EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION AND MERGER
AMONG
MEDICAL RESOURCES MANAGEMENT, INC.,
EMERGENT GROUP INC.
AND
MRM ACQUISITION INC.
DATED AS OF JANUARY 23, 2001
EXHIBIT 2.1
TABLE OF CONTENTS
PAGE
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Article I. THE MERGER; CLOSING; EFFECTIVE TIME .................................. 1
1.1 THE MERGER ........................................................... 1
1.2 CLOSING .............................................................. 1
1.3 EFFECTIVE TIME ....................................................... 2
Article II. ARTICLES OF INCORPORATION AND BY-LAWS OF THE SURVIVING CORPORATION ... 2
2.1 THE ARTICLES OF INCORPORATION ........................................ 2
2.2 THE BY-LAWS .......................................................... 2
Article III. DIRECTORS OF THE SURVIVING CORPORATION ............................... 2
3.1 DIRECTORS ............................................................ 2
Article IV. EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES ...... 2
4.1 EFFECT ON CAPITAL STOCK .............................................. 2
(a) MERGER CONSIDERATION ................................................. 2
(b) CANCELLATION OF EXCLUDED SHARES ...................................... 3
(c) MERGER SUBSIDIARY .................................................... 3
4.2 EXCHANGE OF CERTIFICATES FOR SHARES .................................. 4
(a) EXCHANGE AGENT ....................................................... 4
(b) EXCHANGE PROCEDURES .................................................. 4
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(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES; VOTING ............. 4
(d) TRANSFERS ............................................................ 5
(e) TERMINATION OF EXCHANGE FUND ......................................... 5
(f) LOST, STOLEN OR DESTROYED CERTIFICATES ............................... 5
(g) AFFILIATES ........................................................... 5
4.3 DISSENTERS' RIGHTS ................................................... 6
4.4 ADJUSTMENTS TO PREVENT DILUTION ...................................... 6
Article V. REPRESENTATIONS AND WARRANTIES ....................................... 6
5.1 REPRESENTATIONS AND WARRANTIES OF THE COMPANY ........................ 6
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION ........................ 6
(b) CAPITAL STRUCTURE .................................................... 7
(c) CORPORATE AUTHORITY; APPROVAL......................................... 8
(d) GOVERNMENTAL FILINGS; CONSENTS AND APPROVALS; NO VIOLATIONS .......... 8
(e) COMPANY REPORTS; FINANCIAL STATEMENTS ................................ 9
(f) ABSENCE OF CERTAIN CHANGES ........................................... 10
(g) LITIGATION AND LIABILITIES ........................................... 10
(h) EMPLOYEE BENEFITS .................................................... 10
(i) COMPLIANCE WITH LAWS; PERMITS ........................................ 12
(j) TAKEOVER STATUTES .................................................... 13
(k) ENVIRONMENTAL MATTERS ................................................ 13
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(l) ACCOUNTING AND TAX MATTERS ........................................... 14
(m) TAXES ................................................................ 14
(n) LABOR MATTERS ........................................................ 15
(o) INSURANCE ............................................................ 15
(p) INTELLECTUAL PROPERTY ................................................ 15
(q) MATERIAL CONTRACTS ................................................... 17
(r) ASSETS AND PROPERTIES................................................. 17
(s) BROKERS AND FINDERS .................................................. 17
(t) OWNERSHIP OF PARENT COMMON STOCK ..................................... 17
(u) DISCLOSURE............................................................ 17
5.2 REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY ....... 18
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION ........................ 18
(b) PARENT CAPITAL STRUCTURE ............................................. 18
(c) CAPITALIZATION OF MERGER SUBSIDIARY................................... 19
(d) CORPORATE AUTHORITY; APPROVAL......................................... 19
(e) GOVERNMENTAL FILINGS; NO VIOLATIONS .................................. 19
(f) PARENT REPORTS; FINANCIAL STATEMENTS ................................. 20
(g) ABSENCE OF CERTAIN CHANGES ........................................... 21
(h) LITIGATION AND LIABILITIES ........................................... 21
(i) COMPLIANCE WITH LAWS; PERMITS ........................................ 21
(j) EMPLOYEE BENEFIT PLANS................................................ 22
(k) LABOR MATTERS......................................................... 22
(l) ENVIRONMENTAL MATTERS................................................. 22
(m) ACCOUNTING AND TAX MATTERS ........................................... 22
(n) BROKERS AND FINDERS .................................................. 23
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(o) OWNERSHIP OF COMPANY COMMON STOCK .................................... 23
(p) DISCLOSURE............................................................ 23
Article VI. COVENANTS ............................................................ 23
6.1 INTERIM OPERATIONS ................................................... 23
6.2 ACQUISITION PROPOSALS ................................................ 25
6.3 INFORMATION SUPPLIED ................................................. 26
6.4 STOCKHOLDERS MEETINGS ................................................ 26
6.5 FILINGS; OTHER ACTIONS; NOTIFICATION ................................. 27
6.6 TAXATION AND ACCOUNTING .............................................. 28
6.7 ACCESS ............................................................... 28
6.8 AFFILIATES; LOCKUP LETTERS ........................................... 28
6.9 STOCK EXCHANGE LISTING ............................................... 29
6.10. PUBLICITY ............................................................ 29
6.11. STOCK OPTIONS ........................................................ 29
6.12 EMPLOYEE BENEFITS .................................................... 30
6.13. EXPENSES ............................................................. 30
6.14. TAKEOVER STATUTE ..................................................... 30
Article VII. CONDITIONS ........................................................... 31
7.1 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER ........... 31
(a) STOCKHOLDER APPROVAL ................................................. 31
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(b) LISTING .............................................................. 31
(c) REGULATORY CONSENTS .................................................. 31
(d) LITIGATION ........................................................... 31
(e) S-4 .................................................................. 31
(f) BLUE SKY APPROVALS ................................................... 31
7.2 CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUBSIDIARY ............ 31
(a) REPRESENTATIONS AND WARRANTIES ....................................... 31
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY ............................ 32
(c) CONSENTS ............................................................. 32
(d) AFFILIATES LETTERS ................................................... 32
(e) LOCKUP LETTERS ....................................................... 32
7.3 CONDITIONS TO OBLIGATION OF THE COMPANY .............................. 32
(a) REPRESENTATIONS AND WARRANTIES ....................................... 32
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND MERGER SUBSIDIARY ........... 33
Article VIII. TERMINATION .......................................................... 33
8.1 TERMINATION BY MUTUAL CONSENT ........................................ 33
8.2 TERMINATION BY EITHER PARENT OR THE COMPANY .......................... 33
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8.3 TERMINATION BY THE COMPANY ........................................... 33
8.4 TERMINATION BY PARENT ................................................ 34
8.5 EFFECT OF TERMINATION AND ABANDONMENT ................................ 34
Article IX. MISCELLANEOUS AND GENERAL ............................................ 35
9.1 SURVIVAL ............................................................. 36
9.2 MODIFICATION OR AMENDMENT ............................................ 36
9.3 WAIVER OF CONDITIONS ................................................. 36
9.4 COUNTERPARTS ......................................................... 36
9.5 GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL ........................ 36
9.6 NOTICES .............................................................. 37
9.7 ENTIRE AGREEMENT; NO OTHER REPRESENTATIONS ........................... 38
9.8 NO THIRD PARTY BENEFICIARIES ......................................... 38
9.9 OBLIGATIONS OF PARENT AND OF THE COMPANY ............................. 38
9.10. SEVERABILITY ......................................................... 38
9.11. INTERPRETATION ....................................................... 38
9.12. ASSIGNMENT ........................................................... 38
SIGNATURES............................................................................ 39
EXHIBITS
vi
EXHIBIT 2.1
DEFINITIONS CROSS-REFERENCE SHEET
TERM SECTION
---- -------
Acquisition Proposal .................................. 6.2
affiliates ............................................ 6.8(a)
Affiliates ............................................ 6.1(a)(viii)
Affiliates Letter ..................................... 6.8(a)
Agreement ............................................. Preamble
Average Price ......................................... 4.2(e)
Bankruptcy and Equity Exception ....................... 5.1(c)(i)
By-Laws ............................................... 2.2
Certificate ........................................... 4.1(a)
Charter ............................................... 2.1
Closing ............................................... 1.2
Closing Date .......................................... 1.2
Code .................................................. Recitals
Company ............................................... Preamble
Company Disclosure Letter ............................. 5.1
Company Material Adverse Effect ....................... 5.1(a)(iii)
Company Option ........................................ 5.1(b)
Company Reports ....................................... 5.1(e)(i)
Company Requisite Vote ................................ 5.1(c)(i)
Company Stock Plans ................................... 5.1(b)
Compensation and Benefit Plans ........................ 5.1(h)(i)
Constituent Corporations .............................. Preamble
DEFINITIONS CROSS-REFERENCE SHEET
TERM SECTION
---- -------
Contracts ............................................. 5.1(d)(ii)
Costs ................................................. 6.13(a)
Effective Time ........................................ 1.3
Environmental Law ..................................... 5.1(k)
ERISA ................................................. 5.1(h)(ii)
ERISA Affiliate ....................................... 5.1(h)(iii)
Exchange Act .......................................... 5.1(d)(i)
Exchange Agent ........................................ 4.2(a)
Exchange Fund ......................................... 4.2(a)
Excluded Shares ....................................... 4.1(a)
Expenses .............................................. 8.5(b)
GAAP .................................................. 5.1(e)(i)
Governmental Consents ................................. 7.1(c)
Governmental Entity ................................... 5.1(d)(i)
Hazardous Substance ................................... 5.1(k)
Health Benefit Law .................................... 5.1(i)(ii)
Indemnified Parties ................................... 6.13(a)
Intellectual Property ................................. 5.1(p)
IRS ................................................... 5.1(h)(ii)
knowledge of the executive officer .................... 5.1(f)
Law ................................................... 5.1(d)(ii)
Liens ................................................. 5.1(b)
Material Company Contract ............................. 5.1(q)
Medicaid .............................................. 5.1(i)(ii)
DEFINITIONS CROSS-REFERENCE SHEET
TERM SECTION
---- -------
Medicare .............................................. 5.1(i)(ii)
Merger ................................................ Recitals
Merger Consideration .................................. 4.1(a)
Merger Subsidiary ..................................... Preamble
Nevada Certificate of Merger .......................... 1.3
NGCL .................................................. 1.1
Order ................................................. 7.1(d)
Parent ................................................ Preamble
Parent Common Stock ................................... 4.1(a)
Parent Companies ...................................... 4.1(a)
Parent Disclosure Letter .............................. 5.2
Parent Material Adverse Effect ........................ 5.2(b)
Parent Preferred Shares ............................... 5.2(c)
Parent Reports ........................................ 5.2(f)(i)
Parent Stock Plans .................................... 5.2(c)
Parent Voting Debt .................................... 5.2(c)
Pension Plan .......................................... 5.1(h)(ii)
Person ................................................ 5.1(d)(i)
Preferred Shares ...................................... 5.1(b)
Prospectus/ Proxy Statement ........................... 6.3
Representatives ....................................... 6.2
S-4 Registration Statement ............................ 6.3
SEC ................................................... 5.1(e)(i)
Securities Act ........................................ 5.1(d)(i)
DEFINITIONS CROSS-REFERENCE SHEET
TERM SECTION
---- -------
Share ................................................. 4.1(a)
Shares ................................................ 4.1(a)
Stockholders Meeting .................................. 6.4
Subsidiary ............................................ 5.1(a)(iii)
Superior Proposal ..................................... 6.2
Surviving Corporation ................................. 1.1
Takeover Statute ...................................... 5.1(j)
Tax ................................................... 5.1(m)
Tax Return ............................................ 5.1(m)
Taxable ............................................... 5.1(m)
Taxes ................................................. 5.1(m)
Termination Date ...................................... 8.2
Termination Fee ....................................... 8.5(b)
Third Party Confidentiality Agreement ................. 6.2
EXHIBIT 2.1
AGREEMENT AND PLAN OF
REORGANIZATION AND MERGER
(hereinafter called this "AGREEMENT"), dated as
of January 23, 2001, among Medical Resources
Management, Inc., a Nevada corporation (the
"COMPANY"), Emergent Group Inc., a Nevada
corporation ("PARENT"), and MRM Acquisition
Inc., a Delaware corporation and a wholly
owned subsidiary of Parent ("MERGER
SUBSIDIARY," and together with the Company,
the "CONSTITUENT CORPORATIONS").
------------------------------
The respective Boards of Directors of each of Parent, Merger Subsidiary
and the Company have determined that the merger of Merger Subsidiary with and
into the Company (the "MERGER") upon the terms and subject to the conditions set
forth in this Agreement is advisable and in the best interests of their
corporations and have approved the Merger; and
It is intended that, for federal income tax purposes, the Merger shall
qualify as a reorganization under the provisions of Section 368(a) of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder (the "Code"); and
Concurrently with the execution and delivery of this Agreement and as a
condition and inducement to Parent's willingness to enter into this Agreement,
Parent and certain stockholders of the Company have executed and delivered
Voting Agreements, dated as of the date hereof.
NOW, THEREFORE, in consideration of the premises, and of the
representations, warranties, covenants and agreements contained herein, the
parties hereto agree as follows:
ARTICLE I.
THE MERGER; CLOSING; EFFECTIVE TIME
1.1. THE MERGER. Upon the terms and subject to the conditions set
forth in this Agreement, at the Effective Time (as defined in Section 1.3)
Merger Subsidiary shall be merged with and into the Company and the separate
corporate existence of Merger Subsidiary shall thereupon cease. The Company,
Medical Resources Management, Inc., a Nevada corporation, shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "SURVIVING
CORPORATION"), and the separate corporate existence of the Company with all its
rights, privileges, immunities, powers and franchises shall continue unaffected
by the Merger, except as set forth in Article II. The Merger shall have the
effects specified in the applicable provisions of the General Corporation Law of
the State of Nevada, Chapter 92A of the Nevada Revised Statutes, the Mergers and
Share Exchange Law, and any successor statutes thereto (the "NGCL").
1.2. CLOSING. The closing of the Merger (the "Closing") shall take
place (i) at the offices
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of Xxxxxxxxxxxx Xxxx & Xxxxxxxxx, 1221 Avenue of the Americas, 00xx xxxxx, Xxx
Xxxx, Xxx Xxxx at 10:00 a.m. New York City time on the first business day on
which the last to be fulfilled or waived of the conditions set forth in Article
VII (other than those conditions that by their nature are to be satisfied at the
Closing, but subject to the fulfillment or waiver of those conditions) shall be
satisfied or waived in accordance with this Agreement or (ii) at such other
place and time and/or on such other date as the Company and Parent may agree in
writing (the "CLOSING DATE").
1.3. EFFECTIVE TIME. As soon as practicable following the Closing, the
Company and Parent will cause articles of merger (the "ARTICLES OF MERGER") to
be executed, acknowledged and filed with the Secretary of State of the State of
Nevada in accordance with the applicable provisions of the NGCL. The Merger
shall become effective at the time when the Articles of Merger has been duly
filed with the Secretary of State of Nevada or at such later time as agreed by
the parties and established under the Articles of Merger (the "EFFECTIVE TIME").
ARTICLE II.
ARTICLES OF INCORPORATION AND
BY-LAWS OF THE SURVIVING CORPORATION
2.1. THE ARTICLES OF INCORPORATION. The articles of incorporation
of the Company as in effect immediately prior to the Effective Time shall be
the articles of incorporation of the Surviving Corporation (the "Charter"),
until duly amended as provided therein or by applicable law.
2.2. THE BY-LAWS. The by-laws of the Company in effect at the
Effective Time shall be the by-laws of the Surviving Corporation (the
"By-Laws"), until thereafter amended as provided therein or by applicable law.
ARTICLE III.
DIRECTORS OF THE SURVIVING CORPORATION
3.1. DIRECTORS. The directors of the Company at the Effective Time
shall, from and after the Effective Time, be the directors of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in accordance
with the Charter and the By-Laws.
ARTICLE IV.
EFFECT OF THE MERGER ON CAPITAL STOCK; EXCHANGE OF CERTIFICATES
4.1. EFFECT ON CAPITAL STOCK. At the Effective Time, as a result of
the Merger and without any action on the part of the holder of any capital stock
of the Company:
(a) MERGER CONSIDERATION. Each share of the Common Stock, par
value $0.001 per share, of the Company (a "SHARE" or, collectively, the
"SHARES") issued and
2
outstanding immediately prior to the Effective Time (other than Dissenting
Shares, Shares owned by Parent, Merger Subsidiary or any other direct or
indirect subsidiary of Parent (collectively, the "PARENT COMPANIES") and Shares
that are owned by the Company or any direct or indirect subsidiary of the
Company and in each case not held on behalf of third parties (collectively,
"EXCLUDED SHARES")) shall be converted into, and become exchangeable for, the
Merger Consideration (as defined below). Notwithstanding the immediately
preceding sentence, no fractional shares of Parent Common Stock (as defined
below) will be issuable pursuant to this Section 4.1(a); rather, in the event
that the aggregate Merger Consideration to which any holder of Shares is
otherwise entitled pursuant to this Section 4.1(a) and Section 4.2 includes a
fractional share of Parent Common Stock, the number of shares of Parent Common
Stock comprising the Merger Consideration to which such holder of Shares is
entitled shall be rounded up to the nearest whole number. At the Effective Time,
all Shares shall no longer be outstanding and shall be canceled and retired and
shall cease to exist, and each certificate (a "CERTIFICATE") formerly
representing any of such Shares (other than Excluded Shares) shall thereafter
represent only the right to receive the Merger Consideration and the right, if
any, to receive any distribution or dividend pursuant to Section 4.2(c).
As used herein, the term "MERGER CONSIDERATION shall mean that
number of shares of Common Stock, par value $0.001 per share, of Parent ("PARENT
COMMON STOCK") determined as follows:
(i) in the event that the Parent Average Stock Price (as defined
below) is equal to or greater than $0.27, the Merger
Consideration shall be 0.37 shares of Parent Common Stock;
and
(ii) in the event that the Parent Average Stock Price is less
than $0.27, the Merger Consideration shall be equal to that
number of shares of Parent Common Stock which when
multiplied by the Parent Average Stock Price is equal to
0.10; provided, however, that in no event shall the Merger
Consideration exceed 0.60 shares of Parent Common Stock.
As used herein, the term "PARENT AVERAGE STOCK PRICE" shall mean
the average closing price of a share of Parent Common Stock as reported on the
Nasdaq OTC Bulletin Board (or, in the event that the Parent Common Stock is not
quoted on the OTC Bulletin Board, as quoted in the "pink sheets") for the ten
(10) trading days ending on the trading day immediately prior to the Closing
Date; provided, however, that no trades of Parent Common Stock need have been
made on a trading day in order for such trading day to constitute a "trading
day" for purposes of determining the Parent Average Stock Price.
(b) CANCELLATION OF EXCLUDED SHARES. Each Excluded Share shall,
by virtue of the Merger and without any action on the part of the holder
thereof, cease to be outstanding, shall be canceled and retired without payment
of any consideration therefor and shall cease to exist.
(c) MERGER SUBSIDIARY. At the Effective Time, each share of
Common Stock, par value $0.001 per share, of Merger Subsidiary issued and
outstanding immediately prior to the Effective Time shall be converted into one
share of common stock of the Surviving Corporation.
3
4.2. EXCHANGE OF CERTIFICATES FOR SHARES.
(a) EXCHANGE AGENT. Promptly after the Effective Time, Parent
shall deposit, or shall cause to be deposited, with American Stock Transfer &
Trust Company or such other exchange agent selected by Parent and reasonably
acceptable to the Company (the "EXCHANGE AGENT"), for the benefit of the
holders of Shares, certificates representing the shares of Parent Common
Stock and, after the Effective Time, if applicable, any cash, dividends or
other distributions with respect to the Parent Common Stock to be issued or
paid pursuant to the last sentence of Section 4.1(a) in exchange for Shares
outstanding immediately prior to the Effective Time upon due surrender of the
Certificates (or affidavits of loss in lieu thereof) pursuant to the
provisions of this Article IV (such certificates for shares of Parent Common
Stock, together with the amount of any dividends or other distributions
payable with respect thereto, being hereinafter referred to as the "EXCHANGE
FUND").
(b) EXCHANGE PROCEDURES. Promptly after the Effective Time, the
Surviving Corporation shall cause the Exchange Agent to mail to each holder of
record of Shares (other than holders of Excluded Shares) (i) a letter of
transmittal specifying that delivery shall be effected, and risk of loss and
title to the Certificates shall pass, only upon delivery of the Certificates (or
affidavits of loss in lieu thereof) to the Exchange Agent, such letter of
transmittal to be in such form and have such other provisions as Parent and the
Exchange Agent may reasonably agree, and (ii) instructions for use in effecting
the surrender of the Certificates in exchange for (A) certificates representing
shares of Parent Common Stock and (B) any unpaid dividends and other
distributions. Subject to Section 4.2(g), upon surrender of a Certificate for
cancellation to the Exchange Agent together with such letter of transmittal,
duly executed, the holder of such Certificate shall be entitled to receive in
exchange therefor (x) a certificate representing that number of whole shares of
Parent Common Stock that such holder is entitled to receive pursuant to this
Article IV, (y) a check in the amount (after giving effect to any required tax
withholdings) of any unpaid non-stock dividends and any other dividends or other
distributions that such holder has the right to receive pursuant to the
provisions of this Article IV, and the Certificate so surrendered shall
forthwith be canceled. No interest will be paid or accrued on any amount payable
upon due surrender of the Certificates. In the event of a transfer of ownership
of Shares that is not registered in the transfer records of the Company, a
certificate representing the proper number of shares of Parent Common Stock,
together with a check for any cash to be paid upon due surrender of the
Certificate and any other dividends or distributions in respect thereof, may be
issued and/or paid to such a transferee if the Certificate formerly representing
such Shares is presented to the Exchange Agent, accompanied by all documents
required to evidence and effect such transfer and to evidence that any
applicable stock transfer taxes have been paid. If any certificate for shares of
Parent Common Stock is to be issued in a name other than that in which the
Certificate surrendered in exchange therefor is registered, it shall be a
condition of such exchange that the Person (as defined below) requesting such
exchange shall pay any transfer or other taxes required by reason of the
issuance of certificates for shares of Parent Common Stock in a name other than
that of the registered holder of the Certificate surrendered, or shall establish
to the satisfaction of Parent or the Exchange Agent that such tax has been paid
or is not applicable.
(c) DISTRIBUTIONS WITH RESPECT TO UNEXCHANGED SHARES. All shares
of Parent Common Stock to be issued pursuant to the Merger shall be deemed
issued and
4
outstanding as of the Effective Time and whenever a dividend or other
distribution is declared by Parent in respect of the Parent Common Stock, the
record date for which is at or after the Effective Time, that declaration shall
include dividends or other distributions in respect of all shares issuable
pursuant to this Agreement. No dividends or other distributions in respect of
the Parent Common Stock shall be paid to any holder of any unsurrendered
Certificate until such Certificate is surrendered for exchange in accordance
with this Article IV. Subject to the effect of applicable Laws (as defined in
Section 5.1(d)), following surrender of any such Certificate, there shall be
issued and/or paid to the holder of the certificates representing whole shares
of Parent Common Stock issued in exchange therefor, without interest, (A) at the
time of such surrender, the dividends or other distributions with a record date
after the Effective Time theretofore payable with respect to such whole shares
of Parent Common Stock and not paid and (B) at the appropriate payment date, the
dividends or other distributions payable with respect to such whole shares of
Parent Common Stock with a record date after the Effective Time but with a
payment date subsequent to surrender.
(d) TRANSFERS. After the Effective Time, there shall be no
transfers on the stock transfer books of the Company of the Shares that were
outstanding immediately prior to the Effective Time.
(e) TERMINATION OF EXCHANGE FUND. Any portion of the Exchange
Fund (including the proceeds of any investments thereof and any Parent Common
Stock) that remains unclaimed by the stockholders of the Company for one year
after the Effective Time shall be paid or returned to Parent. Any stockholders
of the Company who have not theretofore complied with this Article IV shall
thereafter look only to Parent for payment of their shares of Parent Common
Stock and any cash, dividends and other distributions in respect thereof payable
and/or issuable pursuant to Section 4.1 and Section 4.2(c) upon due surrender of
their Certificates (or affidavits of loss in lieu thereof), in each case,
without any interest thereon. Notwithstanding the foregoing, none of Parent, the
Surviving Corporation, the Exchange Agent or any other Person (as defined in
Section 5.1(d)) shall be liable to any former holder of Shares for any amount
properly delivered to a public official pursuant to applicable abandoned
property, escheat or similar laws.
(f) LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificate shall have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the Person claiming such Certificate to be lost,
stolen or destroyed and, if required by Parent, the posting by such Person of a
bond in customary amount as indemnity against any claim that may be made against
it with respect to such Certificate, the Exchange Agent will issue in exchange
for such lost, stolen or destroyed Certificate the shares of Parent Common Stock
and any cash payable and any unpaid dividends or other distributions in respect
thereof pursuant to Section 4.2(c) upon due surrender of and deliverable in
respect of the Shares represented by such Certificate pursuant to this Agreement
(g) AFFILIATES. Notwithstanding anything herein to the contrary,
Certificates surrendered for exchange by any "AFFILIATE" (as defined in Section
6.8(a)) of the Company shall not be exchanged until Parent has received a
written agreement from such Person as provided in Section 6.8 hereof.
5
4.3. DISSENTERS' RIGHTS. (a) Notwithstanding any other term or
provision of this Agreement to the contrary, Shares that are outstanding
immediately prior to the Effective Time which are held by shareholders who (i)
have not consented to the Merger, (ii) have demanded appraisal for such Shares
in accordance with the provisions of Section 92A.300 to 92A.500, inclusive, of
the NGCL (if such provisions provide for appraisal rights for such Shares) and
(iii) have not failed to perfect or effectively withdrawn such demand or
otherwise lost their appraisal rights (the "Dissenting Shares"), shall not be
converted into or represent the right to receive the Merger Consideration
pursuant to Section 4.1(a) hereof. Such shareholders shall be entitled to have
such Shares held by them appraised in accordance with the provisions of Section
92A.300 to 92A.500, inclusive, of the NGCL, except that all Dissenting Shares
held by shareholders who have failed to perfect or have effectively withdrawn or
otherwise lost their right to appraisal of such Shares under such provisions of
the NGCL shall thereupon be deemed to have been converted into, and to have
become exchangeable for, as of the Effective Time, the right to receive the
Merger Consideration issuable in exchange therefor pursuant to Section 4.1(a)
hereof, upon surrender in accordance with Section 4.2(b) hereof of the
Certificate(s) that formerly represented such Shares.
(b) The Company shall give Parent (i) prompt notice of any
demands for appraisal received by the Company, withdrawals of demands for
appraisal, and any other instruments served pursuant to the NGCL and received by
the Company, and (ii) the opportunity to participate in all negotiations and
proceedings with respect to demands for appraisal under the NGCL. The Company
shall not, except with the prior written consent of Parent, make any payment
with respect to any demands for appraisal, or offer to settle, or settle, any
such demand for appraisal rights.
4.4. ADJUSTMENTS TO PREVENT DILUTION. In the event that the Company
changes the number of Shares or securities convertible or exchangeable into or
exercisable for Shares, or Parent changes the number of shares of Parent Common
Stock or securities convertible or exchangeable into or exercisable for shares
of Parent Common Stock, issued and outstanding prior to the Effective Time as a
result of a reclassification, stock split (including a reverse split), stock
dividend or distribution, recapitalization, or other similar transaction, the
Merger Consideration shall be appropriately adjusted.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Except as set
forth in the corresponding sections or subsections (or by appropriate
cross-reference) of the disclosure letter delivered to Parent by the Company
prior to entering into this Agreement (the "COMPANY DISCLOSURE LETTER"), the
Company hereby represents and warrants to Parent and Merger Subsidiary that:
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION.
(i) The Company is a corporation duly organized, validly
existing and in good
6
standing under the laws of the State of Nevada, and each of its Subsidiaries (as
defined below) is a corporation or other entity duly organized, validly existing
and in good standing under the laws of its respective jurisdiction of
organization, and the Company and each of its Subsidiaries has all requisite
corporate or similar power and authority to own and operate its properties and
assets and to carry on its business as presently conducted and is qualified to
do business and is in good standing as a foreign corporation in each
jurisdiction where the ownership or operation of its properties or conduct of
its business requires such qualification, except where the failure to have such
corporate or similar power and authority or to be so qualified or in good
standing, when taken together with all other such failures, is not reasonably
likely to have a Company Material Adverse Effect (as defined below). The Company
has made available to Parent a complete and correct copy of the Company's and
each of its Subsidiaries' articles of incorporation and by-laws or comparable
governing instruments, each as amended to date. The Company's and its
Subsidiaries' articles of incorporation and by-laws or comparable governing
instruments so delivered are in full force and effect.
(ii) Section 5.1(a) of the Company Disclosure Letter sets
forth each Subsidiary of the Company and its jurisdiction of incorporation.
Except for the Company's or any of its Subsidiaries' interest in any of the
Company's Subsidiaries, neither the Company nor its Subsidiaries owns directly
or indirectly any interest or investment (whether equity or debt) in any Person.
(iii) As used in this Agreement, the term (A) "SUBSIDIARY"
means, with respect to the Company, Parent or Merger Subsidiary, as the case may
be, any entity, whether incorporated or unincorporated, of which such party is
the general partner or managing member or of which at least a majority of the
securities or ownership interests having by their terms ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions is directly or indirectly owned or controlled by such party or by one
or more of its respective Subsidiaries, or by such party and any one or more of
its respective Subsidiaries, and (B) "COMPANY MATERIAL ADVERSE EFFECT" means a
material adverse effect on the financial condition, properties, business or
results of operations of the Company and its Subsidiaries taken as a whole.
(b) CAPITAL STRUCTURE. The authorized capital stock of the
Company consists of 100,000,000 Shares, of which 14,292,155 Shares were
outstanding as of the close of business on December 31, 2000, and 5,000,000
shares of Preferred Stock, par value $1.00 per share (the "PREFERRED SHARES"),
of which none were outstanding as of the close of business on December 31,
2000. All of the outstanding Shares have been duly authorized and are validly
issued, fully paid and nonassessable. The Company has no Shares or Preferred
Shares reserved for issuance, except that, as of December 31, 2000, there were
2,177,228 Shares reserved for issuance pursuant to the Company's 1986 and 2000
Stock Incentive Plans (collectively, the "COMPANY STOCK PLANS"). Section 5.1(b)
of the Company Disclosure Letter contains a correct and complete list of each
outstanding option to purchase or acquire Shares under each of the Company Stock
Plans (each a "COMPANY OPTION") as of the close of business on December 31,
2000, including the holder, date of grant, exercise price and number of Shares
subject thereto. Each of the outstanding shares of capital stock or other
securities of each of the Company's Subsidiaries is duly authorized, validly
issued, fully paid and nonassessable and owned by the Company or a direct or
indirect wholly owned Subsidiary of the
7
Company, free and clear of any lien, pledge, security interest, claim,
third-party right or other encumbrance ("LIENS") except for immaterial Liens
imposed under local Laws that do not relate to obligations that are past due.
Except as set forth above, as of the date hereof there are no preemptive or
other outstanding rights, options, warrants, conversion rights, stock
appreciation rights, redemption rights, repurchase rights, agreements,
arrangements or commitments to issue or sell any shares of capital stock or
other securities of the Company or any of its Subsidiaries or any securities or
obligations convertible or exchangeable into or exercisable for, or giving any
Person a right to subscribe for or acquire, any securities of the Company or any
of its Subsidiaries, and no securities or obligations evidencing such rights are
authorized, issued or outstanding. The Company does not have outstanding any
bonds, debentures, notes or other obligations the holders of which have the
right to vote (or which are convertible into or are exercisable for securities
having the right to vote) with the stockholders of the Company on any matter.
(c) CORPORATE AUTHORITY; APPROVAL.
(i) The Company has all requisite corporate power and
authority and has taken all corporate action necessary in order to execute,
deliver and perform its obligations under this Agreement and to consummate,
subject only to approval of this Agreement by the holders of at least a majority
of the outstanding Shares (the "COMPANY REQUISITE VOTE"), the Merger and the
other transactions contemplated hereby. This Agreement is a valid and binding
agreement of the Company enforceable against the Company in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles (the "BANKRUPTCY AND EQUITY
EXCEPTION").
(ii) The Board of Directors of the Company has unanimously
approved this Agreement and the Merger and the other transactions contemplated
hereby.
(d) GOVERNMENTAL FILINGS; CONSENTS AND APPROVALS; NO VIOLATIONS.
(i) Other than the filings, notices, consents,
registrations, approvals, permits and authorizations (A) pursuant to Section
1.3, (B) under the the Securities Exchange of 1934, as amended (the "EXCHANGE
ACT") and the Securities Act of 1933, as amended (the "SECURITIES ACT"), (C)
required under any Health Benefit Law (as defined in Section 5.1(i)) or (D) to
comply with state securities or "blue-sky" laws, no notices, reports or other
filings are required to be made by the Company or any of its Subsidiaries with,
nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by the Company or any of its Subsidiaries from, any
governmental or regulatory authority, agency, commission, body or other
governmental or regulatory entity ("GOVERNMENTAL ENTITY") or any other
individual, corporation (including not-for-profit), general or limited
partnership, limited liability company, joint venture, estate, trust,
association, organization, or other entity of any kind or nature ("PERSON"), in
connection with the execution and delivery of this Agreement by the Company and
the consummation by the Company of the Merger and the other transactions
contemplated hereby, except those the failure to make or obtain are not,
individually or in the aggregate, reasonably likely to have a Company Material
Adverse Effect or prevent, materially
8
delay or materially impair the ability of the Company to consummate the
transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this
Agreement by the Company do not, and the consummation by the Company of the
Merger and the other transactions contemplated hereby will not, constitute or
result in (A) a breach or violation of, or a default under, the articles of
incorporation or by-laws or comparable governing instruments of the Company or
any of its Subsidiaries, (B) a breach or violation of, or a default under, or
the acceleration of any obligations under, or the termination of, or the loss of
a material benefit under, or the creation of a Lien on the assets of the Company
or any of its Subsidiaries (with or without notice, lapse of time or both)
pursuant to, any agreement, lease, contract, note, mortgage, indenture,
arrangement, license or other obligation ("CONTRACTS") binding upon the Company
or any of its Subsidiaries or any of their respective assets, or (assuming, as
to consummation, that the filings and notices are made, and approvals are
obtained, as referred to in Section 5.1(d)(i)) any applicable federal, state,
local or foreign law, statute, ordinance, rule, regulation, judgment, order,
injunction, decree, arbitration award, agency requirement, license or permit of,
or agreement or written understanding with, any Governmental Entity ("LAW") to
which the Company or any of its Subsidiaries or any of their respective assets
is subject or (C) any change in the rights or obligations of any party under any
of the Contracts, except, in the case of clause (B) or (C) above, for any
breach, violation, default, acceleration, termination, creation or change that,
individually or in the aggregate, is not reasonably likely to have a Company
Material Adverse Effect or prevent, materially delay or materially impair the
ability of the Company to consummate the transactions contemplated by this
Agreement.
(e) COMPANY REPORTS; FINANCIAL STATEMENTS. The Company has made
available to Parent each registration statement, report, proxy statement or
information statement prepared by it since October 31, 1998, including (i) the
Company's Annual Reports on Form 10-K for the years ended October 31, 1998 and
October 31, 1999 and (ii) the Company's Quarterly Report on Form 10-Q for the
period ended July 31, 2000, each in the form (including exhibits, annexes and
any amendments thereto) filed with the Securities and Exchange Commission (the
"SEC") (collectively, including any such reports filed subsequent to the date
hereof, the "COMPANY REPORTS"). As of their respective dates, the Company
Reports did not, and any Company Reports filed with the SEC subsequent to the
date hereof will not, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances in which they were made,
not misleading. Each of the consolidated balance sheets included in or
incorporated by reference into the Company Reports (including the related notes
and schedules) fairly presents in all material respects, or, in the case of
Company Reports filed with the SEC subsequent to the date hereof, will fairly
present in all material respects, the consolidated financial position of the
Company and its Subsidiaries as of its date and each of the consolidated
statements of income and of changes in financial position included in or
incorporated by reference into the Company Reports (including any related notes
and schedules) fairly presents in all material respects, or, in the case of
Company Reports filed with the SEC subsequent to the date hereof, will fairly
present in all material respects, the results of operations, retained earnings
and changes in financial position, as the case may be, of the Company and its
Subsidiaries on a consolidated basis for the periods set forth therein (subject,
in the case of unaudited statements, to notes and normal year-end audit
adjustments that will not be material in amount or effect), in each case in
accordance
9
with generally accepted accounting principles ("GAAP") consistently applied
during the periods involved, except as may be noted therein.
(f) ABSENCE OF CERTAIN CHANGES. Except as disclosed in the
Company Reports filed prior to the date hereof, since October 31, 1999 the
Company and each of its Subsidiaries have conducted their respective businesses
only in, and have not engaged in any material transaction other than according
to, the ordinary and usual course of such businesses, and there has not been (i)
any change in the financial condition, properties, business or results of
operations of the Company and its Subsidiaries, or any development or
combination of developments of which the executive officers of the Company have
knowledge, that, individually or in the aggregate, has had or is reasonably
likely to have a Company Material Adverse Effect; (ii) any material damage,
destruction or other casualty loss with respect to any material asset or
property owned, leased or otherwise used by the Company or any of its
Subsidiaries, whether or not covered by insurance; (iii) any declaration,
setting aside or payment of any dividend or other distribution in respect of the
capital stock of the Company; (iv) any change by the Company in accounting
policies, practices, procedures, methods, assumptions or principles of the
Company or any of its Subsidiaries; or (v) any increase in the compensation
payable or that could become payable by the Company or any of its Subsidiaries
to executive officers, other than increases in the ordinary course, or, other
than as required by Law, any amendment of any of the Compensation and Benefit
Plans (as defined in Section 5.1(h)) or the adoption of any new Compensation and
Benefit Plan. For purposes of this Agreement, "KNOWLEDGE OF THE EXECUTIVE
OFFICERS" or any variation thereof means, in the case of the Company, knowledge
of the executive officers of the Company (or its Subsidiaries) and, in the case
of Parent, knowledge of the executive officers of Parent (or its Subsidiaries),
in each case after due inquiry.
(g) LITIGATION AND LIABILITIES. Except as disclosed or reserved
for in the Company Reports filed prior to the date hereof, there are no (i)
civil, criminal or administrative actions, suits, claims, hearings,
investigations or proceedings pending or, to the knowledge of the executive
officers of the Company, threatened against, or otherwise adversely affecting
the Company or any of its Subsidiaries, (ii) obligations or liabilities of any
nature, whether accrued, contingent or otherwise and whether or not required to
be disclosed, or (iii) facts or circumstances of which the executive officers of
the Company have knowledge that could result in any claims against, or
obligations or liabilities of, or limitations on the conduct of the business by,
or otherwise adversely affect, the Company or any of its Subsidiaries, except
for any of the foregoing that are not, individually or in the aggregate,
reasonably likely to have a Company Material Adverse Effect or prevent or
materially burden or materially impair the ability of the Company to consummate
the transactions contemplated by this Agreement.
(h) EMPLOYEE BENEFITS.
(i) A copy of each bonus, deferred compensation, pension,
retirement, profit-sharing, thrift, savings, employee stock ownership, stock
bonus, stock purchase, restricted stock, stock option, employment, termination,
severance, change of control, compensation, medical, health or other plan,
agreement, policy or arrangement that covers employees, directors, former
employees or former directors of the Company or any of its Subsidiaries,
including in each case any amendments or supplements thereto (the "COMPENSATION
AND BENEFIT PLANS") and
10
any trust agreement or insurance contract forming a part of such Compensation
and Benefit Plans has been made available to Parent prior to the date hereof.
The Compensation and Benefit Plans are listed in Section 5.1(h) of the Company
Disclosure Letter and any "change of control" or similar provisions therein are
specifically identified in Section 5.1(h) of the Company Disclosure Letter.
(ii) All Compensation and Benefit Plans are in material
compliance with all applicable Law, including the Code and the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). Each Compensation
and Benefit Plan that is an "employee pension benefit plan" within the meaning
of Section 3(2) of ERISA (a "PENSION PLAN") and that is intended to be qualified
under Section 401(a) of the Code has received a favorable determination letter
from the Internal Revenue Service (the "IRS"), with respect to "TRA" (as defined
in Section 1 of Rev. Proc. 93-39) and the Company is not aware of any
circumstances likely to result in revocation of any such favorable determination
letter. There is no pending or, to the knowledge of the executive officers of
the Company, threatened material litigation relating to the Compensation and
Benefit Plans. Neither the Company nor any of its Subsidiaries has engaged in a
transaction with respect to any Compensation and Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would subject
the Company or any of its Subsidiaries to a material tax or penalty imposed by
either Section 4975 of the Code or Section 502 of ERISA. No entity other than an
ERISA Affiliate (as defined below) participates in any Compensation and Benefit
Plan.
(iii) As of the date hereof, no liability under Subtitle C
or D of Title IV of ERISA has been or is reasonably expected to be incurred by
the Company or any Subsidiary with respect to any ongoing, frozen or terminated
"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,
currently or formerly maintained by any of them, or the single-employer plan of
any entity which is considered one employer with the Company under Section 4001
of ERISA or Section 414 of the Code (an "ERISA AFFILIATE"). The Company and its
Subsidiaries have not incurred and do not expect to incur any withdrawal
liability with respect to a multiemployer plan under Subtitle E to Title IV of
ERISA. No notice of a "reportable event", within the meaning of Section 4043 of
ERISA for which the 30-day reporting requirement has not been waived, has been
required to be filed for any Pension Plan or by any ERISA Affiliate within the
12-month period ending on the date hereof.
(iv) All contributions required to be made under the terms
of any Compensation and Benefit Plan as of the date hereof have been timely made
or have been appropriately reflected on the Company's balance sheet. Neither any
Pension Plan nor any single-employer plan of an ERISA Affiliate has an
"accumulated funding deficiency" (whether or not waived) within the meaning of
Section 412 of the Code or Section 302 of ERISA and no ERISA Affiliate has an
outstanding funding waiver. Neither the Company nor its Subsidiaries has
provided, or is required to provide, security to any Pension Plan or to any
single-employer plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the
Code.
(v) Under each Pension Plan which is a single-employer plan,
as of the last day of the most recent plan year ended prior to the date hereof,
the actuarially determined present value of all "benefit liabilities", within
the meaning of Section 4001(a)(16) of ERISA (as determined on the basis of the
actuarial assumptions contained in the Pension Plan's most recent
11
actuarial valuation), did not exceed the then current value of the assets of
such Pension Plan, and there has been no material change in the financial
condition of such Pension Plan since the last day of the most recent plan year.
(vi) Neither the Company nor its Subsidiaries have any
obligations for retiree health and life benefits under any Compensation and
Benefit Plan. The Company or its Subsidiaries may amend or terminate any such
plan under the terms of such plan at any time without incurring any material
liability thereunder.
(vii) The consummation of the Merger and the other
transactions contemplated by this Agreement will not (x) entitle any employees
of the Company or its Subsidiaries to severance pay, (y) accelerate the time of
payment or vesting or trigger any payment of compensation or benefits under,
increase the amount payable or trigger any other material obligation pursuant
to, any of the Compensation and Benefit Plans or (z) result in any breach or
violation of, or a default under, any of the Compensation and Benefit Plans.
(viii) All Compensation and Benefit Plans covering current
or former non-U.S. employees or former employees of the Company and its
Subsidiaries comply in all material respects with applicable local Law. The
Company and its Subsidiaries have no material unfunded liabilities with respect
to any Pension Plan that covers such non-U.S. employees and is required to be
funded.
(ix) No compensation payable by the Company to any of its
employees under any existing Compensation and Benefit Plan (including by reason
of the transactions contemplated hereby) will be subject to disallowance under
Section 162(m) of the Code.
(x) Any amount that could be received (whether in cash or
property or the vesting of property) as a result of any of the transactions
contemplated by this Agreement by any employee, officer, director or independent
contractor of the Company who is a "disqualified individual" (as such term is
defined in proposed Treasury Regulation Section 1.280G-1) under any Compensation
and Benefit Plan would not be characterized as an "excess parachute payment" (as
such term is defined in Section 280G(b)(1) of the Code).
(xi) Neither the Company nor any of its Subsidiaries has
made or committed to make any material increase of contributions or benefits
under any Compensation and Benefit Plan which would become effective after the
date hereof.
(i) COMPLIANCE WITH LAWS; PERMITS.
(i) Except as set forth in the Company Reports filed prior
to the date hereof, the businesses of each of the Company and its Subsidiaries
have been, and are being, conducted in compliance with all Laws, including all
Health Benefit Laws (as defined below), except for any failure to comply that,
individually or in the aggregate, would not be reasonably likely to have a
Company Material Adverse Effect or prevent or materially burden or materially
impair the ability of the Company to consummate the transactions contemplated by
this Agreement, and neither the Company nor any of its Subsidiaries has received
any written notice or communication of any material failure to comply with any
such Laws that has not been cured (as evidenced by a written notice to such
effect, a copy of which has been provided to Parent) as of
12
the date hereof. Except as set forth in the Company Reports filed prior to the
date hereof, no investigation, examination, audit or review by any Governmental
Entity with respect to the Company or any of its Subsidiaries has occurred, is
pending or, to the knowledge of the executive officers of the Company,
threatened, except for those the outcome of which are not, individually or in
the aggregate, reasonably likely to have a Company Material Adverse Effect or
prevent or materially burden or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement. The Company and each
of its Subsidiaries have all permits, licenses, trademarks, patents, trade
names, copyrights, service marks, franchises, variances, exemptions, orders and
other governmental authorizations, consents and approvals necessary to conduct
their businesses as presently conducted, except for those the absence of which
would not be reasonably likely to result in a Company Material Adverse Effect.
Since October 31, 1998, no material Subsidiary of the Company has had any
license or certificate of authority revoked nor has any State denied any of
their applications for a license or certificate of authority.
(ii) For purposes of this Agreement, the term "HEALTH
BENEFIT LAW" means all Laws relating to the licensure, certification,
qualification or authority to transact business relating to the provision of
and/or payment for health benefits and insurance, including but not limited to
ERISA, the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended,
the Health Insurance Portability and Accounting Act of 1996, and Laws relating
to the regulation of HMOs, workers compensation, managed care organizations,
insurance, PPOs, point-of-service plans, certificates of need, third-party
administrators, utilization review, coordination of benefits, hospital
reimbursement, Medicare and Medicaid participation, fraud and abuse and patient
referrals; the term "MEDICAID" means the applicable provision of Title XIX of
the Social Security Act and the regulations promulgated thereunder and the state
laws and regulations implementing the Medicaid program; and the term "MEDICARE"
means the applicable provisions of Title XVIII of the Social Security Act and
the regulations promulgated thereunder.
(j) TAKEOVER STATUTES. No restrictive provision of any "fair
price," "moratorium," "control share acquisition" or other similar anti-takeover
statute or regulation (including Sections 78.378 - 78.3793 and 78.411 - 78.444
of the NRS) (each a "TAKEOVER STATUTE") or restrictive provision of any
applicable anti-takeover provision in the Company's articles of incorporation
and by-laws is, or at the Effective Time will be, applicable to the Company,
Parent, Merger Subsidiary, the Shares, the Merger or any other transactions
contemplated by this Agreement.
(k) ENVIRONMENTAL MATTERS. Except as disclosed in the Company
Reports filed prior to the date hereof and except for such matters that,
individually or in the aggregate, are not reasonably likely to have a Company
Material Adverse Effect: (i) the Company and its Subsidiaries are and have been
in compliance with all applicable Environmental Laws; (ii) neither the Company
nor any of its Subsidiaries is subject to any liability under any Environmental
Law (as defined below); (iii) neither the Company nor any of its Subsidiaries
has received any written notice, demand, letter, claim or request for
information alleging that the Company or any of its Subsidiaries may be in
violation of or liable under any Environmental Law; (iv) neither the Company nor
any of its Subsidiaries is subject to any orders, decrees, injunctions or other
arrangements with any Governmental Entity or is subject to any indemnity or
13
other agreement with any third party relating to liability under any
Environmental Law or relating to Hazardous Substances; and (v) there are no
circumstances or conditions involving the Company or any of its Subsidiaries
that could reasonably be expected to result in any claims, liability,
investigations, costs or restrictions on the ownership, use, or transfer of any
property of the Company pursuant to any Environmental Law. For purposes of this
Agreement, the term "ENVIRONMENTAL LAW" means any Law relating to: (A) the
protection, investigation or restoration of the environment, health and safety,
or natural resources, (B) the handling, use, presence, disposal, release or
threatened release of any Hazardous Substance or (C) noise, odor, wetlands,
pollution, contamination or any injury or threat of injury to persons or
property; and the term "HAZARDOUS SUBSTANCE" means any substance that is: (A)
listed, classified or regulated pursuant to any Environmental Law; (B) any
petroleum product or by-product, asbestos-containing material, lead-containing
paint or plumbing, polychlorinated biphenyls, radioactive materials or radon; or
(C) any other substance which may be the subject of regulatory action by any
Governmental Entity pursuant to any Environmental Law.
(l) ACCOUNTING AND TAX MATTERS. As of the date hereof, neither
the Company nor any of its affiliates has taken or agreed to take any action,
nor do the executive officers of the Company have any knowledge of any fact or
circumstance relating to the Company or any of its Subsidiaries, that would
prevent the Merger and the other transactions contemplated by this Agreement
from qualifying as a "reorganization" within the meaning of Section 368(a) of
the Code.
(m) TAXES. The Company and each of its Subsidiaries (i) have
prepared in good faith and duly and timely filed (taking into account any
extension of time within which to file) all material Tax Returns (as defined
below) required to be filed by any of them and all such filed Tax Returns are
complete and accurate in all material respects; (ii) have paid all material
Taxes (as defined below) that are required to be paid or that the Company or any
of its Subsidiaries are obligated to withhold from amounts owing to any
employee, creditor or third party, except with respect to matters contested in
good faith; and (iii) have not waived any statute of limitations with respect to
Taxes or agreed to any extension of time with respect to a Tax assessment or
deficiency. As of the date hereof, there are not pending or, to the knowledge of
the executive officers of the Company threatened in writing, any audits,
examinations, investigations or other proceedings in respect of Taxes or Tax
matters. There are no unresolved questions or claims concerning the Company's or
any of its Subsidiaries' Tax liability that (A) were raised by any Taxing
authority in a communication to the Company or any Subsidiary and (B) are
reasonably likely to have a Company Material Adverse Effect. The Company has
made available to Purchaser true and correct copies of the United States federal
income Tax Returns filed by the Company and its Subsidiaries for each of the
years ended October 31, 1997, 1998 and 1999. Neither the Company nor any of its
Subsidiaries has any material liability with respect to income, franchise or
similar Taxes that accrued on or before October 31, 1999 in excess of the
amounts accrued with respect thereto that are reflected in the financial
statements included in the Company Reports filed on or prior to the date hereof.
As used in this Agreement, (i) the term "TAX" (including, with
correlative meaning, the terms "TAXES" and "TAXABLE") includes all federal,
state, local and foreign income, profits, franchise, gross receipts, premium,
environmental, customs duty, capital stock, severances, stamp, payroll, sales,
employment, unemployment, disability, use, property,
14
withholding, excise, production, value added, occupancy and other taxes, duties
or governmental assessments of any nature whatsoever, together with all
interest, penalties and additions imposed with respect to such amounts and any
interest in respect of such penalties and additions, and (ii) the term "TAX
RETURN" includes all returns and reports (including elections, declarations,
disclosures, schedules, estimates and information returns) required to be
supplied to a Tax authority relating to Taxes.
(n) LABOR MATTERS. (i) The Company and each of its Subsidiaries
is in compliance with all applicable laws and regulations respecting employment,
discrimination in employment, terms and conditions of employment, wages, hours
and occupational safety and health and employment practices, and is not engaged
in any unfair labor practices, except where failure to be in compliance of the
engagement in such unfair labor practice could not have a Company Material
Adverse Effect. Except as set forth in the Company Reports, there are no
material pending claims against the Company or any of its Subsidiaries under any
workers compensation plan or policy or for long term disability. Neither the
Company nor any of its Subsidiaries has obligations under COBRA with respect to
any former employees or qualifying beneficiaries thereunder, except for
obligations that could not have a Company Material Adverse Effect. There are no
controversies pending, or to the best knowledge of the Company, threatened,
between the Company or any of its Subsidiaries and any of its employees, which
controversies have or could reasonably be expected to have a Company Material
Adverse Effect.
(ii) Neither the Company nor any of its Subsidiaries is a
party to or otherwise bound by any collective bargaining agreement, contract or
other agreement or written understanding with a labor union or labor
organization involving employees of the Company or its Subsidiaries. To the
knowledge of the executive officers of the Company, there are no current efforts
to organize the Company's workforce or certify a collective bargaining unit at
the Company.
(o) INSURANCE. All material fire and casualty, general liability,
business interruption, product liability, directors' and officers', and
sprinkler and water damage insurance policies maintained by the Company or any
of its Subsidiaries are with reputable insurance carriers and are customary and
reasonable in amount and scope for the business in which the Company and its
Subsidiaries are engaged, except for any such failures to maintain insurance
policies that, individually or in the aggregate, are not reasonably likely to
have a Company Material Adverse Effect.
(p) INTELLECTUAL PROPERTY. (i) Section 5.1(p) of the Company
Disclosure Letter sets forth a complete and correct list in all material
respects of all inventions, patents, trademarks, tradenames, service marks,
service names, brand names and copyright registrations, and applications
therefor, applicable to or used in the business of the Company and its
Subsidiaries, together with a complete list of all licenses granted by or to the
Company or its Subsidiaries with respect to any of the above (collectively,
"Company Intellectual Property"). Other than as set forth in Section 5.1(p) of
the Company Disclosure Schedule, all Company Intellectual Property is owned by
the Company, free and clear of all liens, claims, security interests and
encumbrances of any nature whatsoever, except where the failure to own or use
such Company Intellectual Property would not have a Company Material Adverse
Effect, or is used by the Company or its Subsidiaries pursuant to valid
licenses. Neither the Company nor any
15
of its Subsidiaries is currently in receipt of any notice of any violation or
infringement of, and neither the Company nor any of its Subsidiaries is
knowingly violating or infringing in any material respect, the rights of others
in, or to any patent, unpatented invention, trademark, tradename, service xxxx,
copyright, trade secret, know-how, design, process or other intangible asset. To
the knowledge of the executive officers of the Company, no third party is
violating or infringing in any material respect the rights of the Company or any
of its Subsidiaries in any of the Company Intellectual Property Neither the
Company nor any of its Subsidiaries has received with respect to any patent
application comprising a part of the Company Intellectual Property any verbal or
written communication , either that (i) a patent will likely not be granted or
(ii) the scope of the patent or the several claims enumerated thereunder will be
materially reduced.
(ii) Except as set forth on Schedule 5.1(p) of the Company
Disclosure Letter, the Company has title to all material computer software owned
by the Company or its Subsidiaries (other than "off-the-shelf" software not
customized for its use ("Owned Software")) free and clear of all liens, claims,
security interests and encumbrances whatsoever. Except as set forth in Section
5.1(p) of the Company Disclosure Letter, the Owned Software is not dependent on
any Licensed Software (as defined in subsection (iii) below) in order to operate
fully in the manner in which it is intended. The source code of any Owned
Software has not been published or knowingly disclosed to any other parties,
except pursuant to contracts requiring such other parties to keep the source
code of any Owned Software confidential.
(iii) Section 5.1(p) of the Company Disclosure Schedule sets
forth a list of the agreements which require the payment of license fees, rents,
royalties or other charges by the Company or its Subsidiaries with respect to
all material software (other than "off-the-shelf" software that has not been
customized for its use) under which the Company (or its Subsidiaries, as the
case may be) is a licensee, lessee or otherwise has obtained the right to use
(the "Licensed Software"). The Company, as applicable, has the right and license
to use, sublicense, modify and copy Licensed Software, free and clear of any
limitations or encumbrances, except as may be set forth in Section 5.1(p) of the
Company Disclosure Letter or in the agreements referenced therein. The Company
is in material compliance with all provisions of each license, lease or other
similar agreement pursuant to which it has rights to use the Licensed Software.
Except as disclosed on Section 5.1(p) of the Company Disclosure Letter, none of
the Licensed Software has been incorporated into or made a part of any Owned
Software or any other Licensed Software. The Company has not published or
knowingly disclosed any Licensed Software to any other party except, in the case
of Licensed Software which the Company leases or markets to others, in
accordance with and as permitted by any license, lease or similar agreement
relating to the Licensed Software and except pursuant to contracts requiring
such other parties to keep the Licensed Software confidential. As of the date
hereof, to the knowledge of the executive officers of the Company, no party to
whom the Company has disclosed Licensed Software has breached such obligation of
confidentiality.
(iv) The Owned Software and Licensed Software constitute all
software used in the business of the Company and its Subsidiaries (collectively,
the "Company Software") other than "off the shelf" software. The transactions
contemplated herein will not cause a breach or default under any license, lease
or similar agreement relating to the Company Software or impair the ability of
the Surviving Corporation and the Company to use the Company Software subsequent
to the Closing Date in the same manner as the Company Software is currently used
16
by the Company and its Subsidiaries. The Company is not knowingly infringing in
any material respect any intellectual property rights of any other person or
entity with respect to the Company Software, and, to the knowledge of the
executive officers of the Company, no other person or entity is infringing any
intellectual property rights of the Company with respect to the Company
Software.
(q) MATERIAL CONTRACTS. Section 5.1(q) of the Company Disclosure
Letter sets forth a list of all material Contracts of the Company and its
Subsidiaries ("Material Company Contracts"). The Company has made available to
Parent true and complete copies of all the Material Company Contracts. The
Material Company Contracts are in full force and effect and are enforceable
against the Company or its Subsidiaries that are parties thereto and, to the
knowledge of the executive officers of the Company, against the other parties
thereto in accordance with their respective terms. Except to the extent
reflected in the financial statements of the Company Reports, neither the
Company nor any of its Subsidiaries nor, to the knowledge of the executive
officers of the Company, any other party is in breach of or in default under any
such Material Company Contract. There is no pending or, to the knowledge of the
executive officers of the Company, threatened, cancellation of any Material
Company Contract. Neither the Company nor any of its Subsidiaries is a party to
any Contract containing any provision limiting in any material respect the
ability of the Company or any of its Subsidiaries or, assuming the consummation
of the transactions contemplated by this Agreement, Parent or any of its
Subsidiaries, to (A) to sell any products or services of or to any other Person,
(B) to engage in any line of business (including geographical limitations) or
(C) to compete with or to obtain products or services from any Person, or
limiting the ability of any Person to provide products or services to the
Company or any of its Subsidiaries.
(r) ASSETS AND PROPERTIES. Each of the Company and its
Subsidiaries has good and valid title to all their respective properties and
assets and has good title to all their respective leasehold interests, in each
case subject to no mortgage, pledge, lien, lease, encumbrance or charge, other
than (i) the lien of current taxes not yet due and payable and (ii) possible
minor liens and encumbrances, which do not in any case materially detract from
the value of the property subject thereto or materially impair the operations of
the Company or its Subsidiaries and which have not arisen otherwise than in the
ordinary course of business. All of the respective properties and assets of the
Company and its Subsidiaries are in adequate operating condition and repair,
ordinary wear and tear excepted, and are free and clear of any known defects,
except such defects that do not substantially interfere with the continued use
thereof in the conduct or normal operations.
(s) BROKERS AND FINDERS. Neither the Company nor its Subsidiaries
nor any of their respective officers, directors or employees has employed any
broker or finder or incurred any liability for any brokerage fees, commissions
or finders fees in connection with the Merger or the other transactions
contemplated by this Agreement.
(t) OWNERSHIP OF PARENT COMMON STOCK. As of the date hereof,
neither the Company nor any of its Subsidiaries owns any shares of Parent Common
Stock or other securities convertible into shares of Parent Common Stock.
(u) DISCLOSURE. Neither this Agreement with the Exhibits and
Disclosure
17
Schedules thereto, nor any other agreement, document, certificate or information
furnished to Parent or their counsel by or on behalf of the Company in
connection with the transactions contemplated hereby, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein not misleading in light of the
circumstances under which they were made.
5.2. REPRESENTATIONS AND WARRANTIES OF PARENT AND MERGER SUBSIDIARY.
Except as set forth in the corresponding sections or subsections (or by
appropriate cross-reference) of the disclosure letter delivered to the Company
by Parent prior to entering into this Agreement (the "PARENT DISCLOSURE
LETTER"), Parent and Merger Subsidiary each hereby represent and warrant to the
Company that:
(a) ORGANIZATION, GOOD STANDING AND QUALIFICATION. Parent is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Nevada and each of its Subsidiaries is a corporation or other
entity duly organized, validly existing and in good standing under the laws of
its respective jurisdiction of organization and Parent and each of its
Subsidiaries has all requisite corporate or similar power and authority to own
and operate its properties and assets and to carry on its business as presently
conducted and is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction where the ownership or operation of its
properties or conduct of its business requires such qualification, except where
the failure to have such corporate power or authority or to be so qualified or
in good standing, when taken together with all other such failures, is not
reasonably likely to have a Parent Material Adverse Effect (as defined below).
Parent has made available to the Company a complete and correct copy of Parent's
and each of its Subsidiaries' certificates of incorporation and by-laws or
comparable governing instruments, each as amended to date. Parent's and its
Subsidiaries' certificates of incorporation and by-laws or comparable governing
instruments so delivered are in full force and effect. As used in this
Agreement, the term "PARENT MATERIAL ADVERSE EFFECT" means a material adverse
effect on the financial condition, properties, business or results of operations
of Parent and its Subsidiaries taken as a whole.
(b) PARENT CAPITAL STRUCTURE. As of the date hereof, the
authorized capital stock of Parent consists of 50,000,000 shares of Parent
Common Stock, of which 44,172,420 shares were outstanding as of the close of
business on December 31, 2000, and -0- shares of Preferred Stock, par value
$.001 per share (the "PARENT PREFERRED SHARES"), of which none were
outstanding as of the close of business on December 31, 2000. All of the
outstanding shares of Parent Common Stock have been duly authorized and are
validly issued, fully paid and nonassessable. Parent has no Parent Common
Stock or Parent Preferred Shares reserved for issuance. Each of the
outstanding shares of capital stock or other securities of Parent's
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable
and owned by a direct or indirect wholly owned Subsidiary of Parent, free and
clear of any Liens. Except as set forth above, as of the date hereof there
are no preemptive or other outstanding rights, options, warrants, conversion
rights, stock appreciation rights, redemption rights, repurchase rights,
agreements, arrangements or commitments to issue or to sell any shares of
capital stock or other securities of Parent or any of its Subsidiaries or any
securities or obligations convertible or exchangeable into or exercisable
18
for, or giving any Person a right to subscribe for or acquire, any securities of
Parent or any of its Subsidiaries, and no securities or obligations evidencing
such rights are authorized, issued or outstanding. Parent does not have
outstanding any bonds, debentures, notes or other obligations the holders of
which have the right to vote (or convertible into or exercisable for securities
having the right to vote) with the stockholders of Parent on any matter ("PARENT
VOTING DEBT").
(c) CAPITALIZATION OF MERGER SUBSIDIARY. The authorized capital
stock of Merger Subsidiary consists of 1,000 shares of Common Stock, par value
$0.01 per share, of which 100 are validly issued and outstanding. All of the
issued and outstanding capital stock of Merger Subsidiary is, and at the
Effective Time will be, owned by Parent, and there are (i) no other shares of
capital stock or voting securities of Merger Subsidiary, (ii) no securities of
Merger Subsidiary convertible into or exchangeable for shares of capital stock
or voting securities of Merger Subsidiary and (iii) no options or other rights
to acquire from Merger Subsidiary, and no obligations of Merger Subsidiary to
issue, any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of Merger Subsidiary. Merger
Subsidiary has not conducted any business prior to the date hereof and has no,
and prior to the Effective Time will have no, assets, liabilities or obligations
of any nature other than those incident to its formation and pursuant to this
Agreement and the Merger and the other transactions contemplated by this
Agreement.
(d) CORPORATE AUTHORITY; APPROVAL.
(i) Each of Parent and Merger Subsidiary has all requisite
corporate power and authority and has taken all corporate action necessary in
order to execute, deliver and perform its obligations under this Agreement and
to consummate the transactions contemplated hereby. This Agreement is a valid
and binding agreement of Parent and Merger Subsidiary, enforceable against each
of Parent and Merger Subsidiary in accordance with its terms, subject to the
Bankruptcy and Equity Exception.
(ii) The Board of Directors of Parent has unanimously
approved this Agreement and the Merger and the other transactions contemplated
hereby. Parent has taken all necessary action to permit it to issue the number
of shares of Parent Common Stock required to be issued pursuant to Article IV.
The Parent Common Stock, when issued, will be validly issued, fully paid and
nonassessable, and no shareholder of Parent will have any preemptive right of
subscription or purchase in respect thereof. The Parent Common Stock, when
issued, will be registered under the Securities Act and Exchange Act and
registered or exempt from registration under any applicable state securities or
"blue sky" laws.
(e) GOVERNMENTAL FILINGS; NO VIOLATIONS. (i) Other than the
filings, notices, consents, registrations, approvals, permits and authorizations
(A) pursuant to Section 1.3, (B) under the Exchange Act and the Securities Act,
or (C) to comply with state securities or "blue-sky" laws, no notices, reports
or other filings are required to be made by Parent or Merger Subsidiary with,
nor are any consents, registrations, approvals, permits or authorizations
required to be obtained by Parent or Merger Subsidiary from, any Governmental
Entity or any other Person, in connection with the execution and delivery of
this Agreement by Parent and Merger Subsidiary and the consummation by Parent
and Merger Subsidiary of the
19
Merger and the other transactions contemplated hereby, except those the failure
to make or obtain are not, individually or in the aggregate, reasonably likely
to have a Parent Material Adverse Effect or prevent, materially delay or
materially impair the ability of Parent or Merger Subsidiary to consummate the
transactions contemplated by this Agreement.
(ii) The execution, delivery and performance of this
Agreement by Parent and Merger Subsidiary do not, and the consummation by Parent
and Merger Subsidiary of the Merger and the other transactions contemplated
hereby will not, constitute or result in (A) a breach or violation of, or a
default under, the articles of incorporation or by-laws of Parent and Merger
Subsidiary or the comparable governing instruments of any of its Subsidiaries,
(B) a breach or violation of, or a default under, or acceleration of any
obligations under, or the termination of, or the loss of a material benefit
under, or the creation of a Lien on the assets of Parent or any of its
Subsidiaries (with or without notice, lapse of time or both) pursuant to, any
Contracts binding upon Parent or any of its Subsidiaries or any of their
respective assets, or (assuming, as to consummation, the filings and notices are
made, and approvals are obtained, as referred to in Section 5.2(e)(i)) or any
applicable Law to which Parent or any of its Subsidiaries or any of their
respective assets is subject or (C) any change in the rights or obligations of
any party under any of the Contracts, except, in the case of clause (B) or (C)
above, for any breach, violation, default, acceleration, termination, creation
or change that, individually or in the aggregate, is not reasonably likely to
have a Parent Material Adverse Effect or prevent, materially delay or materially
impair the ability of Parent or Merger Subsidiary to consummate the transactions
contemplated by this Agreement.
(f) PARENT REPORTS; FINANCIAL STATEMENTS. Parent has made
available to the Company each registration statement, report, proxy statement or
information statement prepared by it since April 30, 1999, including (i)
Parent's Annual Report on Form 10-K for the years ended April 30, 1999 and April
30, 2000 and (ii) Parent's Quarterly Report on Form 10-Q for the period ended
July 31, 2000, each in the form (including exhibits, annexes and any amendments
thereto) filed with the SEC (collectively, including any such reports filed
subsequent to the date hereof, the "PARENT REPORTS"). As of their respective
dates, the Parent Reports did not, and any Parent Reports filed with the SEC
subsequent to the date hereof will not, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances in
which they were made, not misleading. Each of the consolidated balance sheets
included in or incorporated by reference into the Parent Reports (including the
related notes and schedules) fairly presents in all material respects, or, in
the case of Parent Reports filed with the SEC subsequent to the date hereof,
will fairly present in all material respects, the consolidated financial
position of Parent and its Subsidiaries as of its date and each of the
consolidated statements of income and of changes in financial position included
in or incorporated by reference into the Parent Reports (including any related
notes and schedules) fairly presents in all material respects, or, in the case
of Parent Reports filed with the SEC subsequent to the date hereof, will fairly
present in all material respects, the results of operations, retained earnings
and changes in financial position, as the case may be, of Parent and its
Subsidiaries on a consolidated basis for the periods set forth therein (subject,
in the case of unaudited statements, to notes and normal year-end audit
adjustments that will not be material in amount or effect), in each case in
accordance with GAAP consistently applied during the periods involved, except as
may be noted therein.
20
(g) ABSENCE OF CERTAIN CHANGES. Except as set forth on Schedule
5.2(g) of the Parent Disclosure Schedule, and except as disclosed in the Parent
Reports filed prior to the date hereof, since April 30, 2000 Parent and each of
its Subsidiaries have conducted their respective businesses only in, and have
not engaged in any material transaction other than according to, the ordinary
and usual course of such businesses and there has not been (i) any change in the
financial condition, properties, business or results of operations of Parent and
its Subsidiaries or any development or combination of developments of which the
executive officers of Parent have knowledge that, individually or in the
aggregate, has had or is reasonably likely to have a Parent Material Adverse
Effect; (ii) any material damage, destruction or other casualty loss with
respect to any material asset or property owned, leased or otherwise used by
Parent or any of its Subsidiaries, whether or not covered by insurance; (iii)
any declaration, setting aside or payment of any dividend or other distribution
in respect of the capital stock of Parent, except for cash dividends or other
distributions on its capital stock publicly announced prior to the date hereof
or declared and paid consistent with past practice (including customary
increases); (iv) any change by Parent in accounting principles, practices and
methods; or (v) any material change in the accounting, actuarial, investment,
reserving, underwriting or claims administration or servicing policies,
practices, procedures, methods, assumptions or principles of Parent or any of
its Subsidiaries.
(h) LITIGATION AND LIABILITIES. Except as disclosed in the Parent
Reports filed prior to the date hereof, there are no (i) civil, criminal or
administrative actions, suits, claims, hearings, investigations or proceedings
pending or, to the knowledge of the executive officers of Parent, threatened
against, or otherwise adversely affecting Parent or any of its Subsidiaries,
(ii) obligations or liabilities of any nature, whether accrued, contingent or
otherwise and whether or not required to be disclosed, including those relating
to matters involving any Environmental Law, or (iii) facts or circumstances of
which the executive officers of Parent have knowledge that could result in any
claims against, or obligations or liabilities of, or limitations on the conduct
of business by, or otherwise adversely affect, Parent or any of its
Subsidiaries, except for any of the foregoing that are not, individually or in
the aggregate, reasonably likely to have a Parent Material Adverse Effect or
prevent or materially burden or materially impair the ability of Parent or
Merger Subsidiary to consummate the transactions contemplated by this Agreement.
(i) COMPLIANCE WITH LAWS; PERMITS. Except as set forth in the
Parent Reports filed prior to the date hereof, the businesses of each of Parent
and its Subsidiaries have been, and are being, conducted in compliance with all
Laws, except for any failure to comply that, individually or in the aggregate,
would not be reasonably likely to have a Parent Material Adverse Effect or
prevent or materially burden or materially impair the ability of Parent to
consummate the transactions contemplated by this Agreement, and neither Parent
nor any of its Subsidiaries has received any written notice or communication of
any material failure to comply with any such Laws that has not been cured (as
evidenced by a written notice to such effect, a copy of which has been provided
to Company) as of the date hereof. Except as set forth in the Parent Reports
filed prior to the date hereof, no investigation, examination, audit or review
by any Governmental Entity with respect to Parent or any of its Subsidiaries has
occurred, is pending or, to the knowledge of the executive officers of Parent,
threatened, except for those the outcome of which are not, individually or in
the aggregate, reasonably likely to have a Parent Material Adverse Effect or
prevent or materially burden or materially impair the ability of Parent to
consummate the transactions contemplated by this Agreement. Parent and each of
its
21
Subsidiaries have all permits, licenses, trademarks, patents, trade names,
copyrights, service marks, franchises, variances, exemptions, orders and other
governmental authorizations, consents and approvals necessary to conduct their
businesses as presently conducted, except for those the absence of which would
not be reasonably likely to result in a Parent Material Adverse Effect.
(j) EMPLOYEE BENEFIT PLANS. Parent presently does not maintain or
contribute to any "employee benefit plan," as such term is defined in the
Employee Retirement Income Security Act of 1974, as amended.
(k) LABOR MATTERS. (i) Parent and each of its Subsidiaries is in
compliance with all applicable laws and regulations respecting employment,
discrimination in employment, terms and conditions of employment, wages, hours
and occupational safety and health and employment practices, and is not engaged
in any unfair labor practices, except where failure to be in compliance of the
engagement in such unfair labor practice could not have a Parent Material
Adverse Effect. Except as set forth in the Parent Reports, there are no material
pending claims against the Parent or any of its Subsidiaries under any workers
compensation plan or policy or for long term disability. Neither Parent nor any
of its Subsidiaries has obligations under COBRA with respect to any former
employees or qualifying beneficiaries thereunder, except for obligations that
could not have a Parent Material Adverse Effect. There are no controversies
pending, or to the best knowledge of the executive officers of Parent,
threatened, between Parent or any of its Subsidiaries and any of its employees,
which controversies have or could reasonably be expected to have a Parent
Material Adverse Effect.
(ii) Neither Parent nor any of its Subsidiaries is a party
to or otherwise bound by any collective bargaining agreement, contract or other
agreement or written understanding with a labor union or labor organization
involving employees of Parent or its Subsidiaries. To the knowledge of the
executive officers of Parent, there are no current efforts to organize Parent's
workforce or certify a collective bargaining unit at Parent.
(l) ENVIRONMENTAL MATTERS. Except as disclosed in the Parent
Reports filed prior to the date hereof and except for such matters that,
individually or in the aggregate, are not reasonably likely to have a Parent
Material Adverse Effect: (i) Parent and its Subsidiaries are and have been in
compliance with all applicable Environmental Laws; (ii) neither Parent nor any
of its Subsidiaries is subject to any liability under any Environmental Law;
(iii) neither Parent nor any of its Subsidiaries has received any written
notice, demand, letter, claim or request for information alleging that Parent or
any of its Subsidiaries may be in violation of or liable under any Environmental
Law; (iv) neither Parent nor any of its Subsidiaries is subject to any orders,
decrees, injunctions or other arrangements with any Governmental Entity or is
subject to any indemnity or other agreement with any third party relating to
liability under any Environmental Law or relating to Hazardous Substances; and
(v) there are no circumstances or conditions involving Parent or any of its
Subsidiaries that could reasonably be expected to result in any claims,
liability, investigations, costs or restrictions on the ownership, use, or
transfer of any property of Parent pursuant to any Environmental Law.
(m) ACCOUNTING AND TAX MATTERS. As of the date hereof, neither
Parent nor any of its affiliates has taken or agreed to take any action, nor do
the executive officers of Parent have any knowledge of any fact or circumstance,
that would prevent the Merger and the
22
other transactions contemplated by this Agreement from qualifying as a
"reorganization" within the meaning of Section 368(a) of the Code.
(n) BROKERS AND FINDERS. Neither Parent nor any of its officers,
directors or employees has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders fees in connection with
the Merger or the other transactions contemplated by this Agreement.
(o) OWNERSHIP OF COMPANY COMMON STOCK. Except as set forth on
Schedule 5.2(o) of the Parent Disclosure Schedule, as of the date hereof,
neither Parent nor any of its Subsidiaries owns any shares of Company Common
Stock or other securities convertible into shares of Company Common Stock.
(p) DISCLOSURE. Neither this Agreement with the Exhibits and
Disclosure Schedules thereto, nor any other agreement, document, certificate or
information furnished to the Company or its counsel by or on behalf of Parent in
connection with the transactions contemplated hereby, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein not misleading in light of the
circumstances under which they were made
ARTICLE VI.
COVENANTS
6.1. INTERIM OPERATIONS.
(a) The Company covenants and agrees as to itself and its
Subsidiaries that, after the date hereof and prior to the Effective Time (unless
Parent shall otherwise approve in writing, and except as otherwise expressly
contemplated by this Agreement):
(i) it and its Subsidiaries' businesses shall be
conducted in the ordinary and usual course (it being understood and agreed that
nothing contained herein shall permit the Company to enter into or engage in
(through acquisition, product extension or otherwise) the business of selling
any products or services materially different from existing products or services
of the Company and its Subsidiaries or entering into or engaging in new lines of
business);
(ii) it and its Subsidiaries shall use their respective
best efforts to preserve their business organizations intact and maintain their
existing relations and goodwill with customers, vendors, suppliers, creditors,
lessors, regulators, employees and business associates;
(iii) it shall not (A) issue, sell, pledge, dispose of
or encumber any capital stock owned by it in any of its Subsidiaries; (B) amend
its articles of incorporation or by-laws or adopt any rights agreement or
similar agreement; (C) split, combine or reclassify its outstanding shares of
capital stock; (D) authorize, declare, set aside or pay any dividend or other
distribution payable in cash, stock or property in respect of any capital stock
other than dividends from its direct or
23
indirect wholly owned Subsidiaries; or (E) repurchase, redeem or otherwise
acquire, or permit any of its Subsidiaries to purchase or otherwise acquire, any
shares of its stock or any securities convertible into or exchangeable or
exercisable for any shares of its stock;
(iv) neither it nor any of its Subsidiaries shall (A)
issue, sell, pledge, dispose of or encumber any shares of, or securities
convertible into or exchangeable or exercisable for, or options, warrants,
calls, commitments or rights of any kind to acquire, any shares of its capital
stock of any class or any other property or assets; (B) other than in the
ordinary and usual course of business, transfer, lease, license, guarantee,
sell, mortgage, pledge, dispose of or encumber any other property or assets
(including capital stock of any of its Subsidiaries) or incur or modify any
material indebtedness or other liability, except for immaterial Liens arising by
operation of law; (C) make or authorize or commit to any capital expenditures
other than as set forth in Section 6.1(a)(iv)(C) of the Company Disclosure
Letter; or (D) make any acquisition of, or investment in, assets or stock of any
other Person;
(v) neither it nor any of its Subsidiaries shall
terminate, establish, adopt, enter into, make any new grants or awards under,
amend or otherwise modify, any Compensation and Benefit Plans except as required
by Law or increase the salary, wage, bonus or other compensation of any
employees except increases for employees who are not executive officers of the
Company occurring in the ordinary and usual course of business (which shall
include normal periodic performance reviews and related compensation and benefit
increases);
(vi) neither it nor any of its Subsidiaries shall pay,
discharge, settle or satisfy any claims, liabilities or obligations (absolute,
accrued, asserted or unasserted, contingent or otherwise), other than the
payment, discharge or satisfaction of claims, liabilities or obligations in the
ordinary and usual course of business;
(vii) neither it nor any of its Subsidiaries shall make
or change any material Tax election, settle any audit, file any amended Tax
Returns or permit any insurance policy naming it as a beneficiary or
loss-payable payee to be canceled or terminated except in the ordinary and usual
course of business;
(viii) neither it nor any of its Subsidiaries shall
enter into any Contract containing any provision or covenant limiting in any
respect the ability of the Company or any of its Subsidiaries or any of their
"AFFILIATES" (as defined in Rule 12b-2 under the Exchange Act) to (A) sell any
products or services of or to any other Person, (B) engage in any line of
business (including geographic limitations) or (C) compete with or obtain
products or services from any Person, or limiting the ability of any Person to
provide products or services to the Company or any of its Subsidiaries or their
Affiliates;
(ix) neither it nor any of its Subsidiaries will
terminate, or amend, or modify in any material respect, any Material Company
Contract;
(x) neither it nor any of its Subsidiaries shall take
any action or omit to take any action that would cause any of its
representations and warranties herein to become untrue in any material respect;
and
(xi) neither it nor any of its Subsidiaries will
authorize or enter into an
24
agreement to do any of the foregoing.
(b) During the period from the date of this Agreement through the
Effective Time, (i) as requested by Parent, the Company shall confer on a
regular basis with one or more representatives of Parent with respect to
material operational matters, (ii) upon the knowledge of the executive officers
of the Company of any event or occurrence that is reasonably likely to result in
a Company Material Adverse Effect, any material litigation or material
governmental complaints, investigation or hearings (or communications indicating
that the same may be contemplated), the breach in any material respect of any
representation, warranty or covenant contained herein, or the failure of any
condition precedent to the Merger, the Company shall promptly notify Parent
thereof and (iii) upon the knowledge of the executive officers of Parent of any
event or occurrence that is reasonably likely to result in a Parent Material
Adverse Effect or the failure of any condition precedent to the Merger, Parent
shall promptly notify the Company thereof.
6.2. ACQUISITION PROPOSALS. The Company agrees that neither it nor any
of its Subsidiaries nor any of its or their respective officers and directors
shall, and that the Company shall direct and use its best efforts to cause its
and its Subsidiaries' employees, agents and representatives (including any
investment banker, attorney or accountant retained by it or any of its
Subsidiaries) (such officers, directors, employees, agents and representatives
sometimes collectively referred to herein as "REPRESENTATIVES") not to, directly
or indirectly, initiate, solicit, encourage or otherwise facilitate any
inquiries or the making of any proposal or offer or entering into any agreement
with respect to a merger, reorganization, share exchange, consolidation or
similar transaction involving, or any purchase of 20% or more of the assets or
any equity securities of, the Company or any of its Subsidiaries (any such
proposal or offer being hereinafter referred to as an "ACQUISITION PROPOSAL").
The Company further agrees that neither it nor any of its Subsidiaries nor any
of their respective officers and directors shall, and that the Company shall
direct and cause its and its Subsidiaries' employees, agents and representatives
(including any investment banker, attorney or accountant retained by it or any
of its Subsidiaries) not to, directly or indirectly, engage in any negotiations
concerning, or provide any confidential information or data to, or have any
discussions with, any Person relating to, an Acquisition Proposal, whether made
before or after the date of this Agreement, or otherwise facilitate any effort
or attempt to make or implement an Acquisition Proposal; PROVIDED, HOWEVER, that
nothing contained in this Agreement shall prevent the Company or its Board of
Directors from (A) complying with Rule 14e-2 promulgated under the Exchange Act
with regard to an Acquisition Proposal; (B) providing information in response to
a request therefor by a Person who has made an unsolicited bona fide written
Acquisition Proposal if the Board of Directors receives from the Person so
requesting such information an executed confidentiality agreement ("THIRD PARTY
CONFIDENTIALITY AGREEMENT") on terms no less favorable to the Company than its
agreement with Parent; (C) engaging in any negotiations or discussions with any
Person who has made an unsolicited bona fide written Acquisition Proposal; or
(D) recommending an unsolicited bona fide written Acquisition Proposal to the
stockholders of the Company, if and only to the extent that, prior to taking any
such action (i) in each such case referred to in clause (B), (C) or (D) above,
the Board of Directors of the Company determines in good faith based on the
advice of its outside legal counsel experienced in such matters that such action
is necessary in order for its directors to comply with their respective
fiduciary duties under applicable Law and (ii) in each case referred to in
clause (C) or (D) above, the Board of Directors
25
of the Company determines in good faith that such Acquisition Proposal, if
accepted, is reasonably likely to be consummated, taking into account all legal,
financial and regulatory aspects of the proposal and the Person making the
proposal and would, if consummated, result in a transaction superior to the
transaction contemplated by this Agreement, taking into account, among other
things, the long-term prospects and interests of the Company and its
stockholders (any such superior Acquisition Proposal being referred to in this
Agreement as a "SUPERIOR PROPOSAL"). The Company will immediately cease and
cause to be terminated any existing activities, discussions or negotiations with
any parties conducted heretofore with respect to any of the foregoing. The
Company agrees that it will take the necessary steps to promptly inform its
Representatives of the obligations undertaken in this Section 6.2. The Company
will notify Parent immediately (but, in any event, no less than 24 hours
thereafter) if any Acquisition Proposal or inquiry related thereto is received
by, any information is requested from, or any discussions or negotiations are
sought to be initiated or continued with, the Company or any of its
Representatives relating to an Acquisition Proposal, indicating the name of such
Person and the material terms and conditions of any Acquisition Proposal. The
Company also will promptly request each Person that has heretofore executed a
confidentiality agreement in connection with its consideration of an Acquisition
Proposal to return all confidential information heretofore furnished to such
Person by or on behalf of it or any of its Subsidiaries.
6.3. INFORMATION SUPPLIED. The Company and Parent each agrees, as to
itself and its Subsidiaries, that none of the information supplied or to be
supplied by it or its Subsidiaries for inclusion or incorporation by reference
in (i) the Registration Statement on Form S-4 to be filed with the SEC by Parent
in connection with the issuance of shares of Parent Common Stock in the Merger
(including the joint proxy statement and prospectus (the "PROSPECTUS/PROXY
STATEMENT") constituting a part thereof) (the "S-4 REGISTRATION STATEMENT")
will, at the time the S-4 Registration Statement becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, (ii) the Prospectus/Proxy Statement and any amendment or
supplement thereto will, at the date of mailing to stockholders and at the times
of the meeting of stockholders of the Company to be held in connection with this
Agreement, 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 light of the circumstances under which they were made,
not misleading and (iii) any filing with a Governmental Entity in connection
with this Agreement under any Health Benefit Law, will be untrue or incorrect in
any material respect.
6.4. STOCKHOLDERS MEETING. The Company will take all action necessary
to convene a meeting of holders of Shares (the "STOCKHOLDERS MEETING") as
promptly as practicable after the S-4 Registration Statement is declared
effective (and, in any event, within 45 days thereafter unless otherwise
mutually agreed by the Company and Parent) to consider and vote upon the
approval of the Merger and this Agreement. Except to the extent the Board of
Directors of the Company determines in good faith, based upon advice of its
outside legal counsel experienced in such matters, that such action is necessary
in order for its directors to comply with their fiduciary duties under
applicable Law, the Company's Board of Directors shall recommend such approval,
shall not withdraw or modify such recommendation and shall take all lawful
action to solicit such approval.
26
6.5. FILINGS; OTHER ACTIONS; NOTIFICATION.
(a) Parent and the Company shall promptly prepare and file with
the SEC the Prospectus/Proxy Statement, and Parent shall prepare and file with
the SEC the S-4 Registration Statement as promptly as practicable. Parent shall
use its reasonable best efforts to have the S-4 Registration Statement declared
effective under the Securities Act as promptly as practicable after such filing
(and the Company shall cooperate with Parent in connection therewith), and
promptly thereafter mail the Prospectus/Proxy Statement to the stockholders of
the Company. Parent shall also use its reasonable best efforts to obtain prior
to the effective date of the S-4 Registration Statement all necessary state
securities law or "blue sky" permits and approvals required in connection with
the Merger and to consummate the other transactions contemplated by this
Agreement and will pay all expenses incident thereto.
(b) The Company and Parent each shall cooperate with the other
and use (and shall cause their respective Subsidiaries to use) its reasonable
best efforts to take or cause to be taken all actions, and do or cause to be
done all things, necessary, proper or advisable on its part under this Agreement
and applicable Laws to consummate and make effective the Merger and the other
transactions contemplated by this Agreement as soon as practicable, including
preparing and filing as promptly as practicable all documentation to effect all
necessary notices, reports and other filings (including as required by Health
Benefit Laws) and to obtain as promptly as practicable all consents, waivers,
registrations, approvals, permits and authorizations necessary or advisable to
be obtained from any third party and/or any Governmental Entity in order to
consummate the Merger or any of the other transactions contemplated by this
Agreement; provided, however, that nothing in this Section 6.5 shall require, or
be construed to require, Parent, in connection with the receipt of any
regulatory approval, to proffer to, or agree to (i) sell or hold separate and
agree to sell or to discontinue to or limit, before or after the Effective Time,
any assets, businesses, or interest in any assets or businesses of Parent, the
Company or any of their respective Affiliates (or to consent to any sale, or
agreement to sell, or discontinuance or limitation by the Company of any of its
assets or businesses) or (ii) agree to any material conditions relating to, or
material changes or restriction in, the operations of any such asset or
businesses. Subject to applicable Laws relating to the exchange of information,
Parent and the Company shall have the right to review in advance, and to the
extent practicable each will consult the other on, all the information relating
to Parent or the Company, as the case may be, and any of their respective
Subsidiaries, that appear in any filing made with, or written materials
submitted to, any third party and/or any Governmental Entity in connection with
the Merger and the other transactions contemplated by this Agreement. In
exercising the foregoing right, each of the Company and Parent shall act
reasonably and as promptly as practicable.
(c) The Company and Parent each shall, upon request by the other,
furnish the other with all information concerning itself, its Subsidiaries,
directors, officers and stockholders and such other matters as may be reasonably
necessary or advisable in connection with the Prospectus/Proxy Statement, the
S-4 Registration Statement or any other statement, filing, notice or application
made by or on behalf of Parent, the Company or any of their respective
Subsidiaries to any third party and/or any Governmental Entity in connection
with the Merger and the transactions contemplated by this Agreement.
(d) The Company and Parent each shall keep the other apprised of
the status of
27
matters relating to completion of the transactions contemplated hereby,
including promptly furnishing the other with copies of notices or other
communications received by Parent or the Company, as the case may be, or any of
its Subsidiaries, from any third party and/or any Governmental Entity with
respect to the Merger and the other transactions contemplated by this Agreement.
The Company and Parent each shall give prompt notice to the other of any change
that is reasonably likely to result in a Company Material Adverse Effect or
Parent Material Adverse Effect, respectively.
6.6. TAXATION AND ACCOUNTING.
(a) Neither Parent nor the Company shall take or cause to be
taken, and each of Parent and the Company shall use its reasonable best efforts
to prevent any of its affiliates from taking, any action, whether before or
after the Effective Time, that would disqualify the Merger as a "reorganization"
within the meaning of Section 368(a) of the Code. Each of Parent and the Company
agrees to use all reasonable best efforts to cure any impediment to the
qualification of the Merger as a "reorganization" within the meaning of Section
368(a) of the Code.
(b) On or prior to the date the Prospectus/Proxy Statement is
mailed to its stockholders and on or prior to the Closing Date, each of the
Company and Parent shall use its reasonable best efforts to cause to be
delivered to the other party and its directors a letter of its independent
auditors, dated the date of which the S-4 Registration Statement shall become
effective and the Closing Date, respectively, in form and substance customary
for "comfort" letters delivered by independent public accountants in connection
with registration statements similar to the S-4 Registration Statement.
6.7. ACCESS. Upon reasonable notice, and except as may otherwise be
required by applicable Law, the Company shall (and shall cause its Subsidiaries
to) afford to the Parent's Representatives access, during normal business hours
throughout the period prior to the Effective Time, to its properties, books,
contracts and records and, during such period, the Company shall (and shall
cause its Subsidiaries to) furnish promptly to the Parent all information
concerning its business, properties and personnel as may reasonably be
requested, PROVIDED that no investigation pursuant to this Section shall affect
or be deemed to modify any representation or warranty made by the Company, and
PROVIDED, FURTHER, that the foregoing shall not require the Company to permit
any inspection, or to disclose any information, that in the reasonable judgment
of the Company would result in a violation of applicable Law or would result in
the disclosure of any trade secrets of third parties or violate any of the
Company's obligations with respect to confidentiality if the Company shall have
used all reasonable efforts to obtain the consent of such third party to such
inspection or disclosure. All requests for information made pursuant to this
Section shall be directed to an executive officer of the Company or such Person
as may be designated by the company's officers.
6.8. AFFILIATES; LOCKUP LETTERS.
(a) Within 15 days after the date hereof, the Company shall
deliver to Parent a list of names and addresses of those Persons who are, in the
opinion of the Company, as of the time of the Stockholders Meeting referred to
in Section 6.4, "affiliates" of the Company within the meaning of Rule 145 under
the Securities Act. The Company shall provide to Parent such
28
information and documents as Parent shall reasonably request for purposes of
reviewing such list. There shall be added to such list the names and addresses
of any other Person subsequently identified by either Parent (by written notice
to the Company) or the Company as a Person who may be deemed to be such an
affiliate of the Company; PROVIDED, HOWEVER, that no such Person identified by
Parent shall be added to the list of affiliates of the Company if Parent shall
receive from the Company, on or before the date of the Stockholders Meeting, an
opinion of counsel reasonably satisfactory to Parent to the effect that such
Person is not such an affiliate. To the extent not already delivered to Parent,
the Company shall exercise its reasonable best efforts to deliver or cause to be
delivered to Parent, as promptly as practicable after the date hereof but in no
event later than the date of the Closing, from each affiliate of the Company
identified in the foregoing list (as the same may be supplemented as aforesaid),
a letter substantially in the form to be agreed upon by the parties (the
"AFFILIATES LETTER"). Parent shall not be required to maintain the effectiveness
of the S-4 Registration Statement or any other registration statement under the
Securities Act for the purposes of resale by such affiliates of Parent Common
Stock received in the Merger and the certificates representing Parent Common
Stock received by such affiliates shall bear a customary legend regarding
applicable Securities Act restrictions and the provisions of this Section.
(b) Parent agrees that it shall use its best efforts to cause (i)
each of the directors and executive officers of the Company to execute and
deliver to Parent, on the Closing Date, a lockup letter in the form attached
hereto as Exhibit 6.8(b)(i) (a "Director and Officer Lockup Letter") and (ii)
each of the shareholders of the Company specified on Schedule 6.8(b) to this
Agreement to execute and deliver to Parent, on the Closing Date, a lockup letter
in the form attached hereto as Exhibit 6.8(b)(ii) (a "Shareholder Lockup
Letter").
6.9. STOCK EXCHANGE LISTING. Parent shall use its reasonable best
efforts to cause the shares of Parent Common Stock to be issued in the Merger to
be approved for listing or quotation, as the case may be, on whatever national
stock exchange, if any, that the Parent Common Stock shall then be listed, prior
to the Closing Date.
6.10. PUBLICITY. The initial press release shall be a joint press
release and thereafter the Company and Parent each shall consult with each other
and use reasonable best efforts to agree upon the text of any press release,
subject to their respective legal obligations (including requirements of stock
exchanges and other similar regulatory bodies) with respect to the timing of
such public announcements, prior to issuing any such press releases or otherwise
making public announcements with respect to the Merger and the other
transactions contemplated by this Agreement and prior to making any filings with
any third party and/or any Governmental Entity (including any national
securities exchange) with respect thereto.
6.11. STOCK OPTIONS. (i) At the Effective Time, each Company Option,
whether vested or unvested, shall be deemed to constitute an option to acquire,
on the same terms and conditions as were applicable under such Company Option,
the same number of shares of Parent Common Stock as the holder of such Company
Option would have been entitled to receive pursuant to the Merger had such
holder exercised such option in full immediately prior to the Effective Time
(rounded down to the nearest whole number), at a price per share (rounded up to
the nearest whole cent) equal to (y) the aggregate exercise price for the Shares
otherwise purchasable pursuant to such Company Option divided by (z) the number
of full shares of Parent
29
Common Stock deemed purchasable pursuant to such Company Option in accordance
with the foregoing; PROVIDED, HOWEVER, that in the case of any Company Option to
which Section 422 of the Code applies, the option price, the number of shares
purchasable pursuant to such option and the terms and conditions of exercise of
such option shall be determined in accordance with the foregoing, subject to
such adjustments as are necessary in order to satisfy the requirements of
Section 424(a) of the Code. At or prior to the Effective Time, the Company shall
make all necessary arrangements with respect to the Company Stock Plans to
permit the assumption of the unexercised Company Options by Parent pursuant to
this Section.
(ii) Effective at the Effective Time, Parent shall assume
each Company Option in accordance with the terms of the Company Stock Plan under
which it was issued and the stock option agreement by which it is evidenced. At
or prior to the Effective Time, Parent shall take all corporate action necessary
to reserve for issuance a sufficient number of shares of Parent Common Stock for
delivery upon exercise of the Company Options assumed by it in accordance with
this Section.
6.12. EMPLOYEE BENEFITS. Employees of the Company and its Subsidiaries
who are employees on or after the Effective Time, shall be credited to the
fullest extent permissible under law for purposes of eligibility and vesting
with all service with the Company and its Subsidiaries to the same extent that
such service was credited for such purposes by the Company under each employee
benefit plan, program, policy or arrangement of the Parent and its Subsidiaries
in which the employees are eligible to participate.
6.13. EXPENSES. The Company shall pay all costs and expenses incurred
by Parent and Merger Subsidiary in connection with this Agreement and the Merger
and the other transactions contemplated by this Agreement (including, without
limitation, the reasonable fees, expenses and disbursements of counsel to
Parent), whether or not the Merger is consummated, in an amount not to exceed
$25,000 (exclusive of the filing fee for the S-4 Registration Statement and
expenses incurred in connection with the printing and mailing the
Prospectus/Proxy Statement and the S-4 Registration Statement ("Registration
Expenses")). After the payment by the Company of $25,000 of such costs and
expenses incurred by Parent and Merger Subsidiary, whether or not the Merger is
consummated, except as otherwise provided in Section 8.5, all costs and expenses
incurred in connection with this Agreement and the Merger and the other
transactions contemplated by this Agreement shall be paid by the party incurring
such expense, except that Registration Expenses shall be shared equally by
Parent and the Company.
6.14. TAKEOVER STATUTE. If any Takeover Statute is or may become
applicable to the Merger or the other transactions contemplated by this
Agreement, each of Parent and the Company and its Board of Directors shall grant
such approvals and take such actions as are necessary so that such transactions
may be consummated as promptly as practicable on the terms contemplated by this
Agreement or by the Merger and otherwise act to eliminate or minimize the
effects of such statute or regulation on such transactions.
30
ARTICLE VII.
CONDITIONS
7.1. CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each party to effect the Merger is subject to the
satisfaction or waiver at or prior to the Effective Time of each of the
following conditions:
(a) STOCKHOLDER APPROVAL. This Agreement and the Merger shall
have been duly approved by holders of Shares constituting the Company Requisite
Vote in accordance with applicable Law and the Company's articles of
incorporation and by-laws.
(b) LISTING. The shares of Parent Common Stock issuable to the
Company stockholders pursuant to this Agreement shall have been authorized for
listing or quotation, as the case may be, on whatever National Stock
Exchange, if any, that the Parent Common Stock shall then be listed.
(c) REGULATORY CONSENTS. Other than the filing provided for in
Section 1.3, all notices, reports and other filings required to be made prior to
the Effective Time by the Company or Parent or any of their respective
Subsidiaries with, and all consents, registrations, approvals, permits and
authorizations required to be obtained prior to the Effective Time (including as
required by Health Benefit Laws) by the Company or Parent or any of their
respective Subsidiaries from, any Governmental Entity (collectively,
"GOVERNMENTAL CONSENTS") in connection with the execution and delivery of this
Agreement and the consummation of the Merger and the other transactions
contemplated hereby by the Company, Parent and Merger Subsidiary shall have been
made or obtained (as the case may be).
(d) LITIGATION. No court or Governmental Entity of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
Law (whether temporary, preliminary or permanent) that is in effect and
restrains, enjoins or otherwise prohibits consummation of the Merger
(collectively, an "ORDER"), and no Governmental Entity shall have instituted any
proceeding seeking any such Order.
(e) S-4 REGISTRATION STATEMENT. The S-4 Registration Statement
shall have become effective under the Securities Act. No stop order suspending
the effectiveness of the S-4 Registration Statement shall have been issued, and
no proceedings for that purpose shall have been initiated or be threatened, by
the SEC.
(f) BLUE SKY APPROVALS. Parent shall have received all state
securities and "blue sky" permits and approvals, if any, necessary to consummate
the transactions contemplated hereby.
7.2. CONDITIONS TO OBLIGATIONS OF PARENT AND MERGER SUBSIDIARY. The
obligations of Parent and Merger Subsidiary to effect the Merger are also
subject to the satisfaction or waiver by Parent at or prior to the Effective
Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company set forth in this Agreement shall be true and correct
as of the date hereof and as of the Closing Date as though made on and as of the
Closing Date (except to the extent any such representation or warranty expressly
speaks as of an earlier date); PROVIDED,
31
HOWEVER, that notwithstanding anything herein to the contrary, this Section
7.2(a) shall be deemed to have been satisfied even if such representations or
warranties are not so true and correct unless the failure of such
representations or warranties to be so true and correct, individually or in the
aggregate, has had, or is reasonably likely to have, a Company Material Adverse
Effect or is reasonably likely to prevent or to materially burden or materially
impair the ability of the Company to consummate the transactions contemplated by
this Agreement. Parent shall have received a certificate signed on behalf of the
Company by an executive officer of the Company to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF THE COMPANY. The Company shall
have performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Closing Date, and Parent shall
have received a certificate signed on behalf of the Company by an executive
officer of the Company to such effect.
(c) CONSENTS. The Company shall have obtained the consent or
approval of each Person whose consent or approval shall be required under (i)
any Material Company Contract and (ii) any Contract to which the Company or any
of its Subsidiaries is a party, except in the case of clause (ii), those the
failure to obtain, individually or in the aggregate, are not reasonably likely
to have a Company Material Adverse Effect; and no such consent or approval, and
no Governmental Consent shall impose any condition or conditions relating to, or
requiring changes or restrictions in, the operations of any asset or businesses
of the Company, Parent or their respective Subsidiaries which could, in the
judgment of the Board of Directors of Parent, individually or in the aggregate,
materially and adversely impact the economic or business benefits to Parent and
its Subsidiaries of the transactions contemplated by this Agreement.
(d) AFFILIATES LETTERS. Parent shall have received an Affiliates
Letter from each Person identified as an affiliate of the Company pursuant to
Section 6.8(a).
(e) LOCKUP LETTERS. Parent shall have received (i) a Director
and Officer Lockup Letter executed by each director and executive officer of the
Company and (ii) a Shareholder Lockup Letter executed by each shareholder of the
Company identified on Schedule 6.8(b) hereof as a significant shareholder of the
Company.
7.3. CONDITIONS TO OBLIGATION OF THE COMPANY. The obligation of the
Company to effect the Merger is also subject to the satisfaction or waiver by
the Company at or prior to the Effective Time of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of Parent and Merger Subsidiary set forth in this Agreement shall be
true and correct as of the date hereof and as of the Closing Date as though made
on and as of the Closing Date (except to the extent any such representation or
warranty expressly speaks as of an earlier date); PROVIDED, HOWEVER, that
notwithstanding anything herein to the contrary, this Section 7.3(a) shall be
deemed to have been satisfied even if such representations or warranties are not
so true and correct unless the failure of such representations or warranties to
be so true and correct, individually or in the aggregate, has had, or is
reasonably likely to have, a Parent Material Adverse Effect or is reasonably
likely to prevent or to materially burden or materially impair the ability of
the Parent to consummate the transactions contemplated by this Agreement.
32
The Company shall have received a certificate signed on behalf of Parent by an
executive officer of Parent and on behalf of Merger Subsidiary by an executive
officer of Merger Subsidiary to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF PARENT AND MERGER SUBSIDIARY.
Each of Parent and Merger Subsidiary shall have performed in all material
respects all obligations required to be performed by it under this Agreement at
or prior to the Closing Date, and the Company shall have received a certificate
signed on behalf of Parent and Merger Subsidiary by an executive officer of
Parent to such effect.
ARTICLE VIII.
TERMINATION
8.1. TERMINATION BY MUTUAL CONSENT. This Agreement may be terminated
and the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approvals by stockholders of the Company and Parent referred
to in Section 7.1(a), by mutual written consent of the Company and Parent by
action of their respective Boards of Directors.
8.2. TERMINATION BY EITHER PARENT OR THE COMPANY. This Agreement may
be terminated and the Merger may be abandoned at any time prior to the Effective
Time by action of the Board of Directors of either Parent or the Company if (i)
the Merger shall not have been consummated by the Termination Date (as defined
below), whether such date is before or after the date of approval by the
stockholders of the Company; (ii) the approval of the Company's stockholders
required by Section 7.1(a) shall not have been obtained at a meeting duly
convened therefor or at any adjournment or postponement thereof; PROVIDED,
HOWEVER, that if an Acquisition Proposal has been made by any Person prior to
the time of such vote, the Company may not terminate this Agreement pursuant to
this clause (ii) until a date that is not less than 90 days after the date of
such vote, or (iii) any Order permanently restraining, enjoining or otherwise
prohibiting consummation of the Merger shall become final and non-appealable
(whether before or after the approval by the stockholders of the Company or
Parent); PROVIDED, that the right to terminate this Agreement pursuant to clause
(i) above shall not be available to any party that has breached in any material
respect its obligations under this Agreement in any manner that shall have
proximately contributed to the occurrence of the failure of the Merger to be
consummated. For purposes hereof, the "TERMINATION DATE" shall be July 24, 2001;
provided, however, that if the Merger shall have not been consummated by July
24, 2001 solely by reason of the S-4 Registration Statement not having been
declared effective under the Securities Act, the Termination Date shall be
September 24, 2001; provided further, however, that in the event that the S-4
Registration Statement is permitted to be declared effective under the
Securities Act without prior SEC review, the Termination Date shall be April 24,
2001.
8.3. TERMINATION BY THE COMPANY. This Agreement may be terminated and
the Merger may be abandoned at any time prior to the Effective Time, whether
before or after the approval by stockholders of the Company referred to in
Section 7.1(a), by action of the Board of
33
Directors of the Company:
(a) if (i) the Company is not in material breach of any of the
terms of this Agreement, (ii) the Board of Directors of the Company authorizes
the Company, subject to complying with the terms of this Agreement, to enter
into a binding written agreement concerning a transaction that constitutes a
Superior Proposal and the Company notifies Parent in writing that it intends to
enter into such an agreement, attaching the most current version of such
agreement to such notice, (iii) Parent does not make, within five business days
of receipt of the Company's written notification of its intention to enter into
a binding agreement for a Superior Proposal, an offer that the Board of
Directors of the Company determines, in good faith, is at least as favorable,
taking into account, among other things, the long-term prospects and interests
of the Company and its stockholders, as the Superior Proposal and (iv) the
Company prior to such termination pays to Parent in immediately available funds
the fees required to be paid pursuant to Section 8.5. The Company agrees (x)
that it will not enter into a binding agreement referred to in clause (ii) above
until at least the sixth business day after it has provided the notice to Parent
required thereby and (y) to notify Parent promptly if its intention to enter
into a written agreement referred to in its notification shall change at any
time after giving such notification.
(b) if there has been a material breach by Parent or Merger
Subsidiary of any representation, warranty, covenant or agreement contained in
this Agreement that is not curable or, if curable, is not cured within 30 days
after written notice of such breach is given by the Company to the party
committing such breach.
(c) if there has occurred a Parent Material Adverse Effect.
8.4. TERMINATION BY PARENT. This Agreement may be terminated and the
Merger may be abandoned at any time prior to the Effective Time by action of the
Board of Directors of Parent if (a) the Company enters into a binding agreement
for a Superior Proposal or the Board of Directors of the Company recommends a
Superior Proposal or shall have withdrawn or adversely modified its approval or
recommendation of this Agreement or failed to reconfirm its recommendation of
this Agreement within five business days after a written request by Parent to do
so, (b) there has been a material breach by the Company of any representation,
warranty, covenant or agreement contained in this Agreement that is not curable
or, if curable, is not cured within 30 days after written notice of such breach
is given by Parent to the Company, (c) the Company, any of its Subsidiaries or
any of their Representatives shall take any actions pursuant to clause (B), (C)
or (D) of the proviso set forth in Section 6.2, or (d) there has occurred a
Company Material Adverse Effect.
8.5. EFFECT OF TERMINATION AND ABANDONMENT.
(a) In the event of termination of this Agreement and the
abandonment of the Merger pursuant to this Article VIII, this Agreement (other
than as set forth in Section 9.1) shall become void and of no effect with no
liability on the part of any party hereto (or of any of its directors, officers,
employees, agents, legal and financial advisors or other representatives);
PROVIDED, HOWEVER, except as otherwise provided herein, no such termination
shall relieve any party hereto of any liability or damages resulting from any
breach of this Agreement.
(b) In the event that (i) an Acquisition Proposal shall have been
made to the Company
34
or any of its Subsidiaries or any of its stockholders or any Person shall have
publicly announced an intention (whether or not conditional) to make any
Acquisition Proposal with respect to the Company or any of its Subsidiaries and
thereafter this Agreement is terminated by the Company pursuant to Section
8.2(i) or by either Parent or the Company pursuant to Section 8.2(ii) or (ii)
this Agreement is terminated (A) by the Company pursuant to Section 8.3(a) or
(B) by Parent pursuant to Section 8.4(a), then the Company shall promptly, but
in no event later than two days after the date of such termination or such
earlier time as required by this Agreement, pay to Parent a termination fee of
$250,000 (the "TERMINATION FEE") and shall promptly, but in no event later than
two days after being notified of such by Parent, pay to Parent an amount equal
to all of the reasonable out-of-pocket charges and expenses incurred by Parent
or Merger Subsidiary in connection with this Agreement and the transactions
contemplated by this Agreement and substantiated to the Company in writing, in
each case payable by wire transfer of same day funds ("EXPENSES").
(c) In the event this Agreement is terminated (A) by the Company
pursuant to Section 8.2(i) or Section 8.2(ii) or (B) by Parent pursuant to
Section 8.2(ii) or Section 8.4(c) and no fee is otherwise payable to Parent
pursuant to paragraph (b) above, the Company shall promptly, but in no event
later than two days after the date of such termination or such earlier time as
required by this Agreement, pay to Parent the Expenses, payable by wire transfer
of same day funds. If, within one year of such termination, the Company enters
into an agreement concerning a transaction that constitutes an Acquisition
Proposal, the Company at the time of entering into such Agreement shall pay to
Parent the Termination Fee, payable by wire transfer of same day funds.
(d) The Company acknowledges that the agreements contained in
Sections 8.5(b) and (c) are an integral part of the transactions contemplated
by this Agreement, and that, without these agreements, Parent and Merger
Subsidiary would not enter into this Agreement; accordingly, if the Company
fails to promptly pay the amount due pursuant to either Section 8.5(b) or
(c), and, in order to obtain such payment, Parent or Merger Subsidiary
commences a suit which results in a judgment against the Company for the fee
set forth therein the Company shall pay to Parent or Merger Subsidiary its
costs and expenses (including reasonable attorneys' fees) in connection with
such suit, together with interest from the date such amounts became due on
the amounts owed at the prime rate (as determined by BankAmerica) in effect
from time to time during such period.
ARTICLE IX.
MISCELLANEOUS AND GENERAL
9.1. SURVIVAL. This Article IX and the agreements of the Company,
Parent and Merger Subsidiary contained in Section 6.6 (Taxation and Accounting)
shall survive the consummation of the Merger. This Article IX and the agreements
of the Company, Parent and Merger Subsidiary contained in Section 6.13
(Expenses) and Section 8.5 (Effect of Termination and Abandonment) shall survive
the termination of this Agreement. All other representations, warranties,
covenants and agreements in this Agreement shall not survive the consummation of
the Merger or the termination of this Agreement.
35
9.2. MODIFICATION OR AMENDMENT. Subject to the provisions of the
applicable Law, at any time prior to the Effective Time, the parties hereto may
modify or amend this Agreement, by written agreement executed and delivered by
duly authorized officers of the respective parties.
9.3. WAIVER OF CONDITIONS. The conditions to each of the parties'
obligations to consummate the Merger are for the sole benefit of such party and
may be waived by such party in whole or in part to the extent permitted by
applicable Law.
9.4. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute the same agreement.
9.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CONFLICT OF LAW
PRINCIPLES THEREOF. The parties hereby irrevocably submit to the jurisdiction of
the courts of the State of New York and the Federal courts of the United States
of America located in the Southern District of the State of New York solely in
respect of the interpretation and enforcement of the provisions of this
Agreement and of the documents referred to in this Agreement, and in respect of
the transactions contemplated hereby and thereby, and hereby waive, and agree
not to assert, as a defense in any action, suit or proceeding for the
interpretation or enforcement hereof or of any such document, that it is not
subject thereto or that such action, suit or proceeding may not be brought or is
not maintainable in said courts or that the venue thereof may not be appropriate
or that this Agreement or any such document may not be enforced in or by such
courts, and the parties hereto irrevocably agree that all claims with respect to
such action or proceeding shall be heard and determined in such a New York State
or Federal court. The parties hereby consent to and grant any such court
jurisdiction over the person of such parties and over the subject matter of such
dispute and agree that mailing of process or other papers in connection with any
such action or proceeding in the manner provided in Section 9.6 or in such other
manner as may be permitted by law shall be valid and sufficient service thereof.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH
MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED
36
THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER VOLUNTARILY,
AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.5.
9.6. NOTICES. All notices or other communications under this Agreement
shall be in writing and shall be deemed duly given, effective (i) three business
days later, if sent by registered or certified mail, return receipt requested,
postage prepaid, (ii) when sent, if sent by telecopier or fax, provided that the
telecopy or fax is promptly confirmed by telephone confirmation thereof, (iii)
when served, if delivered personally to the intended recipient, and (iv) one
business day later, if sent by overnight delivery via a national courier
service, and in each case, addressed to the intended recipient at the address
set forth in the preamble hereof. Any party may change the address to which
notices or other communications hereunder are to be delivered by giving the
other party notice in the manner herein set forth:
IF TO PARENT OR MERGER SUBSIDIARY
Emergent Group Inc.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxx Xxxxxxx
Fax: (000) 000-0000
WITH A COPY TO
Xxxxxxxxxxxx Xxxx & Xxxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx X. Xxxxxxx, Esq.
Fax: (000) 000-0000
IF TO COMPANY
Medical Resources Management, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xx Xxxxxxxx
Fax: (000) 000-0000
WITH A COPY TO
Sidley & Austin
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
or to such other persons or addresses as may be designated in writing by the
party to receive such
37
notice as provided above.
9.7. ENTIRE AGREEMENT; NO OTHER REPRESENTATIONS. This Agreement
(including any exhibits hereto), the Company Disclosure Letter and the Parent
Disclosure Letter constitute the entire agreement, and supersede all other prior
agreements, understandings, representations and warranties both written and
oral, among the parties, with respect to the subject matter hereof.
9.8. NO THIRD PARTY BENEFICIARIES. This Agreement is not intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder, except as provided in Section 6.12..
9.9. OBLIGATIONS OF PARENT AND OF THE COMPANY. Whenever this Agreement
requires a Subsidiary of Parent to take any action, such requirement shall be
deemed to include an undertaking on the part of Parent to cause such Subsidiary
to take such action. Whenever this Agreement requires a Subsidiary of the
Company to take any action, such requirement shall be deemed to include an
undertaking on the part of the Company to cause such Subsidiary to take such
action and, after the Effective Time, on the part of the Surviving Corporation
to cause such Subsidiary to take such action.
9.10. SEVERABILITY. The provisions of this Agreement shall be deemed
severable and the invalidity or unenforceability of any provision shall not
affect the validity or enforceability or the other provisions hereof. If any
provision of this Agreement, or the application thereof to any Person or any
circumstance, is invalid or unenforceable, (a) a suitable and equitable
provision shall be substituted therefor in order to carry out, so far as may be
valid and enforceable, the intent and purpose of such invalid or unenforceable
provision so long as the economics or legal substance of the transactions
contemplated hereby are not affected in any manner adverse in any material
respect to any party, and (b) the remainder of this Agreement and the
application of such provision to other Persons or circumstances shall not be
affected by such invalidity or unenforceability, nor shall such invalidity or
unenforceability affect the validity or enforceability of such provision, or the
application thereof, in any other jurisdiction.
9.11. INTERPRETATION. The table of contents and headings herein are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
Where a reference in this Agreement is made to a Section or Exhibit, such
reference shall be to a Section of or Exhibit to this Agreement unless otherwise
indicated. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."
9.12. ASSIGNMENT. This Agreement shall not be assignable by either
party without the written consent of the other; PROVIDED, HOWEVER, that Parent
may designate, by written notice to the Company, another wholly owned direct or
indirect Subsidiary to be a Constituent Corporation in lieu of Merger
Subsidiary, in which event all references herein to Merger Subsidiary shall be
deemed references to such other Subsidiary, except that all representations and
warranties made herein with respect to Merger Subsidiary as of the date hereof
shall be deemed representations and warranties made with respect to such other
Subsidiary as of the date of such designation.
38
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officers of the parties hereto as of the date first
written above.
MEDICAL RESOURCES MANAGEMENT, INC.
By: /s/Xx Xxxxxxxx
------------------------------------
Name: Xx Xxxxxxxx
Title: Senior Vice President & CFO
EMERGENT GROUP INC.
By: /s/Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President & CEO
MRM ACQUISITION INC.
By: /s/Xxxx X. Xxxxxxx
------------------------------------
Name: Xxxx X. Xxxxxxx
Title: President
39
