consists of forty million
(40,000,000) shares of CLC Common Stock, together with the rights associated
therewith under the Rights Agreement, and ten million (10,000,000) shares of
Preferred Stock. As of the date of this Agreement, (a) 2,132,826 shares of CLC
Common Stock were issued and outstanding, (b) no shares of Preferred Stock were
issued and outstanding, and (c) stock options to acquire 42,000 shares of CLC
Common Stock were outstanding under all stock option plans and agreements of CLC
or its Subsidiaries. All of the outstanding shares of Capital Stock are validly
issued, fully paid and nonassessable, and free of preemptive rights. Except as
set forth above, there are no outstanding subscriptions, options, rights,
warrants, convertible securities, stock appreciation rights, phantom equity, or
other agreements or commitments obligating CLC to issue, transfer, sell, redeem,
repurchase or otherwise acquire any shares of its capital stock of any class.
AUTHORITY; BINDING AGREEMENT
(a) CLC has full corporate power and authority to execute and deliver
this Agreement and, subject to obtaining CLC Stockholders' Approval as
contemplated by Section 3.17, to consummate the transactions contemplated hereby
and thereby. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby and thereby have been duly
and validly authorized by CLC's Board of Directors, and no other corporate
proceedings on the part of CLC are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby or thereby, other than CLC
Stockholders' Approval as contemplated by Section 3.17 hereof.
(b) The Company has taken all necessary action so that (a) none of the
execution or delivery of this Agreement, or the performance by the parties of
their respective obligations under this Agreement, including the consummation of
the Merger and the other transactions contemplated by this Agreement, give rise
to or will give rise to a "Distribution Date," a "Stock Acquisition Date" or a
"Flip-In Event," or result in Purchaser, Merger Sub or any affiliate or
associate of either of them becoming an "Acquiring Person" (each as defined in
the Rights Agreement), under the Rights Agreement and (b) the rights, if any,
issued pursuant to the Rights Agreement shall terminate upon the Effective Time.
(c) The Board of Directors of the Company and the Special Committee of
the Board of Directors have taken all appropriate and necessary action to render
any anti-takeover statute or regulation, including Sections 78.378 through
78.3793, inclusive, and Sections 78.411 through 78.444, inclusive, of the NRS
(each, a "Takeover Statute") inapplicable to this Agreement, the Merger and the
other transactions contemplated by this Agreement.
(d) This Agreement has been, or upon execution will be, duly and
validly executed and delivered by CLC and, assuming the due authorization,
execution and delivery hereof and thereof by the other parties hereto and
thereto, constitutes, or upon execution will constitute, valid and binding
obligations of CLC enforceable against CLC in accordance with their respective
terms, except as such enforceability may be subject to the effects of
bankruptcy, insolvency, reorganization, moratorium and other laws relating to or
affecting the rights of creditors and of general principles of equity.
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(CUSIP Number)
CONSENTS AND APPROVALS; NO VIOLATION
The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and the performance by CLC of its obligations
hereunder will not:
(a) conflict with any provision of CLC's articles of incorporation or
bylaws or the articles of incorporation or bylaws (or other similar
organizational documents) of any of its Subsidiaries;
(b) subject to obtaining of any requisite approvals of CLC's
stockholders as contemplated by Section 3.17 hereof, require any consent,
waiver, approval, order, authorization or permit of, or registration, filing
with or notification to, (i)(x) any Governmental Authority, except for
applicable requirements of the Securities Act, the Exchange Act, state
securities or blue sky laws, (y) consents or approvals from Governmental
Authorities other than as set forth on Schedule 3.4(b) hereto, (the "Company
Regulatory Consents"), and (y) approvals that are ministerial in nature and are
customarily obtained from Governmental Authorities after the Effective Time in
connection with transactions of the same nature as are contemplated hereby
("Customary Post Closing Consents") or (ii) any third party other than a
Governmental Authority, other than such Company Regulatory Consents and non
Governmental Authority third party consents, waivers, approvals, orders,
authorizations and permits that would not result in a CLC Material Adverse
Effect, materially impair the ability of CLC or any of its Subsidiaries, as the
case may be, to perform its obligations under this Agreement or prevent the
consummation of any of the transactions contemplated by this Agreement;
(c) result in any violation of or the breach of or constitute a default
(with notice or lapse of time or both) under, or give rise to any right of
termination, cancellation or acceleration or guaranteed payments or a loss of a
material benefit under, any of the terms, conditions or provisions of any
material note, lease, mortgage, license, agreement or other instrument or
obligation to which CLC or any of its Subsidiaries is a party or by which CLC or
any of its Subsidiaries or any of their respective properties or assets may be
bound, except for such violations, breaches, defaults, or rights of termination,
cancellation or acceleration, or losses as to which requisite waivers or
consents have been obtained or which, individually or in the aggregate, would
not (i) result in a CLC Material Adverse Effect, (ii) materially impair the
ability of CLC or any of its Subsidiaries to perform its obligations under this
Agreement or (iii) prevent the consummation of any of the transactions
contemplated by this Agreement;
(d) result in the creation of any Lien or Liens upon any shares of
capital stock or material properties or assets of CLC or any of its Subsidiaries
under any agreement or instrument to which CLC or any of its Subsidiaries is a
party or by which CLC or any of its Subsidiaries or any of their properties or
assets is bound.
CLC SEC REPORTS
CLC has filed with the SEC, and has heretofore made available to
Purchaser true and complete copies of, each form, registration statement,
report, schedule, proxy or information statement and other document (including
exhibits and amendments thereto), including without limitation its annual
reports to stockholders, required to be filed by it or its predecessors with the
SEC since January 1, 2001 under the Securities Act, the Exchange Act or the
Xxxxxxxx-Xxxxx Act of 2002 and the rules promulgated thereunder (collectively,
the "CLC SEC Reports"). As of the respective dates such CLC SEC Reports were
filed or, if any such CLC SEC Reports were amended, as of the date such
amendment was filed, each of the CLC SEC Reports, including without limitation
any financial statements or schedules included therein, (a) complied in all
material respects with all applicable requirements of the Securities Act and the
Exchange Act, as the case may be, and the applicable rules and regulations
promulgated thereunder, and (b) did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading.
[RESERVED]
[RESERVED]
[RESERVED]
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(CUSIP Number)
TAXES
Except as otherwise disclosed in the CLC SEC Reports filed and publicly
available prior to the date of this Agreement and for matters that would not
have a CLC Material Adverse Effect:
(a) CLC and each of its Subsidiaries have timely filed (or have had
timely filed on their behalf) or will file or cause to be timely filed, all
material Tax Returns required by applicable law to be filed by any of them prior
to or as of the Closing Date. All such Tax Returns and amendments thereto are or
will be true, complete and correct in all material respects.
(b) CLC and each of its Subsidiaries have paid (or have had paid on
their behalf), or where payment is not yet due, have established (or have had
established on their behalf and for their sole benefit and recourse), or will
establish or cause to be established on or before the Closing Date, an adequate
accrual for the payment of all material Taxes due with respect to any period
ending prior to or as of the Closing Date.
(c) No Audit by a Tax Authority is pending or, to the knowledge of the
Company, threatened with respect to any Tax Returns filed by, or Taxes due from,
CLC or any Subsidiary. No issue has been raised in writing by any Tax Authority
in any Audit of CLC or any of its Subsidiaries that if raised with respect to
any other period not so audited could be expected to result in a material
proposed deficiency for any period not so audited. No material deficiency or
adjustment for any Taxes has been assessed against CLC or any of its
Subsidiaries. There are no liens for Taxes upon the assets of CLC or any of its
Subsidiaries, except liens for current Taxes not yet delinquent.
(d) Neither CLC nor any of its Subsidiaries has given or been requested
to give any waiver of statutes of limitations relating to the payment of Taxes
or have executed powers of attorney with respect to Tax matters, which will be
outstanding as of the Closing Date.
(e) The Company is not a party to any Tax sharing agreements.
LITIGATION
Except as described on Schedule 3.10 hereto or the Company's Form 10-K
as filed with the SEC, and for matters that would not have a CLC Material
Adverse Effect, there is no suit, claim, action, proceeding or investigation
("Litigation") pending or, to CLC's knowledge, threatened against or directly
affecting CLC, any Subsidiaries of CLC or any of the directors or officers of
CLC or any of its Subsidiaries in their capacity as such, nor is there any
reasonable basis therefor that could reasonably be expected to have a CLC
Material Adverse Effect, if adversely determined. Schedule 3.10 includes a
description, accurate as of the date of this Agreement, of any Litigation
disclosed in the CLC SEC Reports filed and publicly available prior to the date
of this Agreement that could have a CLC Material Adverse Effect. Neither CLC nor
any of its Subsidiaries, nor any officer, director or employee of CLC or any of
its Subsidiaries, has been permanently or temporarily enjoined by any order,
judgment or decree of any court or any other Governmental Authority from
engaging in or continuing any conduct or practice in connection with the
business, assets or properties of CLC or such Subsidiary nor, to the knowledge
of CLC; is CLC, any Subsidiary or any officer, director or employee of CLC or
its Subsidiaries under investigation by any Governmental Authority. Except as
disclosed in the CLC SEC Reports filed and publicly available prior to the date
of this Agreement, there is not in existence any order, judgment or decree of
any court or other tribunal or other agency enjoining or requiring CLC or any of
its Subsidiaries to take any action of any kind with respect to its business,
assets or properties. Notwithstanding the foregoing, no representation or
warranty in this Section 3.10 is made with respect to Environmental Laws, which
are covered exclusively by the provisions set forth in Section 3.12.
[RESERVED]
ENVIRONMENTAL LIABILITY
Prior to August 1, 2003 and except for matters that would not have a
CLC Material Adverse Effect:
(a) The businesses of CLC and its Subsidiaries have been and are
operated in compliance with all federal, state and local environmental
protection, health and safety or similar laws, statutes, ordinances,
restrictions, licenses, rules, regulations, permit conditions and legal
requirements, including without limitation the Federal Clean Water Act, Safe
Drinking Water Act, Resource Conservation & Recovery Act, Clean Air Act, Outer
Continental Shelf Lands Act, Comprehensive Environmental Response, Compensation
and Liability Act, and Emergency Planning and Community Right to Know Act, each
as amended and currently in effect (together, "Environmental Laws").
00000X000
(CUSIP Number)
(b) Neither CLC nor any of its Subsidiaries has caused or allowed the
generation, treatment, manufacture, processing, distribution, use, storage,
discharge, release, disposal, transport or handling of any chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum, petroleum products or any substance regulated under any Environmental
Law ("Hazardous Substances") at any of its properties or facilities, except in
material compliance with all Environmental Laws, and, to CLC's knowledge, no
generation, manufacture, processing, distribution, use, treatment, handling,
storage, discharge, release, disposal, transport or handling of any Hazardous
Substances has occurred at any property or facility owned, leased or operated by
CLC or any of its Subsidiaries except in material compliance with all
Environmental Laws.
(c) Neither CLC nor any of its Subsidiaries has received any written
notice from any Governmental Authority or third party or, to the knowledge of
CLC, any other communication alleging or concerning any material violation by
CLC or any of its Subsidiaries of, or responsibility or liability of CLC or any
of its Subsidiaries under, any Environmental Law.
(d) There are no pending, or to the knowledge of CLC, threatened,
claims, suits, actions, proceedings or investigations with respect to the
businesses or operations of CLC or any of its Subsidiaries alleging or
concerning any material violation of or responsibility or liability under any
Environmental Law that, if adversely determined, could reasonably be expected to
have a CLC Material Adverse Effect, nor does CLC have any knowledge of any fact
or condition that could give rise to such a claim, suit, action, proceeding or
investigation.
(e) CLC and its Subsidiaries are in possession of all material
approvals, permits, licenses, registrations and similar type authorizations from
all Governmental Authorities under all Environmental Laws with respect to the
operation of the businesses of CLC and its Subsidiaries; there are no pending
or, to the knowledge of CLC, threatened, actions, proceedings or investigations
seeking to modify, revoke or deny renewal of any of such approvals, permits,
licenses, registrations and authorizations; and CLC does not have knowledge of
any fact or condition that is reasonably likely to give rise to any action,
proceeding or investigation to modify, revoke or deny renewal of any of such
approvals, permits, licenses, registrations and authorizations.
(f) There has been no discharge, release or disposal by CLC or its
Subsidiaries or, to CLC's knowledge, any predecessor in interest at any of the
properties owned or operated by CLC, its Subsidiaries or a predecessor in
interest, or to the knowledge of CLC, at any disposal or treatment facility
which received Hazardous Substances generated by CLC, its Subsidiaries, or any
predecessor in interest which could reasonably be expected to result in
liabilities that have a CLC Material Adverse Effect.
(g) To CLC's knowledge, no pending claims have been asserted or
threatened to be asserted against CLC or its Subsidiaries for any personal
injury (including wrongful death) or property damage (real or personal) arising
out of exposure to Hazardous Substances used, handled, generated, transported or
disposed by CLC or its Subsidiaries at property owned or operated by CLC or its
Subsidiaries, except as could not reasonably be expected to have a CLC Material
Adverse Effect.
COMPLIANCE WITH APPLICABLE LAWS
Prior to August 1, 2003:
(a) CLC and each of its Subsidiaries hold all material approvals,
licenses, permits, registrations and similar type authorizations necessary for
the lawful conduct of their respective businesses, as now conducted, and such
businesses are not being, and neither CLC nor any of its Subsidiaries has
received any notice from any Governmental Authority or person that any such
business has been or is being conducted in violation of any law, ordinance or
regulation, including without limitation any law, ordinance or regulation
relating to occupational health and safety, except for possible violations which
either individually or in the aggregate have not resulted and would not result
in a CLC Material Adverse Effect; provided, however, notwithstanding the
foregoing, no representation or warranty in this Section 3.13 is made with
respect to Environmental Laws, which are covered exclusively by the provisions
set forth in Section 3.12.
(b) Except as set forth on Schedule 3.10 hereto, neither the Company
nor any Company Subsidiary is the subject of any formal investigation, nor to
the knowledge of the Company or any Company Subsidiary has any investigation or
prosecution or other action been threatened by any Governmental Entity or any
private entity or person regarding non-compliance with any Law and no basis
exists for any such investigation or prosecution, except as would not be
reasonably likely to have, individually or in the aggregate, a Company Material
Adverse Effect.
(c) Current billing policies, arrangements, protocols and instructions
of the Company and the Company Subsidiaries related to services covered by
Medical Reimbursement Programs comply in all material respects with applicable
requirements of Medical Reimbursement Programs. The Company and each Company
Subsidiary have complied with all applicable billing policies, procedures,
limitations and restrictions of third-party payors, including Medical
Reimbursement Programs, and there is no pending or, to the knowledge of the
Company, threatened recoupment or penalty action or proceedings against the
Company or any Company Subsidiaries under any other third party payor, except
for such non-compliance, actions or proceedings that would not be reasonably
likely to have, individually or in the aggregate, a Company Material Adverse
Effect.
00000X000
(CUSIP Number)
(d) The Company and each Company Subsidiary has obtained, and maintains
in force, all licenses, permits, franchises, certificates of authority, orders
and waivers required from any Governmental Authority ("Company Permits") to
operate their respective businesses in the manner in which they are currently
operated (and currently proposed to be operated) and to occupy, operate and use
any buildings, improvements, fixtures and equipment owned or leased in
connection with the operation of long term care facilities to provide the
services currently provided by the Company and the Company Subsidiaries at all
locations of the Company and the Company Subsidiaries and all such Company
Permits are valid and in full force and effect, with only such exceptions that
would not be reasonably likely to have, individually or in the aggregate, a
Company Material Adverse Effect. All Company Permits have been issued in the
name of the Company or the applicable Company Subsidiary having an ownership,
leasehold, management or operational interest in the facilities referenced
therein. No Company Permits have been suspended, cancelled or terminated and, to
the knowledge of the Company, no suspension, cancellation or termination of any
such Company Permits is threatened or imminent, except to the extent that would
not cause a CLC Material Adverse Effect. Each employee of the Company and each
Company Subsidiary (including each facility administrator) has obtained, and
maintains in force, all licenses, permits or similar authorizations required to
authorize such employee to perform his or her duties on behalf of the Company
and the Company Subsidiaries with only such exceptions that would not be
reasonably likely to have, individually and in the aggregate, a Company Material
Adverse Effect.
(e) Neither the Company nor any Company Subsidiary, nor, to the
knowledge of the Company, any director, officer, agent, employee of the Company
or any Company Subsidiary acting for or on behalf of the Company or any Company
Subsidiary, has paid or caused to be paid, directly or indirectly, in connection
with the business of the Company or any of the Company Subsidiaries: (i) any
bribe, kickback, direct or indirect unlawful payment or other similar payment to
any Governmental Entity or any agent of any supplier or customer, or (ii) any
contribution, payment, gift or entertainment to any political party or candidate
(other than from personal funds of directors, officers or employees not
reimbursed by their respective employers or other than in compliance with
applicable Law).
(f) To the extent required, the Company and each Company Subsidiary is
qualified for the conduct of its business in the ordinary and regular course,
for participation in the Medicare program and is a party to provider agreements
for such programs which are in full force and effect with no events of default
having occurred thereunder, except as would not be reasonably likely to have,
individually or in the aggregate, a Company Material Adverse Effect. The Company
and each of the Company Subsidiaries has filed all claims or other reports
required to be filed with respect to the purchase of services by third-party
payors, including the Medical Reimbursement Programs, except as would not be
reasonably likely to have a Company Material Adverse Effect. All such claims or
reports are complete and accurate in all material respects. The Company and each
of the Company Subsidiaries has paid or has properly recorded on the Company's
financial statements all actually known and undisputed refunds, discounts or
adjustments which have become due pursuant to such claims, and neither the
Company nor any Company Subsidiary has any material liability to any payor with
respect thereto, except, as has been fully reserved for in the Company's
financial statements. Except as set forth on Schedule 3.13(f) hereto, neither
the Company nor any Company Subsidiary has received any written notice or, to
the knowledge of the Company, any oral notice of any pending appeals,
overpayment determinations, adjustments, challenges, audits, litigation, or
notices of intent to reopen Medicare claims determinations or other reports
required to be filed by the Company or any Company Subsidiary in order to be
paid by a payor for services rendered. None of the Company nor any of the
Company Subsidiaries, nor, to the knowledge of the Company, any of their
respective directors, officers or employees, consultants, or partners (other
than limited partners in the Company Public Subsidiaries or stockholders of the
Company) has been convicted of, or pled guilty or nolo contendere to, patient
abuse or neglect, or any other Medicare program-related offense. Neither the
Company nor any of the Company Subsidiaries, nor to the knowledge of the
Company, any of their respective directors, officers, current employees,
consultants or partners (other than limited partners in the Company Public
Subsidiaries or stockholders of the Company), has committed any offense which
would be reasonably likely to serve as the basis for suspension or exclusion
from the Medicare program, including defrauding a government program, loss of a
license to provide health care services, and failure to provide quality care.
INSURANCE
Section 3.14 of the Disclosure letter lists each insurance policy to
which CLC and/or its Subsidiaries is a party. None of CLC, any of its
Subsidiaries or any other party to any such insurance policy is in breach or
default thereunder (including with respect to the payment of premiums or the
giving of notices), and CLC does not know of any occurrence or any event which
(with notice or the lapse of time or both) would constitute such a breach or
default or permit termination, modification or acceleration under the policy,
except for such breaches or defaults which, individually or in the aggregate,
would not have a CLC Material Adverse Effect.
[RESERVED]
00000X000
(CUSIP Number)
MATERIAL CONTRACTS
CLC has filed as exhibits to the CLC SEC Reports filed and publicly
available prior to the date of this Agreement a list of each contract, lease,
indenture, agreement, arrangement or understanding to which CLC or any of its
Subsidiaries is subject that is of a type that would be required to be included
as an exhibit to a Form 10-K as filed with the SEC (collectively, the "CLC
Material Contracts").
REQUIRED STOCKHOLDER VOTE OR CONSENT
The only vote of the holders of any class or series of capital stock of
CLC that will be necessary to consummate the CLC Merger and the other
transactions contemplated by this Agreement is the approval of this Agreement by
the holders of sixty-six and two-thirds percent (66-2/3%) of the outstanding
shares of CLC Common Stock entitled to vote on the record date ("CLC
Stockholders' Approval").
PROXY STATEMENT/PROSPECTUS; REGISTRATION STATEMENT
None of the information to be supplied by CLC or its Subsidiaries for
inclusion in the proxy statement relating to the CLC Special Meeting (the "Proxy
Statement"), to be filed by the Company with the SEC, and any amendments or
supplements thereto will, at the time the Proxy Statement is filed or any
amendment or supplement thereto is first mailed to stockholders of the Company,
at the time such stockholders vote on approval of this Agreement and at the
Effective Time, contain any untrue statement of a material fact or omit to state
any material fact required to be made therein or necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading.
[RESERVED]
BROKERS
No broker, finder or investment banker is entitled to any brokerage,
finder's fee or other fee or commission payable by CLC or any of its
Subsidiaries in connection with the transactions contemplated by this Agreement
based upon arrangements made by and on behalf of CLC or any of its Subsidiaries.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser and Merger Sub jointly and severally represent and warrant to
the Company as follows, except as disclosed the Purchaser Disclosure Letter.
ORGANIZATION AND QUALIFICATION
(a) Purchaser is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada, is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
in which the character of Purchaser's properties or the nature of its business
makes such qualification necessary, except in jurisdictions, if any, where the
failure to be so qualified would not result in a Purchaser Material Adverse
Effect. Purchaser has all requisite corporate or other power and authority to
own, use or lease its properties and to carry on its business as it is now being
conducted. Purchaser has made available to the Company a complete and correct
copy of its articles of incorporation and bylaws, each as amended to date, and
Purchaser's articles of incorporation and bylaws as so delivered are in full
force and effect. Purchaser is not in default in any respect in the performance,
observation or fulfillment of any provision of its articles of incorporation or
bylaws.
(b) Each of Purchaser's Subsidiaries that is a corporation has been
duly organized, is validly existing and in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction in which the character
of such Subsidiary's properties or the nature of its business makes such
qualification necessary, except in jurisdictions, if any, where the failure to
be so qualified would not result in a Purchaser Material Adverse Effect. Each of
Purchaser's Subsidiaries that is not a corporation has been duly organized, is
validly existing and in good standing under the laws of its jurisdiction of
organization, is duly qualified to do business as a foreign entity and is in
good standing in each jurisdiction in which the character of such Subsidiary's
properties or the nature of its business makes such qualification necessary,
except in jurisdictions, if any, where the failure to be so qualified would not
result in a Purchaser Material Adverse Effect. Each of Purchaser's Subsidiaries
has all requisite corporate or other power and authority to own, use or lease
its properties and to carry on its business as it is now being conducted and as
it is now proposed to be conducted. No Subsidiary of
00000X000
(CUSIP Number)
Purchaser is in default in any respect in the performance, observation or
fulfillment of any provision of its articles of incorporation or bylaws (or
similar organizational documents).
(c) All of the outstanding shares of Merger Sub are duly authorized,
validly issued and outstanding, fully paid and nonassessable and owned by
Purchaser. Merger Sub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement and has not engaged in any business
activities or conducted any operations of any kind, entered into any agreement
or arrangement with any Person or entity, or incurred, directly or indirectly,
any material liabilities or obligations, in each case except in connection with
their incorporation, the negotiation of this Agreement, the Merger and the
transactions contemplated hereby.
AUTHORITY; BINDING AGREEMENT
(a) Purchaser and Merger Sub have all requisite corporate power and
authority to execute and deliver this Agreement and to consummate the Merger and
the other transactions contemplated by this Agreement. This Agreement, the
execution and delivery of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement have been duly and validly
authorized by the necessary corporate actions and no other proceedings on behalf
of Purchaser or Merger Sub are necessary to authorize the execution and delivery
of this Agreement or to consummate the Merger and the other transactions
contemplated by this Agreement other than the filing of the Certificate of
Merger in accordance with the NRS. This Agreement has been duly and validly
executed and delivered by Purchaser and Merger Sub and, assuming the due
authorization, execution and delivery of this Agreement by the Company and the
other parties hereto, constitutes the legal, valid and binding agreement of
Purchaser and Merger Sub, enforceable against Purchaser and Merger Sub in
accordance with its terms except as enforceability thereof may be limited by
creditors rights generally or by general principals of equity.
CONSENTS AND APPROVALS; NO VIOLATION
The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and the performance by Purchaser or Merger Sub
of their respective obligations hereunder will not:
(a) conflict with any provision of the articles of incorporation or
bylaws of Purchaser or Merger Sub or the articles of incorporation or bylaws (or
other similar organizational documents) of any of their Subsidiaries;
(b) require any consent, waiver, approval, order, authorization or
permit of, or registration, filing with or notification to, (i) any Governmental
Authority, except for applicable requirements of the Securities Act, the
Exchange Act, state securities or blue sky laws and Customary Post-Closing
Consents, (iii) consents or approvals from Governmental Authorities set forth on
Schedule 4.3(b) hereto (the "Purchaser Regulatory Consents") or (ii) any third
party other than a Governmental Authority, other than such non-Governmental
Authority third party consents, waivers, approvals, orders, authorizations and
permits that would not (x) result in a Purchaser Material Adverse Effect, (y)
materially impair the ability of Purchaser or any of its Subsidiaries to perform
its obligations under this Agreement or (z) prevent the consummation of any of
the transactions contemplated by this Agreement;
(c) result in any violation of or the breach of or constitute a default
(with notice or lapse of time or both) under, or give rise to any right of
termination, cancellation or acceleration or guaranteed payments or a loss of a
material benefit under, any of the terms, conditions or provisions of any note,
lease, mortgage, license, agreement or other instrument or obligation to which
Purchaser or any of its Subsidiaries is a party or by which Purchaser or any of
its Subsidiaries or any of their respective properties or assets may be bound,
except for such violations, breaches, defaults, or fights of termination,
cancellation or acceleration, or losses as to which requisite waivers or
consents have been obtained or which, individually or in the aggregate; would
not (i) result in a Purchaser Material Adverse Effect,
00000X000
(CUSIP Number)
(ii) materially impair the ability of Purchaser or any of its Subsidiaries to
perform its obligations under this Agreement or (iii) prevent the consummation
of any of the transactions contemplated by this Agreement;
(d) violate, the provisions of any order, writ, injunction, judgment,
decree, statute, rule or regulation applicable to Purchaser or any of its
Subsidiaries;
(e) result in the creation of any Lien upon any material properties or
assets or on any shares of capital stock of Purchaser or its Subsidiaries under
any agreement or instrument to which Purchaser or any of its Subsidiaries is a
party or by which Purchaser or any of its Subsidiaries or any of their
properties or assets is bound; or
(f) result in any holder of any securities of Purchaser being entitled
to appraisal, dissenters' or similar rights.
[RESERVED]
BROKERS
No broker, finder or investment banker is entitled to any brokerage,
finder's fee or other fee or commission payable by Purchaser or any of its
Subsidiaries in connection with the transactions contemplated by this Agreement
based upon arrangements made by and on behalf of Purchaser or any of its
Subsidiaries.
COVENANTS OF CLC
CLC covenants and agrees as follows:
CONDUCT OF BUSINESS
Except as expressly provided in this Agreement or as set forth in the
Company Disclosure Schedule or unless Purchaser or its affiliates take any of
the following actions under the terms of that certain Management Agreement
between the Company and Comprehensive Consulting, Inc., an affiliate of
Purchaser dated as of August 1, 2003, the Company will not, nor will it permit
or authorize any Company Subsidiary to, unless the prior written consent of
Purchaser has been obtained, which consent shall be deemed given if Purchaser
has not provided notice of objection within five (5) business days of receipt by
the Purchaser of the Company's consent request in writing, during the period
from the date of this Agreement to the earlier of the Effective Time or
termination of this Agreement:
(i) amend or propose to amend the articles of incorporation,
or bylaws or the organizational documents of the Company
Subsidiaries;
(ii) authorize for issuance, issue, grant, sell, pledge,
dispose of or propose to issue, grant, sell, pledge or dispose of
any shares of, or any options, warrants, commitments,
subscriptions or rights of any kind to acquire or sell any shares
of, the capital stock or other securities of the Company or the
Company Subsidiaries including any securities convertible into or
exchangeable for shares of capital stock of any class of the
Company or the Company Subsidiaries, except for the issuance of
Common Shares pursuant to the exercise of the Stock Options
outstanding on the date of this Agreement;
(iii) split, combine or reclassify any shares of its capital
stock or other securities or declare, pay or set aside any
dividend or other distribution (whether in cash, stock or
property or any combination thereof) in respect of its capital
stock or other securities, other than dividends or distributions
to the Company, or redeem,
00000X000
(CUSIP Number)
purchase or otherwise acquire or offer to acquire any shares of
its capital stock or other securities;
(iv) (A) create, incur, or assume any Indebtedness other
than loans by the Company to a wholly-owned Company Subsidiary or
by a wholly-owned Company Subsidiary to the Company; (B) assume,
guarantee, endorse or otherwise become liable or responsible
(whether directly, indirectly, contingently or otherwise) for the
obligations of any Person; (C) make any capital expenditures in
excess of $5,000, or make any loans, advances or capital
contributions to, or investments in, any other Person (other than
for customary travel, relocation or businesses advances or loans
to employees in each case in accordance with applicable Law and
in the ordinary course of business consistent with past
practice); (D) acquire or agree to acquire by merging or
consolidating with, or by purchasing, or by any other manner, (i)
any business or any corporation, limited liability company,
partnership, joint venture, association or other business
organization or division thereof, or (ii) any assets, except in
the ordinary and usual course of business consistent with past
practice; provided that such assets acquired in the ordinary and
usual course of business would not, individually or in the
aggregate, be material to the Company and the Company
Subsidiaries taken as a whole; or (E) divest, sell, transfer,
mortgage, pledge or otherwise dispose of, or encumber, or agree
to divest, sell, transfer, mortgage, pledge or otherwise dispose
of or encumber, any assets, businesses or properties, of assets
other than transfers of assets in the ordinary and usual course
of business consistent with past practice; provided that, such
assets transferred in the ordinary and usual course of business
are not, individually or in the aggregate, material to the
Company and the Company Subsidiaries taken as a whole. For
purposes of this Agreement, "Indebtedness" means (A) all
obligations for borrowed money, or with respect to deposits or
advances of any kind (other than nonrefundable customer
deposits), (B) all obligations evidenced by bonds, debentures,
notes or similar instruments, (C) all obligations under
conditional sale or other title retention agreements (D) all
obligations issued or assumed as the deferred purchase price of
property or services (excluding obligations to creditors for raw
materials, inventory, services and supplies incurred in the
ordinary course of business), (E) all capitalized lease
obligations, (F) all obligations under interest rate or currency
hedging or swap transactions (valued at the termination value
thereof), (G) all performance bonds or letters of credit, (H) all
guarantees and arrangements having the economic effect of a
guarantee of any Indebtedness of any other person, (I) all
operating leases, and (J) all performance guarantees;
(v) except as required by law or contract in effect as of
the date of this Agreement, increase in any respect the salary,
compensation or benefits of any of its officers or employees
(other than increases in salary in the ordinary course of
business consistent with past practice to any officer or employee
with an annual salary that does not exceed $125,000) or enter
into, establish, grant, award, amend, accelerate or terminate any
employment, consulting, retention, management continuity, change
in control, collective bargaining, bonus or other incentive
compensation, profit sharing, health or other welfare, stock
option or other equity, pension, retirement, vacation, severance,
deferred compensation or other compensation or benefit plan,
policy, agreement, trust, fund or arrangement (or
00000X000
(CUSIP Number)
awards thereunder) with, for or in respect of, any stockholder,
officer, director, other employee, agent, consultant or
affiliate;
(vi) [RESERVED];
(vii) make or rescind any express or deemed election
relating to Taxes;
(viii) settle or compromise any material Tax liability or
agree to an extension of a statute of limitations with respect to
the assessment or determination of Taxes;
(ix) file or cause to be filed any amended Tax Return with
respect to the Company or file or cause to be filed any claim for
refund of Taxes paid by or on behalf of the Company;
(x) prepare or file any Tax Return inconsistent with past
practice in preparing or filing similar Tax Returns in prior
periods or, on any such Tax Return, take any position, make any
election, or adopt any method that is inconsistent with positions
taken, elections made or methods used in preparing or filing
similar Tax Returns in prior periods;
(xi) make any material change to its accounting methods,
principles or practices, except as may be required by GAAP;
(xii) pay, discharge, or satisfy any material (on a
consolidated basis for the Company taken as a whole) claim,
liability, or obligation (absolute, accrued, asserted or
unasserted, contingent or otherwise);
(xiii) adopt any plan, enter into any agreement or take any
action that would have the effect of impairing or delaying the
completion of the Merger and the other transactions contemplated
by this Agreement;
(xiv) enter into, modify or amend in any material respect,
or terminate, any Significant Contract;
(xv) except as may be required to consummate the
transactions hereunder, amend the Rights Agreement, redeem the
rights thereunder or exempt any person or entity from, the Rights
Agreement; or
(xvi) authorize, or commit or agree to take (or fail to
take), any of the foregoing actions with respect to itself or the
Company Subsidiaries.
ACCESS AND INFORMATION
Between the date of this Agreement and the Effective Time, the Company
shall give (and shall direct its accountants and legal counsel to give, upon
reasonable notice) Purchaser, its lenders, financial advisors, accountants and
legal counsel and its respective authorized representatives at reasonable times
with reasonable notice access to all offices and other facilities (including to
conduct reasonable inspections) and to all contracts, agreements, commitments,
Tax Returns (and supporting schedules), books and records of or pertaining to
the Company and the Company Subsidiaries will cause its officers promptly to
furnish Purchaser with (a) such financial and operating data and other
information
00000X000
(CUSIP Number)
with respect to the business and properties of the Company and the Company
Subsidiaries as Purchaser may from time to time reasonably request and (b) a
copy of each material report, schedule and other document filed or received by
the Company and the Company Subsidiaries in accordance with the rules and
regulations of the SEC or other applicable Law. In the event that the foregoing
access is subject to restrictions contained in confidentiality agreements to
which the Company is a party, the Company shall use commercially reasonable
efforts to obtain waivers of such restrictions. To the extent reasonably
requested by Purchaser, the Company shall, and shall cause its officers to
cooperate with Purchaser in connection with any due diligence investigation or
preparation of any syndication materials by Purchaser's financing sources in
connection with the obtaining of financing for the payment of the Merger
Consideration and the completion of the Merger and the other transactions
contemplated by this Agreement.
RECOMMENDATION; STOCKHOLDER APPROVAL
The Board of Directors of the Company and the Special Committee (i)
shall recommend to the stockholders of the Company that such stockholders
approve this Agreement, the Merger and the other transactions contemplated by
this Agreement and (ii) shall use their respective commercially reasonable
efforts to solicit and obtain approval and adoption of this Agreement and the
Merger by holders of sixty-six and two-thirds of the outstanding shares of CLC
Common Stock entitled to vote on the record date for determining the shares
entitled to vote at the stockholders meeting, the Merger and the other
transactions contemplated by this Agreement; provided that, subject to Section
5.4 of this Agreement, the Board of Directors of the Company or the Special
Committee may withdraw, modify or change such recommendation of this Agreement,
the Merger and the other transactions contemplated by this Agreement if and only
if they have determined in good faith, based on such matters as they deem
relevant and after receiving advice from outside legal counsel, that the failure
to withdraw, modify or change their recommendation of this Agreement, the Merger
and the other transactions contemplated by this Agreement would be reasonably
likely to result in a breach of their fiduciary duties under applicable Law.
Unless this Agreement shall have been terminated prior to the Company
Stockholders Meeting in accordance with Section 9.1 hereof, whether or not the
Special Committee or the Board of Directors of the Company has withdrawn,
modified or changed their recommendations of this Agreement or the transactions
contemplated by this Agreement, the Company shall take all steps necessary to
duly call, give notice of, convene and hold a meeting of its stockholders (the
"Company Stockholders Meeting") as soon as practicable after the date hereof for
the purpose of approving and adopting this Agreement and the Merger and the
transactions contemplated by this Agreement and for such other purposes as may
be consented to by Purchaser and the Company in connection with effectuating the
Merger and the other transactions contemplated by this Agreement.
NO SOLICITATION
(a) Neither the Company, any Company Subsidiary nor any of
their respective Representatives shall, nor shall the Company or any
Company Subsidiary authorize any of its Representatives, agents, or
affiliates, or authorize or encourage any of its employees, to (i)
directly or indirectly, initiate, solicit or encourage, or take any
action to facilitate the making of, any Takeover Proposal, or (ii)
directly or indirectly engage in any discussions or negotiations with,
or provide any information or data to, or afford any access to the
properties, books or records of the Company or any Company Subsidiary
to, or otherwise assist, facilitate or encourage, any person (other
than Purchaser or any affiliate or associate thereof) relating to any
Takeover Proposal, or (iii) approve or enter into any letter of intent,
agreement in principle, acquisition agreement or similar agreement
relating to any Takeover Proposal; provided, however, that at any time
prior to the Company Stockholders Meeting, the Company may, in response
to a bona fide written Takeover Proposal that is reasonably likely to
result in a Superior Proposal and which was not solicited in violation
of this Section 5.4(a), and subject to providing Purchaser reasonable
advance written notice of its decision to take such action (x) furnish
information with respect to the Company to any person making such
Takeover Proposal pursuant to a customary confidentiality agreement and
(y) participate in discussions and negotiations regarding such Takeover
Proposal but, in each case, only if the Special Committee determines,
after receiving the advice of its outside counsel, that failure to
furnish such information or to participate in such discussions or
negotiations is reasonably likely to result in a breach of the
fiduciary duties of the Special Committee or the Board of Directors of
the Company under applicable Law.
(b) Prior to the Special Committee, the Board of Directors or
the Company accepting a Superior Proposal or, in connection with a
Takeover Proposal, to withdrawing, modifying, or changing in a manner
adverse to Purchaser or Merger Sub, the Special Committee or Board of
Directors' approval or recommendation of the Merger and this Agreement,
the Company shall give Purchaser five business days notice of the
Special Committee, Board of Directors or the Company's intention to
accept a Superior Proposal or to withdraw, modify or change its
approval or recommendation, which notice shall include the identity of
the person making such Superior Proposal or Takeover Proposal, as
applicable, and the material terms of such Superior Proposal or
Takeover Proposal, and the Company shall provide Purchaser during such
five business day period the opportunity to propose modifications to
the terms of this Agreement.
(c) Nothing contained in this Agreement shall prohibit the
Board of Directors of the Company or the Special Committee from taking
and disclosing to its stockholders a position contemplated by Rules
14d-9 and 14e-2 under the Exchange Act or from making any other
disclosure to its stockholders if, in the good faith judgment of the
Board of Directors of the Company or the Special
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Committee, after consultation with counsel, failure to so disclose
would be reasonably likely to be inconsistent with their respective
obligations under applicable Law.
SEC AND STOCKHOLDER FILINGS; OTHER REPORTS
The Company shall send to Purchaser a copy of all public reports and
materials as and when it sends the same to its stockholders, the SEC or any
securities exchange or any state or foreign securities commission. The Company
shall send to Purchaser a copy of all communications with banks, trustees under
any indentures or other debt instruments and rating agencies as and when it
sends such communications to such parties.
TAKEOVER STATUTES; RIGHTS PLAN
(a) If any Takeover Statute is or may become applicable to the
Merger or the other transactions contemplated by this Agreement (or to
a subsequent business combination between the Purchaser, the Surviving
Corporation or their respective affiliates, on the one hand, and any
Company Public Subsidiary, on the other hand), the Company, the Special
Committee, the Purchaser and Merger Sub and their respective Boards of
Directors, subject to compliance with its Board of Directors' fiduciary
duties, will grant (or the Company will ensure that the governing body
of such Company Public Subsidiary, as applicable, will grant subject to
compliance with its fiduciary duties) such approvals and will take such
other actions as are necessary so that the Merger and the other
transactions contemplated by this Agreement may be consummated as
promptly as practicable on the terms contemplated hereby (or any such
subsequent business combination) and, subject to compliance with such
Board of Directors' fiduciary duties, will otherwise act to eliminate
or minimize the effects of any Takeover Statute on the Merger and the
other transactions contemplated by this Agreement (or any such
subsequent business combination).
(b) The Company shall take all action necessary to amend the
Rights Agreement, effective no later than five business days after the
date hereof, to provide that, from the date of such amendment until the
termination of this Agreement, for purposes of determining whether a
"Distribution Date," a "Stock Acquisition Date" or a "Flip-In Event"
has occurred or whether Purchaser, any of its affiliates or associates
or any of the directors, officers or employees of the Company or the
Company Subsidiaries is an "Acquiring Person," without otherwise
limiting the terms of the Rights Agreement, neither the Purchaser nor
any of its affiliates or associates shall be deemed to beneficially own
the Common Shares beneficially owned by any of the officers, directors
or employees of the Company or the Company Subsidiaries (by virtue of
any equity or employment agreements, arrangements or understandings
involving such parties and relating to the periods after the Closing or
any other agreement, arrangement or understanding approved by the Board
of Directors or Special Committee), and such officers, and directors
and employee shall not be deemed to beneficially own the Common Shares
beneficially owned by any other officer, director or employee of the
Company or any Company Subsidiary or by Purchaser or any of its
affiliates or associates (by virtue of any equity or employment
agreements, arrangements or understandings involving such parties and
relating to the periods after the Closing or any other agreement,
arrangement or understanding approved by the Board of Directors or
Special Committee).
COVENANTS OF PURCHASER
Purchaser covenants and agrees as follows:
DIRECTOR AND OFFICER LIABILITY
(a) The Company and the Surviving Corporation agree that all
rights to indemnification and all limitations on liability existing in
favor of any individual, who on or at any time prior to the Effective
Time was an officer, director, employee, or agent of the Company (an
"Indemnified Person") in respect of acts or omissions of such
Indemnified Person on or prior to the Effective Time, as provided in
the Certificate of Incorporation or Bylaws or an agreement between an
Indemnified Person and the Company in effect as of the date of this
Agreement, shall continue in full force and effect in accordance with
its terms, and shall not be amended, repealed or otherwise modified
after the Effective Time in any manner that would adversely affect the
rights thereunder of the individuals who on or at any time prior to the
Effective Time was a director, officer, employee, or agent of the
Company, and the Surviving Corporation shall honor all such
indemnification provisions. Subject to receipt of necessary third-party
consents, which Purchaser will use commercially reasonable efforts to
obtain, Purchaser hereby unconditionally and irrevocably guarantees for
the benefit of the Indemnified Parties the obligations of the Surviving
Corporation under the foregoing indemnification arrangements, including
any such existing indemnification by agreements to which the Company is
a party.
(b) In the event that the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other
Person and is not the continuing or surviving corporation or entity of
such consolidation or merger or (ii) transfers or
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(CUSIP Number)
conveys all or substantially all of its properties and assets to any
Person, then, and in each such case, Purchaser shall cause proper
provision to be made so that the successors and assigns of the
Surviving Corporation assume the obligations set forth in this Section
6.1.
(c) Prior to the Closing, Purchaser shall purchase a
directors' and officers' liability insurance policy (or substantially
similar liability insurance) covering acts or omissions occurring prior
to the Effective Time covering each person currently covered by the
Company's directors' and officers' liability insurance policy on terms
with respect to such coverage and amounts no less favorable than those
of each such policy in effect on the date hereof. Such insurance policy
shall provide coverage for six years after the Effective Time.
(d) The provisions of this Section 6.1 are intended to be for
the benefit of, and will be enforceable by, each Indemnified Person,
his or her heirs and his or her representatives and are in addition to,
and not in substitution for, any other rights to indemnification or
contribution that any such person may have by contract or otherwise.
COVENANTS OF THE PARTIES
Purchaser and the Company covenant and agree as follows:
PROXY STATEMENT
(a) The Company shall use commercially reasonable efforts to
promptly prepare and file with the SEC pursuant to the terms of this
Agreement the Proxy Statement, including any necessary amendments and
supplements thereto. Purchaser shall be given reasonable opportunity to
review and comment on the Proxy Statement, including all amendments and
supplements thereto prior to the filing thereof with the SEC.
(b) Each of the Company and Purchaser agrees, as to itself and
their respective Subsidiaries, that none of the information supplied or
to be supplied by it or its Subsidiaries for inclusion or incorporation
by reference in the Proxy Statement, including any amendment or
supplement, will, at the date of filing thereof with the SEC, mailing
of the Proxy Statement to stockholders and at the time of the Company
Stockholder Meeting, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If at any
time prior to the date of the consummation of the transactions
contemplated herein any information relating to the Company or
Purchaser, or any of their respective affiliates, officers or
directors, should be discovered by the Company or Purchaser which
should be set forth in an amendment and/or a supplement to the Proxy
Statement, so that the Proxy Statement would not, at the date of
mailing of the Proxy Statement to stockholders and at the time of the
Company Stockholder Meeting, include any misstatement of a material
fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, the party
which discovers this information shall promptly notify the other party
and, to the extent required by Law, an appropriate amendment or
supplement describing that information shall be promptly filed with the
SEC or any other applicable Governmental Authority and, to the extent
required by Law, disseminated to the Company's stockholders. Each of
the Company and Purchaser agrees to provide the other and the other's
counsel in writing any comments it or its counsel may receive from the
SEC or its staff with respect to the Proxy Statement promptly after
receipt of such comments. Each of the Company and Purchaser shall use
commercially reasonable efforts to respond to such comments promptly
and shall provide the other with copies of any written responses and
telephonic notification of any verbal responses by it or its counsel.
(c) Notwithstanding anything herein to the contrary, neither
the Company nor Purchaser shall file the Proxy Statement (or any
amendment or supplement) or respond to any comment or question raised
by the SEC or its staff with respect to the Proxy Statement (or any
amendment or supplement), the Agreement, the Merger or the other
transactions contemplated hereby without the approval of the other
party (which approval shall not to be unreasonably withheld or
delayed).
FURTHER ASSURANCES
In addition to complying with all of the other covenants set forth in
this Agreement, each party hereto shall, subject to the fulfillment at or before
the Effective Time of each of the conditions of performance set forth herein or
the waiver thereof, perform such further acts and execute such documents as may
be reasonably required to effect the transactions contemplated by this
Agreement.
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(CUSIP Number)
PRESS RELEASE AND PUBLIC ANNOUNCEMENTS
The parties shall cooperate in preparing and promptly issuing a press
release announcing the execution of this Agreement. Thereafter, so long as this
Agreement is in effect, (i) the Company shall not, and shall cause its
affiliates (other than Purchaser and its affiliates) not to, issue or cause the
publication of any press release or any other announcement, or submit any public
filings, with respect to the Company Stockholders Meeting or the transactions
contemplated by this Agreement without the consent of Purchaser (which approval
shall not be unreasonably withheld or delayed), except when such release,
announcement or filing is required by the rules and regulations of the SEC or
other applicable Law, in which case the Company, prior to making such
announcement, issuing or publishing such press release or making any public
filing, shall notify and afford Purchaser the opportunity to comment thereon.
The Purchaser may issue or cause the publication of any press release or any
other announcement, and may submit any public filing, required by the rules and
regulations of the SEC or other applicable Law.
REASONABLE COMMERCIAL EFFORTS
The parties shall use (and shall cause their respective Subsidiaries
to use) commercially reasonable efforts to promptly (i) take or cause to be
taken all necessary actions, and do or cause to be done all things, necessary,
proper or advisable under this Agreement and applicable Law to consummate and
make effective the Merger and the other transactions contemplated by this
Agreement as soon as practicable, including preparing and filing promptly and
fully all documentation to effect all necessary filings, notices, petitions,
statements, registrations, submissions of information, applications and other
documents; provided that neither the Company nor any Company Subsidiary shall
agree in connection with the foregoing to the sale, transfer, divestiture or
other disposition of any assets, properties or businesses of the Company or any
Company Subsidiary without the prior written consent of Purchaser; (ii) obtain
all Consents (including Consents from any Governmental Authority) required to be
obtained from any third party necessary, proper or advisable to consummate the
Merger and the other transactions contemplated by this Agreement; provided that
neither the Company nor any Company Subsidiary shall in connection with the
foregoing make any payments (other than governmental or regulatory filing or
similar fees), amend or modify any agreement or agree to the foregoing without
the prior written consent of Purchaser not to be unreasonably withheld or
delayed; provided, further, that no such consent shall be required if the making
of any such payment or any such amendment or modification would be permitted
under Section 5.1 without the consent of Purchaser; and (iii) defend any
Litigation challenging this Agreement or the consummation of the Merger and the
other transactions contemplated by this Agreement, including seeking to have any
stay or temporary restraining order entered by any court or Governmental
Authority vacated or reversed; provided that the Company shall keep Purchaser
reasonably apprised of any such Litigation against the Company or any of its
Subsidiaries, Purchaser may at its option participate in the defense of any such
Litigation against the Company or any of its Subsidiaries, and the Company shall
not enter into any settlement or consent to any judgment without the prior
written consent of Purchaser. The Company and Purchaser shall each use (and
shall cause their respective officers and employees to use) reasonable
commercial efforts to promptly make all necessary filings required to be made
with the SEC pursuant to the Exchange Act. Subject to applicable Law relating to
the exchange of information, the Company and Purchaser shall have the right to
review in advance, and to the extent practicable each will consult the other on,
all the information relating to the Company and the Company Subsidiaries or
Purchaser and its affiliates, as the case may be, that appears in any filing
made with, or written materials submitted to, any third party and/or any
Governmental Authority in connection with the Merger and the other transactions
contemplated by this Agreement.
This Section 7.4 shall not be interpreted as requiring Purchaser to
take any action that, individually or in the aggregate, would be reasonably
likely to have a Company Material Adverse Effect prior to, on or after the
Effective Time.
NOTIFICATION OF CERTAIN MATTERS
Each of the Company or Purchaser shall give prompt notice to the other
if any of the following occurs after the date of this Agreement (provided
Purchaser need not give notice with respect to the events described in clauses
(i) or (v)): (i) any written notice, or other written communication that the
Company or any Company Subsidiary receives, of which the Company obtains
knowledge, relating to a material default or Event which, with notice or lapse
of time or both, would be reasonably likely to become a material default under
any Significant Contract; (ii) any receipt by it or any of its Subsidiaries of
any written notice or other written communication from any Person of which the
Company or Purchaser, as applicable, obtains knowledge alleging that the Consent
of such Person is or may be required in connection with the Merger and the other
transactions contemplated by this Agreement if such Consent is not disclosed in
the Company Disclosure Schedule; (iii) receipt by it or any of its Subsidiaries
of any material notice or other communication from any Governmental Authority
(including any securities exchange) in connection with the Merger and the other
transactions contemplated by this Agreement of which the Company or Purchaser,
as applicable, obtains knowledge; (iv) the occurrence of any Event or Events
which, individually or in the aggregate, would be reasonably likely to have a
Company Material Adverse Effect (in the case of the Company) or a Purchaser
Material Adverse Effect (in the case of Purchaser); (v) the commencement or
written threat of any Litigation involving or affecting the Company, the Company
Subsidiaries or any of their respective properties or assets, or any employee,
agent, director or officer of the Company, in his or her capacity as such or as
a fiduciary under a Benefit Plan, which, if pending on the date hereof, would
have been required to have been disclosed in or pursuant to this Agreement, or
any material adverse development in connection with any Litigation disclosed by
the Company in or pursuant to this Agreement or the Securities Filings; (vi) the
commencement or written threat against it or any of its Subsidiaries of any
Litigation relating to the Merger; (vii) the occurrence of any Event that causes
or is reasonably likely to cause a material breach by it of any provision of
this Agreement; (viii) the receipt by it or any of its Subsidiaries of an
administrative or other order or notification of which the Company or Purchaser,
as applicable,
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(CUSIP Number)
obtains knowledge relating to any violation or claimed violation by it or its
Subsidiaries of the rules and regulations of any Governmental Authority that
could adversely affect its ability to consummate the Merger and the other
transactions contemplated by this Agreement; or (ix) if it obtains knowledge of
any change in Law that is reasonably likely to cause a Governmental Authority to
withhold a Company Regulatory Consent (in the case of the Company) or a
Purchaser Regulatory Consent (in the case of Purchaser).
CONDITIONS TO THE MERGER
CONDITIONS TO THE OBLIGATIONS OF THE PARTIES
The respective obligations of each party to effect the Merger shall be
subject to the fulfillment or waiver on or prior to the Closing Date of the
following conditions:
(a) Company Stockholder Approval. The Agreement, the Merger
and the other transactions contemplated by this Agreement shall have
been approved by holders of a sixty-six and two-thirds percent
(66-2/3%) of the outstanding Common Shares (the "Company Stockholder
Approval").
(b) No Law, Injunction or Action. No order, statute, rule,
regulation, executive order, stay, decree, judgment, Law, or injunction
of any court or other Governmental Authority that prohibits or prevents
the consummation of the Merger or the other transactions contemplated
by this Agreement shall have been enacted, entered, promulgated or
enforced.
CONDITIONS TO OBLIGATIONS OF THE COMPANY
The obligation of the Company to effect the Merger shall be subject to
the fulfillment on or prior to the Closing Date of the following additional
conditions, any one or more of which may be waived in whole or in part by the
Company:
(a) Purchaser Representation and Warranties. The
representations and warranties of Purchaser contained in this Agreement
shall be true and correct (disregarding for these purposes any
materiality, Purchaser Material Adverse Effect or corollary
qualifications contained therein) when made, and as of the Closing Date
as if made on and as of such date (provided that such representations
and warranties which are expressly made as of a specific date need be
so true and correct only as of such specific date), except to the
extent that any failures of such representations and warranties to be
so true and correct, would not, individually or in the aggregate, have
a Purchaser Material Adverse Effect.
(b) Performance by Purchaser. Purchaser and Merger Sub shall
have performed and complied in all material respects with all of the
material covenants and agreements required by this Agreement to be
performed or complied with by Purchaser and Merger Sub on or prior to
the Closing Date.
(c) Certificates and Other Deliveries. Purchaser and Merger
Sub shall have delivered to the Company an officer's certificate to the
effect that the conditions set forth in Sections 8.2(a) and (b) have
been satisfied.
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(CUSIP Number)
CONDITIONS TO OBLIGATIONS OF PURCHASER AND MERGER SUB
The obligations of Purchaser and Merger Sub to effect the Merger shall
be subject to the fulfillment on or prior to the Closing Date of the following
additional conditions, any one or more of which may be waived in whole or in
part by Purchaser:
(a) Company Representations and Warranties. The
representations and warranties of the Company contained in this
Agreement shall be true and correct (disregarding for these purposes
any materiality, Company Material Adverse Effect or corollary
qualifications contained therein), when made and as of the Closing Date
as if made on and as of such date (provided that such representations
and warranties which are by their express provisions made as of a
specific date need be so true and correct only as of such specific
date), except to the extent that any failures of such representations
and warranties to be so true and correct, would not, individually or in
the aggregate, have a Company Material Adverse Effect.
(b) Performance by the Company. The Company shall have
performed and complied in all material respects with all covenants and
agreements required by this Agreement to be performed or complied with
by the Company on or prior to the Closing Date.
(c) No Company Material Adverse Effect. There shall not have
occurred after the date of this Agreement any known and undisclosed
Event or Events that would be reasonably likely to, individually or in
the aggregate, have a Company Material Adverse Effect.
(d) Governmental Approvals; No Challenge. All waivers,
consents, approvals, orders and authorizations of, and notices, reports
and filings with, Governmental Authorities necessary for the
consummation of the Merger and the other transactions contemplated by
this Agreement (including, without limitation, all Company Regulatory
Consents and Purchaser Regulatory Consents) shall have been obtained or
made and shall be in full force and effect without the imposition of
any terms, conditions, restrictions or limitations, except for the
imposition of any terms, conditions, restrictions and limitations in
respect of such waivers, consents, approvals, orders, authorizations,
notices, reports or filings, or failures to have obtained or made, or
to be in full force and effect, of such waivers, consents, approvals,
orders, authorizations, notices, reports or filings (other than Company
Regulatory Consents and Purchaser Regulatory Consents, all of which
shall have been obtained and made and be in full force effect) which
would not, individually or in the aggregate, be material to the
business, operations, assets, liability, condition (financial or
otherwise) or prospects of the Company and the Company Subsidiaries
taken as a whole. There shall not be pending any action, proceeding or
investigation by any Governmental Entity or any action or proceeding by
any other Person challenging, seeking to prohibit, prevent or delay, or
seeking material damages in connection with the Merger or any other
transaction contemplated by this Agreement.
(e) Certificates and Other Deliveries. The Company shall have
delivered, or caused to be delivered, to Purchaser an officer's
certificate to the effect that the conditions set forth in Sections
8.3(a),(b) and (c) have been satisfied.
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(CUSIP Number)
TERMINATION, AMENDMENT AND WAIVER
TERMINATION
This Agreement may be terminated at any time prior to the Effective
Time, whether before or after approval of this Agreement, the Merger and the
other transactions contemplated by this Agreement by the stockholders of the
Company:
(a) by mutual written consent of the Company, Purchaser and
Merger Sub;
(i) by the Company, if there has been a breach by Purchaser of
any of its representations, warranties, covenants or agreements contained in
this Agreement that would cause the condition set forth in Section 8.2(a) or
Section 8.2(b) not to be satisfied and, in either such case, such breach or
condition is not curable or, if curable, has not been promptly cured within 30
days following receipt by Purchaser of written notice of such breach; (ii) by
Purchaser, if there has been a breach by the Company of (x) any of the covenants
or agreements set forth in Sections 5.3 or 5.4 or (y) any of its
representations, warranties, covenants or agreements (other than those set forth
in Sections 5.3 or 5.4) contained in this Agreement that would cause the
condition set forth in Section 8.3(a) or Section 8.3(b) not to be satisfied and,
in the case of a breach described in clause (x) or (y), such breach or condition
is not curable or, or if curable, has not been promptly cured within 3 days (in
the case of a breach described in clause (x)) or 30 days (in the case of a
breach described in clause (y)) following receipt by the Company of written
notice of such breach;
(b) by either Purchaser or the Company if any decree,
permanent injunction, judgment or order of any Governmental Authority
preventing or prohibiting consummation of the Merger shall have become
final and nonappealable;
(c) by either Purchaser or the Company if the transactions
contemplated by this Agreement shall not have been consummated before
the End Date; provided, however, that the right to terminate this
Agreement under this Section 9.1(c) shall not be available to any party
whose breach of any provision of this Agreement was a significant cause
of the failure of the Merger to occur on or before the End Date; "End
Date" means January 31, 2004.
(d) by either Purchaser or the Company if the Merger and the
other transactions contemplated by this Agreement shall fail to receive
the Company Stockholder Approval at the Company Stockholders Meeting
(or any adjournment or postponement thereof);
(e) by Purchaser, if the Special Committee or the Company's
Board of Directors shall have withdrawn, or modified or changed, in a
manner adverse to Purchaser, their approval or recommendation of the
Merger and the other transactions contemplated by this Agreement or
shall have recommended any Takeover Proposal (other than the Merger) or
resolved to do the same; and
(f) by the Company (prior to the Company Stockholders
Meeting), in connection with a Superior Proposal, if and only if (x)
the Company has complied with the covenants and agreements set forth in
Sections 5.3 and 5.4 and (y) upon such termination of this Agreement
the Company immediately (i) enters into a definitive agreement for an
Acquisition Transaction with respect to such Superior Proposal and (ii) pays the
Purchaser Expenses to Purchaser as set forth in Section 9.2 of this Agreement.
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(CUSIP Number)
EFFECT OF TERMINATION
In the event of the termination of this Agreement by either the Company
or Purchaser pursuant to Section 9.1:
(a) This Agreement (other than Section 7.3, Section 9.2 and
Article X hereof) shall become null and void and of no force and effect
and there shall be no liability under this Agreement on the part of
Purchaser or the Company (other than with respect to the provisions of
Section 7.3, Section 9.2 and Article X), except to the extent that such
termination results from a willful breach by either party of any of its
representations, warranties, covenants or agreements set forth in this
Agreement; provided that the payment of Company Expenses or Purchaser
Expenses, as applicable, shall not affect or reduce a party's liability
for any willful breach by such party.
(b) The Company shall pay to Purchaser up to $10,000 of
Purchaser Expenses (without duplication for Purchaser Expenses
otherwise paid pursuant to Section 9.2(c)), as follows: (1) if the
Company shall terminate this Agreement pursuant to Section 9.1(d) and
at any time after the date of this Agreement and prior to the date of
such termination a Takeover Proposal shall have been made or reaffirmed
to the Company or publicly announced and, within nine months of the
termination of this Agreement, the Company enters into a definitive
agreement with respect to any Acquisition Transaction, (2) if the
Company or Purchaser shall terminate this Agreement pursuant to Section
9.1(e) and at any time after the date of this Agreement and on or prior
to the date of the Company Stockholders Meeting a Takeover Proposal
shall have been made or reaffirmed to the Company or publicly announced
and, within nine months of the termination of this Agreement, the
Company enters into a definitive agreement with respect to any
Acquisition Transaction. The Purchaser shall pay to the Company up to
$10,000 of Company Expenses (without duplication for Company Expenses
otherwise paid pursuant to Section 9.1(c)), if the Company or Purchaser
shall terminate this Agreement pursuant to Section 9.1 and, at the time
of such termination, all of the conditions set forth in Sections 8.1
and 8.3 if the termination occurs after 5:00 p.m. Pacific Standard Time
on January 31, 2004) shall have been satisfied or waived (or with
respect to conditions that by their nature are to be fulfilled at the
Closing, shall then be capable of being satisfied at a Closing).
(c) All of Purchaser Expenses required to be paid pursuant to
Sections 9.2(b)(1) and (2) shall be paid at the time the Company enters
into a definitive agreement with respect to an Acquisition Transaction.
The Purchaser Expenses required to be paid pursuant to Sections
9.2(b)(3) shall be paid concurrently with notice of termination of this
Agreement by the Company or by Purchaser, as applicable. The Company
Expenses required to be paid pursuant to the last sentence of Section
9.2(b) shall be paid concurrently with notice of termination of this
Agreement by the Company or Purchaser, as applicable.
(d) Notwithstanding anything to the contrary contained herein,
in the event that the Agreement is terminated pursuant to Section
9.1(d), the Company shall not be obligated to pay Purchaser Expenses to
Purchaser.
(e) All payments under this Section 9.2 shall be made by wire
transfer of immediately available funds to an account designated by
Purchaser or the Company, as applicable.
(f) The Company and Purchaser acknowledge that the agreements
contained in this Section 9.2 are an integral part of the transactions
contemplated by this Agreement, and that, without such agreements, the
Company and the Purchaser would not enter into this Agreement.
Accordingly, if the Company or the Purchaser fails to promptly pay any
amounts owing pursuant to this Section 9.2 when due, the Company or the
Purchaser, as applicable, shall in addition thereto pay to Purchaser
and its affiliates, or the Company and its affiliates, as
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applicable, all costs and expenses (including fees and disbursements of
counsel) incurred in collecting such amounts, together with interest on
such amounts (or any unpaid portion thereof) from the date such payment
was required to be made until the date such payment is received by the
Purchaser and its affiliates, or the Company, as applicable, at the
prime rate of Citibank, N.A. as in effect from time to time during such
period plus two percent.
MISCELLANEOUS
NOTICES
All notices or communications hereunder shall be in writing (including
facsimile or similar writing) addressed as follows:
TO PURCHASER OR MERGER SUB: Center Healthcare, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxx
Fax: 000-000-0000
TO CLC: CLC Healthcare, Inc.
0000 Xxxxx Xxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxx Xxxx
Fax 000-000-0000
Any such notice or communication shall be deemed given (i) when made,
if made by hand delivery, and upon confirmation of receipt, if made by
facsimile, (ii) one business day after being deposited with a next day courier,
postage prepaid, or (iii) three business days after being sent certified or
registered mail, return receipt requested, postage prepaid, in each case
addressed as above (or to such other address as such party may designate in
writing from time to time).
SEPARABILITY
If any provision of this Agreement shall be declared to be invalid or
unenforceable, in whole or in part, such invalidity or unenforceability shall
not affect the remaining provisions hereof which shall remain in full force and
effect.
ASSIGNMENT
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, legal representatives, successors,
and assigns; provided, however, that neither this Agreement nor any rights
hereunder shall be assignable or otherwise subject to hypothecation and any
assignment in violation hereof shall be null and void.
INTERPRETATION
The headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.
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COUNTERPARTS
This Agreement may be executed in one or more counterparts, all of
which shall be considered one and the same Agreement, and shall become effective
when one or more such counterparts have been signed by each of the parties and
delivered to each party.
ENTIRE AGREEMENT
This Agreement represent the entire Agreement of the parties with
respect to the subject matter hereof and shall supersede any and all previous
contracts, arrangements or understandings between the parties hereto with
respect to the subject matter hereof.
GOVERNING LAW.
This Agreement shall be construed, interpreted, and governed in
accordance with the laws of Nevada, without reference to rules relating to
conflicts of law.
ATTORNEYS' FEES
If any action at law or equity, including an action for declaratory
relief, is brought to enforce or interpret any provision of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
expenses from the other party, which fees and expenses shall be in addition to
any other relief which may be awarded.
NO THIRD PARTY BENEFICIARIES
Except as provided in Section 6.1, no person or entity other than the
parties hereto is an intended beneficiary of this Agreement or any portion
hereof.
AMENDMENTS AND SUPPLEMENTS
At any time before or after approval of the matters presented in
connection with the Merger by the respective stockholders of Purchaser and the
Company and prior to the Effective Time, this Agreement may be amended or
supplemented in writing by Purchaser and the Company with respect to any of the
terms contained in this Agreement, except as otherwise provided by law.
EXTENSIONS, WAIVERS, ETC.,
At any time prior to the Effective Time, either party may:
(a) extend the time for the performance of any of the
obligations or acts of the other party;
(b) waive any inaccuracies in the representations and
warranties of the other party contained herein or in any
document delivered pursuant hereto; or
(c) waive compliance with any of the agreements or
conditions of the other party contained herein.
Notwithstanding the foregoing; no failure or delay by Purchaser or the
Company in exercising any right hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right hereunder. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party.
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DEFINITIONS
As used herein, the following terms shall have the following meanings:
"ACQUIRING PERSON" has the meaning given such term in the Rights
Agreement.
"ACQUISITION TRANSACTION" means (i) any direct or indirect acquisition
or purchase of a business that constitutes twenty percent (20%) or more of the
net revenues or assets of the Company, taken as a whole, or any direct or
indirect acquisition or purchase of Common Shares that would result in a Person
or group owning ten percent (10%) or more of the Common Shares or voting power
(or of securities or rights convertible into or exercisable for such Common
Shares or voting power) of the Company, (ii) any tender offer or exchange offer
or other acquisition or series of acquisitions of Common Shares that if
consummated would result in any Person or group beneficially owning ten percent
(10%) or more of the Common Shares or voting power (or of securities or rights
convertible into or exercisable for such Common Shares or voting power) of the
Company, or (iii) any merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or any of the Company Subsidiaries that constitutes twenty percent (20%)
or more of the net revenues or assets of the Company and the Company
Subsidiaries taken as a whole, in each case other than the transactions
contemplated by this Agreement.
"AGREEMENT" means this Agreement and Plan of Merger, dated as of the
date first written above, by and among Purchaser, Merger Sub and CLC.
"AUDIT" means any audit, assessment of Taxes, other examination by any
Tax Authority, proceeding or appeal of such proceeding relating to Taxes.
"CAPITAL STOCK" means the Preferred Stock and the Common Stock.
"CERTIFICATE," or "CERTIFICATES," has the meaning given such term in
Section 1.3(b) hereof.
"CERTIFICATE OF MERGER" has the meaning given such term in Section
1.1(c) hereof.
"CHAMPUS" means the United States Department of Defense Civilian
Health and Medical Program of the Uniformed Services.
"CLC" means CLC Healthcare, Inc., a Nevada corporation.
"CLC DISCLOSURE LETTER" means the disclosure letter delivered by CLC
to Purchaser as of the date hereof.
"CLC MATERIAL ADVERSE EFFECT" means any event, circumstance,
condition, development or occurrence causing, resulting in or having (or with
the passage of time likely to cause, result in or have) a material adverse
effect on the financial condition, business, assets, properties or results of
operations of CLC and its Subsidiaries taken as a whole; provided, that such
term shall not include effects that are (a) not applicable primarily to CLC
resulting from market conditions generally in the assisted living industry or
(b) from any matter or facts previously disclosed in the CLC SEC Reports (as
defined in Section 3.5), in this Agreement and/or in the CLC Disclosure Letter.
"CLC MATERIAL CONTRACTS" has the meaning given such term in Section
3.16 hereof.
"CLC SEC REPORTS" has the meaning given such term in Section 3.5
hereof.
"CLC STOCKHOLDERS' APPROVAL" has the meaning given such term in
Section 3.17 hereof.
"CLOSING" has the meaning given such term in Section 1.1(b) hereof.
"CLOSING DATE" has the meaning given such term in Section 1.1(b)
hereof.
"CODE" means Internal Revenue Code of 1986, as amended.
"COMMON STOCK" means the common stock, par value of $0.01 per share,
of CLC.
"COMPANY" means CLC Healthcare, Inc., a Nevada corporation.
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(CUSIP Number)
"COMPANY EXPENSES" means all out-of-pocket expenses reasonably
incurred by the Company, its Subsidiaries and its affiliates (other than the
Purchaser, Merger Sub and their respective affiliates) in connection with this
Agreement and the transactions contemplated hereby, including fees and expenses
of accountants, attorneys, financial advisors and lenders up to but not
exceeding $10,000.
"COMPANY PERMITS" has the meaning given such term in Section 3.13(d)
hereof.
"COMPANY REGULATORY CONSENT" has the meaning given such term in
Section 3.4(b) hereof.
"COMPANY STOCKHOLDER APPROVAL" has the meaning given such term in
Section 8.1(a) hereof.
"CUSTOMARY POST CLOSING CONSENTS" has the meaning given such term in
Section 3.4(b) hereof.
"DISSENTING SHARES" means any Common Shares outstanding immediately
prior to the Effective Time and held by a holder who has not voted in favor of
the Merger and who has timely demanded and perfected the right for appraisal for
such Common Shares in accordance with Chapter 92A of the NRS.
"DISTRIBUTION DATE" has the meaning given such term in the Rights
Agreement.
"EFFECTIVE TIME" has the meaning given such term in Section 1.1(c)
hereof.
"END DATE" has the meaning given such term in Section 9.1(c) hereof.
"ENVIRONMENTAL LAWS" has the meaning given such term in Section
3.12(a) hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FLIP-IN EVENT" has the meaning given such term in the Rights
Agreement.
"GAAP" means generally accepted accounting principals in the United
States.
"GOVERNMENTAL AUTHORITY" means any state or federal governmental or
regulatory authority or agency.
"HAZARDOUS SUBSTANCES" has the meaning given such term in Section
3.12(b) hereof.
"INDEMNIFIED PERSON" has the meaning given such term in Section 6.1(a)
hereof.
"LIEN" means any lien, mortgage, pledge, security interest,
encumbrance, claim or change of any kind.
"MEDICAL REIMBURSEMENT PROGRAMS" means the Medicare, Medicaid, Blue
Cross/Blue Shield and CHAMPUS programs and any other health care program
operated by or financed in whole or in part by any Governmental Entity.
"MEDICAID" means that means-tested entitlement program under Title XIX
of the Social Security Act that provides federal grants to states for medical
assistance based on specific eligibility criteria. (Social Security Act of 1965,
Title XIX, P.L. 89-97, as amended; 42 U.S.C. 1396 et seq.).
"MEDICARE" means that government-sponsored entitlement program under
Title XVIII of the Social Security Act that provides for a health insurance
system for eligible elderly and disabled individuals. (Social Security Act of
1965, Title XVIII, P.L. 89-97, as amended, 42 U.S.C. 1395 et seq.).
"MERGER" has the meaning given such term in Section 1.1(a) hereof.
"MERGER CONSIDERATION" has the meaning given such term in Section
1.2(a) hereof.
"MERGER SUB" means [CHMS, INC.], a Nevada corporation.
"NEVADA SECRETARY OF STATE" means the Secretary of State of the State
of Nevada.
"NRS" means the Nevada Revised Statutes.
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(CUSIP Number)
"PAYING AGENT" has the meaning given such term in Section 1.3(a)
hereof.
"PAYMENT FUND" has the meaning given such term in Section 1.3(a)
hereof.
"PERSON" mean any individual, corporation, trust, association,
unincorporated association, estate, partnership, joint venture, limited
liability company, Governmental Authority or other legal entity.
"PREFERRED STOCK" means the preferred stock, par value of $0.01 per
share, of CLC.
"PURCHASER" means [CENTER HEALTHCARE, INC.], a Nevada corporation.
"PURCHASER DISCLOSURE LETTER" means the disclosure letter delivered by
Purchaser to CLC as of the date hereof.
"PURCHASER EXPENSES" means all out-of-pocket expenses reasonably
incurred by Purchaser, Merger Sub and their respective affiliates (other than
the Company and its Subsidiaries) in connection with this Agreement and the
transactions contemplated hereby, including fees and expenses of accountants,
attorneys, financial advisors and lenders up to but not exceeding $10,000.
"PURCHASER MATERIAL ADVERSE EFFECT" means any event, circumstance,
condition, development or occurrence causing, resulting in or having (or with
the passage of time likely to cause, result in or have) a material adverse
effect on the financial condition, business, assets, properties or results of
operations of Purchaser and its Subsidiaries, taken as a whole.
"PURCHASER REGULATORY CONSENT" has the meaning given such term in
Section 4.3(b) hereof.
"REPRESENTATIVES" means, with respect to any Person, its officers,
directors, accountants, counsel, investment bankers or financial advisors.
"RIGHTS AGREEMENT" means the Rights Agreement, dated as of November 9,
2001, between the Company and Computershare Investor Services, LLC.
"SEC" means the U.S. Securities and Exchange Commission.
"SECURITIES ACT" means Securities Act of 1933, as amended.
"SPECIAL COMMITTEE" has the meaning given such term in the recitals
hereto.
"STOCK ACQUISITION DATE" has the meaning given such term in the Rights
Agreement.
"STOCK OPTIONS" has the meaning given such term in Section 1.4 hereof.
"STOCK PLANS" has the meaning given such term in Section 1.4 hereof.
"SUBSIDIARY" means, with respect to any party, any corporation or
other organization, whether incorporated or unincorporated, of which (i) at
least a majority of the securities or other interests having by their terms
voting power to elect a majority of the Board of Directors or others performing
similar functions with respect to such corporation or other organization is
directly or indirectly beneficially owned or controlled by such party or by any
one or more of its subsidiaries, or by such party and one or more of its
subsidiaries, or (ii) such party or any Subsidiary of such party is a general
partner of a partnership or a manager of a limited liability company.
"SUPERIOR PROPOSAL" means any bona fide written offer made by a third
party relating to (i) any direct or indirect acquisition or purchase of a
business that constitutes eighty percent (80%) or more of the net revenues or
assets of the Company, taken as a whole, or any direct or indirect acquisition
or purchase of Common Shares that would result in a Person or group owning
one-hundred percent (100%) of the Common Shares or voting power (or of
securities or rights convertible into or exercisable for such Common Shares or
voting power) of the Company, (ii) any tender offer or exchange offer or other
acquisition or series of acquisitions of Common Shares that if consummated would
result in any Person or group beneficially owning one-hundred percent (100%) of
the Common Shares or voting power (or of securities or rights convertible into
or exercisable for such Common Shares or voting power) of the Company, or (iii)
any merger, consolidation, business combination, recapitalization, liquidation,
dissolution or similar transaction involving the Company or any of the Company
Subsidiaries that constitutes one-hundred percent (100%) of the net revenues or
assets of the Company and the Company Subsidiaries taken as a whole, in each
case other than the transactions contemplated by this Agreement, pursuant to
which all holders of Common Shares would be given the opportunity to receive the
same consideration for their Common Shares, that the Special Committee
determines in its good faith judgment (based on the advice of its financial
advisors), (x) after considering any proposed modifications to this Agreement
made by Purchaser, is more
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favorable to the Company's stockholders from a financial point of view than
those terms contained herein (as such terms may be proposed to be modified by
the Purchaser) and (y) is reasonably likely to be consummated on a timely basis.
"SURVIVING CORPORATION" has the meaning given such term in Section
1.1(a) hereof.
"TAKEOVER PROPOSAL" means any inquiry, proposal or offer from any
Person (other than Purchaser) relating to an Acquisition Transaction.
"TAKEOVER STATUTE" has the meaning given to such term in Section
3.3(c) hereof.
"TAX AUTHORITY" means the Internal Revenue Service and any other
domestic or foreign Governmental Authority responsible for the administration of
any Taxes.
"TAX RETURNS" means all federal, state, local and foreign tax returns,
declarations, statements, reports, schedules, forms and information returns and
any amended Tax Return relating to Taxes.
"TAXES" means all federal, state, local and foreign taxes, and other
assessments of a similar nature (whether imposed directly or through
withholding), including any interest, additions to tax, or penalties applicable
thereto.
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In Witness Whereof, the parties hereto have duly executed this
Agreement as of the day and year first above written.
CENTER HEALTHCARE, INC.]
By: /s/ XXXX X. XXXXXXX
------------------------------
NAME: XXXX X. XXXXXXX
TITLE: CHIEF EXECUTIVE OFFICER
CHMS, INC.
By: /s/ XXXX X. XXXXXXX
------------------------------
NAME: XXXX X. XXXXXXX
TITLE: CHIEF EXECUTIVE OFFICER
CLC HEALTHCARE, INC.
By: /s/ XXXX X. XXXXXXX
------------------------------
NAME: XXXX X. XXXXXXX
TITLE: CHIEF EXECUTIVE OFFICER
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(CUSIP Number)
The undersigned each hereby agree that for so long as the merger
consideration is at least $1.00 per share they will vote all Common Shares of
CLC Healthcare owned by them in favor of the Merger of CLC Merger Sub, Inc. with
and into CLC Healthcare, Inc. as set forth in the foregoing Agreement and Plan
of Merger dated October __, 2003.
Dated October _______, 2003 /s/ XXXX XXXXX
-------------------------------------------
XXXX XXXXX, on his own behalf and on behalf
of entities he owns or controls which own,
hold or control CLC shares
Dated October _______, 2003 /s/ ASA HAMOT
-------------------------------------------
ASA HAMOT, on his own behalf and on behalf
of entities he owns or controls which own,
hold or control CLC shares
Dated October _______, 2003 /s/ XXXXXX XXXXX
-------------------------------------------
XXXXXX XXXXX, on his own behalf and on
behalf of entities he owns or controls
which own, hold or control CLC shares
Dated October _______, 2003 Costa Brava Partnership II, a partnership
By:
--------------------------------------
Its:
--------------------------------------
Dated October _______, 2003 Xxxxxx LTD, a corporation
By:
--------------------------------------
Its:
--------------------------------------
Dated _______, 2003 Greenwood Capital LP, a partnership
By:
--------------------------------------
Its:
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