EXHIBIT 2.2
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AGREEMENT AND PLAN OF MERGER
BY AND AMONG
AMERICAN MEDICAL RESPONSE, INC.
SHI ACQUISITION CORP.
and
STAT HEALTHCARE, INC.
Dated as of October 7, 1996
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TABLE OF CONTENTS
ARTICLE I - THE MERGER....................................................... 2
SECTION 1.1 THE MERGER......................................... 2
SECTION 1.2 EFFECTIVE TIME..................................... 2
SECTION 1.3 EFFECT OF THE MERGER............................... 2
SECTION 1.4 CERTIFICATE OF INCORPORATION, BY-LAWS.............. 2
SECTION 1.5 DIRECTORS AND OFFICERS............................. 3
SECTION 1.6 EFFECT ON CAPITAL STOCK............................ 3
SECTION 1.7 EXCHANGE OF CERTIFICATES........................... 5
SECTION 1.8 STOCK TRANSFER BOOKS............................... 7
SECTION 1.9 NO FURTHER OWNERSHIP RIGHTS IN COMPANY
COMMON STOCK..................................... 7
SECTION 1.10 LOST, STOLEN OR DESTROYED CERTIFICATES............. 7
SECTION 1.11 TAX AND ACCOUNTING CONSEQUENCES.................... 7
SECTION 1.12 TAKING OF NECESSARY ACTION; FURTHER ACTION......... 7
SECTION 1.13 MATERIAL ADVERSE EFFECT............................ 8
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF THE COMPANY................... 8
SECTION 2.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES....... 8
SECTION 2.2 CERTIFICATE OF INCORPORATION AND BY-LAWS........... 9
SECTION 2.3 CAPITALIZATION..................................... 9
SECTION 2.4 AUTHORITY RELATIVE TO THIS AGREEMENT............... 10
SECTION 2.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS......... 10
SECTION 2.6 COMPLIANCE, PERMITS................................ 12
SECTION 2.7 SEC FILINGS; FINANCIAL STATEMENTS.................. 12
SECTION 2.8 ABSENCE OF CERTAIN CHANGES OR EVENTS............... 13
SECTION 2.9 NO UNDISCLOSED LIABILITIES......................... 13
SECTION 2.10 ABSENCE OF LITIGATION.............................. 13
SECTION 2.11 EMPLOYEE BENEFIT PLANS, EMPLOYMENT AGREEMENTS...... 13
SECTION 2.12 LABOR MATTERS...................................... 15
SECTION 2.13 REGISTRATION STATEMENT, PROXY
STATEMENT/PROSPECTUS............................. 15
SECTION 2.14 RESTRICTIONS ON BUSINESS ACTIVITIES................ 16
SECTION 2.15 TITLE TO PROPERTY.................................. 16
SECTION 2.16 TAXES.............................................. 17
SECTION 2.17 ENVIRONMENTAL MATTERS.............................. 18
SECTION 2.18 INTELLECTUAL PROPERTY.............................. 18
SECTION 2.19 INTERESTED PARTY TRANSACTIONS...................... 18
SECTION 2.20 INSURANCE.......................................... 19
SECTION 2.21 ACCOUNTS RECEIVABLE................................ 19
SECTION 2.22 POOLING MATTERS.................................... 19
SECTION 2.23 OPINION OF FINANCIAL ADVISOR....................... 19
SECTION 2.24 BROKERS............................................ 19
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SECTION 2.25 SECTION 203 OF THE DGCL NOT APPLICABLE............. 20
SECTION 2.26 CHANGE IN CONTROL PAYMENTS......................... 20
SECTION 2.27 EXPENSES........................................... 20
SECTION 2.28 HEALTHCARE REGULATORY COMPLIANCE................... 20
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF PARENT AND
MERGER SUB..................................................... 21
SECTION 3.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES....... 21
SECTION 3.2 CHARTER AND BY-LAWS................................ 21
SECTION 3.3 CAPITALIZATION..................................... 22
SECTION 3.4 AUTHORITY RELATIVE TO THIS AGREEMENT............... 22
SECTION 3.5 NO CONFLICT, REQUIRED FILINGS AND CONSENTS......... 23
SECTION 3.6 COMPLIANCE; PERMITS................................ 24
SECTION 3.7 SEC FILINGS; FINANCIAL STATEMENTS.................. 24
SECTION 3.8 ABSENCE OF CERTAIN CHANGES OR EVENTS............... 25
SECTION 3.9 REGISTRATION STATEMENT; PROXY
STATEMENT/PROSPECTUS............................. 25
SECTION 3.10 POOLING MATTERS.................................... 26
SECTION 3.11 NO UNDISCLOSED LIABILITIES......................... 26
SECTION 3.12 ABSENCE OF LITIGATION.............................. 26
SECTION 3.13 OWNERSHIP OF MERGER SUB; NO PRIOR ACTIVITIES....... 26
ARTICLE IV - CONDUCT OF BUSINESS PENDING THE MERGER.......................... 27
SECTION 4.1 CONDUCT OF BUSINESS BY THE COMPANY
PENDING THE MERGER............................... 27
SECTION 4.2 NO SOLICITATION.................................... 29
SECTION 4.3 CONDUCT OF BUSINESS BY PARENT PENDING THE MERGER... 30
ARTICLE V - ADDITIONAL AGREEMENTS............................................ 31
SECTION 5.1 HSR ACT............................................ 31
SECTION 5.2 PROXY STATEMENT PROSPECTUS; REGISTRATION
STATEMENT........................................ 31
SECTION 5.3 STOCKHOLDERS MEETING............................... 31
SECTION 5.4 ACCESS TO INFORMATION; CONFIDENTIALITY............. 32
SECTION 5.5 CONSENTS; APPROVALS................................ 32
SECTION 5.6 AGREEMENTS WITH RESPECT TO AFFILIATES. ........... 32
SECTION 5.7 INDEMNIFICATION AND INSURANCE...................... 33
SECTION 5.8 NOTIFICATION OF CERTAIN MATTERS.................... 34
SECTION 5.9 FURTHER ACTION/TAX TREATMENT....................... 34
SECTION 5.10 PUBLIC ANNOUNCEMENTS. ............................. 35
SECTION 5.11 CONVEYANCE TAXES................................... 35
SECTION 5.12 ACCOUNTANTS' LETTERS............................... 35
SECTION 5.13 POOLING ACCOUNTING TREATMENT....................... 35
SECTION 5.14 NASDAQ LISTING..................................... 35
SECTION 5.15 LISTING OF PARENT SHARES........................... 35
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ARTICLE VI - CONDITIONS TO THE MERGER........................................ 36
SECTION 6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO
EFFECT THE MERGER................................ 36
SECTION 6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF
PARENT AND MERGER SUB............................ 37
SECTION 6.3 ADDITIONAL CONDITIONS TO OBLIGATION
OF THE COMPANY................................... 38
ARTICLE VII - TERMINATION.................................................... 39
SECTION 7.1 TERMINATION........................................ 39
SECTION 7.2 EFFECT OF TERMINATION.............................. 41
SECTION 7.3 FEES AND EXPENSES.................................. 41
ARTICLE VIII - GENERAL PROVISIONS............................................ 42
SECTION 8.1 EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES
AND AGREEMENTS; KNOWLEDGE, ETC. ................. 42
SECTION 8.2 NOTICES............................................ 42
SECTION 8.3 CERTAIN DEFINITIONS................................ 43
SECTION 8.4 AMENDMENT.......................................... 44
SECTION 8.5 WAIVER............................................. 44
SECTION 8.6 HEADINGS........................................... 45
SECTION 8.7 SEVERABILITY....................................... 45
SECTION 8.8 ENTIRE AGREEMENT................................... 45
SECTION 8.9 ASSIGNMENT; GUARANTEE OF MERGER SUB................ 45
SECTION 8.10 PARTIES IN INTEREST................................ 45
SECTION 8.11 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE....................................... 45
SECTION 8.12 GOVERNING LAW...................................... 46
SECTION 8.13 COUNTERPARTS....................................... 46
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AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of October 7, 1996 (this
"Agreement"), among American Medical Response, Inc., a Delaware corporation
("Parent"), SHI Acquisition Corp., a Delaware corporation and a wholly owned
subsidiary of Parent ("Merger Sub"), and STAT Healthcare, Inc., a Delaware
corporation (the "Company").
WITNESSETH:
WHEREAS, the Boards of Directors of Parent, Merger Sub and the Company
have each determined that it is advisable and in the best interests of their
respective stockholders for Parent to enter into a business combination with the
Company upon the terms and subject to the conditions set forth herein;
WHEREAS, in furtherance of such combination, the Boards of Directors of
Parent, Merger Sub and the Company have each approved the merger (the "Merger")
of Merger Sub with and into the Company in accordance with the applicable
provisions of the Delaware General Corporation Law (the "DGCL"), and upon the
terms and subject to the conditions set forth herein;
WHEREAS, Parent, Merger Sub and the Company intend, by approving
resolutions authorizing this Agreement, to adopt this Agreement as a plan of
reorganization within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), and the regulations promulgated thereunder;
WHEREAS, for accounting purposes, it is intended that the Merger shall be
accounted for as a pooling of interests under both generally accepted accounting
principles and regulations of the Securities and Exchange Commission (the
"SEC");
WHEREAS, pursuant to the Merger, each outstanding share (a "Share") of the
Company's common stock, $.01 par value (the "Company Common Stock"), shall be
converted into the right to receive the Merger Consideration (as defined in
Section 1.7(b)), upon the terms and subject to the conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Parent, Merger Sub and the Company hereby agree as follows:
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ARTICLE I
THE MERGER
SECTION 1.1 THE MERGER.
(a) EFFECTIVE TIME. At the Effective Time (as defined in Section 1.2), and
subject to and upon the terms and conditions of this Agreement and the DGCL,
Merger Sub shall be merged with and into the Company, the separate corporate
existence of Merger Sub shall cease, and the Company shall continue as the
surviving corporation. The Company as the surviving corporation after the Merger
is hereinafter sometimes referred to as the "Surviving Corporation."
(b) CLOSING. Unless this Agreement shall have been terminated and the
transactions herein contemplated shall have been abandoned pursuant to Section
7.1 and subject to the satisfaction or waiver of the conditions set forth in
Article VI, the consummation of the Merger will take place as promptly as
practicable (and in any event within two business days) after satisfaction or
waiver of the conditions set forth in Article VI, at the offices of Ropes &
Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, Xxxxxxxxxxxxx, unless another date, time
or place is agreed to in writing by the parties hereto.
SECTION 1.2 EFFECTIVE TIME. As promptly as practicable after the
satisfaction or waiver of the conditions set forth in Article VI, the parties
hereto shall cause the Merger to be consummated by filing a certificate of
merger as contemplated by the DGCL (the "Certificate of Merger"), together with
any required related certificates, with the Secretary of State of the State of
Delaware, in such form as required by, and executed in accordance with the
relevant provisions of, the DGCL (the time of such filing being the "Effective
Time").
SECTION 1.3 EFFECT OF THE MERGER. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement, the Certificate of Merger and the
applicable provisions of the DGCL. Without limiting the generality of the
foregoing, and subject thereto, at the Effective Time all the property, rights,
privileges, powers and franchises of the Company and Merger Sub shall vest in
the Surviving Corporation, and all debts, liabilities and duties of the Company
and Merger Sub shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 1.4 CERTIFICATE OF INCORPORATION, BY-LAWS.
(a) CERTIFICATE OF INCORPORATION. Unless otherwise determined by Parent
prior to the Effective Time, but in all cases subject to Section 5.7(a), at the
Effective Time the Certificate of Incorporation of the Company, as in effect
immediately prior to the Effective Time, shall be the Certificate of
Incorporation of the Surviving Corporation until thereafter amended in
accordance with the DGCL and such Certificate of Incorporation.
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(b) BY-LAWS. Unless otherwise determined by Parent prior to the Effective
Time, but in all cases subject to Section 5.7(a), the By-Laws of the Company, as
in effect immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation until thereafter amended in accordance with the DGCL, the
Certificate of Incorporation of the Surviving Corporation and such By-Laws;
PROVIDED, HOWEVER, that the Company shall take such actions as may be necessary
to ensure that, at the Effective Time, the authorized number of directors of the
Surviving Corporation shall consist of the same number of directors as the
number of directors of Merger Sub at the Effective Time.
SECTION 1.5 DIRECTORS AND OFFICERS. The directors of Merger Sub
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation, and the persons listed
on SCHEDULE 1.5 shall serve as the initial officers of the Surviving Corporation
in the capacity or capacities specified on SCHEDULE 1.5, in each case until
their respective successors are duly elected or appointed and qualified.
SECTION 1.6 EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of
the Merger and without any action on the part of the Parent, Merger Sub, the
Company or the holders of any of the following securities:
(a) CONVERSION OF SECURITIES. Each Share issued and outstanding
immediately prior to the Effective Time (excluding any Shares to be canceled
pursuant to Section 1.6(b)) shall be converted, subject to Section 1.6(f), into
the right to receive 0.25 of a share (the "Exchange Ratio") of validly issued,
fully paid and nonassessable shares ("Parent Shares") of the Common Stock, $.01
par value, of Parent ("Parent Common Stock").
(b) CANCELLATION. Each Share held in the treasury of the Company and each
Share owned by Parent, Merger Sub or any direct or indirect wholly owned
subsidiary of the Company or Parent immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of the holder
thereof, cease to be outstanding, be canceled and retired without payment of any
consideration therefor and cease to exist.
(c) STOCK OPTIONS AND WARRANTS.
(i) At the Effective Time, (A) each outstanding option to purchase
Company Common Stock granted under the Company's 1996 Stock Incentive
Plan, (the "Company Stock Option Plan") and (B) each outstanding option to
purchase Company Common Stock described in Section 1.6(c) of the Company
Disclosure Schedule (collectively with the options described in clause (A)
("Stock Options")), whether vested or unvested, shall be deemed assumed by
Parent and deemed to constitute an option to acquire, on the same terms
and conditions as were applicable under such Stock Option prior to the
Effective Time, the number (rounded to the nearest whole number) of Parent
Shares as the holder of such Stock Option would have been entitled to
receive pursuant to the Merger had
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such holder exercised such option in full immediately prior to the
Effective Time (not taking into account whether or not such option was in
fact exercisable), at a price per share equal to (x) the aggregate
exercise price for Company Common Stock otherwise purchasable pursuant to
such Stock Option divided by (y) the number of Parent Shares deemed
purchasable pursuant to such Stock Option. It is intended that the
foregoing provisions shall be undertaken in a manner that will not
constitute a "modification" as defined in Section 425 of the Code, as to
any Stock Option which is an "incentive stock option."
(ii) As soon as practicable after the Effective Time, Parent shall
deliver to each holder of an outstanding Stock Option an appropriate
notice setting forth such holder's rights pursuant thereto, and such Stock
Option shall continue in effect on the same terms and conditions
(including antidilution provisions).
(iii) Parent shall take all corporate action necessary to reserve
for issuance a sufficient number of Parent Shares for delivery pursuant to
the terms set forth in this Section 1.6(c).
(iv) Subject to any applicable limitations under the Securities Act
of 1933, as amended, and the rules and regulations thereunder (the
"Securities Act"), Parent shall either (in consultation with the Company
and its advisors) (A) file a Registration Statement on Form S-8 (or any
successor form), effective as of the Effective Time, with respect to the
shares of Parent Common Stock issuable upon exercise of the Stock Options,
or (B) file any necessary amendments to the Company's previously-filed
Registration Statement(s) on Form S-8 in order that the Parent will be
deemed a "successor registrant" thereunder, and, in either event the
Parent shall use all reasonable efforts to maintain the effectiveness of
such registration statement(s) (and maintain the current status of the
prospectus or prospectuses relating thereto) for so long as such options
shall remain outstanding.
(v) At the Effective Time, each of the 599,726 Class A redeemable
common stock purchase warrant expiring April 19, 1998 (the "Class A
Warrants") to purchase one share of Company Common Stock at a purchase
price of $4.50 and each of the 62,500 warrants expiring April 19, 2000
(the "Other Warrants") to purchase two shares of Company Common Stock and
one Class A Warrant at a purchase price of $10.875 (the Class A Warrants
and the Other Warrants are hereinafter known collectively as, the
"Warrants"), shall be deemed to constitute a warrant to acquire, on the
same terms and conditions as were applicable under such Warrant prior to
the Effective Time (including anti-dilution provisions), the number
(rounded to the nearest whole number) of Parent Shares as the holder of
such Warrant would have been entitled to receive pursuant to the Merger
had such holder exercised such Warrant in full immediately prior to the
Effective Time, at a price per share equal to (x) the aggregate exercise
price for Company Common
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Stock otherwise purchasable pursuant to such Warrant divided by (y) the
number of Parent Shares deemed purchasable pursuant to such Warrant.
(d) CAPITAL STOCK OF MERGER SUB. Each share of common stock, $.01 par
value, of Merger Sub issued and outstanding immediately prior to the Effective
Time shall be converted into and exchanged for one validly issued, fully paid
and nonassessable share of common stock, $.01 par value, of the Surviving
Corporation.
(e) ADJUSTMENTS TO EXCHANGE RATIO. The Exchange Ratio shall be adjusted to
reflect fully the effect of any stock split, reverse split, stock dividend
(including any dividend or distribution of securities convertible into Parent
Common Stock), reorganization, recapitalization or other like change with
respect to Parent Common Stock occurring after the date hereof and prior to the
Effective Time.
(f) NO FRACTIONAL SHARES. No certificates or scrip representing less than
one Parent Share shall be issued upon the surrender for exchange of a
certificate or certificates which immediately prior to the Effective Time
represented outstanding Shares (the "Certificates"). In lieu of any such
fractional share, each holder of Shares who would otherwise have been entitled
to a fraction of a Parent Share upon surrender of Certificates for exchange
shall be paid upon such surrender (without interest) cash equal to the product
of (i) such fraction, multiplied by (ii) the average closing price per share of
Parent Common Stock as reported in the Wall Street Journal for the twenty
trading days on the New York Stock Exchange ending on the fifth day prior to the
date on which the Effective Time occurs.
SECTION 1.7 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Parent shall supply, or shall cause to be supplied, to
or for the account of The First National Bank of Boston, or such other bank or
trust company as shall be designated by Parent (the "Exchange Agent"), in trust
for the benefit of the holders of Company Common Stock, for exchange in
accordance with this Section 1.7, through the Exchange Agent, certificates
evidencing the Parent Shares issuable pursuant to Section 1.6 in exchange for
outstanding Shares.
(b) EXCHANGE PROCEDURES. As soon as reasonably practicable after the
Effective Time, Parent will instruct the Exchange Agent to mail to each holder
of record of Certificates (i) a 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 Exchange Agent and
shall be in such form and have such other provisions as Parent may reasonably
specify), and (ii) instructions to effect the surrender of the Certificates in
exchange for the certificates evidencing Parent Shares. Upon surrender of a
Certificate for cancellation to the Exchange Agent together with such letter of
transmittal, duly executed, and such other customary documents as may be
required pursuant to such instructions, the holder of such Certificate shall be
entitled to receive in exchange therefor (A) certificates evidencing that number
of whole Parent Shares which such
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holder has the right to receive in accordance with the Exchange Ratio in respect
of the Shares formerly evidenced by such Certificate, (B) any dividends or other
distributions to which such holder is entitled pursuant to Section 1.7(c), and
(C) cash in respect of fractional shares as provided in Section 1.6(f) (the
Parent Shares and the cash described in clauses (B) and (C) being, collectively,
the "Merger Consideration"), and the Certificate so surrendered shall forthwith
be canceled. In the event of a transfer of ownership of Shares which is not
registered in the transfer records of the Company as of the Effective Time,
Parent Shares, dividends and distributions may be issued and paid in accordance
with this Article I to a transferee if the Certificate evidencing such Shares is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer pursuant to this Section 1.7(b) and by
evidence that any applicable stock transfer taxes have been paid. Until so
surrendered, each outstanding Certificate that, prior to the Effective Time,
represented Shares of Company Common Stock will be deemed from and after the
Effective Time, for all corporate purposes, other than the payment of dividends
and subject to Section 1.6(f), to evidence only the right to receive the number
of full Parent Shares into which such shares of Company Common Stock shall have
been so converted.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED PARENT SHARES. No dividends
or other distributions declared or made after the Effective Time with respect to
Parent Shares with a record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the Parent Shares they
are entitled to receive until the holder of such Certificate shall surrender
such Certificate. Subject to applicable law, following surrender of any such
Certificate, there shall be paid to the record holder of the certificates
representing whole Parent Shares issued in exchange therefor, without interest,
at the time of such surrender, the amount of dividends or other distributions
with a record date after the Effective Time theretofore paid with respect to
such whole Parent Shares.
(d) TRANSFERS OF OWNERSHIP. If any certificate for Parent Shares is to be
issued in a name other than that in which the Certificate surrendered in
exchange therefor is registered, it will be a condition to the issuance thereof
that the Certificate so surrendered will be properly endorsed and otherwise in
proper form for transfer and that the person requesting such exchange will have
paid to Parent or any agent designated by it any transfer or other taxes
required by reason of the issuance of a certificate for Parent Shares in any
name other than that of the registered holder of the certificate surrendered, or
have established to the satisfaction of Parent or any agent designated by it
that such tax has been paid or is not payable.
(e) NO LIABILITY. Neither Parent, Merger Sub nor the Company shall be
liable to any holder of Company Common Stock for any Merger Consideration
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.
(f) WITHHOLDING RIGHTS. Parent or the Exchange Agent shall be entitled to
deduct and withhold from the Merger Consideration otherwise payable pursuant to
this Agreement to any holder of Company Common Stock such amounts as Parent or
the Exchange Agent is required to deduct and withhold with respect to the making
of such payment under the Code, or any
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provision of state, local or foreign tax law. To the extent that amounts are so
withheld by Parent or the Exchange Agent, such withheld amounts shall be treated
for all purposes of this Agreement as having been paid to the holder of the
Shares in respect of which such deduction and withholding was made by Parent or
the Exchange Agent.
SECTION 1.8 STOCK TRANSFER BOOKS. At the Effective Time, the stock
transfer books of the Company shall be closed, and there shall be no further
registration of transfers of Company Common Stock thereafter on the records of
the Company.
SECTION 1.9 NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. The
Merger Consideration delivered upon the surrender for exchange of Shares in
accordance with the terms hereof shall be deemed to have been issued in full
satisfaction of all rights pertaining to such Shares, and there shall be no
further registration of transfers on the records of the Surviving Corporation of
Shares which were outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to the Surviving Corporation for
any reason, they shall be canceled and exchanged as provided in this Article I.
SECTION 1.10 LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
issue in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, such Parent Shares as
may be required pursuant to Section 1.6; PROVIDED, HOWEVER, that Parent may, in
its discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed Certificates to deliver a bond in such
sum as it may reasonably direct as indemnity against any claim that may be made
against Parent or the Exchange Agent with respect to the Certificates alleged to
have been lost, stolen or destroyed.
SECTION 1.11 TAX AND ACCOUNTING CONSEQUENCES. It is intended by the
parties hereto that the Merger shall (i) constitute a reorganization within the
meaning of Section 368 of the Code and (ii) qualify for accounting treatment as
a pooling of interests. The parties hereto hereby adopt this Agreement as a
"plan of reorganization" within the meaning of Sections 1.368-2(g) and
1.368-3(a) of the United States Treasury Regulations.
SECTION 1.12 TAKING OF NECESSARY ACTION; FURTHER ACTION. Each of Parent,
Merger Sub and the Company will take all such reasonable and lawful action as
may be necessary or appropriate in order to effectuate the Merger in accordance
with this Agreement as promptly as possible. If, at any time after the Effective
Time, any such further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Merger Sub, the officers and directors of the
Company and Merger Sub immediately prior to the Effective Time are fully
authorized in the name of their respective corporations to take, and will take,
all such lawful and necessary action.
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SECTION 1.13 MATERIAL ADVERSE EFFECT. When used in connection with the
Company or any of its subsidiaries, or Parent or any of its subsidiaries, as the
case may be, the term "Material Adverse Effect" means any change, effect or
circumstance that, individually or when taken together with all other such
changes, effects or circumstances that have occurred prior to the date of
determination of the occurrence of the Material Adverse Effect, (a) is or would
be materially adverse to the business, assets (including intangible assets),
prospects, financial condition or results of operations of the Company and its
subsidiaries or Parent and its subsidiaries, as the case may be, in each case
taken as a whole or (b) is or would materially delay or prevent the consummation
of the transactions contemplated hereby.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to Parent and Merger Sub that,
except as set forth in the written disclosure schedule delivered on or prior to
the date hereof by the Company to Parent that is arranged in paragraphs
corresponding to the numbered and lettered paragraphs contained in this Article
II and discloses the exception to the representation or warranty with reasonable
particularity (the "Company Disclosure Schedule"):
SECTION 2.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of the
Company and each of its subsidiaries is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation and has the requisite corporate power and authority and is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exemptions, consents, certificates, approvals and orders
("Approvals") necessary to own, lease and operate the properties it purports to
own, operate or lease and to carry on its business as it is now being conducted,
except where the failure to be so organized, existing and in good standing or to
have such power, authority and Approvals would not have a Material Adverse
Effect. Each of the Company and each of its subsidiaries is duly qualified or
licensed as a foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned, leased or
operated by it or the nature of its activities makes such qualification or
licensing necessary, except for such failures to be so duly qualified or
licensed and in good standing that would not have a Material Adverse Effect. A
true and complete list of all of the Company's subsidiaries, together with the
jurisdiction of incorporation of each subsidiary, the authorized capitalization
of each subsidiary, and the percentage of each subsidiary's outstanding capital
stock owned by the Company or another subsidiary, is set forth in Section 2.1 of
the Company Disclosure Schedule. Except as set forth in Section 2.1 of the
Company Disclosure Schedule, the Company does not directly or indirectly own any
equity or similar interest in, or any interest convertible into or exchangeable
or exercisable for, any equity or similar interest in, any corporation,
partnership, joint venture or other business association or entity, with respect
to which interest the Company or any of its subsidiaries has invested or is
required to invest $50,000 or more, excluding securities in any publicly traded
company held for
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investment by the Company and comprising less than five percent of the
outstanding stock of such company.
SECTION 2.2 CERTIFICATE OF INCORPORATION AND BY-LAWS. The Company has
heretofore furnished to Parent a complete and correct copy of its Certificate of
Incorporation and By-Laws as most recently restated and subsequently amended to
date, and has furnished or made available to Parent the Certificate of
Incorporation and By-Laws (or equivalent organizational documents) of each of
its subsidiaries (the "Subsidiary Documents"). Such Certificate of
Incorporation, By-Laws and Subsidiary Documents are in full force and effect.
Neither the Company nor any of its subsidiaries is in violation of any of the
provisions of its Certificate of Incorporation or By-Laws or Subsidiary
Documents, except for immaterial violations of the Subsidiary Documents which
may exist.
SECTION 2.3 CAPITALIZATION. The authorized capital stock of the Company
consists of (1) 40,000,000 shares of Company Common Stock and (ii) 5,000,000
shares of preferred stock, $.01 par value per share, none of which is issued and
outstanding and none of which is held in treasury. As of September 30, 1996, (i)
14,975,412 shares of Company Common Stock were issued and outstanding, all of
which are validly issued, fully paid and nonassessable, and no shares were held
in treasury, (ii) no shares of Company Common Stock were held by subsidiaries of
the Company, (iii) 344,500 shares of Company Common Stock were reserved for
future issuance pursuant to outstanding stock options granted under the Company
Stock Option Plan, (iv) 10,000 shares of Company Common Stock were reserved for
future issuance pursuant to the options described in Section 1.6(c) of the
Company Disclosure Schedule, (v) 598,726 shares of Company Common Stock were
reserved for future issuance upon exercise of the Class A Warrants and (vi)
187,500 shares of Company Common Stock were reserved for future issuance upon
exercise of the Other Warrants (including the Class A Warrants underlying the
Other Warrants). No material change in such capitalization has occurred between
September 30, 1996 and the date hereof. Except as set forth in Section 2.3 or
Section 2.11 of the Company Disclosure Schedule, there are no options, warrants
or other rights, agreements, arrangements or commitments of any character
relating to the issued or unissued capital stock of the Company or any of its
subsidiaries or obligating the Company or any of its subsidiaries to issue or
sell any shares of capital stock of, or other equity interests in, the Company
or any of its subsidiaries. All shares of Company Common Stock subject to
issuance as aforesaid, upon issuance on the terms and conditions specified in
the instruments pursuant to which they are issuable, shall be duly authorized,
validly issued, fully paid and nonassessable. Except as disclosed in Section 2.3
of the Company Disclosure Schedule, there are no obligations, contingent or
otherwise, of the Company or any of its subsidiaries to repurchase, redeem or
otherwise acquire any shares of Company Common Stock or the capital stock of any
subsidiary or to provide funds to or make any investment (in the form of a loan,
capital contribution, guaranty or otherwise) in any such subsidiary or any other
entity. Except as set forth in Sections 2.1 and 2.3 of the Company Disclosure
Schedule, all of the outstanding shares of capital stock of each of the
Company's subsidiaries are duly authorized, validly issued, fully paid and
nonassessable, and all such shares are owned by the Company or another
subsidiary of the Company free and clear of all security
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interests, liens, claims, pledges, agreements, limitations in voting rights,
charges or other encumbrances of any nature whatsoever (collectively, "Liens").
SECTION 2.4 AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and, subject to the required approval of its stockholders, to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement by the Company and the consummation
by the Company of the transactions contemplated hereby have been duly and
validly authorized by all necessary corporate action, and no other corporate
proceedings on the part of the Company are necessary to authorize this Agreement
or to consummate the transactions so contemplated (other than the adoption of
this Agreement by the holders of at least a majority of the outstanding shares
of Company Common Stock entitled to vote in accordance with the DGCL and the
Company's Certificate of Incorporation and By-Laws). The Board of Directors of
the Company has determined that it is advisable and in the best interest of the
Company's stockholders for the Company to enter into a business combination with
Parent upon the terms and subject to the conditions of this Agreement, and has
recommended that the Company's stockholders approve and adopt this Agreement and
the Merger. This Agreement has been duly and validly executed and delivered by
the Company and, assuming the due authorization, execution and delivery by
Parent and Merger Sub, as applicable, constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in accordance with its
terms.
SECTION 2.5 NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) Section 2.5(a) of the Company Disclosure Schedule includes a list of
(i) all loan agreements, indentures, mortgages, notes, pledges, conditional sale
or title retention agreements, security agreements, equipment obligations,
guaranties, standby letters of credit, equipment leases or lease purchase
agreements to which the Company or any of its subsidiaries is a party or by
which any of them is bound each in an amount equal to or exceeding $50,000, but
excluding any such agreement between the Company and its wholly owned
subsidiaries or between two or more wholly owned subsidiaries of the Company;
and (ii) all contracts, agreements, commitments or other understandings or
arrangements to which the Company or any of its subsidiaries is a party or by
which any of them or any of their respective properties or assets are bound or
affected, but excluding contracts, agreements, commitments or other
understandings or arrangements entered into in the ordinary course of business
and involving, in each case, payments or receipts by the Company or any of its
subsidiaries of less than $50,000 in any single instance but not more than
$250,000 in the aggregate; and (iii) all agreements which, as of the date
hereof, are required to be filed as "material contracts" with the SEC pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, and the
SEC's rules and regulations thereunder (the "Exchange Act").
(b) Except as disclosed in Section 2.5(b) of the Company Disclosure
Schedule, (i) neither the Company nor any of its subsidiaries has breached, is
in default under, or has received written
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notice of any breach of or default under, any of the agreements, contracts or
other instruments referred to in clauses (i), (ii) or (iii) of Section 2.5(a),
(ii) to the best knowledge of the Company, no other party to any of the
agreements, contracts or other instruments referred to in clauses (i), (ii) or
(iii) of Section 2.5 (a) has breached or is in default of any of its obligations
thereunder, and (iii) each of the agreements, contracts and other instruments
referred to in clauses (i), (ii) or (iii) of Section 2.5(a) is in full force and
effect, except in any such case for breaches, defaults or failures to be in full
force and effect that would not have a Material Adverse Effect.
(c) Except as set forth in Section 2.5(c) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and, assuming that the conditions described in Sections 6.1(a), (b) and (c) are
satisfied, the performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby will not, (i) conflict with or violate
the Certificate of Incorporation or By-Laws of the Company, (ii) conflict with
or violate any federal, foreign, state or provincial law, rule, regulation,
order, judgment or decree (collectively, "Laws") applicable to the Company or
any of its subsidiaries or by which its or any of their respective properties is
bound or affected, or (iii) result in any breach of or constitute a default (or
an event that with notice or lapse of time or both would become a default) under
or impair the Company's or any of its subsidiaries' rights or alter the rights
or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of the Company or any of
its subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries or its or any of their respective properties
is bound or affected, except in any such case for any such conflicts,
violations, breaches, defaults or other occurrences that would not have a
Material Adverse Effect.
(d) The execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority except (i) for applicable
requirements, if any, of the Securities Act, the Exchange Act, state securities
laws ("Blue Sky Laws"), the pre-merger notification requirements of the
HartScott-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
and the filing and recordation of appropriate merger or other documents as
required by the DGCL, and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or notifications,
would not prevent or materially delay the Company from performing its
obligations under this Agreement, or would not otherwise have a Material Adverse
Effect.
SECTION 2.6 COMPLIANCE, PERMITS.
(a) Except as disclosed in Section 2.6(a) of the Company Disclosure
Schedule, neither the Company nor any of its subsidiaries is in conflict with,
or in default or violation of, (i) any Law applicable to the Company or any of
its subsidiaries or by which its or any of their
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respective properties is bound or affected or (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or any of its subsidiaries is a
party or by which the Company or any of its subsidiaries or its or any of their
respective properties is bound or affected, except for any such conflicts,
defaults or violations which would not have a Material Adverse Effect.
(b) The Company and its subsidiaries are in compliance with the terms of
all Approvals from governmental authorities, except where the failure to so
comply would not have a Material Adverse Effect.
SECTION 2.7 SEC FILINGS; FINANCIAL STATEMENTS.
(a) The Company has filed and has made available to Parent all forms,
reports and documents required to be filed by the Company with the SEC since
September 1, 1994 (collectively, the "Company SEC Reports"). Except as disclosed
in Section 2.7 of the Company Disclosure Schedule, the Company SEC Reports (i)
were prepared in all material respects in accordance with the requirements of
the Securities Act or the Exchange Act, as the case may be, and (ii) did not at
the time they were filed (or if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing) 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 the
light of the circumstances under which they were made, not misleading. None of
the Company's subsidiaries is required to file any forms, reports or other
documents with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports was
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto), and each fairly presents in all material respects the
consolidated financial position of the Company and its subsidiaries as at the
respective dates thereof and the consolidated results of its operations and cash
flows and changes in stockholders' equity for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be material
in amount and the addition of footnotes.
SECTION 2.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Section 2.8 of the Company Disclosure Schedule or the Company SEC Reports filed
with the SEC prior to the date hereof, since January 1, 1996, the Company has
conducted its business in the ordinary course and there has not occurred: (a)
any Material Adverse Effect; (b) any amendments or changes in the Certificate of
Incorporation or By-laws of the Company; (c) any damage to, destruction or loss
of any asset of the Company or any of its subsidiaries (whether or not covered
by insurance) that would have a Material Adverse Effect; (d) any material change
by the Company in its accounting methods, principles or practices; (e) any
material revaluation by the Company of any of its assets, including, without
limitation, writing down the value of inventory
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or writing off notes or accounts receivable other than in the ordinary course of
business; (f) any other action or event that would have required the consent of
Parent pursuant to Section 4.1 had such action or event occurred after the date
of this Agreement; or (g) any sale of a material amount of assets of the Company
or any of its subsidiaries, except in the ordinary course of business.
SECTION 2.9 NO UNDISCLOSED LIABILITIES. Except as is disclosed in Section
2.9 of the Company Disclosure Schedule, neither the Company nor any of its
subsidiaries has any liabilities (absolute, accrued, contingent or otherwise),
except liabilities (a) in the aggregate adequately provided for in the Company's
audited balance sheet (including any related notes thereto) for the fiscal year
ended December 31, 1995 (the "1995 Company Balance Sheet") included in the
Company's S-1 Registration Statement dated August 29, 1996, (b) incurred in the
ordinary course of business and not required under generally accepted accounting
principles to be reflected on the 1995 Company Balance Sheet, (c) incurred since
December 31, 1995 in the ordinary course of business consistent with past
practice, (d) incurred in connection with this Agreement, or (e) which would not
have a Material Adverse Effect.
SECTION 2.10 ABSENCE OF LITIGATION. Except as set forth in Section 2.10 of
the Company Disclosure Schedule, there are no claims, actions, suits,
proceedings or investigations pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries, or any properties or
rights of the Company or any of its subsidiaries, before any federal, foreign,
state or provincial court, arbitrator or administrative, governmental or
regulatory authority or body that would have a Material Adverse Effect.
SECTION 2.11 EMPLOYEE BENEFIT PLANS, EMPLOYMENT AGREEMENTS.
(a) Section 2.11 (a) of the Company Disclosure Schedule lists all employee
pension plans (as defined in Section 3(2) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")), all material employee welfare plans
(as defined in Section 3(1) of ERISA), and all other material bonus, stock
option, stock purchase, incentive, deferred compensation, supplemental
retirement, severance and other similar fringe or employee benefit plans,
programs or arrangements, and any material current or former employment,
executive compensation, consulting or severance agreements, written or
otherwise, for the benefit of, or relating to, any employee of or consultant to
the Company, any trade or business (whether or not incorporated) which is a
member of a controlled group including the Company or which is under common
control with the Company (an "ERISA Affiliate") within the meaning of Section
414 of the Code, or any subsidiary of the Company, as well as each plan with
respect to which the Company or an ERISA Affiliate could incur liability under
Section 4069 (if such plan has been or were terminated) or Section 4212(c) of
ERISA (all such plans, practices and programs are referred to as the "Company
Employee Plans"). There have been made available to Parent copies of (i) each
such written Company Employee Plan (other than those referred to in Section
4(b)(4) of ERISA), (ii) the most recent annual report on Form 5500 series, with
accompanying schedules and attachments, filed with respect to each Company
Employee Plan required to make such a filing,
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and (iii) the most recent actuarial valuation for each Company Employee Plan
subject to Title IV of ERISA. For purposes of this Section 2.11 (a), the term
"material," used with respect to any Company Employee Plan, shall mean that the
Company or an ERISA Affiliate has incurred or may incur obligations in an annual
amount exceeding $50,000 with respect to such Company Employee Plan.
(b) (i) Except in each case as set forth in Section 2.11(b) of the Company
Disclosure Schedule, none of the Company Employee Plans promises or provides
retiree medical or other retiree welfare benefits to any person, and none of the
Company Employee Plans is a "multiemployer plan" as such term is defined in
Section 3(37) of ERISA; (ii) there has been no "prohibited transaction," as such
term is defined in Section 406 of ERISA and Section 4975 of the Code, with
respect to any Company Employee Plan, which could result in any material
liability of the Company or any of its subsidiaries; (iii) all Company Employee
Plans are in compliance in all material respects with the requirements
prescribed by any and all Laws (including ERISA and the Code), currently in
effect with respect thereto (including all applicable requirements for
notification to participants or the Department of Labor, Pension Benefit
Guaranty Corporation (the "PBGC"), Internal Revenue Service (the "IRS") or
Secretary of the Treasury), and the Company and each of its subsidiaries have
performed all material obligations required to be performed by them under, are
not in any material respect in default under or violation of, and have no
knowledge of any default or violation by any other party to, any of the Company
Employee Plans; (iv) each Company Employee Plan intended to qualify under
Section 401(a) of the Code and each trust intended to qualify under Section
501(a) of the Code is the subject of a favorable determination letter from the
IRS, and nothing has occurred which may reasonably be expected to impair such
determination; (v) all contributions required to be made to any Company Employee
Plan pursuant to Section 412 of the Code, or the terms of the Company Employee
Plan or any collective bargaining agreement, have been made on or before their
due dates; (vi) with respect to each Company Employee Plan, no "reportable
event" within the meaning of Section 4043 of ERISA (excluding any such event for
which the 30 day notice requirement has been waived under the regulations to
Section 4043 of ERISA) nor any event described in Section 4062, 4063 or 4041 of
ERISA has occurred; and (vii) neither the Company nor any ERISA Affiliate has
incurred, nor reasonably expects to incur, any liability under Title IV of ERISA
(other than liability for premium payments to the PBGC arising in the ordinary
course).
(c) Section 2.11(c) of the Company Disclosure Schedule sets forth a true
and complete list of each current or former employee, officer or director of the
Company or any of its subsidiaries who holds (i) any option to purchase Company
Common Stock as of the date hereof, together with the number of shares of
Company Common Stock subject to such option, the option price of such option (to
the extent determined as of the date hereof), whether such option is intended to
qualify as an incentive stock option within the meaning of Section 422(b) of the
Code (an "ISO"), and the expiration date of such option; (ii) any other right,
directly or indirectly, to acquire Company Common Stock (other than the
Warrants), together with the number of shares of Company Common Stock subject to
such right. Section 2.11(c) of the Company
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Disclosure Schedule also sets forth the total number of such ISOs, such
nonqualified options and such other rights.
(d) Section 2.11(d) of the Company Disclosure Schedule sets forth a true
and complete list of: (i) all employment agreements with officers of the Company
or any of its subsidiaries; (ii) all agreements with consultants who are
individuals obligating the Company or any of its subsidiaries to make annual
cash payments in an amount exceeding $25,000; (iii) all employees of, or
consultants to, the Company or any of its subsidiaries who have executed a
non-competition agreement with the Company or any of its subsidiaries; (iv) all
severance agreements, programs and policies of the Company or any of its
subsidiaries with or relating to its employees, in each case with outstanding
commitments exceeding $25,000, excluding programs and policies required to be
maintained by law; and (v) all plans, programs, agreements and other
arrangements of the Company or any of its subsidiaries with or relating to its
employees which contain change in control provisions.
SECTION 2.12 LABOR MATTERS. Except as set forth in Section 2.12 of the
Company Disclosure Schedule: (i) there are no claims or proceedings pending or,
to the knowledge of the Company or any of its subsidiaries, threatened, between
the Company or any of its subsidiaries and any of their respective employees,
asserting that the Company has committed an unfair labor practice which claims
or proceedings have or would have a Material Adverse Effect; (ii) neither the
Company nor any of its subsidiaries is a party to any collective bargaining
agreement or other labor union contract applicable to persons employed by the
Company or its subsidiaries, nor does the Company or any of its subsidiaries
know of any activities or proceedings of any labor union to organize any such
employees; and (iii) neither the Company nor any of its subsidiaries has any
knowledge of any strikes, slowdowns, work stoppages, lockouts, or threats
thereof, by or with respect to any employees of the Company or any of its
subsidiaries.
SECTION 2.13 REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS. The
information supplied by the Company for inclusion in the Registration Statement
(as defined in Section 3.9) shall not at the time the Registration Statement is
declared effective by the SEC 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. The information supplied by the Company
for inclusion in the proxy statement/prospectus (such proxy statement/prospectus
as amended or supplemented is referred to herein as the "Proxy
Statement/Prospectus") to be sent to the stockholders of the Company in
connection with the meeting of the stockholders of the Company to consider the
Merger (the "Stockholders Meeting"), will not, on the date the Proxy
Statement/Prospectus (or any amendment thereof or supplement thereto) is first
mailed to stockholders, at the time of the Stockholders Meetings, or at the
Effective Time, contain any statement which, at such time and in light of the
circumstances under which it shall be made, is false or misleading with respect
to any material fact, or shall omit to state any material fact necessary in
order to make the statements made therein, in light of the circumstances in
which they were made, not false or misleading, or omit to state any material
fact necessary to correct any statement in any earlier
-15-
communication with respect to the solicitation of proxies for the Stockholders
Meeting which has become false or misleading. If at any time prior to the
Effective Time any event relating to the Company or any of its respective
affiliates, officers or directors should be discovered by the Company which
should be set forth in an amendment to the Registration Statement or a
supplement to the Proxy Statement/Prospectus, the Company shall promptly inform
Parent and Merger Sub. Notwithstanding the foregoing, the Company makes no
representation or warranty with respect to any information supplied by Parent or
Merger Sub which is contained in any of the foregoing documents.
SECTION 2.14 RESTRICTIONS ON BUSINESS ACTIVITIES. Except for this
Agreement or as set forth in Section 2.14 of the Company Disclosure Schedule, to
the best of the Company's knowledge, there is no agreement, judgement,
injunction, order or decree binding upon the Company or any of its subsidiaries
which has or would have the effect of prohibiting or impairing any business
practice of the Company or any of its subsidiaries, acquisition of property by
the Company or any of its subsidiaries or the conduct of business by the Company
or any of its subsidiaries as currently conducted or as proposed to be conducted
by the Company, except for any prohibition or impairment as would not have a
Material Adverse Effect.
SECTION 2.15 TITLE TO PROPERTY. Except as set forth in Section 2.15 of the
Company Disclosure Schedule, the Company and each of its subsidiaries have good
and defensible title to all of their properties and assets, free and clear of
all liens, charges and encumbrances, except liens for taxes not yet due and
payable and such liens or other imperfections of title, which would not have a
Material Adverse Effect; and, to the knowledge of the Company, all leases
pursuant to which the Company or any of its subsidiaries lease from others
material amounts of real or personal property, are in good standing, valid and
effective in accordance with their respective terms, and there is not, to the
knowledge of the Company, under any of such leases, any existing default or
event of default (or event which with notice or lapse of time, or both, would
constitute a default), except where the lack of such good standing, validity and
effectiveness or the existence of such default or event of default would not
have a Material Adverse Effect.
SECTION 2.16 TAXES.
(a) For purposes of this Agreement, "Tax" or "Taxes" shall mean taxes,
fees, levies, duties, tariffs, imposts, and governmental impositions or charges
of any kind in the nature of (or similar to) taxes, payable to any federal,
state, local or foreign taxing authority, including (without limitation) (i)
income, franchise, profits, gross receipts, AD VALOREM, net worth, value added,
sales, use, service, real or personal property, special assessments, capital
stock, license, payroll, withholding, employment, social security, workers'
compensation, unemployment compensation, utility, severance, production, excise,
stamp, occupation, premiums, windfall profits, transfer and gains taxes, and
(ii) interest, penalties, additional taxes and additions to tax imposed with
respect thereto; and "Tax Returns" shall mean returns, reports, and information
statements with respect to Taxes required to be filed with the IRS or any other
federal, foreign,
-16-
state or provincial taxing authority, domestic or foreign, including, without
limitation, consolidated, combined and unitary tax returns.
(b) Other than as disclosed in Section 2.16(b) of the Company Disclosure
Schedule, (i) the Company and its subsidiaries have filed all Tax Returns
required to be filed by them, (ii) the Company and its subsidiaries have paid
and discharged all Taxes due in connection with or with respect to the periods
or transactions covered by such Tax Returns and have paid all other Taxes as are
due, except such as are being contested in good faith by appropriate proceedings
(to the extent that any such proceedings are required) and with respect to which
the Company is maintaining adequate reserves, and (iii) there are no other Taxes
that would be due if asserted by a taxing authority, except with respect to
which the Company is maintaining reserves to the extent currently required
unless the failure to do so would not have a Material Adverse Effect. Except as
does not involve or would not result in liability to the Company or any of its
subsidiaries that would have a Material Adverse Effect: (i) there are no tax
liens on any assets of the Company or any subsidiary thereof; and (ii) neither
the Company nor any of its subsidiaries has granted any waiver of any statute of
limitations with respect to, or any extension of a period for the assessment of,
any Tax. The accruals and reserves for Taxes (including deferred taxes)
reflected in the 1995 Company Balance Sheet are in all material respects
adequate to cover all Taxes required to be accrued through the date thereof
(including interest and penalties, if any, thereon and Taxes being contested) in
accordance with generally accepted accounting principles.
(c) Neither the Company nor any of its subsidiaries is, or has been, a
United States real property holding corporation (as defined in Section 897(c)(2)
of the Code) during the applicable period specified in Section 897(c)(1)(A)(ii)
of the Code. To the best knowledge of the Company, neither the Company nor any
of its subsidiaries owns any property of a character, the indirect transfer of
which, pursuant to this Agreement, would give rise to any material documentary,
stamp or other transfer tax.
SECTION 2.17 ENVIRONMENTAL MATTERS. Except as set forth in Section 2.17 of
the Company Disclosure Schedule, and except in all cases as, in the aggregate,
have not had and would not have a Material Adverse Effect, the Company and each
of its subsidiaries: (i) have obtained all Approvals which are required to be
obtained under all applicable federal, state, foreign or local laws or any
regulation, code, plan, order, decree, judgment, notice or demand letter issued,
entered, promulgated or approved thereunder relating to pollution or protection
of the environment, including laws relating to emissions, discharges, releases
or threatened releases of pollutants, contaminants, or hazardous or toxic
materials or wastes into ambient air, surface water, ground water, or land or
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of pollutants, contaminants or
hazardous or toxic materials or wastes by the Company or its subsidiaries or
their respective agents ("Environmental Laws"); (ii) are in compliance with all
terms and conditions of such required Approvals, and also are in compliance with
all other limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in applicable
Environmental Laws; (iii) as of the date hereof, are not aware of nor have
received
-17-
notice of any past or present violations of Environmental Laws or any event,
condition, circumstance, activity, practice, incident, action or plan which is
reasonably likely to interfere with or prevent continued compliance with or
which would give rise to any common law or statutory liability, or otherwise
form the basis of any claim, action, suit or proceeding, against the Company or
any of its subsidiaries based on or resulting from the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling, or the
emission, discharge or release into the environment, of any pollutant,
contaminant or hazardous or toxic material or waste; and (iv) have taken all
actions necessary under applicable Environmental Laws to register any products
or materials required to be registered by the Company or its subsidiaries (or
any of their respective agents) thereunder.
SECTION 2.18 INTELLECTUAL PROPERTY.
(a) The Company, directly or indirectly, owns, or is licensed or otherwise
possesses legally enforceable rights to use, all patents, trademarks, trade
names, service marks, copyrights, and any applications therefor, technology,
know-how, computer software programs or applications (in both source code and
object code form), and tangible or intangible proprietary information or
material that are material to the business of the Company and its subsidiaries
as currently conducted or as proposed to be conducted by the Company or its
subsidiaries (the "Company Intellectual Property Rights").
(b) Section 2.18(b) of the Company Disclosure Schedule sets forth a
complete list of all patents, trademarks, registered copyrights, trade names and
service marks, and any applications therefor, included in the Company
Intellectual Property Rights. All registered trademarks, service marks and
copyrights held by the Company are valid and subsisting.
SECTION 2.19 INTERESTED PARTY TRANSACTIONS. Except as set forth in Section
2.19 of the Company Disclosure Schedule or in the Company SEC Reports filed with
the SEC prior to the date hereof, no event has occurred that would be required
to be reported as a Certain Relationship or Related Transaction, pursuant to
Item 404 of Regulation S-K promulgated by the SEC.
SECTION 2.20 INSURANCE. Section 2.20 of the Company Disclosure Schedule
sets forth a complete list of all material fire and casualty, general liability,
business interruption, product liability, professional liability and sprinkler
and water damage insurance policies maintained by the Company or any of its
subsidiaries. All such policies are with reputable insurance carriers, provide
full and adequate coverage for all normal risks incident to the business of the
Company and its subsidiaries and their respective properties and assets and are
in character and amount at least equivalent to that carried by persons engaged
in similar businesses and subject to the same or similar perils or hazards,
except as would not have a Material Adverse Effect.
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SECTION 2.21 ACCOUNTS RECEIVABLE. The accounts receivable of the Company
and its subsidiaries as reflected in the most recent financial statements
contained in the Company SEC Reports, to the extent uncollected on the date
hereof and the accounts receivable reflected on the books of the Company and its
subsidiaries are valid and existing and represent monies due, and the Company
has made reserves reasonably considered adequate for receivables not collectible
in the ordinary course of business, and (subject to the aforesaid reserves) are
subject to no refunds or other adjustments and to no defenses, rights of setoff,
assignments, restrictions, encumbrances or conditions enforceable by third
parties on or affecting any thereof, except for such refunds, adjustments,
defenses, rights of setoff, assignments, restrictions, encumbrances or
conditions as would not have a Material Adverse Effect.
SECTION 2.22 POOLING MATTERS. Neither the Company nor any of its
affiliates has, to the best of the Company's knowledge and based upon
consultation with its independent accountants, taken or agreed to take any
action that could affect the ability of Parent to account for the business
combination to be effected by the Merger as a pooling of interests. The failure
of this representation to be true and correct, shall, if the Merger is not able
to be accounted for as a pooling of interests, constitute a breach of this
Agreement by the Company for the purposes of Section 7.1(f).
SECTION 2.23 OPINION OF FINANCIAL ADVISOR. The Company has been advised by
its financial advisor, Pacific Growth Equities, Inc., that in its opinion, as of
the date hereof, the Exchange Ratio set forth herein is fair to the holders of
Shares from a financial point of view.
SECTION 2.24 BROKERS. No broker, finder or investment banker (other than
Pacific Growth Equities, Inc., the fees and expenses of whom will be paid by the
Company) is entitled to any brokerage, finder's or other fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company or its subsidiaries. The
Company has heretofore furnished to Parent a complete and correct copy of all
agreements between the Company and Pacific Growth Equities, Inc. pursuant to
which such firm would be entitled to any payment relating to the transactions
contemplated hereunder.
SECTION 2.25 SECTION 203 OF THE DGCL NOT APPLICABLE. The Board of
Directors of the Company has taken all actions so that the restrictions
contained in Section 203 of the DGCL applicable to a "business combination" (as
defined in Section 203) will not apply to the execution, delivery or performance
of this Agreement or the respective Stockholders Agreements dated as of the date
hereof between Parent and certain stockholders of the Company (collectively, the
"Stockholders Agreements") or the consummation of the Merger or the other
transactions contemplated by this Agreement or by the Stockholders Agreements.
SECTION 2.26 CHANGE IN CONTROL PAYMENTS. Except as set forth in Section
2.11(d) or Section 2.26 of the Company Disclosure Schedule, neither the Company
nor any of its subsidiaries have any plans, programs or agreements to which they
are parties, or to which they
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are subject, pursuant to which payments may be required or acceleration of
benefits may be required upon a change of control of the Company.
SECTION 2.27 EXPENSES. The Company has provided to Parent a good faith
estimate and description of the expenses of the Company and its subsidiaries
which the Company expects to incur, or has incurred, in connection with the
transactions contemplated by this Agreement.
SECTION 2.28 HEALTHCARE REGULATORY COMPLIANCE. (a) The relationships among
the Company, its subsidiaries and third parties are in compliance with all
applicable Laws and the rules of ethical conduct of applicable medical societies
and accrediting bodies, except where the failure to be in compliance would not
have a Material Adverse Effect.
(b) To the best knowledge of the Company, the Company and its subsidiaries
have not engaged knowingly and willfully in any activities which are prohibited
under federal Medicare and Medicaid statutes, including, without limitation, 42
U.S.C. 1395 nn et seq., 42 U.S.C. ss. 1320a-7b et seq. and related state or
local statutes or regulations or which otherwise constitutes fraud or false
claims, including, without limitation, the following: (i) knowingly and
willfully making or causing to be made a false statement or representation of a
material fact in any application for any benefit or payment; (ii) knowingly and
willfully making or causing to be made any false statement or representation of
a material fact for use in determining rights to any benefit or payment; (iii)
failing to disclose knowledge of the occurrence of any event affecting the
initial or continued right to any benefit or payment on its behalf or on behalf
of another, with intent to secure such benefit or payment fraudulently; and (iv)
knowingly and willfully soliciting or receiving any remuneration (including any
kickback, bribe, or rebate), directly or indirectly, overtly or covertly, in
cash or in kind or offering to pay such remuneration (A) in return for referring
an individual to a person for the furnishing or arranging for the furnishing of
any item or service for which payment may be made in whole or in part by
Medicare or Medicaid or (B) in return for purchasing, leasing, or ordering or
arranging for or recommending purchasing, leasing or ordering any good,
facility, service or item for which payment may be made in whole or in part by
Medicare or Medicaid.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUB
Parent and Merger Sub hereby, jointly and severally, represent and warrant
to the Company that, except as set forth in the written disclosure schedule
delivered on or prior to the date hereof by Parent to the Company that is
arranged in paragraphs corresponding to the numbered and lettered paragraphs
contained in this Article III and discloses the exception to the representation
or warranty with reasonable particularity (the "Parent Disclosure Schedule"):
SECTION 3.1 ORGANIZATION AND QUALIFICATION; SUBSIDIARIES. Each of Parent
and its subsidiaries is a corporation duly organized, validly existing and in
good standing under the laws
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of the jurisdiction of its incorporation and has the requisite corporate power
and authority and is in possession of all Approvals necessary to own, lease and
operate the properties it purports to own, operate or lease and to carry on its
business as it is now being conducted, except where the failure to be so
organized, existing and in good standing or to have such power, authority and
Approvals would not have a Material Adverse Effect. Each of Parent and each of
its subsidiaries is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
its properties owned, leased or operated by it or the nature of its activities
makes such qualification or licensing necessary, except for such failures to be
so duly qualified or licensed and in good standing that would not have a
Material Adverse Effect. A true and complete list as of the date hereof of all
of Parent's subsidiaries, together with the jurisdiction of incorporation of
each subsidiary and the percentage of each subsidiary's outstanding capital
stock owned by Parent or another subsidiary, is set forth in Section 3.1 of the
Parent Disclosure Schedule. Except as set forth in Section 3.1 of the Parent
Disclosure Schedule as of the date hereof, Parent does not directly or
indirectly own any equity or similar interest in, or any interest convertible
into or exchangeable or exercisable for, any equity or similar interest in, any
corporation, partnership, joint venture or other business association or entity,
with respect to which Parent has invested or is required to invest $250,000 or
more, excluding securities in any publicly traded Company held for investment by
Parent and comprising less than five percent of the outstanding capital stock of
such company.
SECTION 3.2 CHARTER AND BY-LAWS. Parent has heretofore furnished to the
Company a complete and correct copy of the Certificates of Incorporation and
By-Laws, as amended to date, of each of Parent and Merger Sub. Such Certificate
of Incorporation and By-Laws are in full force and effect. Neither Parent nor
Merger Sub is in violation of any of the provisions of its Certificate of
Incorporation or By-Laws.
SECTION 3.3 CAPITALIZATION. As of September 30, 1996, the authorized
capital stock of Parent consisted of (i) 75,000,000 shares of Parent Common
Stock, of which 21,029,705 shares were issued and outstanding, all of which are
validly issued, fully paid and non-assessable, no shares were held in treasury,
2,579,709 shares were reserved for future issuance under Parent's stock plans
and arrangements and 3,311,258 were reserved for issuance upon exercise of
Parent's 5 1/4% Convertible Subordinated Notes due February 1, 2001 and (ii)
500,000 shares of preferred stock, $.01 par value per share, none of which was
issued and outstanding and none of which was held in treasury. No material
change in such capitalization has occurred between September 30, 1996 and the
date hereof. Except as set forth in Section 3.3 of the Parent Disclosure
Schedule, as of the date hereof there are no options, warrants or other rights,
agreements, arrangements or commitments of any character relating to the issued
or unissued capital stock of Parent or any of its subsidiaries or obligating
Parent or any of its subsidiaries to issue or sell any shares of capital stock
of, or other equity interests in, Parent or any of its subsidiaries. Except as
set forth in Section 3.3 of the Parent Disclosure Schedule as of the date
hereof, there are no obligations, contingent or otherwise, of Parent or any of
its subsidiaries to repurchase, redeem or otherwise acquire any shares of Parent
Common Stock or the capital stock of any subsidiary or to provide funds to or
make any investment (in the form of a loan, capital contribution or otherwise)
in any
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such subsidiary other than guarantees of bank obligations of subsidiaries
entered into in the ordinary course of business. Except as set forth in Section
3.1 or 3.3 of the Parent Disclosure Schedule, all of the outstanding shares of
capital stock of each of Parent's subsidiaries is duly authorized, validly
issued, fully paid and nonassessable and all such shares are owned by Parent or
another subsidiary of Parent free and clear of all security interests, liens,
claims, pledges, agreements, limitations in Parent's voting rights, charges or
other encumbrances of any nature whatsoever.
SECTION 3.4 AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and
Merger Sub has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and Merger Sub and the consummation by Parent and
Merger Sub of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent and Merger
Sub, and no other corporate proceedings on the part of Parent or Merger Sub are
necessary to authorize this Agreement or to consummate the transactions
contemplated hereby. The Board of Directors of Parent has determined that it is
advisable and in the best interest of Parent's stockholders for Parent to enter
into a business combination with the Company upon the terms and subject to the
conditions of this Agreement. This Agreement has been duly and validly executed
and delivered by Parent and Merger Sub and, assuming the due authorization,
execution and delivery by the Company, constitutes a legal, valid and binding
obligation of Parent and Merger Sub enforceable against each of them in
accordance with its terms.
SECTION 3.5 NO CONFLICT, REQUIRED FILINGS AND CONSENTS.
(a) Section 3.5(a) of the Parent Disclosure Schedule includes a list as of
the date hereof (or such other date specified in Section 3.5(a) of the Parent
Disclosure Schedule) of: (i) all loan agreements, indentures, mortgages, notes,
pledges, conditional sale or title retention agreements, security agreements,
equipment obligations, guaranties, standby letters of credit, equipment leases
or lease purchase agreements to which Parent or any of its subsidiaries is a
party or by which any of them is bound, each in an amount equal to or exceeding
$500,000, but excluding any such agreement between Parent and its wholly-owned
subsidiaries or between two or more wholly-owned subsidiaries of Parent; (ii)
all contracts, agreements, commitments or other understandings or arrangements
to which Parent or any of its subsidiaries is a party or by which any of them or
any of their respective property or assets are bound or affected, but excluding
contracts, agreements, commitments or other understandings or arrangements
entered into in the ordinary course of business and involving, in each case,
payments or receipts by Parent or any of its subsidiaries of less than
$1,000,000 in any single instance but not more than $2,000,000 in the aggregate;
and (iii) all agreements which, as of the date hereof, are required to be filed
with the SEC pursuant to the requirements of the Exchange Act as "material
contracts."
(b) Except as disclosed in Section 3.5(b) of the Parent Disclosure
Schedule, (i) neither the Parent nor any of its subsidiaries has breached, is in
default under, or has received written
-22-
notice of any breach of or default under, any of the agreements, contracts or
other instruments referred to in clauses (i), (ii) or (iii) of Section 3.5(a),
(ii) to the best knowledge of Parent, no other party to any of the agreements,
contracts or other instrument referred to in clauses (i), (ii) or (iii) of
Section 3.5(a) has breached or is in default of any of its obligations
thereunder, and (iii) each of the agreements, contracts and other instruments
referred to in clauses (i), (ii) or (iii) of Section 3.5(a) is in full force and
effect, except in any such case for breaches, defaults or failures to be in full
force and effect that would not have a Material Adverse Effect.
(c) Except as set forth in Section 3.5(c) of the Parent Disclosure
Schedule, the execution and delivery of this Agreement by Parent and Merger Sub
do not, and assuming that the conditions described in Sections 6.1(b) and (c)
are satisfied, the performance of this Agreement by Parent and Merger Sub will
not, (i) conflict with or violate the Certificate of Incorporation or By-Laws of
Parent or Merger Sub, (ii) conflict with or violate any Law applicable to Parent
or any of its subsidiaries or by which its or their respective properties are
bound or affected, or (iii) result in any breach of or constitute a default (or
an event which with notice or lapse of time or both would become a default)
under, or impair Parent's or any of its subsidiaries' rights or alter the rights
or obligations of any third party under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any of the properties or assets of Parent or any of its
subsidiaries pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or any of its subsidiaries is a party or by which Parent or any
of its subsidiaries or its or any of their respective properties are bound or
affected, except in any such case for any such conflicts, violations, breaches,
defaults or other occurrences that would not have a Material Adverse Effect.
(d) The execution and delivery of this Agreement by Parent and Merger Sub
does not, and the performance of this Agreement by Parent and Merger Sub will
not, require any consent, approval, authorization or permit of, or filing with
or notification to, any governmental or regulatory authority, except (i) for
applicable requirements, if any, of the Securities Act, the Exchange Act, the
Blue Sky Laws, the pre-merger notification requirements of the HSR Act, and the
filing and recordation of appropriate merger or other documents as required by
the DGCL, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or materially delay Parent or Merger Sub from performing their
respective obligations under this Agreement or would not otherwise have a
Material Adverse Effect.
SECTION 3.6 COMPLIANCE; PERMITS.
(a) Except as disclosed in Section 3.6(a) of the Parent Disclosure
Schedule, neither Parent nor any of its subsidiaries is in conflict with, or in
default or violation of, (i) any law, rule, regulation, order, judgment or
decree applicable to Parent or any of its subsidiaries or by which its or any of
their respective properties is bound or affected or (ii) any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation
-23-
to which Parent or any of its subsidiaries is a party or by which Parent or any
of its subsidiaries or its or any of their respective properties is bound or
affected, except for any such conflicts, defaults or violations which would not
have a Material Adverse Effect.
(b) Parent and its subsidiaries are in compliance with the terms of all
Approvals from governmental authorities, except where the failure to so comply
would not have a Material Adverse Effect.
SECTION 3.7 SEC FILINGS; FINANCIAL STATEMENTS.
(a) Parent has filed and has made available to the Company all forms,
reports and documents required to be filed by Parent with the SEC since January
1, 1994 (collectively, the "Parent SEC Reports"). The Parent SEC Reports (i)
were prepared in all material respects in accordance with the requirements of
the Securities Act or the Exchange Act, as the case may be, and (ii) did not at
the time they were filed (or if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing) 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 the
light of the circumstances under which they were made, not misleading. None of
Parent's subsidiaries is required to file any forms, reports or other documents
with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Parent SEC Reports has been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto) and each fairly presents in all material respects the
consolidated financial position of Parent and its subsidiaries as at the
respective dates thereof and the consolidated results of its operations and cash
flows and changes in stockholders' equity for the periods indicated, except that
the unaudited interim financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not expected to be material
in amount and the addition of footnotes.
SECTION 3.8 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Section 3.8 of the Parent Disclosure Schedule or in the Parent SEC Reports filed
with the SEC prior to the date hereof, since January 1, 1996, Parent has
conducted its business in the ordinary course and there has not occurred: (i)
any Material Adverse Effect; (ii) any amendments or changes in the Certificate
of Incorporation or By-Laws of Parent; (iii) any damage to, destruction or loss
of any assets of the Parent or any of its subsidiaries (whether or not covered
by insurance) that would have a Material Adverse Effect; (iv) any material
change by Parent in its accounting methods, principles or practices; (v) any
material revaluation by Parent of any of its assets, including without
limitation, writing down the value of inventory or writing off notes or accounts
receivable other than in the ordinary course of business; (vi) any other action
or event that would have required the consent of the Company pursuant to Section
4.3 had such action or event
-24-
occurred after the date of this Agreement; or (vii) any sale of a material
amount of assets of Parent or any of its subsidiaries except in the ordinary
course of business.
SECTION 3.9 REGISTRATION STATEMENT; PROXY STATEMENT/PROSPECTUS. Subject to
the accuracy of the representations of the Company in Section 2.13, the
registration statement (the "Registration Statement") pursuant to which the
Parent Common Stock to be issued in the Merger will be registered with the SEC
shall not, at the time the Registration Statement (including any amendments or
supplements thereto) is declared effective by the SEC, contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements included therein not false or misleading. The
information supplied by Parent for inclusion in the Proxy Statement/Prospectus
will not, on the date the Proxy Statement/Prospectus is first mailed to
stockholders, at the time of the Stockholders Meeting and at the Effective Time,
contain any statement which, at such time and in light of the circumstances
under which it shall be made, is false or misleading with respect to any
material fact, or will omit to state any material fact necessary in order to
make the statements therein not false or misleading; or omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of proxies for the Stockholders Meeting which
has become false or misleading. If at any time prior to the Effective Time any
event relating to Parent, Merger Sub or any of their respective affiliates,
officers or directors should be discovered by Parent or Merger Sub which should
be set forth in an amendment to the Registration Statement or a supplement to
the Proxy Statement/Prospectus, Parent or Merger Sub will promptly inform the
Company. Notwithstanding the foregoing, Parent and Merger Sub make no
representation or warranty with respect to any information supplied by the
Company which is contained in any of the foregoing documents. The Registration
Statement and Proxy Statement/Prospectus shall comply in all material respects
as to form and substance with the requirements of the Securities Act, the
Exchange Act and the rules and regulations thereunder. Notwithstanding the
foregoing, Parent makes no representation or warranty with respect to any
information supplied by the Company which is contained in, or furnished in
connection with the preparation of, the Registration Statement.
SECTION 3.10 POOLING MATTERS. Neither Parent nor any of its affiliates
has, to Parent's knowledge and based upon consultation with its independent
accountants, taken or agreed to take any action that could affect the ability of
Parent to account for the business combination to be effected by the Merger as a
pooling of interests. The failure of this representation to be true and correct,
shall, if the Merger is not able to be accounted for as a pooling of interests,
constitute a breach of the Agreement by Parent for the purposes of Section
7.1(f).
SECTION 3.11 NO UNDISCLOSED LIABILITIES. Except as is disclosed in Section
3.11 of the Parent Disclosure Schedule, neither Parent nor any of its
subsidiaries has any liabilities (absolute, accrued, contingent or otherwise),
except liabilities (a) in the aggregate adequately provided for in the Parent's
audited balance sheet (including any related notes thereto) for the fiscal year
ended December 31, 1995 (the "1995 Parent Balance Sheet") included in Parent's
Annual Report on Form 10-K for the year ended December 31, 1995, (b) incurred in
the ordinary course of business
-25-
and not required under generally accepted accounting principles to be reflected
on the 1995 Parent Balance Sheet, (c) incurred since December 31, 1995 in the
ordinary course of business consistent with past practice, (d) incurred in
connection with this Agreement, or (e) which would not have a Material Adverse
Effect.
SECTION 3.12 ABSENCE OF LITIGATION. Except as set forth in Section 3.12 of
the Parent Disclosure Schedule, there are no claims, actions, suits, proceedings
or investigations pending or, to the knowledge of the Parent, threatened against
Parent or any of its subsidiaries, or any properties or rights of the Parent or
any of its subsidiaries, before any federal, foreign, state or provincial court,
arbitrator or administrative, governmental or regulatory authority or body that
would have a Material Adverse Effect.
SECTION 3.13 OWNERSHIP OF MERGER SUB; NO PRIOR ACTIVITIES.
(a) Merger Sub was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement.
(b) As of the date hereof and the Effective Time, except for obligations
or liabilities incurred in connection with its incorporation or organization and
the transactions contemplated by this Agreement and except for this Agreement
and any other agreements or arrangements contemplated by this Agreement, Merger
Sub has not and will not have incurred, directly or indirectly, through any
subsidiary or affiliate, any obligations or liabilities or engaged in any
business activities of any type or kind whatsoever or entered into any
agreements or arrangements with any person.
ARTICLE IV
CONDUCT OF BUSINESS PENDING THE MERGER
SECTION 4.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The
Company covenants and agrees that, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, unless Parent shall otherwise agree in writing, the
Company shall conduct its business and shall cause the businesses of its
subsidiaries to be conducted only in, and the Company and its subsidiaries shall
not take any action except in, the ordinary course of business and in a manner
consistent with prudent industry practice; and the Company shall use all
reasonable commercial efforts to preserve substantially intact the business
organization of the Company and its subsidiaries, to keep available the services
of the present officers, employees and consultants of the Company and its
subsidiaries and to preserve the present relationships of the Company and its
subsidiaries with customers, suppliers and other persons with which the Company
or any of its subsidiaries has significant business relations. By way of
amplification and not limitation, except as contemplated by this Agreement,
neither the Company nor any of its subsidiaries shall, during the period from
the date of this Agreement and continuing until the earlier of the termination
of
-26-
this Agreement or the Effective Time, directly or indirectly do, or propose to
do, any of the following without the prior written consent of Parent:
(a) amend or otherwise change the Certificate of Incorporation or By-Laws
of the Company or any of its subsidiaries;
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of capital
stock of any class, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock, or any other
ownership interest (including, without limitation, any phantom interest) in the
Company, any of its subsidiaries or affiliates (except for the issuance of
shares of Company Common Stock issuable (i) pursuant to Stock Options which were
granted under the Company Stock Option Plan and are outstanding on the date
hereof, (ii) pursuant to options described in Section 1.6(c) of the Company
Disclosure Schedule outstanding on the date hereof and (iii) pursuant to the
Warrants).
(c) sell, pledge, dispose of or encumber any assets of the Company or any
of its subsidiaries (except for (i) sales of assets in the ordinary course of
business and in a manner consistent with past practice, (ii) dispositions of
obsolete or worthless assets, and (iii) sales of immaterial assets not in excess
of $50,000 in the aggregate);
(d) (i) declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
any of its capital stock, except that a wholly owned subsidiary of the Company
may declare and pay a dividend to its parent, (ii) split, combine or reclassify
any of its capital stock or issue or authorize or propose the issuance of any
other securities in respect of, in lieu of or in substitution for shares of its
capital stock, or (iii) amend the terms or change the period of exercisability
of, accelerate the vesting of, purchase, repurchase, redeem or otherwise
acquire, or permit any subsidiary to purchase, repurchase, redeem or otherwise
acquire, any of its securities or any securities of its subsidiaries, including,
without limitation, shares of Company Common Stock or any option, warrant or
right, directly or indirectly, to acquire shares of Company Common Stock, or
propose to do any of the foregoing;
(e) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof, except that the Company may (1) acquire complementary businesses or
finance the acquisition by its affiliated physician groups of hospital medical
service contracts in an amount not to exceed $1,000,000 in any single case and
$2,750,000 in the aggregate, (2) with the prior written consent of Parent (which
consent will not be unreasonably withheld or delayed) acquire the businesses
described on Section 4.1(e) of the Company Disclosure Schedule and (3) finance
the acquisition by its affiliated physician groups of the hospital medical
service contracts described in Section 4.1(e) of the Company Disclosure Schedule
not to exceed in the aggregate the amount previously specified in writing by the
Company to Parent; (ii) incur any indebtedness for borrowed money or issue any
debt securities or assume, guarantee or endorse or otherwise as an accommodation
become responsible for, the obligations of any person or, except in the ordinary
course of business
-27-
consistent with past practice, make any loans or advances; (iii) enter into or
amend any material contract or agreement, except that the Company may amend its
existing $6,500,000 bank credit agreement to increase the amount of credit
available thereunder to up to $25,000,000; (iv) authorize any capital
expenditures or purchase of fixed assets which are, in the aggregate, in excess
of $100,000 for the Company and its subsidiaries taken as a whole (except for
purchases and leases of equipment not to exceed $1,000,000 in aggregate payments
required for the development of new hyperbaric oxygen therapy and dialysis
treatment facilities); or (v) enter into or amend any contract, agreement,
commitment or arrangement to effect any of the matters prohibited by this
Section 4.1(e);
(f) increase the compensation payable or to become payable to its officers
or employees (except for increases in compensation of employees without
employment agreements in amounts consistent with past practices), or grant any
severance or termination pay to, or enter into any employment or severance
agreement with any director, officer or other employee of the Company or any of
its subsidiaries, or establish, adopt, enter into or amend any collective
bargaining, bonus, profit sharing, thrift, compensation, stock option,
restricted stock, pension, retirement, deferred compensation, employment,
termination, severance or other plan, agreement, trust, fund, policy or
arrangement for the benefit of any current or former directors, officers or
employees, except, in each case, as may be required by law;
(g) take any action to change accounting policies or procedures
(including, without limitation, procedures with respect to revenue recognition,
payments of accounts payable and collection of accounts receivable);
(h) make any material tax election inconsistent with past practice or
settle or compromise any material federal, state, local or foreign tax liability
or agree to an extension of a statute of limitations;
(i) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, asserted or unasserted, contingent or otherwise), other than
the payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of liabilities reflected or reserved against in
the financial statements contained in the Company SEC Reports filed prior to the
date of this Agreement or incurred in the ordinary course of business and
consistent with past practice; or
(j) take, or agree in writing or otherwise to take, any of the actions
described in Sections 4.1 (a) through (i) above, or any action which would make
any of the representations or warranties of the Company contained in this
Agreement untrue or incorrect or prevent the Company from performing or cause
the Company not to perform its covenants hereunder.
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SECTION 4.2 NO SOLICITATION.
(a) The Company shall not, directly or indirectly, through any officer,
director, employee, representative or agent of the Company or any of its
subsidiaries, (i) solicit, initiate or knowingly encourage the initiation of any
inquiries or proposals regarding any merger, sale of substantial assets, sale of
shares of capital stock (including without limitation by way of a tender offer)
or similar transactions involving the Company or any subsidiaries of the Company
other than the Merger (any of the foregoing inquiries or proposals being
referred to herein as an "Acquisition Proposal"), (ii) engage in negotiations or
discussions concerning, or provide any nonpublic information to any person
relating to, any Acquisition Proposal or (iii) agree to, approve or recommend
any Acquisition Proposal. Nothing contained in this Section 4.2(a) shall prevent
the Board of Directors of the Company from considering, negotiating, approving
and recommending to the stockholders of the Company a bona fide Acquisition
Proposal not solicited in violation of this Agreement, provided the Board of
Directors of the Company determines in good faith (upon advice of independent
counsel) that it is required to do so in order to discharge properly its
fiduciary duties.
(b) The Company shall immediately notify Parent after receipt of any
Acquisition Proposal, or any modification of or amendment to any Acquisition
Proposal, or any request for nonpublic information relating to the Company or
any of its subsidiaries in connection with an Acquisition Proposal or for access
to the properties, books or records of the Company or any subsidiary by any
person or entity that informs the Board of Directors of the Company or such
subsidiary that it is considering making, or has made, an Acquisition Proposal.
Such notice to Parent shall be made orally and in writing, and shall indicate
whether the Company is providing or intends to provide the person making the
Acquisition Proposal with access to information concerning the Company as
provided in Section 4.2(c).
(c) If the Board of Directors of the Company receives a request for
material nonpublic information by a person who makes, or indicates that it is
considering making, a bona fide Acquisition Proposal, and the Board of Directors
determines in good faith and upon the advice of independent counsel that it is
required to cause the Company to act as provided in this Section 4.2(c) in order
to discharge properly the directors' fiduciary duties, then, provided the person
making the Acquisition Proposal has executed a confidentiality agreement
substantially similar to the one then in effect between the Company and Parent,
the Company may provide such person with access to information regarding the
Company.
(d) The Company shall immediately cease and cause to be terminated any
existing discussions or negotiations with any persons (other than Parent and
Merger Sub) conducted heretofore with respect to any of the foregoing. The
Company agrees not to release any third party from the confidentiality
provisions of any confidentiality agreement to which the Company is a party.
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(e) The Company shall ensure that the officers, directors and employees of
the Company and its subsidiaries and any investment banker or other advisor or
representative retained by the Company are aware of the restrictions described
in this Section 4.2.
SECTION 4.3 CONDUCT OF BUSINESS BY PARENT PENDING THE MERGER. During the
period from the date of this Agreement and continuing until the earlier of the
termination of this Agreement or the Effective Time, Parent covenants and agrees
that, unless the Company shall otherwise agree in writing, Parent shall conduct
its business, and cause the businesses of its subsidiaries to be conducted, only
in the ordinary course of business and in a manner consistent with past
practices, other than actions taken by Parent or its subsidiaries in
contemplation of the Merger, and shall not directly or indirectly do, or propose
to do, any of the following without the prior written consent of the Company:
(a) amend or otherwise change Parent's Certificate of Incorporation or
By-Laws;
(b) declare, set aside, make or pay any dividend or other distribution
(whether in cash, stock or property or any combination thereof) in respect of
any of its capital stock, except that a wholly owned subsidiary of Parent may
declare and pay a dividend to its parent; or
(c) take or agree in writing or otherwise to take any action which would
make any of the representations or warranties of Parent contained in this
Agreement untrue or incorrect or prevent Parent from performing or cause Parent
not to perform its covenants hereunder.
ARTICLE V
ADDITIONAL AGREEMENTS
SECTION 5.1 HSR ACT. As promptly as practicable after the date of the
execution of this Agreement, the Company and Parent shall file notifications
under and in accordance with the HSR Act in connection with the Merger and the
transactions contemplated hereby and to respond as promptly as practicable to
any inquiries received from the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "Antitrust Division") for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other governmental authority in connection with antitrust matters.
SECTION 5.2 PROXY STATEMENT PROSPECTUS; REGISTRATION STATEMENT. As
promptly as practicable after the execution of this Agreement, the Company and
Parent shall prepare and file with the SEC preliminary proxy materials which
shall constitute the Proxy Statement/Prospectus and the Registration Statement
of the Parent with respect to the Parent Common Stock to be issued in connection
with the Merger. As promptly as practicable after comments are received from the
SEC thereon and after the furnishing by the Company and Parent of all
information
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required to be contained therein, the Company and Parent shall file with the SEC
a combined proxy and Registration Statement on Form S-4 (or on such other form
as shall be appropriate) (the "S-4 Registration Statement") relating to the
adoption of this Agreement and approval of the transactions contemplated hereby
by the stockholders of the Company, and shall use all reasonable efforts to
cause the Registration Statement to become effective, and to mail the Proxy
Statement/Prospectus to the stockholders of the Company as soon thereafter as
practicable. The Proxy Statement/Prospectus shall include the recommendation of
the Board of Directors of the Company in favor of the Merger, subject to the
last sentence of Section 5.3.
SECTION 5.3 STOCKHOLDERS MEETING. The Company shall call and hold a
Stockholders Meeting as promptly as practicable and in accordance with
applicable laws for the purpose of voting upon the approval of the Merger, and
the Company shall use its reasonable best efforts to hold the Stockholders
Meeting as soon as practicable after the date on which the Registration
Statement becomes effective. Unless otherwise required under the applicable
fiduciary duties of the directors of the Company, as determined by such
directors in good faith after consultation with and based upon the advice of
independent counsel, the Company shall use all reasonable efforts to solicit
from its stockholders proxies in favor of adoption of this Agreement and
approval of the transactions contemplated hereby and shall take all other action
necessary or advisable to secure the vote or consent of stockholders to obtain
such approvals.
SECTION 5.4 ACCESS TO INFORMATION; CONFIDENTIALITY. Upon reasonable notice
and subject to restrictions contained in confidentiality agreements to which
such party is subject (from which such party shall use reasonable efforts to be
released), the Company and Parent shall each (and shall cause each of their
subsidiaries to) afford to the officers, employees, accountants, counsel and
other representatives of the other, reasonable access, during the period to the
Effective Time, to all its properties, books, contracts, commitments and records
and, during such period, the Company and Parent each shall (and shall cause each
of their subsidiaries to) furnish promptly to the other all information
concerning its business, properties and personnel as such other party may
reasonably request, and each shall make available to the other the appropriate
individuals (including attorneys, accountants and other professionals) for
discussion of the other's business, properties and personnel as either Parent or
the Company may reasonably request. Each party shall keep such information
confidential in accordance with the terms of the confidentiality letter dated
September 13, 1996 as amended as of October 1, 1996 (the "Confidentiality
Letter"), between Parent and the Company.
SECTION 5.5 CONSENTS; APPROVALS. The Company and Parent shall each use all
reasonable efforts to obtain all consents, waivers, approvals, authorizations or
orders (including, without limitation, all United States and foreign
governmental and regulatory rulings and approvals), and the Company and Parent
shall make all filings (including, without limitation, all filings with United
States and foreign governmental or regulatory agencies) required in connection
with the authorization, execution and delivery of this Agreement by the Company
and Parent and the consummation by them of the transactions contemplated hereby,
in each case as promptly as practicable. The Company and Parent shall furnish
promptly all information
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required to be included in the Proxy Statement/Prospectus and the Registration
Statement, or for any application or other filing to be made pursuant to the
rules and regulations of any United States or foreign governmental body in
connection with the transactions contemplated by this Agreement.
SECTION 5.6 AGREEMENTS WITH RESPECT TO AFFILIATES. Each of Parent and the
Company shall deliver to the other, prior to the date the Registration Statement
becomes effective under the Securities Act, a letter (the "Affiliate Letters")
identifying all persons who are "affiliates" of the Parent or the Company,
respectively, for purposes of Rule 145 under the Securities Act ("Rule 145").
Each of Parent and the Company shall use its reasonable best efforts to cause
each person who is identified as an "affiliate" in its Affiliate Letter to
deliver, prior to the Effective Time, a written agreement (an "Affiliate
Agreement") in connection with restrictions on affiliates under Rule 145 and
pooling of interests accounting treatment, in substantially the form of Exhibit
5.6.
SECTION 5.7 INDEMNIFICATION AND INSURANCE.
(a) The Certificate of Incorporation and By-Laws of the Surviving
Corporation shall contain the provisions with respect to indemnification set
forth in the Certificate of Incorporation and By-Laws of the Company,
respectively, which provisions shall not be amended, repealed or otherwise
modified for a period of five years from the Effective Time in any manner that
would adversely affect the rights thereunder of individuals who at any time
prior to the Effective Time were directors, officers, employees or agents of the
Company, unless such modification is required by law.
(b) The Company shall, to the fullest extent permitted under applicable
law or under the Company's Certificate of Incorporation or By-Laws and
regardless of whether the Merger becomes effective, indemnify and hold harmless,
and, after the Effective Time, Parent and the Surviving Corporation shall, to
the fullest extent permitted under applicable law or under the Surviving
Corporation's Certificate of Incorporation or By-Laws, indemnify and hold
harmless, each present and former director, officer or employee of the Company
or any of its subsidiaries (collectively, the "Indemnified Parties") against any
costs or expenses (including attorneys' fees), judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
claim, action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, (x) arising out of or pertaining to the
transactions contemplated by this Agreement or (y) otherwise with respect to any
acts or omissions occurring at or prior to the Effective Time, to the same
extent as provided in the Company's Certificate of Incorporation or By-Laws or
any applicable contract or agreement as in effect on the date hereof, in each
case for a period of five years after the date hereof. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) any counsel retained by the Indemnified Parties
for any period after the Effective Time shall be reasonably satisfactory to the
Surviving Corporation, (ii) after the Effective Time, Parent or the Surviving
Corporation shall pay the reasonable fees and expenses of such counsel, promptly
after statements therefor are received, and (iii) Parent and the Surviving
Corporation will cooperate in
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the defense of any such matter; PROVIDED, HOWEVER, that neither Parent nor the
Surviving Corporation shall be liable for any settlement effected without its
written consent (which consent shall not be unreasonably withheld); and
PROVIDED, FURTHER, that, in the event that any claim or claims for
indemnification are asserted or made within such five-year period, all rights to
indemnification in respect of any such claim or claims shall continue until the
disposition of any and all such claims. The Indemnified Parties as a group may
retain only one law firm to represent them with respect to any single action
unless there is, under applicable standards of professional conduct, a conflict
on any significant issue between the positions of any two or more Indemnified
Parties.
(c) Parent and the Surviving Corporation shall honor and fulfill in all
respects the obligations of the Company pursuant to indemnification agreements
with the Company's directors and officers existing at or before the Effective
Time.
(d) For a period of three years after the Effective Time, Parent shall
cause the Surviving Corporation to maintain in effect, if available, directors'
and officers' liability insurance covering those persons who are currently
covered by the Company's directors' and officers' liability insurance policy (a
copy of which has been made available to Parent) on terms comparable to those
now applicable to directors and officers of the Company; PROVIDED, HOWEVER, that
in no event shall Parent or the Surviving Corporation be required to expend in
excess of 150% of the annual premium currently paid by the Company for such
coverage; and PROVIDED FURTHER, that if the annual premium would exceed such
amount, Parent shall cause the Surviving Corporation to obtain a policy with the
maximum coverage available at a cost not exceeding such amount.
(e) This Section shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Company, the Surviving Corporation
and the Indemnified Parties, shall be binding, jointly and severally, on all
successors and assigns of Parent and the Surviving Corporation and shall be
enforceable by the Indemnified Parties.
SECTION 5.8 NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt
notice to Parent, and Parent shall give prompt notice to the Company, of (i) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be likely to cause any representation or warranty contained in this
Agreement to become materially untrue or inaccurate, or (ii) any failure of the
Company, Parent or Merger Sub, as the case may be, materially to comply with or
satisfy any covenant, condition or agreement to be complied with or satisfied by
it hereunder; PROVIDED, HOWEVER, that the delivery of any notice pursuant to
this Section shall not limit or otherwise affect the remedies available
hereunder to the party receiving such notice; and PROVIDED FURTHER that failure
to give such notice shall not be treated as a breach of covenant for the
purposes of Sections 6.2(a) or 6.3(a) unless the failure to give such notice
results in material prejudice to the other party.
SECTION 5.9 FURTHER ACTION/TAX TREATMENT. Upon the terms and subject to
the conditions hereof each of the parties hereto shall use all reasonable
efforts to take, or cause to be
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taken, all actions and to do, or cause to be done, all other things necessary,
proper or advisable to consummate and make effective as promptly as practicable
the transactions contemplated by this Agreement, to obtain in a timely manner
all necessary waivers, consents and approvals and to effect all necessary
registrations and filings, and otherwise to satisfy or cause to be satisfied all
conditions precedent to its obligations under this Agreement. The foregoing
covenant shall not include any obligation by Parent to agree to divest, abandon,
license or take similar action with respect to any assets (tangible or
intangible) of Parent or the Company. Each of Parent, Merger Sub and the Company
shall use its best efforts to cause the Merger to qualify, and will not (both
before and after consummation of the Merger) take any actions which to its
knowledge could reasonably be expected to prevent the Merger from qualifying, as
a reorganization under the provisions of Section 368 of the Code.
SECTION 5.10 PUBLIC ANNOUNCEMENTS. Parent and the Company shall consult
with each other before issuing any press release with respect to the Merger or
this Agreement and shall not issue any such press release or make any such
public statement without the prior consent of the other party, which shall not
be unreasonably withheld; PROVIDED, HOWEVER, that a party may, without the prior
consent of the other party, issue such press release or make such public
statement as may upon the advice of counsel be required by law or the rules and
regulations of the New York Stock Exchange ("NYSE") or Nasdaq National Market
System ("Nasdaq"), if it has used all reasonable efforts to consult with the
other party prior thereto.
SECTION 5.11 CONVEYANCE TAXES. Parent and the Company shall cooperate in
the preparation, execution and filing of all returns, questionnaires,
applications, or other documents regarding any real property transfer or gains,
sales, use, transfer, value added, stock transfer and stamp taxes, any transfer,
recording, registration and other fees, and any similar taxes which become
payable in connection with the transactions contemplated hereby that are
required or permitted to be filed at or before the Effective Time.
SECTION 5.12 ACCOUNTANTS' LETTERS. Upon reasonable notice from the other,
the Company and Parent shall use their respective best efforts to cause KPMG
Peat Marwick LLP to deliver to Parent and the Company a letter, dated within 2
business days of the Effective Date of the S-4 Registration Statement covering
such matters as are requested by Parent or the Company, as the case may be, and
as are customarily addressed in accountant's "comfort" letters.
SECTION 5.13 POOLING ACCOUNTING TREATMENT. Each of Parent and the Company
agrees not to take any action that to its knowledge could reasonably be expected
to adversely affect the ability of Parent to treat the Merger as a pooling of
interests, and each of Parent and the Company agrees to take such action as may
be reasonably required to negate the impact of any past actions which to its
knowledge could reasonably be expected to adversely impact the ability of Parent
to treat the Merger as a pooling of interests. The taking by Parent or the
Company of any action prohibited by the previous sentence, or the failure of
Parent or the Company to take any action required by the previous sentence,
shall, if the Merger is not able to be accounted for as a pooling
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of interests, constitute a breach of this Agreement by Parent or the Company, as
the case may be, for the purposes of Section 7.1(f).
SECTION 5.14 NASDAQ LISTING. The Company shall use its best efforts to
continue the quotation of the Company Common Stock on the Nasdaq National Market
during the term of this Agreement.
SECTION 5.15 LISTING OF PARENT SHARES. Parent shall use its best efforts
to cause the Parent Shares to be issued in the Merger to be approved for
listing, upon official notice of issuance, on the NYSE.
ARTICLE VI
CONDITIONS TO THE MERGER
SECTION 6.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) EFFECTIVENESS OF THE REGISTRATION STATEMENT. The Registration
Statement shall have been declared effective by the SEC under the Securities
Act. No stop order suspending the effectiveness of the Registration Statement
shall have been issued by the SEC and no proceedings for that purpose and no
similar proceeding in respect of the Joint Proxy Statement/Prospectus shall have
been initiated by the SEC;
(b) STOCKHOLDER APPROVAL. This Agreement and the Merger shall have been
approved and adopted by the requisite vote of the stockholders of the Company;
(c) HSR ACT. The waiting period applicable to the consummation of the
Merger under the HSR Act shall have expired or been terminated;
(d) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect, nor shall any proceeding brought
by any administrative agency or commission or other governmental authority or
instrumentality, domestic or foreign, seeking any of the foregoing be pending;
and there shall not be any action taken, or any statute, rule, regulation or
order enacted, entered, enforced or deemed applicable to the Merger, which makes
the consummation of the Merger illegal; and
(e) GOVERNMENTAL ACTIONS. There shall not have been instituted, pending or
overtly threatened any action or proceeding having a reasonable possibility of
success by any governmental authority or administrative agency before any
governmental authority,
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administrative agency or court of competent jurisdiction, nor shall there be in
effect any judgment, decree or order of any governmental authority,
administrative agency or court of competent jurisdiction, in either case,
seeking to prohibit or limit Parent from exercising all material rights and
privileges pertaining to its ownership of the Surviving Corporation or the
ownership or operation by Parent or any of its subsidiaries of all or a material
portion of the business or assets of Parent or any of its subsidiaries, or
seeking to compel Parent or any of its subsidiaries to dispose of or hold
separate all or any material portion of the business or assets of Parent or any
of its subsidiaries (including the Surviving Corporation and its subsidiaries),
as a result of the Merger or the transactions contemplated by this Agreement.
SECTION 6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUB.
The obligations of Parent and Merger Sub to effect the Merger are also subject
to the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company contained in this Agreement shall be true and correct in all
respects at and as of the Effective Time as if made at and as of such time,
except for (i) changes contemplated by this Agreement, (ii) those
representations and warranties which address matters only as of a particular
date (which shall have been true and correct as of such date, subject to clause
(iii)), and (iii) where the failure to be true and correct would not have a
Material Adverse Effect, with the same force and effect as if made at and as of
the Effective Time, and Parent and Merger Sub shall have received a certificate
to such effect signed by the President and the Chief Financial Officer of the
Company;
(b) AGREEMENTS AND COVENANTS. The Company shall have performed or complied
in all material respects with all agreements and covenants required by this
Agreement to be performed or complied with by it at or prior to the Effective
Time, and Parent and Merger Sub shall have received a certificate to such effect
signed by the President and the Chief Financial Officer of the Company;
(c) CONSENTS OBTAINED. All consents, waivers, approvals, permits,
licenses, authorizations or orders required to be obtained, and all filings
required to be made, by the Company for the due authorization, execution and
delivery of this Agreement and the consummation by it of the transactions
contemplated hereby shall have been obtained and made by the Company, except
where the failure to receive such consents, etc. would not (i) have a Material
Adverse Effect on the Company or Parent, or (ii) materially delay or prevent the
consummation of the Merger;
(d) OPINION OF COUNSEL. Parent shall have received a written opinion from
Ropes & Xxxx, in form and substance reasonably satisfactory to Parent, to the
effect that the Merger will constitute a reorganization within the meaning of
Section 368 of the Code;
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(e) OPINION OF ACCOUNTANT. Parent shall have received an opinion (the fees
and expenses of which shall be borne by Parent) of KPMG Peat Marwick LLP,
independent certified public accountants, to the effect that the Merger
qualifies for pooling of interests accounting treatment if consummated in
accordance with this Agreement;
(f) AFFILIATE AGREEMENTS. Parent shall have received from each person who
is identified in the Affiliate Letter as an "affiliate" of the Company, an
Affiliate Agreement, and such Affiliate Agreement shall be in full force and
effect.
(g) STOCKHOLDERS AGREEMENT. The Stockholders Agreement shall be in full
force and effective at and as of the Effective Time; and
(h) EMPLOYMENT AGREEMENTS. Each of Xxxxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxx,
Xxxxxx X. Xxxxx and Xxxxx Xxxxx shall have executed and delivered to the Company
and Parent an Employment Agreement in the form of Exhibit A providing for such
salaries and severance benefits and specifying the number of Parent Shares that
will be owned by each such person, as are specified for such person in Schedule
6.2(h), and each of Xxxxxxx X. Xxxx and Xxxxxx X. Xxxxxxx shall have executed
and delivered to the Company and Parent an Employment Agreement in the form of
Exhibit B providing for such salaries and severance benefits and specify the
number of Parent Shares that will be subject to options held by such person as
are specified for such person in Schedule 6.2(h), and all such Employment
Agreements shall be in full force and effect.
SECTION 6.3 ADDITIONAL CONDITIONS TO OBLIGATION OF THE COMPANY. The
obligation of the Company to effect the Merger is also subject to the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties of
Parent and Merger Sub contained in this Agreement shall be true and correct in
all respects on and as of the Effective Time, except for (i) changes
contemplated by this Agreement, (ii) those representations and warranties which
address matters only as of a particular date (which shall have been true and
correct as of such date, subject to clause (iii)), and (iii) where the failure
to be true and correct would not have a Material Adverse Effect, with the same
force and effect as if made on and as of the Effective Time, and the Company
shall have received a certificate to such effect signed by the President and the
Chief Financial Officer of Parent;
(b) AGREEMENTS AND COVENANTS. Parent and Merger Sub shall have performed
or complied in all material respects with all agreements and covenants required
by this Agreement to be performed or complied with by them on or prior to the
Effective Time, and the Company shall have received a certificate to such effect
signed by the President and the Chief Financial Officer of Parent;
(c) CONSENTS OBTAINED. All consents, waivers, approvals, permits,
licenses, authorizations or orders required to be obtained, and all filings
required to be made, by Parent
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and Merger Sub for the authorization, execution and delivery of this Agreement
and the consummation by them of the transactions contemplated hereby shall have
been obtained and made by Parent and Merger Sub, except where the failure to
receive such consents, etc. would not have a Material Adverse Effect on the
Company or Parent;
(d) TAX OPINIONS. The Company shall have received a written opinion of
KPMG Peat Marwick LLP, in form and substance reasonably satisfactory to the
Company, to the effect that the Merger will constitute a reorganization within
the meaning of Section 368 of the Code;
(e) OPINION OF ACCOUNTANT. The Company shall have received a copy of the
opinions referred to in Section 6.2(e) above;
(f) NYSE. The Parent Shares to be issued in the Merger shall have been
approved, upon official notice of issuance, for listing on the NYSE;
(g) AFFILIATE AGREEMENTS. Parent shall have received from each person who
is identified in the Affiliate Letter as an "affiliate" of Parent, an Affiliate
Agreement, and such Affiliate Agreement shall be in full force and effect; and
(h) PARENT BOARD SEAT. Parent shall have taken all actions necessary to
nominate and elect Xxxxxxx X. Xxxxxxxxx as a member of its Board of Directors.
ARTICLE VII
TERMINATION
SECTION 7.1 TERMINATION. This Agreement may be terminated at any time
prior to the Effective Time, notwithstanding approval thereof by the
stockholders of the Company:
(a) by mutual written consent duly authorized by the Boards of Directors
of Parent and the Company; or
(b) by either Parent or the Company if the Merger shall not have been
consummated by March 31, 1997 (provided that the right to terminate this
Agreement under this Section 7.1(b) shall not be available to any party whose
failure to fulfill any obligation under this Agreement has been the cause of or
resulted in the failure of the Merger to occur on or before such date); or
(c) by either Parent or the Company if a court of competent jurisdiction
or governmental, regulatory or administrative agency or commission shall have
issued a nonappealable final order, decree or ruling or taken any other action
having the effect of permanently restraining, enjoining or otherwise prohibiting
the Merger (provided that the right to terminate this Agreement under this
Section 7.1(c) shall not be available to any party who has not
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complied with any obligation under this Agreement and such noncompliance
materially contributed to the issuance of any such order, decree or ruling or
the taking of such action); or
(d) by Parent, if the requisite vote of the stockholders of the Company
shall not have been obtained by March 31, 1997; or
(e) by Parent or the Company, if: (i) the Board of Directors of the
Company shall withdraw, modify or change its approval or recommendation of this
Agreement or the Merger in a manner adverse to Parent or shall have resolved to
do so in accordance with Section 5.3 hereof; (ii) after the receipt by the
Company of an Acquisition Proposal, Parent requests in writing that the Board of
Directors of the Company reconfirm its recommendation of this Agreement and the
Merger and the Board of Directors of the Company fails to do so within 10
business days; (iii) the Board of Directors of the Company shall have
recommended to the stockholders of the Company an Alternative Transaction (as
defined below); or (iv) a tender offer or exchange offer for 25% or more of the
outstanding shares of Company Common Stock is commenced (other than by Parent or
an affiliate of Parent) and the Board of Directors of the Company recommends
that the stockholders of the Company tender their shares in such tender or
exchange offer; PROVIDED, THAT, the Company shall not be entitled to exercise
any termination rights under this Section 7.1(e) unless (x) any action of the
Board of Directors of the Company referred to in either such clause is required
to be taken by the Board of Directors in order to properly discharge its
fiduciary duties and (y) the Company has complied with its obligations in
Section 4.2; or
(f) by Parent or the Company, (i) if any representation or warranty of the
Company or Parent, respectively, set forth in this Agreement shall be untrue
when made, or (ii) upon a breach of any covenant or agreement on the part of the
Company or Parent, respectively, set forth in this Agreement and, in the case of
any such breach that is curable, if such breach shall not have been cured within
10 days after the nonbreaching party gives the breaching written notice of such
breach, in each case such that the conditions set forth in Section 6.2(a) or
6.2(b), or Section 6.3(a) or 6.3(b), as the case may be, would not be satisfied
(either (i) or (ii) above being a "Terminating Breach"), PROVIDED, THAT, if such
Terminating Breach is curable prior to March 31, 1997 by the Company or Parent,
as the case may be, through the exercise of its reasonable best efforts and for
so long as the Company or Parent, as the case may be, continues to exercise such
reasonable best efforts, neither Parent nor the Company, respectively, may
terminate this Agreement under this Section 7.1(f); or
(g) by Parent, if any representation or warranty of the Company shall have
become untrue such that the condition set forth in Section 6.2(a) would not be
satisfied, or by the Company, if any representation or warranty of Parent shall
have become untrue such that the condition set forth in Section 6.3(a) would not
be satisfied, in either case other than by reason of a Terminating Breach.
As used herein, "Alternative Transaction" means any of (i) a transaction
pursuant to which any person (or group of persons) other than Parent or its
affiliates (a "Third Party")
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acquires or would acquire more than 25% of the outstanding Shares, whether from
the Company or pursuant to a tender offer or exchange offer or otherwise, (ii) a
merger or other business combination involving the Company pursuant to which any
Third Party acquires more than 25% of the outstanding equity securities of the
Company or the entity surviving such merger or business combination, or (iii)
any other transaction pursuant to which any Third Party acquires or would
acquire control of assets (including for this purpose the outstanding equity
securities of subsidiaries of the Company, and the entity surviving any merger
or business combination including any of them) of the Company or any of its
subsidiaries having a fair market value (as determined by the Board of Directors
of the Company in good faith) equal to more than 25% of the fair market value of
all the assets of the Company and its subsidiaries, taken as a whole,
immediately prior to such transaction.
SECTION 7.2 EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to Section 7.1, this Agreement shall forthwith become void
and there shall be no liability on the part of any party hereto or any of its
affiliates, directors, officers or stockholders except (i) as set forth in
Section 7.3 and Section 8.1 hereof, and (ii) nothing herein shall relieve any
party from liability for any breach hereof.
SECTION 7.3 FEES AND EXPENSES.
(a) Except as set forth in this Section 7.3, all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated.
(b) The Company shall pay Parent a fee of $4,500,000 (the "Company Fee"),
plus actual, documented and reasonable out-of-pocket expenses of Parent (not to
exceed $500,000 in the aggregate) relating to the transactions contemplated by
this Agreement (including, but not limited to, fees and expenses of Parent's
counsel, accountants and financial advisers), upon the first to occur of the
following events:
(i) the termination of this Agreement by Parent pursuant to Section
7.1(d) if a proposal for an Alternative Transaction shall have been made
prior to the Stockholders Meeting; or
(ii) the termination of this Agreement by Parent or the Company
pursuant to Section 7.1(e); or
(iii) the termination of this Agreement by Parent pursuant to
Section 7.1(f) on account of a Terminating Breach by the Company.
(c) Parent shall pay the Company a fee of $4,500,000 (the "Parent Fee"),
plus actual, documented and reasonable out-of-pocket expenses of the Company
(not to exceed $500,000 in the aggregate) relating to the transactions
contemplated by this Agreement (including, but not
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limited to, fees and expenses of the Company's counsel, accountants and
financial advisers) if the Company terminates this Agreement pursuant to Section
7.1(f) on account of a Terminating Breach by Parent.
(d) The Company Fee and related expenses payable pursuant to Section
7.3(b) and the Parent Fee and related expenses payable pursuant to Section
7.3(c), as the case may be, shall be paid within one business day after the
first to occur of any of the events described in Sections 7.3(b)(i), (ii) or
(iii) or 7.3(c); PROVIDED, THAT, in no event shall the Company or Parent be
required to pay such Fee and expenses to the other if, immediately prior to the
termination of this Agreement, the party that was otherwise entitled to such Fee
was in material breach of its obligations under this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
SECTION 8.1 EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS;
KNOWLEDGE, ETC.
(a) Except as otherwise provided in this Section 8.1, the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any other party hereto, any person controlling any such party or any of their
officers or directors, whether prior to or after the execution of this
Agreement. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Section 7.1, as the case may be, except that the agreements set
forth in Article I and Section 5.7 shall survive the Effective Time indefinitely
and those set forth in Section 7.3 shall survive such termination indefinitely.
The Confidentiality Letter shall survive termination of this Agreement as
provided therein.
(b) Any disclosure made with reference to one or more sections of the
Company Disclosure Schedule or the Parent Disclosure Schedule shall be deemed
disclosed only with respect to such section.
SECTION 8.2 NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made if and when delivered personally or by overnight courier to the parties
at the following addresses or sent by electronic transmission, with confirmation
received, to the telecopy numbers specified below (or at such other address or
telecopy number for a party as shall be specified by like notice):
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(a) If to Parent or Merger Sub:
American Medical Response, Inc.
0000 X. Xxxxxx Xxxx, 00xx Xxxxx
Xxxxxx, Xxxxxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: General Counsel
With a copy to:
Xxx X. Xxxxxx, Esq.
Ropes & Xxxx
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(b) If to the Company:
00000 Xxxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: President
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Chairman
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Xxxxxxx, Phleger & Xxxxxxxx LLP
000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
SECTION 8.3 CERTAIN DEFINITIONS. For purposes of this Agreement, the term:
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(a) "affiliates" means a person that directly or indirectly, through one
or more intermediaries, controls, is controlled by, or is under common control
with, the first mentioned person; including, without limitation, any partnership
or joint venture in which the first mentioned person (either alone, or through
or together with any other subsidiary) has, directly or indirectly, an interest
of 10% or more;
(b) "beneficial owner" with respect to any shares of Company Common Stock
means a person who shall be deemed to be the beneficial owner of such shares (i)
which such person or any of its affiliates or associates (as such term is
defined in Rule 12b-2 of the Exchange Act) beneficially owns, directly or
indirectly, (ii) which such person or any of its affiliates or associates has,
directly or indirectly, (A) the right to acquire (whether such right is
exercisable immediately or subject only to the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of conversion
rights, exchange rights, warrants or options, or otherwise, or (B) the right to
vote pursuant to any agreement, arrangement or understanding, or (iii) which are
beneficially owned, directly or indirectly, by any other persons with whom such
person or any of its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
shares;
(c) "business day" means any day other than a day on which banks in the
State of Colorado and the State of Texas are required or authorized to be
closed;
(d) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or cause the direction of the management or
policies of a person, whether through the ownership of stock, as trustee or
executor, by contract or credit arrangement or otherwise;
(e) "generally accepted accounting principles" shall mean United States
generally accepted accounting principles.
(f) "person" means an individual, corporation, partnership, association,
trust, unincorporated organization, other entity or group (as defined in Section
13(d)(3) of the Exchange Act); and
(g) "subsidiary" or "subsidiaries" of the Company, Parent or any other
person means any corporation, partnership, joint venture or other legal entity
of which the Company, the Surviving Corporation, Parent or such other person, as
the case may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, more than 50% of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.
SECTION 8.4 AMENDMENT. This Agreement may be amended by the parties hereto
by action taken by or on behalf of their respective Boards of Directors at any
time prior to the
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Effective Time; PROVIDED, HOWEVER, that, after approval of the Merger by the
stockholders of the Company, no amendment may be made which by law requires
further approval by such stockholders without such further approval. This
Agreement may not be amended except by an instrument in writing signed by the
parties hereto.
SECTION 8.5 WAIVER. At any time prior to the Effective Time, any party
hereto may with respect to any other party hereto (a) extend the time for the
performance of any of the obligations or other acts, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, or (c) waive compliance with any of the agreements or
conditions contained herein. 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.
SECTION 8.6 HEADINGS. 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.
SECTION 8.7 SEVERABILITY. If any term or other provision of this Agreement
is invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party. Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transactions contemplated hereby are fulfilled to the fullest extent possible.
SECTION 8.8 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement and supersedes all prior agreements and undertakings (other than the
Confidentiality Letters), both written and oral, among the parties, or any of
them, with respect to the subject matter hereof.
SECTION 8.9 ASSIGNMENT; GUARANTEE OF MERGER SUB OBLIGATIONS. This
Agreement shall not be assigned by operation of law or otherwise, except that
Parent and Merger Sub may assign all or any of their rights hereunder to any
affiliate thereof provided that no such assignment shall relieve the assigning
party of its obligations hereunder. Parent guarantees the full and punctual
performance by Merger Sub of all the obligations hereunder of Merger Sub or any
such assignees.
SECTION 8.10 PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, including, without limitation, by way of subrogation, other than
Section 5.6 (which is intended to be for the benefit of the Indemnified Parties
and may be enforced by such Indemnified Parties).
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SECTION 8.11 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of any party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude any other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement are cumulative to, and not exclusive of, any rights or
remedies otherwise available; PROVIDED, HOWEVER, that if this Agreement shall be
terminated in accordance with Sections 7.1(d), (e) or (f) by Parent, then the
Company Fee and related expenses provided for in Section 7.3 shall be deemed
liquidated damages to Parent for the loss of its bargain hereunder, and shall be
Parent's sole and exclusive remedy in the event of termination of this Agreement
by the Parent pursuant to Sections 7.1(d), (e) or (f); and PROVIDED FURTHER,
that if this Agreement is terminated in accordance with Section 7.1(f) by the
Company, then the Parent Fee and related expenses provided for in Section 7.3
shall be deemed liquidated damages to the Company for the loss of its bargain
hereunder, and shall be the Company's sole and exclusive remedy in the event of
termination of this Agreement by the Company pursuant to Section 7.1(f).
SECTION 8.12 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware
applicable to contracts executed and fully performed within the State of
Delaware.
SECTION 8.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
[This space intentionally left blank.]
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IN WITNESS WHEREOF, Parent, Merger Sub and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
AMERICAN MEDICAL RESPONSE, INC.
By: /s/ XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: President
SHI ACQUISITION CORP.
By: /s/ XXXX X. XXXXXXX
Name: Xxxx X. Xxxxxxx
Title: President
STAT HEALTHCARE, INC.
By: /s/ XXXXXXX X. XXXXXXXXX
Name: Xxxxxxx X. Xxxxxxxxx
Title: Chief Executive Officer
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