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EXHIBIT 2(b)
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SHORT FORM MERGER OPTION AGREEMENT
SHORT FORM MERGER OPTION AGREEMENT, dated as of September 8,
1999 (the "Agreement"), among Plato Holdings, Inc., a Delaware corporation
("Parent"), New Plato Acquisition, Inc., a Delaware corporation ("Sub"), and
Nova Care Employee Services, Inc., a Delaware corporation (the "Company").
Capitalized terms used and not defined in this Agreement shall have the meaning
ascribed to them in the Agreement and Plan of Merger, dated as of the date
hereof, (the "Merger Agreement") by and among Parent, Sub and the Company.
WHEREAS, concurrently with the execution of this Agreement,
Parent, Sub and the Company are entering into the Merger Agreement, providing
for the making of a tender offer (the "Offer") to purchase all of the issued and
outstanding shares of the Company's common stock, par value $0.01 per share (the
"Shares"), at a price per Share equal to the Offer Price and, following the
completion of the Offer, the merger (the "Merger") of Sub and the Company,
whereby each Share not purchased pursuant to the Offer (other than Shares owned
by Parent, Sub or any other wholly owned subsidiary of Parent, Shares held in
the treasury of the Company and Dissenting Shares) will be converted into the
right to receive in cash the Offer Price in accordance with the terms of the
Merger Agreement; and
WHEREAS, the Company desires to induce Parent and Sub to enter
into the Merger Agreement and to facilitate the prompt completion of the Merger
following the purchase of Shares pursuant to the Offer.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth in
this Agreement, the parties hereto hereby agree as follows:
1. Grant of Option. The Company hereby grants to Sub an
irrevocable option (the "Option") to purchase up to that number of newly issued
Shares (the "Option Shares") equal to the number of Shares, that when added to
the number of Shares owned by Sub and its affiliates immediately following
consummation of the Offer, shall constitute 90% of the Shares then outstanding
on a fully diluted basis (giving effect to the issuance of the Option Shares)
for a consideration per Option Share equal to the Offer Price; provided,
however, that the number of Option Shares shall not exceed that number equal to
19.9% of the Shares outstanding on the date of this Agreement.
2. Exercise of the Option. The Option may be exercised by Sub
at any time after the acceptance for payment by Sub of Shares pursuant to the
Offer in accordance with the terms of the Merger Agreement. In the event Sub
wishes to exercise the Option, Sub shall give written notice (the "Notice") of
its exercise of the Option and specifying the number of Shares owned by Sub and
its affiliates immediately following consummation of the Offer and a place and a
time (which shall not be less than three business days from the date of the
Notice) for the closing of such purchase. The Company shall, within two business
days after receipt of the Notice, deliver written notice to Sub specifying the
number of Option Shares.
3. Payment and Delivery of Certificates. At the closing
hereunder: (i) the Company will deliver to Sub a certificate or certificates
representing the number of Option
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Shares so purchased and (ii) Sub will make payment to the Company of the
aggregate price for the Option Shares being purchased, as stated in the Notice,
by check or wire transfer in an amount equal to the product of (x) the Offer
Price and (y) the total number of Option Shares delivered at the closing. The
Company shall pay all expenses, and any and all United States Federal, state and
local taxes and other charges, that may be payable in connection with the
preparation, issuance and delivery of stock certificates under this Section 3.
4. Representations and Warranties of the Company. The Company
hereby represents and warrants to Parent and Sub as follows:
4.1. The Company has all requisite corporate power
and authority to enter into and perform all of its obligations under this
Agreement. The execution and delivery of this Agreement and the consummation by
the Company of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of the Company. This Agreement has
been duly executed and delivered by the Company.
4.2. The Company has taken all necessary corporate
action to authorize and reserve for issuance, and at all times prior to the
termination of this Agreement shall have reserved, all of the Option Shares
issuable pursuant to this Agreement.
4.3. The Shares to be issued upon exercise of the
Option, upon their issuance and delivery in accordance with this Agreement as
provided herein, will be duly authorized, validly issued, fully paid and
non-assessable, will be delivered free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements,
limitations on Sub's voting rights, charges, adverse rights and other
encumbrances of any nature whatsoever (other than this Agreement) and will not
be subject to any preemptive rights. Upon the delivery to Sub by the Company of
a certificate or certificates evidencing the Option Shares, Sub will receive
good, valid and marketable title to the Option Shares.
5. Representations and Warranties of Parent and Sub. Each of
Parent and Sub hereby represents and warrants to the Company that (i) it has all
requisite power and authority to enter into and perform all of its obligations
under this Agreement; (ii) the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby have been duly authorized
by all necessary action on the part of Parent and Sub; (iii) this Agreement has
been duly executed and delivered by Parent and Sub and, assuming the due and
valid authorization, execution and delivery by the Company, constitutes a valid
and binding obligation of Parent and Sub, enforceable against each of Parent and
Sub in accordance with its terms, except as such enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally, and by general equitable
principles; and (iv) if and when Sub exercises the Option, it will be acquiring
the Option Shares pursuant to this Agreement for its own account and not with a
view to any public distribution thereof.
6. Adjustment Upon Changes in Capitalization. In the event of
any change in the number of issued and outstanding Shares by reason of any stock
dividend, subdivision, merger, recapitalization, combination, conversion or
exchange of shares, or any other change in the corporate or capital structure of
the Company (including, without limitation, the declaration
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or payment of any extraordinary dividend of cash or securities) which would have
the effect of diluting or otherwise adversely affecting Sub's rights and
privileges under this Agreement, the number and kind of the Option Shares and
the consideration payable in respect of the Option Shares shall be appropriately
and equitably adjusted to restore to Sub its rights and privileges under this
Agreement.
7. Termination. This Agreement will terminate upon the earlier
to occur of (i) termination of the Merger Agreement in accordance with its terms
and (ii) the Effective Time of the Merger.
8. Assignment. Neither this Agreement nor any of the rights,
interests or obligations hereunder shall be assigned by any of the parties
hereto (whether by operation of law or otherwise) without the prior written
consent of the other parties, except that Sub may assign, in its sole
discretion, any or all of its rights, interests and obligations hereunder to
Parent or to any direct or indirect wholly owned Subsidiary of Parent or to any
other entity owned by, or controlling, controlled by or under common control
with the same equityholders of Parent. Subject to the preceding sentence, this
Agreement will be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and permitted assigns.
9. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given (and shall be
deemed to have been duly received if so given) if personally delivered or sent
by registered or certified mail, postage prepaid, or telecopy addressed to the
respective parties at their addresses specified in Section 8.7 of the Merger
Agreement.
10. Specific Performance. Each of the parties hereto
acknowledges and agrees that in the event of any breach by the Company of this
Agreement, Parent and Sub would be irreparably and immediately harmed and could
not be made whole by monetary damages. It is accordingly agreed that the Company
will waive, in any action for specific performance, the defense of adequacy of a
remedy at law, and Parent and Sub shall be entitled, in addition to any other
remedy to which they may be entitled at law or in equity, to compel specific
performance of this Agreement in any action instituted in a court of competent
jurisdiction.
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the conflict of laws provisions thereof.
12. Amendment. This Agreement may not be amended except by an
instrument in writing signed by the parties hereto.
13. Waiver. Any party hereto may (i) extend the time for or
waive compliance with the performance of any obligation or other act of any
other party hereto or (ii) waive any inaccuracy in the representations and
warranties contained herein or in any document delivered pursuant hereto. Any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed by the party or parties to be bound thereby. The failure of any
party to this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
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14. Fees and Expenses. Except as otherwise provided herein or
in Section 8.1 of the Merger Agreement, all costs, fees and expenses incurred in
connection with this Agreement shall be paid by the party incurring such
expenses.
15. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void, unenforceable or against its regulatory
policy, the remainder of the terms, provisions, covenants and restrictions of
this Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
16. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, this Agreement has been executed by duly
authorized officers of each of the parties hereto all as of the date first above
written.
PLATO HOLDINGS, INC.
By /s/ Xxxxxxx X. Case
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Name: Xxxxxxx X. Case
Title: President
NEW PLATO ACQUISITION, INC.
By /s/ Xxxxxxx X. Case
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Name: Xxxxxxx X. Case
Title: President
NOVACARE EMPLOYEE SERVICES, INC.
By /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: President and CEO
