AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Plan of Merger") is entered into
as of October 19, 1996, among CORAM HEALTHCARE CORPORATION, a Delaware
corporation ("Coram"), INTEGRATED HEALTH SERVICES, INC., a Delaware corporation
("IHS"), and IHS ACQUISITION XIX, INC., a Delaware corporation and a
wholly-owned subsidiary of IHS ("Merger Sub").
W I T N E S S E T H:
WHEREAS, the respective Boards of Directors of Coram, IHS and Merger Sub
have approved the merger of Merger Sub with and into Coram (the "Merger"), upon
the terms and subject to the conditions set forth herein, whereby each share of
Common Stock, par value $.001 per share, of Coram (the "Coram Common Stock" and
the issued and outstanding shares thereof, the "Coram Shares"), not owned
directly or indirectly by Coram, will be converted into the right to receive the
"Merger Consideration" (as herein defined);
WHEREAS, each of Coram, IHS and Merger Sub desire to make certain
representations, warranties, covenants and agreements in connection with the
Merger and also to prescribe various conditions to the Merger; and
WHEREAS, it is intended that the Merger shall qualify for federal income
tax purposes as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and that the Merger
shall be recorded for accounting purposes as a pooling of interests.
NOW, THEREFORE, in consideration of the premises, and the mutual covenants
and agreements contained herein, the parties do hereby agree as follows:
Section 1. The Merger
1.1 The Merger. Upon the terms and subject to the conditions set forth in
this Plan of Merger and in accordance with the General Corporation Law of the
State of Delaware (the "DGCL"), at the "Effective Time" (as defined herein),
Merger Sub shall be merged with and into Coram in
accordance with the provisions of Section 252 of the DGCL. Following the
Effective Time, the separate existence of Merger Sub shall cease, and Coram
shall continue as the surviving corporation in the Merger (hereinafter sometimes
referred to as the "Surviving Corporation") as a business corporation
incorporated under the laws of the State of Delaware under the name "Coram
Healthcare Corporation," and shall succeed to and assume all the rights and
obligations of Merger Sub and Coram in accordance with the DGCL.
1.2 Effective Time of the Merger. The Merger shall become effective at such
time (the "Effective Time") as a duly executed Certificate of Merger (the
"Certificate of Merger") is filed with the Secretary of State of the State of
Delaware.
1.3 Closing. The closing (the "Closing") of the Merger will take place at
the New York offices of ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP on a date and at
the time to be agreed upon by the parties (the "Closing Date") which (subject to
the satisfaction or waiver of the conditions set forth in Sections 9.2 and 9.3
hereof) is not later than the second business day after satisfaction of the
conditions set forth in Section 9.1 (other than Sections 9.1(a) and 9.1(b)),
but, subject to Section 8.4, in no event later than March 31, 1997, or such
other date, time and place as shall be agreed upon among the parties hereto.
1.4 Surviving Corporation.
(a) Certificate of Incorporation. The Certificate of Incorporation of
Merger Sub as in effect immediately prior to the Effective Time shall be
the Certificate of Incorporation of the Surviving Corporation, until duly
amended in accordance with the terms thereof and of the DGCL.
(b) By-Laws. The By-laws of Merger Sub as in effect immediately prior
to the Effective Time shall be the By-laws of the Surviving Corporation
until duly amended in accordance with their terms and as provided by the
Certificate of Incorporation of the Surviving Corporation and the DGCL.
(c) Directors. The directors of Merger Sub at the Effective Time
shall, from and after the Effective Time, be the directors of the Surviving
Corporation until their respective successors have been duly elected or
appointed and qualified or until their earlier death,
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resignation or removal in accordance with the Surviving Corporation's
Certificate of Incorporation and By-laws.
(d) Officers. The officers of Merger Sub at the Effective Time shall,
from and after the Effective Time, be the officers 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 Surviving Corporation's Certificate of Incorporation
and By-Laws.
(e) Further Action. If at any time after the Effective Time, IHS shall
consider that any further deeds, assignments, conveyances, agreements,
documents, instruments or assurances in law or any other things are
necessary or desirable to vest, perfect, confirm or record in the Surviving
Corporation the title to any property, rights, privileges, powers and
franchises of Merger Sub by reason of, or as a result of, the Merger, or
otherwise to carry out the provisions of this Plan of Merger, the officers
of Merger Sub shall execute and deliver, upon IHS's request, any
instruments or assurances, and do all other things necessary or proper to
vest, perfect, confirm or record title to such property, rights,
privileges, powers and franchises in the Surviving Corporation, and
otherwise to carry out the provisions of this Plan of Merger.
Section 2. Effect of the Merger on the Capital Stock of the Constituent
Corporations; Exchange of Certificates
2.1 Shares of the Constituent and the Surviving Corporations. At the
Effective Time, by virtue of the Merger:
(a) Each share of capital stock of Merger Sub issued and outstanding
immediately prior to the Effective Time, without any action on the part of
the holder thereof, shall be converted into one fully paid and
nonassessable share of common stock, par value $.001 per share, of the
Surviving Corporation.
(b) Each share of Coram Common Stock that is owned by Coram or any
subsidiary of Coram shall automatically be canceled and retired and shall
cease to exist.
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(c) Each other share of Coram Common Stock issued and outstanding at
the Effective Time, without any further action by the holder thereof, shall
be converted into the right to receive, and become exchangeable for, .2111
(the "Exchange Ratio") validly issued, fully paid and nonassessable shares
of common stock, $.001 par value, of IHS (the "IHS Common Stock," shares
thereof, "IHS Shares" and the IHS Shares to be issued pursuant hereto, the
"IHS Merger Shares").
(d) Anti-Dilution Provisions. If after the date hereof and prior to
the Effective Time IHS shall have declared a stock split (including a
reverse split) of IHS Common Stock or a dividend payable in IHS Common
Stock, or any other distribution of securities or dividend (in cash (other
than ordinary cash dividends) or otherwise) to holders of IHS Common Stock
with respect to their IHS Common Stock (including without limitation such a
distribution or dividend made in connection with a recapitalization,
reclassification, merger, consolidation, reorganization or similar
transaction) then the Merger Consideration shall be appropriately adjusted
to reflect such stock split, dividend or other distribution of securities.
2.2 Reserved.
2.3 Exchange of Certificates. (a) Exchange Agent. Prior to the Effective
Time, IHS shall enter into an agreement with American Stock Transfer & Trust
Company (the "Exchange Agent") which provides that IHS shall deposit with the
Exchange Agent as of the Effective Time, for the benefit of the holders of Coram
Shares, for exchange in accordance with this Section 2, through the Exchange
Agent, certificates representing the IHS Merger Shares (such shares, together
with any dividends or distributions with respect thereto with a record date
after the Effective Time, being hereinafter referred to as the "Exchange Fund")
issuable pursuant to Section 2.1 in exchange for outstanding Coram Shares.
(b) Exchange Procedures. As soon as reasonably practicable, but no later
than ten business days after the Effective Time, the Exchange Agent shall mail
to each holder of record of a certificate or certificates which immediately
prior to the Effective Time represented outstanding Coram Shares (the
"Certificates") whose shares were converted into the right to receive the Merger
Consideration pursuant to Section 2.1, (i) a letter of transmittal (which shall
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specify that delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon delivery of the Certificates to the Exchange
Agent and shall be in such form and have such other provisions as IHS may
reasonably specify) and (ii) instructions for use in effecting the surrender of
the Certificates in exchange for certificates representing shares of IHS Common
Stock. Upon surrender of a Certificate for cancellation to the Exchange Agent,
together with such letter of transmittal, duly executed, and such other
documents as may reasonably be required by the Exchange Agent, the holder of
such Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of IHS Common Stock which such holder
has the right to receive pursuant to the provisions of this Section 2, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of Coram Shares which is not registered in the transfer
records of Coram, a certificate representing the proper number of shares of IHS
Common Stock may be issued to a person other than the person in whose name the
Certificate so surrendered is registered, if such Certificate shall be properly
endorsed or otherwise be in proper form for transfer and the person requesting
such payment shall pay any transfer or other taxes required by reason of the
issuance of shares of IHS Common Stock to a person other than the registered
holder of such Certificate or establish to the satisfaction of IHS that such tax
has been paid or is not applicable. Until surrendered as contemplated by this
Section 2.3, each Certificate shall be deemed at any time after the Effective
Time to represent only the right to receive upon such surrender the certificate
representing shares of IHS Common Stock and cash in lieu of any fractional
shares of IHS Common Stock as contemplated by this Section 2.3. No interest will
be paid or will accrue on any cash payable in lieu of any fractional shares of
IHS Common Stock or on any cash dividends payable with respect to IHS Merger
Shares. To the extent permitted by law, former stockholders of record of Coram
shall be entitled to vote after the Effective Time at any meeting of IHS
stockholders the number of whole shares of IHS Common Stock into which their
respective Coram Shares are converted, regardless of whether such holders have
exchanged their Certificates for certificates representing IHS Common Stock in
accordance with this Section 2.3.
(c) Distributions with Respect to Unexchanged Shares. No dividends or other
distributions with respect to IHS Common Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate
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with respect to the shares of IHS Common Stock represented thereby and no cash
payment in lieu of fractional shares shall be paid to any such holder pursuant
to Section 2.3(e) until the surrender of such Certificate in accordance with
this Section 2. Subject to the effect of applicable laws, following surrender of
any such Certificate, there shall be paid to the holder of the certificate
representing whole shares of IHS Common Stock issued in exchange therefor,
without interest, (i) at the time of such surrender, the amount of any cash
payable in lieu of a fractional share of IHS Common Stock to which such holder
is entitled pursuant to Section 2.3(e) and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid with
respect to such whole shares of IHS Common Stock and (ii) at the appropriate
payment date, the amount of dividends or other distributions with a record date
after the Effective Time but prior to such surrender and with a payment date
subsequent to such surrender payable with respect to such whole shares of IHS
Common Stock.
(d) No Further Ownership Rights in Coram Shares. All shares of IHS Common
Stock issued upon the surrender for exchange of Certificates in accordance with
the terms of this Section 2 (including any cash paid pursuant to Section 2.3(c)
or 2.3(e)) shall be deemed to have been issued (and paid) in full satisfaction
of all rights pertaining to the Coram Shares theretofore represented by such
Certificates. If, after the Effective Time, Certificates are presented to the
Surviving Corporation or the Exchange Agent for any reason, they shall be
canceled and exchanged as provided in this Section 2, except as otherwise
provided by law.
(e) No Fractional Shares. No certificates or scrip representing fractional
shares of IHS Common Stock shall be issued upon the surrender for exchange of
Certificates, and such fractional share interests will not entitle the owner
thereof to vote or to any rights of a stockholder of IHS. Notwithstanding any
other provision of this Plan of Merger, each holder of shares of Coram Common
Stock exchanged pursuant to the Merger who would otherwise have been entitled to
receive a fraction of a share of IHS Common Stock (after taking into account all
Certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest) in an amount equal to such fractional part of a share of IHS
Common Stock multiplied by the Average IHS Trading Price.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund which
remains undistributed to the holders of
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the Certificates for six months after the Effective Time shall be delivered to
IHS, upon demand, and any holders of the Certificates who have not theretofore
complied with this Section 2 shall thereafter look only to IHS for payment of
IHS Common Stock, any cash in lieu of fractional shares of IHS Common Stock and
any dividends or distributions with respect to IHS Common Stock.
(g) No Liability. None of IHS, Merger Sub, Coram or the Exchange Agent
shall be liable to any person in respect of any shares of IHS Common Stock (or
dividends or distributions with respect thereto) or cash from the Exchange Fund
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law. If any Certificates shall not have been surrendered
prior to the end of the applicable period after the Effective Time under escheat
laws (or immediately prior to such earlier date on which any shares of IHS
Common Stock, any cash in lieu of fractional shares of IHS Common Stock or any
dividends or distributions with respect to IHS Common Stock in respect of such
Certificates would otherwise escheat to or become the property of any
governmental entity), any such shares, cash, dividends or distributions in
respect of such Certificates shall, to the extent permitted by applicable law,
become the property of the Surviving Corporation, free and clear of all claims
or interest of any person previously entitled thereto.
(h) Investment of Exchange Fund. The Exchange Agent shall invest any cash
included in the Exchange Fund, as directed by IHS, on a daily basis. Any
interest and other income resulting from such investments shall be paid to IHS.
2.4 Corporate Acts of Merger Sub. All corporate acts, plans, policies,
approvals and authorizations of Merger Sub, its stockholders, its Board of
Directors, committees elected or appointed by the Board of Directors, and all
officers and agents, valid immediately prior to the Effective Time, shall be
those of the Surviving Corporation and shall be as effective and binding thereon
as they were with respect to Merger Sub to the extent not inconsistent with the
terms of this Plan of Merger.
Section 3. Representations and Warranties of Coram.
Coram hereby represents and warrants to IHS and Merger Sub as follows:
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3.1 Organization, Existence and Good Standing. Coram is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Coram has all necessary corporate power to own its properties and
assets and to carry on its business as presently conducted. Coram does not, and
has not within the two years immediately preceding the date of this Plan of
Merger owned, directly or indirectly, any shares of IHS Common Stock or Common
Stock of Merger Sub.
3.2 Coram Capital Stock. Coram's authorized capital consists of (i)
75,000,000 shares of Common Stock, par value $0.001 per share, of which
42,266,867 shares are issued and outstanding as of September 30, 1996 and 48,232
shares are held in treasury and (ii) 10,000,000 shares of Preferred Stock, par
value $.001 per share, none of which are issued and outstanding. All of the
issued and outstanding Coram Shares are duly and validly issued, fully paid and
nonassessable. Except as set forth on Exhibit 3.2 to the Disclosure Schedule
delivered to IHS by Coram at the time of the execution and delivery of this Plan
of Merger (the "Coram Disclosure Schedule"), there are no options, warrants, or
similar rights granted by Coram or any other agreements to which Coram is a
party providing for the issuance or sale by it of any additional securities.
There is no liability for dividends declared or accumulated but unpaid with
respect to any of the Coram Shares. Coram has not made any distributions to any
holders of Coram Shares or participated in or effected any issuance, exchange or
retirement of Coram Shares, or otherwise changed the equity interests of holders
of Coram Shares in contemplation of effecting the Merger within the two years
immediately preceding the date of this Plan of Merger. Any Coram Shares that
Coram has re-acquired during the two years immediately preceding the date of
this Plan of Merger have been so re-acquired only for purposes other than
"business combinations", as such term is defined in Accounting Principles Board
Opinion No. 16, as amended ("Business Combinations"). Except as set forth on
Exhibit 3.2 to the Coram Disclosure Schedule, since the date of the "Coram
Balance Sheet" (as defined below), except pursuant to options, warrants,
conversion rights or other contractual rights existing on such date, Coram has
not issued any shares of its capital stock, effected any stock split or
otherwise changed its capitalization as it existed on such date.
3.3 Subsidiaries. Except as set forth on Exhibit 3.3 to the Coram
Disclosure Schedule, Coram does not own stock
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in and does not control, directly or indirectly, any other corporation,
association or business organization. Except as set forth on Exhibit 3.3 to the
Coram Disclosure Schedule, Coram does not own, directly or indirectly, an equity
interest in, and Coram does not control, directly or indirectly, any other
operating joint venture, partnership or limited liability company. Except as set
forth on Exhibit 3.3 to the Coram Disclosure Schedule, there are no outstanding
options, warrants or other agreements pursuant to which any person or entity has
a right to acquire or be issued any capital stock or other interest in any Coram
Subsidiary. Exhibit 3.3 to the Coram Disclosure Schedule accurately sets forth
Coram's percentage ownership interest in each such entity. Except as set forth
on Exhibit 3.3 to the Coram Disclosure Schedule, each subsidiary, direct or
indirect, of Coram (each a "Coram Subsidiary" and, collectively, the "Coram
Subsidiaries") is a corporation, partnership, limited partnership or limited
liability company duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation. Except as set forth on Exhibit
3.3 to the Coram Disclosure Schedule, each Coram Subsidiary has all necessary
corporate, partnership, limited partnership or limited liability company, as the
case may be, power to own its properties and assets and to carry on its business
as presently conducted. To the knowledge of Coram, no Coram Subsidiary has
within the two years immediately preceding the date of this Plan of Merger
owned, directly or indirectly, any shares of IHS Common Stock or Common Stock of
Merger Sub. Except as set forth on Exhibit 3.3 to the Coram Disclosure Schedule,
Coram is not subject to any contractual obligation, contingent or otherwise, to
purchase, and there are no rights to acquire, any additional interest in any
such partnership or joint venture or any preemptive rights or rights of first
refusal with respect to any outstanding interest in any such partnership or
joint venture.
3.4 Foreign Qualifications. Except as set forth on Exhibit 3.4 to the Coram
Disclosure Schedule, each of Coram and the Coram Subsidiaries is qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the nature or character of the property owned, leased or operated by it or
the nature of the business transacted by it makes such qualification necessary.
3.5 Power and Authority. Subject to the satisfaction of the conditions
precedent set forth herein, Coram has the
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corporate power to execute, deliver and perform this Plan of Merger and all
agreements and other documents executed and delivered or to be executed and
delivered by it pursuant to this Plan of Merger, and, subject to the
satisfaction of the conditions precedent set forth herein has taken all action
required by its Certificate of Incorporation, By-laws or otherwise, to authorize
the execution, delivery and performance of this Plan of Merger and such related
documents. Except as set forth on Exhibit 3.5 to the Coram Disclosure Schedule,
the execution and delivery of this Plan of Merger does not and, subject to the
receipt of required stockholder approval the consummation of the Merger and the
consummation of the transactions contemplated hereby will not, violate any
provisions of the Certificate of Incorporation or By-laws of Coram or any
provisions of, or result in the acceleration of any obligation under, any
mortgage, lien, lease, agreement, instrument, order, arbitration award, judgment
or decree, to which Coram or any Coram Subsidiary is a party, or by which any of
them is bound, or violate any restrictions of any kind to which any of them are
subject. The execution and delivery of this Plan of Merger has been approved by
the Board of Directors of Coram.
3.6 Reports and Financial Statements. (a) Coram has timely filed all
reports required to be filed with the Securities and Exchange Commission (the
"SEC") pursuant to and in accordance with the Securities Exchange Act of 1934,
as amended (together with the rules and regulations promulgated thereunder, the
"Exchange Act") and the applicable rules of the NYSE, since January 1, 1995
(collectively, as heretofore amended, the "Coram SEC Reports"), and has
previously furnished to IHS true and complete copies of all such Coram SEC
Reports. Except for certain information provided to Coram by Caremark
International, Inc., Caremark, Inc. and/or related parties for inclusion in the
Coram SEC Reports, none of such reports, as of their respective dates, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances in which they were made, not misleading. Each of the
balance sheets (including the related notes) included in the Coram SEC Reports
fairly presents the consolidated financial position of Coram and the Coram
Subsidiaries as of the respective dates thereof, and the other related
consolidated financial statements (including the related notes) included therein
fairly present the results of operations and the changes in consolidated
financial position of Coram and the Coram
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Subsidiaries for the respective periods or as of the respective dates set forth
therein, all in conformity with generally accepted accounting principles
consistently applied during the periods involved ("GAAP") except as otherwise
noted therein and, with respect to quarterly financial statements, except for
normal year-end audit adjustments.
(b) Each of the balance sheets included in the "Coram Monthly Financial
Statements" (as defined in Section 7.9) fairly presents or will present, as the
case may be, the consolidated financial position of Coram and the Coram
Subsidiaries as of the respective dates thereof, and the other related
consolidated financial statements included therein fairly present or will
present, as the case may be, the consolidated results of operations and the
changes in consolidated financial position of Coram and the Coram Subsidiaries,
taken as a whole, for the periods reflected therein. The balance sheets and
statements of income included in the Coram Monthly Financial Statements have
been prepared in accordance with GAAP except for the notes thereto (if any) and
except for normal, quarterly and year-end audit adjustments.
(c) Except as set forth on Exhibit 3.6 to the Coram Disclosure Schedule and
in the notes to the consolidated financial statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the Coram SEC Reports, there are no liabilities of Coram and the
Coram Subsidiaries on a consolidated basis required in accordance with GAAP to
be reserved against or disclosed in the Coram Balance Sheet, as of the date
thereof which are not so reserved or disclosed.
(d) Except as disclosed on Exhibit 3.6 to the Coram Disclosure Schedule and
in the notes to the consolidated financial statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the Coram SEC Reports, the consolidated financial statements
included in the Coram SEC Reports and the Coram Monthly Financial Statements do
not reflect any material non-recurring or extraordinary income not identified
therein.
3.7 Contracts, etc. (a) All material contracts, leases, agreements and
arrangements to which Coram or any Coram Subsidiary is a party are legally
valid, binding and enforceable in accordance with their terms and in full force
and effect, and Coram has provided IHS with the opportunity
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to review and copy all such documents. Coram and the Coram Subsidiaries and, to
the knowledge of Coram, all other parties to such contracts, leases, agreements
and arrangements have complied with the provisions of such contracts, leases,
agreements and arrangements, and, Coram and the Coram Subsidiaries are not and,
to the knowledge of Coram, no other party is, in default thereunder, and no
event has occurred which, but for the passage of time or the giving of notice or
both, would constitute a default thereunder.
(b) Set forth on Exhibit 3.7 to the Coram Disclosure Schedule is a list of
all contracts to which Coram or a Coram Subsidiary is a party which cannot be
terminated or do not terminate within 12 months or less without cause or
obligate Coram for amounts in excess of $200,000. Except as set forth on Exhibit
3.7 to the Coram Disclosure Schedule, none of such contracts or agreements will,
by its terms, terminate as a result of the transactions contemplated hereby or
require any consent from any obligor thereto in order to remain in full force
and effect immediately after the Effective Time.
(c) Except as set forth on Exhibit 3.7 to the Coram Disclosure Schedule,
neither Coram nor any Coram Subsidiary has granted any right of first refusal or
similar right in favor of any third party with respect to any material portion
of its properties or assets (excluding liens described in Section 3.8) or
entered into any non-competition agreement or similar agreement restricting its
ability to engage in any business in any location.
(d) True and complete copies (except for pages containing price
information, which have been redacted) of the contracts listed on Exhibit 3.7 to
the Coram Disclosure Schedule have been made available to IHS for inspection in
connection with this Agreement.
3.8 Properties and Assets. Coram and the Coram Subsidiaries collectively
own or lease all of the real and personal property included in the balance sheet
dated as of June 30, 1996 included in the Coram SEC Reports ( the "Coram Balance
Sheet") (except assets recorded under capital lease obligations and such
property as has been disposed of in the ordinary course of Coram's and the Coram
Subsidiaries' business since the date of the Coram Balance Sheet), free and
clear of any liens, claims, charges, exceptions or encumbrances, except for
those (i) if any, which in the aggregate are not material and which do not
materially
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affect continued use of such property, or (ii) which are set forth in Exhibit
3.8 to the Coram Disclosure Schedule. The assets of Coram and the Coram
Subsidiaries are sufficient to carry on the business of Coram in the ordinary
course as presently conducted.
3.9 Legal Proceedings. Except as listed on Exhibit 3.9 to the Coram
Disclosure Schedule, there are no actions, suits, proceedings or investigations
pending or, to the knowledge of Coram, threatened against Coram or any Coram
Subsidiary, at law or in equity, relating to or affecting Coram or any of the
Coram Subsidiaries, including the Merger, and Coram does not have knowledge of
facts from which it should reasonably conclude, without investigation, that a
third party has a basis for asserting any of the foregoing.
3.10 Subsequent Events. Except as set forth on Exhibit 3.10 to the Coram
Disclosure Schedule or as contemplated by this Plan of Merger, Coram has not,
since the date of the Coram Balance Sheet:
(a) Incurred any material adverse change.
(b) Discharged or satisfied any material lien or encumbrance, or paid
or satisfied any material obligation or liability (absolute, accrued,
contingent or otherwise) other than (i) liabilities shown or reflected on
the Coram Balance Sheet or (ii) liabilities incurred since the date of the
Coram Balance Sheet in the ordinary course of business.
(c) Increased or established any reserve for taxes or any other
liability on its books or otherwise provided therefor, except as may have
been required due to income or operations of Coram since the date of the
Coram Balance Sheet in the ordinary course of business.
(d) Mortgaged, pledged or subjected to any lien, charge or other
encumbrance any of the assets, tangible or intangible, other than in the
ordinary course of business.
(e) Sold, transferred or acquired any material assets, canceled any
material debts or claims or waived any material rights, except in the
ordinary course of business.
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(f) Granted any general or uniform increase in the rates of pay of
employees or granted any material increase in salary payable or to become
payable by Coram to any officer or employee, consultant or agent (except as
provided by contract or bonus plan), or by means of any bonus or pension
plan, contract or other commitment, increased in a material respect the
compensation of any Director, officer, employee, consultant or agent,
except for (i) bonuses payable as set forth on Exhibit 3.10(f) to the Coram
Disclosure Schedule not exceeding $2,400,000 (exclusive of any such bonus
to be paid to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ in such amounts as shall be agreed upon by
▇▇. ▇▇▇▇▇▇ and IHS) in the aggregate granted or to be granted to certain
employees to seek to assure their continuance with the Surviving
Corporation for a period of time after the Effective Time and to enable
Coram to satisfy its obligations hereunder, including without limitation
the "Coram October 31 Audit" (as defined below), (ii) to provide for the
severance arrangements set forth on Exhibit 3.10(f) to the Coram Disclosure
Schedule and (iii) the audit bonuses provided for in Section 7.16.
(g) Except for this Plan of Merger and any other agreement executed
and delivered pursuant to this Plan of Merger, entered into any transaction
other than in the ordinary course of business and involving more than
$250,000 other than as permitted under other Sections of this Plan of
Merger.
(h) Issued any stock, bonds or other securities or any options or
rights to purchase any of its securities other than in connection with
existing agreements.
(i) Suffered the loss of, terminated or modified any contract other
than in the ordinary course of business to which Coram or a Coram
Subsidiary is party involving more than $250,000 other than in accordance
with their terms.
(j) Declared, set aside or paid any dividend or made any other
distribution or payment with respect to any shares of its capital stock or,
directly or indirectly, redeemed, repurchased or otherwise acquired any
shares of its capital stock or made any commitment for any such action.
(k) Suffered any casualty or loss not covered by insurance.
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(l) Made any change in applicable accounting principles.
3.11 Accounts Receivable. The accounts receivable set forth on the Coram
Balance Sheet, and all accounts receivable arising since the date thereof, in
respect of the business of Coram and the Coram Subsidiaries represent bona fide
claims of Coram and the Coram Subsidiaries against debtors for sales, services
performed or other charges arising on or before the date hereof, and all the
goods delivered and services performed which gave rise to said accounts were
delivered or performed in material compliance with the applicable orders,
contracts or customer requirements. Said accounts receivable are subject to no
defenses, counterclaims or rights of set-off and are fully collectible in the
ordinary course of business, except in the aggregate to the extent of the
appropriate reserves for doubtful accounts receivable as set forth on the Coram
Balance Sheet and, in the case of accounts receivable arising since the date
thereof, in the aggregate to the extent of a reasonable reserve rate for
doubtful accounts receivable which is not greater than the rate reflected by the
reserve for doubtful accounts on the Coram Balance Sheet.
3.12 Tax Returns. Except as set forth on Exhibit 3.12 of the Coram
Disclosure Schedule, Coram and each Coram Subsidiary has prepared and filed in
accordance with applicable laws, rules and regulations all tax returns required
to be filed by it or requests for extensions to file such returns have been
timely filed and granted and have not expired in accordance with applicable
laws, rules and regulations. Coram and each Coram Subsidiary has made all
payments shown as due on such returns. Except as set forth on Exhibit 3.12 of
the Coram Disclosure Schedule, Coram has not been notified that any tax returns
of Coram or any Coram Subsidiary are currently under audit and no adjustment to
any tax reported or paid has been asserted by the Internal Revenue Service or
any state or local tax agency. No agreements have been made by Coram or any
Coram Subsidiary for the extension of time or the waiver of the statute of
limitations for the assessment or payment of any federal, state or local taxes.
None of Coram and the Coram Subsidiaries is party to any contract, agreement,
plan, or arrangement (other than any of the foregoing with or in respect of
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇) that is a tax sharing or allocation arrangement or that could
give rise to any payment that would not be deductible under Sections 162, 280G
or 404 of the Code. True and complete copies of the tax
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returns referred to in this Section 3.12 have been made available to IHS for
inspection, except that Coram has delivered to IHS only the Forms 1120x and 1139
dated September 30, 1995.
3.13 Employee Benefit Plans; Employment Matters. (a) Except as set forth on
Exhibit 3.13 to the Coram Disclosure Schedule, neither Coram nor any Coram
Subsidiary has established or maintains or is obligated to make contributions to
or under or otherwise participate in (i) any bonus or other type of incentive
compensation plan, program or arrangement (whether or not set forth in a written
document), (ii) any pension, profit-sharing, retirement or other plan, program
or arrangement, or (iii) stock ownership, stock purchase, phantom stock,
retirement, vacation, severance, disability, death benefit, hospitalization or
any other employee benefit plan, fund or program, including, but not limited to,
those described in Section 3(3) of ERISA, except those permitted or required to
be established hereunder. All such plans listed on Exhibit 3.13 (individually, a
"Coram Plan" and collectively, the "Coram Plans",) have been operated and
administered in all material respects in accordance with, as applicable, ERISA,
the Age Discrimination in Employment Act of 1967, as amended, and the related
rules and regulations adopted by those federal agencies responsible for the
administration of such laws. No act or failure to act by Coram or any Coram
Subsidiary has resulted in a "prohibited transaction" (as defined in ERISA) with
respect to the Coram Plans that is not subject to a statutory or regulatory
exception. No "reportable event" (as defined in ERISA, but excluding any event
for which notice is waived under the ERISA regulations) has occurred with
respect to any of the Coram Plans which is subject to Title IV of ERISA. No
Coram Plan has any accumulated funding deficiency or liability to the Pension
Benefit Guaranty Corporation. Neither Coram nor any of the Coram Subsidiaries
has previously made, is currently making, or is obligated in any way to make,
any contributions to any multi-employer plan within the meaning of the
Multi-Employer Pension Plan Amendments Act of 1980.
(b) Except as set forth on Exhibit 3.13 to the Coram Disclosure Schedule,
neither Coram nor any Coram Subsidiary is a party to any oral or written (i)
union, guild or collective bargaining agreement which agreement covers employees
(nor is it aware of any union organizing activity currently being conducted in
respect to any of its employees), (ii) agreement with any executive officer or
other key employee the benefits of which are contingent, or
-16-
the terms of which are materially altered or permit termination, upon the
occurrence of a transaction of the nature contemplated by this Plan of Merger
and which provides for the payment of in excess of $100,000, or (iii) agreement
or plan, including any stock option plan, stock appreciation rights plan,
restricted stock plan or stock purchase plan, any of the benefits of which will
be increased, or the vesting of which will be accelerated, by the occurrence of
any of the transactions contemplated by this Plan of Merger or the value of any
of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Plan of Merger.
3.14 Compliance with Laws in General. Except as set forth on Exhibit 3.14
to the Coram Disclosure Schedule, neither Coram nor any Coram Subsidiary has
received any notices from any governmental authority of material violations of
any federal, state or local laws, regulations or ordinances ("Governmental
Regulations") relating to its business and operations, no notice of any pending
inspection or violation of any such law, regulation or ordinance has been
received from any governmental authority by Coram or a Coram Subsidiary, and
Coram does not have knowledge of facts from which it should reasonably conclude,
without investigation, that any such material violations exist.
3.15 Regulatory Approvals. Except as set forth on Exhibit 3.15 to the Coram
Disclosure Schedule, Coram and each Coram Subsidiary, as applicable, holds all
licenses, certificates of need and other regulatory approvals required or
necessary to be applied for or obtained in connection with its business as
presently conducted or as presently proposed to be conducted. Except as set
forth on Exhibit 3.15 to the Coram Disclosure Schedule, all such licenses,
certificates of need and other regulatory approvals relating to the business,
operations and facilities of Coram and the Coram Subsidiaries are in full force
and effect. Any and all past litigation concerning such licenses, certificates
of need and regulatory approvals, and all claims and causes of action raised
therein, have been finally adjudicated, and, in the case of such litigation
finally adjudicated since the date of the Coram Balance Sheet, such adjudication
has not had a material adverse effect on Coram and the Coram Subsidiaries, taken
as a whole. Except as set forth on Exhibit 3.15 to the Coram Disclosure
Schedule, no such license, certificate of need or regulatory approval has been
revoked, conditioned (except as may be customary) or restricted, and no action
(equitable, legal or administrative), arbitration or other process is pending,
or
-17-
to the best knowledge of Coram, threatened, which in any way challenges the
validity of, or seeks to revoke, condition or restrict any such license,
certificate of need, or regulatory approval. Except as set forth on Exhibit 3.15
to the Coram Disclosure Schedule, subject to compliance with applicable
securities laws, the consummation of the Merger will not violate any law or
restriction to which Coram or a Coram Subsidiary is subject.
3.16 Commissions and Fees. Except for fees payable to ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ Securities Corporation ("DLJ") pursuant to the engagement letter dated
October 4, 1996, and the fees payable to UBS Securities LLC pursuant to the
engagement letter dated October 8, 1996 there are no valid claims for brokerage
commissions or finder's or similar fees in connection with the transactions
contemplated by this Plan of Merger which may be now or hereafter asserted
against IHS, Coram or any Coram Subsidiary resulting from any action taken by
Coram or its officers, directors or agents, or any of them.
3.17 Retirement or Re-Acquisition of IHS Common Stock. Neither Coram nor
any of the Coram Subsidiaries is a party to any agreement the effect of which
would be to require IHS directly or indirectly to retire or re-acquire all or
part of the shares of IHS Common Stock issued pursuant to Section 2.1 hereof.
3.18 Fairness Opinion. Coram has received from UBS Securities LLC ("UBS")
an opinion (the "Coram Fairness Opinion") dated of even date herewith that the
Merger Consideration is fair to the stockholders from a financial point of view.
3.19 Vote Required. The affirmative vote of the holders of a majority of
the outstanding Coram Shares entitled to vote thereon is the only vote of the
holders of any class or series of Coram capital stock necessary to approve this
Plan of Merger, the Merger and the transactions contemplated hereby.
3.20 Compliance with Healthcare Laws. Except as set forth on Exhibit 3.20
to the Coram Disclosure Schedule, (a) Coram, the Coram Subsidiaries and each of
their licensed employees is in compliance with all applicable statutes, laws,
ordinances, rules, orders and regulations of any governmental authority with
respect to regulatory matters primarily relating to patient healthcare
(including without limitation Section 1128B(b) of the Social Security Act, as
-18-
amended, 42 U.S.C. Section WP-7(b) (Criminal Penalties Involving Medicare or
State Health Care Programs) commonly referred to as the "Federal Anti-Kickback
Statute" and The Social Security Act, as amended, Section 1877, 42 U.S.C.
Section WP (Prohibition Against Certain Referrals), commonly referred to as
"▇▇▇▇▇ Statute") (collectively, "Healthcare Laws"). Coram and the Coram
Subsidiaries have maintained all records required to be maintained by the Food
and Drug Administration, Drug Enforcement Agency and State Boards of Pharmacy
and the Medicare and Medicaid programs as required by applicable Healthcare
Laws, and, to the knowledge of Coram, there are no presently existing
circumstances which would result or likely would result in material violations
of Healthcare Laws.
3.21 Medicare and Medicaid Programs. To the knowledge of Coram, except as
set forth on Exhibit 3.21 to the Coram Disclosure Schedule, Coram and the Coram
Subsidiaries, to the extent necessary to conduct their business in a manner
consistent with past practice, are qualified for participation in Medicare and
Medicaid programs. Except as set forth on Exhibit 3.21 to the Coram Disclosure
Schedules or the Coram SEC Reports, (a) Coram and the Coram Subsidiaries have no
liability with respect to recoupment from the Medicare or Medicaid programs or
any other third party reimbursement source that would materially exceed the
reserves or allowances made therefor as set forth on the financial Statements
included in the Coram Balance Sheet, and Coram has no knowledge for the
assertion of any such recoupment claim that arose out of any transactions
completed prior to the date hereof except as reflected in the Coram SEC Reports,
and (b) no Medicare or Medicaid investigation, survey or audit is pending or, to
the knowledge of Coram, threatened with respect to the operation of the current
business of Coram and the Coram Subsidiaries, except to the extent such
investigation, survey or audit is routine and is not reasonably likely to have a
material adverse effect on Coram and the Coram Subsidiaries, taken as a whole.
None of Coram, the Coram Subsidiaries or, to the knowledge of Coram, their
licensed employees has been convicted of, or pled guilty or nolo contendere to
any criminal offense related to any Medicare or Medicaid program while such
person was an employee of Coram or a Coram Subsidiary or after the termination
of such person's employment by Coram or such subsidiary, and, to the knowledge
of Coram, none of such employees has committed any offense which may serve as
the basis for suspension or exclusion of Coram or any Coram Subsidiary from the
Medicare and Medicaid programs.
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3.22 Environmental Matters. Coram and the Coram Subsidiaries are in
compliance with all environmental laws applicable to them and their business and
assets, including, without limitation, the Resource Conservation and Recovery
Act of 1976, the Comprehensive Environmental Response Compensation and Liability
Act of 1980, the Federal Water Pollution Control Act (as amended by the Clean
Water Act), the Federal Toxic Substances Act and the Clean Air Act, each as
amended to date.
3.23 Questionable Payments. To the knowledge of Coram, Coram and the Coram
Subsidiaries have not made, and no officer, director, employee, agent or other
representative of any of them acting on behalf thereof has made, directly or
indirectly, with respect to the business of Coram and the Coram Subsidiaries,
any illegal bribes, kickbacks or other illegal payments of a similar nature, or
illegal political contributions with corporate funds not recorded in the
corporate records of Coram, illegal payments from corporate funds to
governmental officials, or illegal payments from corporate funds to obtain or
retain business either within the United States or abroad.
3.24 Inventory. Except for inventory that is excess, damaged or obsolete,
for which Coram has established in the aggregate an adequate reserve in the
Coram Balance Sheet in accordance with generally accepted accounting principles,
consistently applied, the inventory reflected in the Coram Balance Sheet and not
disposed of or reserved since such date is of good and merchantable quality, of
a quantity and quality saleable in the ordinary course of business of Coram and
the Coram Subsidiaries in accordance with past practices, and is adequate as of
the date hereof for the business of Coram and the Coram Subsidiaries as
conducted as of such date.
3.25 Equipment. Equipment used by Coram and the Coram Subsidiaries in the
conduct of their business is, as of the date hereof, taken as a whole in good
and operating condition (reasonable wear and tear excepted) and is sufficient to
carry on the business of Coram and the Coram Subsidiaries in the ordinary course
as it is presently conducted.
3.26 No Untrue Representations. No representation or warranty in this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary to make any such representation not misleading in any
material respect.
-20-
3.27 Insurance. All material contracts or policies of insurance maintained
by Coram and the Coram Subsidiaries are set forth on Exhibit 3.7. The policies
or contracts of insurance maintained by Coram and the Coram Subsidiaries are
adequate to cover the business of Coram and the Coram Subsidiaries in accordance
with industry practice.
Section 4. Representations and Warranties of Merger Sub.
Merger Sub and IHS, jointly and severally, hereby represent and warrant to
Coram as follows:
4.1 Organization, Existence and Capital Stock. Merger Sub is a corporation
duly organized and validly existing and is in good standing under the laws of
the State of Delaware. Merger Sub's authorized capital consists of 1,000 shares
of Common Stock, par value $.01 per share, all of which shares are issued and
registered in the name of IHS. Merger Sub has not, within the two years
immediately preceding the date of this Plan of Merger, owned, directly or
indirectly, any Coram Shares.
4.2 Power and Authority. Merger Sub has the corporate power to execute,
deliver and perform this Plan of Merger and all agreements and other documents
executed and delivered, or to be executed and delivered, by it pursuant to this
Plan of Merger, and, subject to the satisfaction of the conditions precedent set
forth herein, has taken all actions required by law, its Certificate of
Incorporation, its By-laws or otherwise, to authorize the execution and delivery
of this Plan of Merger and such related documents. The execution and delivery of
this Plan of Merger does not and, subject to the receipt of required regulatory
approvals and any other required third-party consents or approvals, the
consummation of the Merger contemplated hereby will not, violate any provisions
of the Certificate of Incorporation or By-laws of Merger Sub, or any agreement,
instrument, order, judgment or decree to which Merger Sub is a party or by which
it is bound, violate any restrictions of any kind to which Merger Sub is
subject, or result in the creation of any lien, charge or encumbrance upon any
of the property or assets of Merger Sub.
4.3 Commissions and Fees. There are no claims for brokerage commissions,
investment bankers' fees or finder's fees in connection with the transaction
contemplated by this Plan of Merger resulting from any action taken by Merger
Sub or any of its officers, Directors or agents.
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4.4 No Subsidiaries. Merger Sub does not own stock in, and does not control
directly or indirectly, any other corporation, association or business
organization. Merger Sub is not a party to any joint venture or partnership.
4.5 Legal Proceedings. There are no actions, suits or proceedings pending
or threatened against Merger Sub, at law or in equity, relating to or affecting
Merger Sub, including the Merger.
4.6 No Contracts or Liabilities. Other than the obligations created under
this Plan of Merger, Merger Sub has no obligations or liabilities (contingent or
otherwise) under any contracts, claims, leases, loans or otherwise.
Section 5. Representations and Warranties of IHS.
IHS hereby represents and warrants to Coram as follows:
5.1 Organization, Existence and Good Standing. IHS is a corporation duly
organized and validly existing and is in good standing under the laws of the
State of Delaware. IHS has all necessary corporate power to own its properties
and assets and to carry on its business as presently conducted. IHS is not, and
has not been within the two years immediately preceding the date of this Plan of
Merger, a subsidiary or division of another corporation, and, except as set
forth on Exhibit 5.1 to the IHS Disclosure Schedule, IHS has not within such
time owned, directly or indirectly, any Coram Shares.
5.2 IHS Capitalization. IHS has an authorized capitalization of 15,000,000
shares of Preferred Stock, par value $.01 per share, of which no shares are
issued and outstanding, and no shares are held in treasury, and 150,000,000
shares of Common Stock, par value $.001 per share, of which 23,117,934 shares
were issued and outstanding at September 30, 1996, and no shares are held in
treasury. All of the issued and outstanding shares of IHS Common Stock have been
duly and validly issued and are fully paid and nonassessable. Except as
disclosed on Exhibit 5.2 to the IHS Disclosure Schedule delivered to Coram at
the time of the execution and delivery of this Plan of Merger (the "IHS
Disclosure Schedule"), there are no options, warrants or similar rights granted
by IHS or any other agreements to which IHS is a party providing for the
issuance or sale by it of any additional securities. There is no liability for
dividends declared or accumulated but unpaid with respect to any shares of IHS
Common Stock. IHS
-22-
has not made any distributions to any holder of IHS Common Stock or participated
in or effected any issuance, exchange or retirement of IHS Common Stock, or
otherwise changed the equity interests of holders of IHS Common Stock, in
contemplation of effecting the Merger within the two years immediately preceding
the date of this Plan of Merger. Any shares of IHS Common Stock that IHS has
re-acquired during the two years immediately preceding the date of this Plan of
Merger have been so re-acquired only for purposes other than Business
Combinations. Except as set forth on Exhibit 5.2 to the IHS Disclosure Schedule,
since the date of the "IHS Balance Sheet" (as defined below), except pursuant to
options, warrants, conversion rights or other contractual rights existing on
such date, IHS has not issued any shares of its capital stock, effected any
stock split or otherwise changed its capitalization as it existed on such date.
5.3 IHS Common Stock. On the Closing Date, IHS will have a sufficient
number of authorized but unissued and/or treasury shares of its Common Stock
available for issuance to the holders of Coram Shares in accordance with the
provisions of this Plan of Merger. The IHS Common Stock to be issued pursuant to
this Plan of Merger will, when so delivered, be (i) duly and validly issued,
fully paid and nonassessable, (ii) issued pursuant to an effective registration
statement under the Securities Act of 1933, as amended (the "Securities Act"),
and (iii) listed on the NYSE, upon official notice of issuance.
5.4 Organization, Existence and Good Standing of IHS Subsidiaries. Each
operating subsidiary of IHS (each an "IHS Subsidiary" and, collectively, the
"IHS Subsidiaries") is a corporation duly organized, validly existing and in
good standing under the laws of its state of incorporation. Each IHS Subsidiary
has all necessary corporate power to own its properties and assets and to carry
on its business as presently conducted.
5.5 Foreign Qualifications. IHS and each IHS Subsidiary is qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the nature or character of the property owned, leased or operated by it or
the nature of the business transacted by it makes such qualification necessary.
5.6 Merger Sub Common Stock. IHS owns, beneficially and of record, all of
the issued and outstanding shares of Common Stock, par value $.01 per share, of
Merger Sub (the "Merger Sub Common Stock"), which are validly issued and
-23-
outstanding, fully paid and nonassessable, free and clear of all liens and
encumbrances. IHS has the corporate power to endorse and surrender such shares
of Merger Sub Common Stock for conversion pursuant to this Plan of Merger. IHS
has, or will by the Effective Time have, taken all such actions as may be
required in its capacity as the sole stockholder of Merger Sub to approve the
Merger.
5.7 Power and Authority. IHS has corporate power to execute, deliver and
perform this Plan of Merger and all agreements and other documents executed and
delivered, or to be executed and delivered, by it pursuant to this Plan of
Merger, and, subject to the satisfaction of the conditions precedent set forth
herein has taken all actions required by law, its Certificate of Incorporation,
its By-laws or otherwise, to authorize the execution and delivery of this Plan
of Merger and such related documents. The execution and delivery of this Plan of
Merger does not and, except for the lender and bondholder consents referred to
in Sections 9.1(i) and 9.1(j), respectively, and subject to the receipt of
required regulatory approvals and any other required third-party consents or
approvals, the consummation of the Merger and the transactions contemplated
hereby will not, violate any provisions of the Certificate of Incorporation or
By-laws of IHS, or any provision of, or result in the acceleration of any
obligation under, any mortgage, lien, lease, agreement, instrument, order,
arbitration award, judgment or decree to which IHS or any IHS Subsidiary is a
party or by which any of them is bound, or violate any restrictions of any kind
to which any of them is subject. The execution and delivery of this Plan of
Merger has been approved by the Board of Directors of IHS.
5.8 Reports and Financial Statements. (a) IHS has timely filed all reports
required to be filed with the SEC pursuant to and in accordance with the
Exchange Act since January 1, 1995 (collectively, the "IHS SEC Reports") and the
applicable rules of the NYSE, and has previously furnished to Coram with true
and complete copies of all such IHS SEC Reports. None of such reports, as of
their respective dates, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which they were
made, not misleading. Each of the balance sheets (including the related notes)
included in the IHS SEC Reports fairly presents in all material respects the
consolidated financial position of IHS and the IHS Subsidiaries as of the
respective dates thereof, and the other related statements
-24-
(including the related notes) included therein fairly present in all material
respects the results of operations and the changes in consolidated financial
position of IHS and the IHS Subsidiaries for the respective periods or as of the
respective dates set forth therein, all in conformity with GAAP except as
otherwise noted therein.
(b) Except as set forth on Exhibit 5.8(b) to the IHS Disclosure Schedule
and in the notes to the consolidated financial statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the IHS SEC Reports, there are no liabilities of IHS and the IHS
Subsidiaries on a consolidated basis required in accordance with GAAP to be
reserved against or disclosed in the IHS Balance Sheet as of the date thereof
which are not so reserved or disclosed.
(c) Except as disclosed on Exhibit 5.8(c) to the IHS Disclosure Schedule
and in the notes to the consolidated financial statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
included in the IHS SEC Reports, the consolidated financial statements included
in the IHS SEC Reports do not reflect any material non-recurring or
extraordinary income not identified therein.
5.9 Legal Proceedings. Except as set forth on Exhibit 5.9 to the IHS
Disclosure Schedule, there is no pending or threatened litigation, governmental
investigation, condemnation or other proceeding against or relating to or
affecting IHS and the IHS Subsidiaries, taken as a whole, or the transactions
contemplated by this Plan of Merger for which IHS is uninsured, and IHS does not
have knowledge of facts from which it should reasonably conclude, without
investigation, that a third party has a basis for asserting any of the
foregoing.
5.10 Subsequent Events. Except as set forth on Exhibit 5.10 to the IHS
Disclosure Schedule, IHS has not, since the date of the balance sheet of IHS as
of June 30, 1996 included in the IHS SEC Reports (the "IHS Balance Sheet"):
(a) Incurred any material adverse change.
(b) Except for this Plan of Merger and any other agreement executed
and delivered pursuant to this Plan of Merger, entered into any material
transaction other than in the ordinary course of
-25-
business or permitted under other Sections of this Plan of Merger.
5.11 Compliance with Laws in General. IHS and the IHS Subsidiaries have not
received from any governmental authority any notices of material violations of
any federal, state and local laws, regulations and ordinances relating to its
business and operations, and no notice of any pending inspection or violation of
any such law, regulation or ordinance has been received by IHS from any
governmental authority which, if it were determined that a violation had
occurred, would have a material adverse effect on IHS, and IHS does not have
knowledge of facts from which it should reasonably conclude, without
investigation, that any such material violations exist.
5.12 Regulatory Approvals. IHS and each IHS Subsidiary, as applicable,
holds all licenses, certificates of need and other regulatory approvals required
or necessary to be applied for or obtained in connection with its business as
presently conducted or as proposed to be conducted, except where the failure to
obtain such license, certificate of need or regulatory approval would not have a
material adverse effect on IHS and the IHS Subsidiaries, taken as a whole. All
such licenses, certificates of need and other regulatory approvals relating to
the business, operations and facilities of IHS and the IHS Subsidiaries are in
full force and effect, except where any failure of such license, certificate of
need or regulatory approval to be in full force and effect would not have a
material adverse effect on IHS and the IHS Subsidiaries, taken as a whole. Any
and all past litigation concerning such licenses, certificates of need and
regulatory approvals, and all claims and causes of action raised therein which,
if adversely determined, would have a material adverse effect on IHS and the IHS
Subsidiaries, taken as a whole, have been finally adjudicated. No such license,
certificate of need or regulatory approval has been revoked, conditioned (except
as may be customary) or restricted in any manner which would have a material
adverse effect on IHS and the IHS Subsidiaries, taken as a whole, and no action
(equitable, legal or administrative), arbitration or other process is pending,
or to the best knowledge of IHS, threatened, which in any way challenges the
validity of, or seeks to revoke, condition or restrict any such license,
certificate of need, or regulatory approval. Subject to compliance with
applicable securities laws and the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"), the consummation of the Merger will not violate any law
or
-26-
restriction to which IHS or an IHS Subsidiary is subject which, if violated,
would have a material adverse effect on IHS and the IHS Subsidiaries, taken as a
whole.
5.13 Contracts, etc. All material contracts, leases, agreements and
arrangements to which IHS is a party are legally valid, binding and enforceable
in accordance with their terms and in full force and effect. IHS and the IHS
Subsidiaries and, to the knowledge of IHS, all other parties to such contracts,
leases, agreements and arrangements have complied with the provisions of such
contracts, leases, agreements and arrangements, and, IHS and the IHS
Subsidiaries are not in default thereunder, and no event has occurred which, but
for the passage of time or the giving of notice or both, would constitute a
default thereunder, except, in each case, where the invalidity of the lease,
contract, agreement or arrangement or the default or breach thereunder or
thereof would not, individually or in the aggregate, have a material adverse
effect on IHS and the IHS Subsidiaries, taken as a whole.
5.14 Accounts Receivable. Since the date of the IHS Balance Sheet, IHS has
not changed any principle or practice with respect to the recordation of
accounts receivable, calculation of reserves therefor, or any material
collection, discount or write-off policy or procedure. IHS is in substantial
compliance with the terms and conditions of all third-party payor arrangements
relating to its accounts receivable.
5.15 Commissions and Fees. Except for fees payable to ▇▇▇▇▇ ▇▇▇▇▇▇ Inc.,
there are no claims for brokerage commissions, *investment bankers' fees or
finder's fees in connection with the transactions contemplated by this Plan of
Merger resulting from any action taken by IHS or any of its officers, Directors
or agents.
5.16 Retirement or Re-Acquisition of IHS Common Stock. None of IHS and the
IHS Subsidiaries has agreed directly or indirectly to retire or re-acquire all
or part of the shares of IHS Common Stock issued pursuant to Section 2.1 hereof.
5.17 Opinion of IHS Financial Advisor. The Board of Directors of IHS has
received from ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ("▇▇▇▇▇ ▇▇▇▇▇▇"), financial advisor to IHS, an
opinion (the "IHS Fairness Opinion") dated the date of this Plan of Merger to
the effect that, as of such date, the Exchange Ratio is fair to IHS from a
financial point of view.
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5.18 Compliance with Healthcare Laws. (a) IHS, each IHS Subsidiary and each
of their licensed employees is in compliance with all applicable Healthcare
Laws, except where the failure to be in such compliance would not have a
material adverse effect on IHS and the IHS Subsidiaries, taken as a whole. IHS
has maintained all records required to be maintained by the Food and Drug
Administration, Drug Enforcement Agency and State Boards of Pharmacy and the
Medicare and Medicaid programs as required by applicable Healthcare Laws, and,
to the knowledge of IHS, there are no presently existing circumstances which
would result or likely would result in material violations of Healthcare Laws,
except where the failure to maintain such records or said violations would not
have a material adverse effect on IHS and the IHS Subsidiaries, taken as a
whole.
5.19 Medicare and Medicaid Programs. IHS and the IHS Subsidiaries, to the
extent necessary to conduct their business in a manner consistent with past
practice, are qualified for participation in Medicare and Medicaid programs. IHS
and the IHS Subsidiaries have no liability with respect to recoupment from the
Medicare or Medicaid programs or any other third party reimbursement source that
would materially exceed the reserves or allowances made therefor as set forth on
the financial statements included in the IHS Balance Sheet, and IHS has no
knowledge of the assertion of any such recoupment claim that arose out of any
transactions completed prior to the date hereof except as reflected in the IHS
SEC Reports. No Medicare or Medicaid investigation, survey or audit is pending
or, to the knowledge of IHS, threatened with respect to the operation of the
current business of IHS and the IHS Subsidiaries, except to the extent such
investigation, survey or audit is routine and is not reasonably likely to have a
material adverse effect on IHS and the IHS Subsidiaries, taken as a whole.
Except as set forth on Exhibit 5.19 to the IHS Disclosure Schedules, none of
IHS, the IHS Subsidiaries or, to the knowledge of IHS, their licensed employees
has been convicted of, or pled guilty or nolo contendere to any criminal offense
related to any Medicare or Medicaid program while such person was an employee of
IHS or an IHS Subsidiary or after the termination of such person's employment by
IHS or such subsidiary, and, to the knowledge of IHS, none of such employees has
committed any offense which may serve as the basis for suspension or exclusion
of IHS from the Medicare and Medicaid programs which, in the aggregate, would
have a material adverse effect on IHS and the IHS Subsidiaries, taken as a
whole.
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5.20 Environmental Matters. To the knowledge of IHS, IHS and the IHS
Subsidiaries are in compliance with all environmental laws applicable to them
and their business and assets, including, without limitation, the Resource
Conservation and Recovery Act of 1976, the Comprehensive Environmental Response
Compensation and Liability Act of 1980, the Federal Water Pollution Control Act
(as amended by the Clean Water Act), the Federal Toxic Substances Act and the
Clean Air Act, each as amended to date, which, in the aggregate, would have a
material adverse effect on IHS and the IHS Subsidiaries, taken as a whole.
5.21 Questionable Payments. To the knowledge of IHS, IHS and the IHS
Subsidiaries have not made, and no officer, director, employee, agent or other
representative of any of them acting on behalf thereof has made, directly or
indirectly, with respect to the business of IHS and the IHS Subsidiaries, any
illegal bribes, kickbacks or other illegal payments of a similar nature, or
illegal political contributions with corporate funds not recorded in the
corporate records of IHS, illegal payments from corporate funds to governmental
officials, or illegal payments from corporate funds to obtain or retain business
either within the United States or abroad.
5.22 No Untrue Representations. No representation or warranty in this
Agreement contains any untrue statement of a material fact or omits to state a
material fact necessary to make any such representation not misleading in any
material respect.
Section 6. Access to Information and Documents.
6.1 Access to Information. (a) Between the date hereof and the Closing
Date, Coram will give to IHS and its counsel, accountants and other
representatives full access to all the properties, documents, contracts,
personnel files and other records of Coram and shall furnish IHS with copies of
such documents and with such information with respect to the affairs of Coram as
IHS may from time to time reasonably request. Coram will disclose to IHS and
make available to the other and its representatives all books, contracts,
accounts, personnel records, letters of intent, papers, records, communications
with regulatory authorities and other documents relating to the business and
operations of Coram and the Coram Subsidiaries. In addition, Coram shall make
available to IHS all such banking, investment and financial information as shall
be necessary to allow for the efficient integration of Coram's banking,
investment and
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financial arrangements with those of IHS at the Effective Time. Access of IHS
pursuant to the foregoing shall be initiated and coordinated only through
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ or such other persons as Coram may from time to time
designate. All such access shall be granted at a reasonable time and upon
reasonable notice.
(b) Between the date hereof and the Closing Date, IHS will give to Coram
and its counsel, accountants and other representatives reasonable access to all
the properties, material contracts filed with the SEC and other records of IHS
and shall furnish Coram with copies of such documents and with such information
with respect to the affairs of IHS as Coram may from time to time reasonably
request. IHS will make reasonably available to Coram and its representatives all
material contracts filed with the SEC, books, accounts, records, communications
with regulatory authorities and other documents relating to the business and
operations of IHS and the IHS Subsidiaries. Access of Coram pursuant to the
foregoing shall be initiated and coordinated only through ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ or such other persons as IHS
may from time to time designate. All such access such be granted at a reasonable
time and upon reasonable notice.
6.2 Return of Records. If the transactions contemplated hereby are not
consummated and this Plan of Merger terminates, each party agrees promptly to
return upon request all documents, contracts, records or properties of the other
party and all copies thereof furnished pursuant to this Section 6 or otherwise.
All information disclosed by any party or any affiliate or representative of any
party shall be deemed to be "Evaluation Material" under the terms of the
Confidentiality Agreements, dated September 13, 1996 and October 15, 1996,
respectively, between Coram and IHS (the "Confidentiality Agreements").
6.3 Effect of Access. (a) Nothing contained in this Section 6 shall be
deemed to create any duty or responsibility on the part of either party to
investigate or evaluate the value, validity or enforceability of any contract,
lease or other asset included in the assets of the other party.
(b) With respect to matters as to which any party has made express
representations or warranties herein, the parties shall be entitled to rely upon
such express representations and warranties irrespective of any investigations
made by such parties, except to the extent
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that such investigations result in actual knowledge of the inaccuracy or
falsehood of particular representations and warranties.
Section 7. Covenants.
7.1 Preservation of Business. Prior to the Effective Time or the
termination of this Agreement, Coram will conduct its business in the ordinary
course. Coram will use its commercially reasonable best efforts to preserve the
business organization of Coram intact, to keep available to IHS and the
Surviving Corporation the services of the present employees of Coram, and to
preserve for IHS and the Surviving Corporation the goodwill of the suppliers,
customers and others having business relations with Coram.
7.2 Material Transactions. Prior to the Effective Time, Coram will not, and
will not permit any Coram Subsidiary to (in each case other than (i) as
contemplated by the terms of the Plan of Merger and the other documents
contemplated hereby, (ii) with respect to transactions for which there is a
binding commitment existing prior to the date hereof disclosed in the Coram
Disclosure Schedules, (iii) the transactions contemplated by that certain
Memorandum of Understanding concerning the settlement of lawsuits captioned In
re Coram Healthcare Corp. Securities Litigation, Master File No. 95-N-2074 and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ et al., Civil Action No. 96-N-722 and (iv) transactions
described on Exhibit 7.2 to the Coram Disclosure Schedule which do not vary
materially from the terms set forth on such Exhibit 7.2), or in the ordinary
course of business without first obtaining the written consent of IHS:
(a) Encumber any asset or enter into any transaction or make any
contract or commitment relating to the properties, assets and business of
Coram, other than in the ordinary course of business or as otherwise
disclosed herein.
(b) Enter into any employment contract which is not terminable upon
notice of 90 days or less, at will, and without penalty except as provided
herein.
(c) Enter into any contract or agreement which (i) cannot be
terminated or does not terminate within 12 months or less without cause or
(ii) obligates Coram for amounts in excess of $200,000.
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(d) Make any payment or distribution to the trustee under any bonus,
pension, profit-sharing or retirement plan or incur any obligation to make
any such payment or contribution which is not in accordance with Coram's
usual past practice, or make any payment or contributions or incur any
obligation pursuant to or in respect of any other plan or contract or
arrangement providing for bonuses, options, executive incentive
compensation, pensions, deferred compensation, retirement payments,
profit-sharing or the like, establish or enter into any such plan, contract
or arrangement, or terminate or modify any plan, except for (i) bonuses
which may be granted by the Board of Directors to certain members of
Coram's management in anticipation of the Merger not exceeding $2,400,000
in the aggregate (exclusive of any such bonus to be paid to ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ in such amounts as shall be agreed upon by ▇▇. ▇▇▇▇▇▇ and IHS) and
(ii) the severance arrangements set forth on Exhibit 3.10(f) to the Coram
Disclosure Schedule.
(e) Guarantee the obligation of any person, firm or corporation,
except in the ordinary course of business consistent with prior practices.
(f) Amend its Certificate of Incorporation or By-laws.
(g) Except pursuant to options, warrants, conversion rights or other
contractual rights disclosed on Exhibit 3.2 to the Coram Disclosure
Schedule, issue any shares of its capital stock, effect any stock split or
otherwise change its capitalization.
(h) Take any action of a character described in Section 3.10(a) to
3.10(h), inclusive.
7.3 Meetings of Stockholders. (a) Coram will take all steps necessary in
accordance with its Certificate of Incorporation and By-laws to call, give
notice of, convene and hold a meeting of its stockholders (the "Coram
Stockholders Meeting") as soon as practicable after the effectiveness of the
Registration Statement (as defined in Section 7.4 hereof), for the purpose of
approving this Plan of Merger and for such other purposes as may be necessary.
Unless this Plan of Merger shall have been validly terminated as provided
herein, the Board of Directors of Coram (subject to the provisions of Section
8.1 (d) hereof) will (i) recommend to its stockholders the approval of this
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Plan of Merger, the transactions contemplated hereby and any other matters to be
submitted to the stockholders of Coram in connection therewith, to the extent
that such approval is required by applicable law in order to consummate the
Merger, and (ii) use its reasonable, good faith efforts to obtain the approval
by its stockholders of this Plan of Merger and the transactions contemplated
hereby.
(b) IHS will take all steps necessary in accordance with its Certificate of
Incorporation and By-laws to call, give notice of, convene and hold a meeting of
its stockholders (the "IHS Stockholders Meeting") as soon as practicable after
the effectiveness of the Registration Statement (as defined in Section 7.4
hereof), for the purpose of approving this Plan of Merger and for such other
purposes as may be necessary. Unless this Plan of Merger shall have been validly
terminated as provided herein, the Board of Directors of IHS (subject to the
provisions of Section 8.1(f) hereof) will (i) recommend to its stockholders the
approval of this Plan of Merger, the transactions contemplated hereby and any
other matters to be submitted to the stockholders of IHS in connection
therewith, to the extent that such approval is required by applicable law in
order to consummate the Merger, and (ii) use its reasonable, good faith efforts
to obtain the approval by its stockholders of this Plan of Merger and the
transactions contemplated hereby.
7.4 Registration Statement. (a) IHS shall prepare and file with the SEC and
any other applicable regulatory bodies, as soon as reasonably practicable a
Registration Statement on Form S-4 with respect to the shares of IHS Common
Stock to be issued in the Merger (the "Registration Statement"), and will
otherwise proceed promptly to satisfy the requirements of the Securities Act.
Such Registration Statement shall contain a joint proxy statement of IHS and
Coram (the "Proxy Statement") containing the information required by the
Exchange Act. IHS shall take all reasonable steps to cause the Registration
Statement to be declared effective and to maintain such effectiveness until all
of the shares covered thereby have been distributed. IHS shall promptly amend or
supplement the Registration Statement to the extent necessary in order to make
the statements therein not misleading or to correct any misstatements which have
become false or misleading; provided that if such statements or misstatements
accurately reflect information supplied for inclusion in the Registration
Statement by Coram, such obligation shall adhere only upon Coram's supplying to
IHS corrective information, which Coram hereby agrees to provide
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promptly. IHS and Coram shall use their respective reasonable, good faith
efforts to have the Proxy Statement approved by the SEC under the provisions of
the Exchange Act. IHS shall provide Coram with copies of all filings made
pursuant to this Section 7.4 and shall consult with Coram on responses to any
comments made by the Staff of the SEC with respect thereto.
(b) Coram covenants that the information supplied by Coram for inclusion in
the Registration Statement shall not, at the time the Registration Statement is
declared effective, at the time any amendment or supplement thereto is declared
effective, at the time the Proxy Statement is first mailed to holders of Coram
Common Stock and IHS Common Stock, at the time of the Stockholders Meetings and
at the Effective Time, 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, not misleading. Coram covenants that the
information supplied by Coram for inclusion in the Proxy Statement shall not, at
the date the Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to holders of Coram Common Stock and IHS Common Stock, at the time
any amendment or supplement thereto is declared effective, at the time of the
Stockholders Meetings and at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading. If at any time prior to
the Effective Time any event or circumstance relating to Coram, or its officers
or Directors, should be discovered by Coram which should-be set forth in an
amendment to the Registration Statement or a supplement to the Proxy Statement,
Coram shall promptly inform IHS. Coram covenants that all documents, if any,
that Coram is responsible for filing with the SEC in connection with the
transactions contemplated herein will comply as to form and substance in all
material respects with the applicable requirements of the Securities Act and the
rules and regulations thereunder and the Exchange Act and the rules and
regulations thereunder.
(c) IHS covenants that the information supplied by IHS for inclusion in the
Registration Statement shall not, at the time the Registration Statement is
declared effective, at the time any amendment or supplement thereto is declared
effective, at the time the Proxy Statement is first mailed to holders of Coram
Common Stock and IHS Common Stock, at
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the time of the Stockholders Meetings and at the Effective Time, 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, not
misleading. The information supplied by IHS for inclusion in the Proxy Statement
to be sent to the holders of Coram Common Stock and IHS Common Stock in
connection with the Stockholders Meetings shall not, at the date the Proxy
Statement (or any amendment thereof or supplement thereto) is first mailed to
holders of Coram Common Stock and IHS Common Stock, at the time of the
Stockholders Meeting or at the Effective Time, 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. If at any time prior
to the Effective Time any event or circumstance relating to IHS or its officers
or directors, should be discovered by IHS which should be set forth in an
amendment to the Registration Statement or a supplement to the Proxy Statement,
IHS shall promptly inform Coram and shall promptly file such amendment to the
Registration Statement. All documents that IHS is responsible for filing with
the SEC in connection with the transactions contemplated herein will comply as
to form and substance in all material respects with the applicable requirements
of the Securities Act and the rules and regulations thereunder and the Exchange
Act and the rules and regulations thereunder.
(d) Prior to the Closing Date, IHS shall use its reasonable, good faith
efforts to cause the shares of IHS Common Stock to be issued pursuant to the
Merger to be registered or qualified under all applicable securities or Blue Sky
laws of each of the states and territories of the United States, and to take any
other actions which may be necessary to enable the IHS Common Stock to be issued
pursuant to the Merger to be distributed in each such jurisdiction.
(e) Prior to the Closing Date, IHS shall file a Subsequent Listing
Application with the NYSE relating to the shares of IHS Common Stock to be
issued in connection with the Merger, and shall use its best efforts to cause
such shares of IHS Common Stock to be approved for listing on the NYSE, upon
official notice of issuance, prior to the Closing Date.
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(f) Coram shall furnish all information to IHS with respect to Coram as IHS
may reasonably request for inclusion in or in connection with the Registration
Statement, the Proxy Statement and shall otherwise cooperate with IHS in the
preparation and filing of such documents.
7.5 Exemption from State Takeover Laws. Coram shall take all reasonable
steps necessary and within its power to exempt the Merger from the requirements
of any state takeover statute or other similar state law which would prevent or
impede the consummation of the transactions contemplated hereby, by action of
Coram's Board of Directors.
7.6 HSR Act Compliance. IHS and Coram shall promptly make their respective
filings, and shall thereafter use their reasonable, good faith efforts to
promptly make any required submissions, under the HSR Act with respect to the
Merger and the transactions contemplated hereby. IHS and Coram will use their
respective reasonable, good faith efforts to obtain all other permits,
authorizations, consents and approvals from third parties and governmental
authorities necessary to consummate the Merger and the transactions contemplated
hereby.
7.7 Public Disclosures. IHS and Coram will consult with each other before
issuing any press release or otherwise making any public statement with respect
to the transactions contemplated by this Plan of Merger, and shall not issue any
such press release or make any such public statement prior to such consultation
except as may be required by applicable law or requirements of the NYSE. The
parties shall issue a joint press release, mutually acceptable to IHS and Coram,
promptly upon execution and delivery of this Plan of Merger.
7.8 Resignation of Coram Directors and Executive Officers. On or prior to
the Closing Date, Coram shall deliver to IHS evidence satisfactory to IHS of the
resignation of the Directors and executive officers of Coram, such resignations
to be effective on the Closing Date.
7.9 Monthly Financial Statements; Exchange Act Reports. (a) Coram covenants
that prior to the Effective Time or earlier termination of this Agreement, it
will deliver to IHS a balance sheet, income statement and statement of cash
in-flow and cash out-flow as of and for (i) the one-month period ending the last
day of each month subsequent to the
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date of this Agreement that is not the last month of a fiscal quarter (together
with such statements for July 1996 and August 1996 previously delivered to IHS,
the "Coram Monthly Financial Statements"), that such consolidated financial
statements will be delivered within 30 days following the end of each such
month, and (ii) the three month period ending on the last day of each fiscal
quarter, which quarterly statement will be delivered within 30 days following
the end of each such quarter and will be limited to Coram's good faith estimate
of the information included as of and for such period.
(b) Coram covenants that from and after the date hereof, it will file all
periodic reports required to be filed by it under the Exchange Act and will
promptly deliver to IHS all such reports and supporting internal management
relating thereto.
(c) IHS covenants that from and after the date hereof, it will file all
periodic reports required to be filed by it under the Exchange Act and will
promptly deliver to Coram all such reports.
7.10 No Solicitations. From the date of this Agreement until the Effective
Time or until this Agreement is terminated in accordance with Section 8 hereof,
Coram shall not initiate, solicit or encourage (including by way of furnishing
assistance or proprietary information), or take any other action to facilitate,
any inquiries or the making of any proposal relating to, or that may reasonably
be expected to lead to, any "Coram Competing Transaction" (as defined below), or
enter into any discussions or negotiate with any person or entity in furtherance
of such inquiries or to obtain a Coram Competing Transaction, or agree to or
endorse any Coram Competing Transaction, or authorize or permit any of the
officers, directors or employees of Coram or the Coram Subsidiaries or any
investment banker, financial advisor, attorney, accountant or other
representative retained by Coram or any Coram Subsidiary to take any such
action, and Coram shall promptly notify IHS of all relevant terms (including the
identity of the parties involved) of any such inquiries and proposals received
by Coram or any Coram Subsidiary or any such officer, director, investment
banker, financial advisor, attorney, accountant or other representative relating
to any of such matters and if such inquiry or proposal is in writing, Coram
shall promptly deliver or cause to be delivered to IHS a copy of such inquiry or
proposal; provided, however, that, prior to the receipt of the approval of the
Merger of Coram's
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stockholders at the Coram Stockholders Meeting, nothing contained in this
Section 7.10 shall prohibit the Board of Directors of Coram from (i) furnishing
information to, or entering into discussions or negotiations with, any person or
entity in connection with an unsolicited bona fide offer by such person or
entity to acquire Coram pursuant to a merger, consolidation, share exchange,
business combination or other similar transaction or to acquire greater than 50%
of the assets of Coram and the Coram Subsidiaries, taken as a whole, to the
extent and only to the extent that (A) the Board of Directors of Coram, after
consultation with and based upon advice of independent legal counsel, determines
in good faith that such action is advisable for Coram's Board of Directors to
comply with its fiduciary duties under applicable law and (B) prior to
furnishing such information to, or entering into discussions or negotiations
with, such person or entity Coram (x) provides notice to IHS to the effect that
it is furnishing information to, or entering into discussions or negotiations
with, such person or entity and (y) enters into a confidentiality agreement with
such person or entity reasonably calculated under the circumstances, in the
reasonable judgment of Coram, to protect the confidentiality of Coram's
proprietary information; or (ii) complying with Rule 14e-2 promulgated under the
Exchange Act with regard to a Coram Competing Transaction. For the purposes of
this Agreement, "Coram Competing Transaction" shall mean any of the following
(other than the transactions contemplated by this Agreement) involving Coram:
(i) any merger, consolidation, share exchange, business combination or similar
transaction; (ii) any sale, lease, exchange, mortgage, pledge, transfer or other
disposition of 40% or more of the assets of Coram and the Coram Subsidiaries,
taken as a whole; (iii) any tender offer or exchange offer for more than 50% of
the outstanding shares of the capital stock of Coram; (iv) any person acquiring
beneficial ownership of, or any group (as such term is defined under Section
13(d) of the Exchange Act) being formed which beneficially owns or has the right
to acquire beneficial ownership of, 25% or more of the outstanding shares of the
capital stock of Coram; or (v) any public announcement of a proposal, plan or
intention to do any of the foregoing or any agreement to engage in any of the
foregoing.
7.11 Other Actions. Subject to the provisions of Section 7.10 hereof, none
of Coram, IHS and Merger Sub shall knowingly or intentionally take any action,
or omit to take any action, if such action or omission would, or reasonably
might be expected to, result in any of its representations
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and warranties set forth herein being or becoming untrue in any material
respect, or in any of the conditions to the Merger set forth in this Plan of
Merger not being satisfied, or delay the Effective Time or (unless such action
is required by applicable law) which would materially adversely affect the
ability of Coram or IHS to obtain any consents or approvals required for the
consummation of the Merger without imposition of a condition or restriction
which would have a material adverse effect on the Surviving Corporation or which
would otherwise materially impair the ability of Coram or IHS to consummate the
Merger in accordance with the terms of this Plan of Merger or materially delay
such consummation. Without limiting the generality of the foregoing, Coram shall
use its reasonable best efforts to obtain all consents required of third parties
in respect of the Merger under all material contracts to which Coram or any
Coram Subsidiary is a party, including without limitation lessor consents under
the lease of Coram's corporate headquarters and all pharmacy leases.
7.12 Accounting Methods. Prior to Closing, neither IHS nor Coram shall
change, in any material respect, its methods of accounting in effect at its most
recent fiscal year end, except as required by changes in generally accepted
accounting principles as concurred by such parties' independent accountants.
7.13 Pooling and Tax-Free Reorganization Treatment. Neither IHS nor Coram
shall intentionally take or cause to be taken any action, whether on or before
the Effective Time, which would disqualify the Merger as a "pooling of
interests" for accounting purposes or as a "reorganization" within the meaning
of Section 368(a) of the Code.
7.14 Affiliate and Pooling Agreements. IHS and Coram will each use their
respective reasonable, good faith efforts to cause each of their respective
Directors and executive officers and each of their respective "affiliates"
(within the meaning of Rule 145 under the Securities Act) to execute and deliver
to IHS as soon as practicable an agreement in the form reasonably acceptable to
IHS and Coram relating to the disposition of shares of Coram Common Stock and
shares of IHS Common Stock held by such person and the shares of IHS Common
Stock issuable pursuant to this Plan of Merger.
7.15 Cooperation. (a) IHS and Coram shall together, or pursuant to an
allocation of responsibility agreed to between them, (i) cooperate with one
another in determining
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whether any filings are required to be made or consents required to be obtained
in any jurisdiction prior to the Effective Time in connection with the
consummation of the transactions contemplated hereby and cooperate in making any
such filings promptly and in seeking to obtain timely any such consents, (ii)
use their respective commercially reasonable efforts to cause to be lifted any
injunction prohibiting the Merger, or any part thereof, or the other
transactions contemplated hereby, and (iii) furnish to one another and to one
another's counsel all such information as may be required to effect the
foregoing actions.
(b) Subject to the terms and conditions herein provided, and unless this
Plan of Merger shall have been validly terminated as provided herein, each of
IHS and Coram shall use all reasonable efforts (i) to take, or cause to be
taken, all actions necessary to comply promptly with all legal requirements
which may be imposed on such party (or any subsidiaries or affiliates of such
party) with respect to the Plan of Merger and to consummate the transactions
contemplated hereby, subject to the vote of its stockholders described above,
and (ii) to obtain (and to cooperate with the other party to obtain) any
consent, authorization, order or approval of, or any exemption by, any
governmental entity and/or any other public or private third party which is
required to be obtained or made by such party or any of its subsidiaries or
affiliates in connection with this Plan of Merger and the transactions
contemplated hereby each of IHS and Coram will promptly cooperate with and
furnish information to the other in connection with any such burden suffered by,
or requirement imposed upon, either of them or any of their subsidiaries or
affiliates in connection with the foregoing.
(c) IHS shall use its best efforts to secure all consents required pursuant
to outstanding convertible debt and subordinated debentures of IHS.
7.16 October 31, 1996 Audit. Coram shall prepare in accordance with
generally accepted accounting principles, and shall have done an audit (the
"Coram October 31 Audit") by KMPG Peat Marwick LLP of its consolidated financial
statements dated as of and for the ten month period ending October 31, 1996. IHS
agrees that it will bear the expense equal to the sum of the amount charged by
KMPG Peat Marwick LLP to perform the Coram October 31 Audit and the amount
charged by Ernst & Young LLP to perform the audit of Coram's financial
statements for the year ended December 31, 1996 (the "Year-end Audit"), less the
amount Ernst & Young LLP
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would have charged to perform the Year-end Audit had KMPG Peat Marwick LLP not
performed the Coram October 31 Audit. Notwithstanding anything in this Plan of
Merger to the contrary, IHS and Merger Sub acknowledge and agree that Coram may
pay cash audit bonuses in an aggregate amount not to exceed $150,000 to its
accounting staff in connection with the Coram October 31 Audit.
7.17 Tax Opinions. The parties hereto shall use their reasonable best
efforts to cause counsel for each of IHS and Coram to render opinions as to the
federal income tax consequences of the Merger, which opinions shall be filed as
Exhibits to the Registration Statement. Each of IHS and Coram agrees that it
shall provide certificates containing reasonable representations to such counsel
in connection with the rendering of such opinions.
7.18 Employee Stock Options; Warrants. (a) Each holder of an option (each
herein referred to as a "Coram Option") granted by Coram to purchase shares of
Common Stock pursuant to any stock option plan or plans of the Company or
otherwise (collectively the "Coram Stock Option Plans") that is outstanding and
unexercised immediately prior to the Effective Time, shall receive, in lieu of
each such Coram Option, an option to purchase IHS Shares (a "Substituted
Option") under a stock option plan maintained by IHS, in accordance with the
Coram Stock Option Plan or stock option agreement governing each such option in
an amount and at an exercise price as determined below.
(b) The number of shares, the exercise price and the terms and conditions
of a Substituted Option shall be determined in a manner that preserves both (1)
the aggregate gain (or loss) on the Coram Option immediately prior to the time
of substitution, and (2) the ratio of the exercise price per share of Common
Stock subject to the Coram Option to the fair market value (determined
immediately prior to the time of substitution) per share subject to the Coram
Option; provided, however, that in the case of any Coram Option that is an
"inventive stock option" as defined in section 422 of the Code, the adjustment
described above shall be, and is intended to be, effected in a manner that is
consistent with section 424(a) of the Code. The duration and other terms of the
new option shall be the same as the original option, except that all references
to Coram shall be deemed to be references to IHS. IHS shall file with the SEC a
registration statement on Form S-8 (or other appropriate form) or a
post-effective amendment to the Registration Statement as promptly as
practicable after the
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Effective Time, for purposes of registering all IHS Shares issuable after the
Effective Time upon exercise of the Substituted Options, and use all reasonable
efforts to have such registration statement or post-effective amendment become
effective and to comply, to the extent applicable, with state securities or blue
sky laws with respect hereto at the Effective Time. Unless otherwise prohibited
by law, such Form S-8 shall also register the reoffer and resale by affiliates
of IHS of the IHS Shares issuable to such affiliates upon exercise of the
Substituted Options. IHS shall maintain the effectiveness under the Securities
Act of such Form S-8 registration statement as long as any such affiliates'
options remain outstanding.
(c) Coram will take such reasonable steps as are necessary to effectuate
the agreements of this Section 7.18.
7.19 Notice of Subsequent Events. Each party hereto shall notify the other
parties of any changes, additions or events of which they have or obtain
knowledge as to which they have concluded or reasonably should have concluded
would cause any material change in or material addition to any Exhibit to its
Disclosure Schedule delivered by the notifying party under this Plan of Merger,
or otherwise would in such party's reasonable judgment likely result in a breach
of this Agreement by such party prior to the Closing Date, promptly after the
occurrence of the same.
7.20 Caremark Litigation. Coram agrees that, promptly upon the request of
IHS, it will enter into the agreement with Caremark International, Inc. and
Caremark, Inc. in the form of Exhibit 7.20 attached hereto.
Section 8. Termination, Amendment and Waiver.
8.1 Termination. This Plan of Merger may be terminated at any time prior to
the Effective Time, either before or after approval of matters presented in
connection with the Merger by the holders of Coram Common Stock and IHS Common
Stock:
(a) by mutual written consent of IHS, Merger Sub and Coram;
(b) by either IHS or Coram:
(i) if, upon a vote at a duly held meeting of stockholders or any
adjournment thereof, any approval of the holders of Coram Common Stock
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necessary to consummate the Merger and the transactions contemplated
hereby shall not have been obtained;
(ii) if, upon a vote at a duly held meeting of stockholders or
any adjournment thereof, any approval of the holders of IHS Common
Stock necessary to consummate the Merger and the transactions
contemplated hereby shall not have been obtained;
(iii) if the Merger shall not have been consummated on or before
March 31, 1997, unless the failure to consummate the Merger is the
result of a willful and material breach of this Plan of Merger by the
party seeking to terminate this Plan of Merger, provided, however,
that the passage of such period shall be tolled for any part thereof
(but not exceeding 60 days in the aggregate) during which any party
shall be subject to a nonfinal order, decree, ruling or action
restraining, enjoining or otherwise prohibiting the consummation of
the Merger or the calling or holding of a meeting of stockholders;
(iv) if any court of competent jurisdiction or other governmental
entity shall have issued an order, decree or ruling or taken any other
action permanently enjoining, restraining or otherwise prohibiting the
Merger and such order, decree, ruling or other action shall have
become final and nonappealable;
(v) in the event of a breach by the other party of any
representation, warranty, covenant or other agreement contained in
this Plan of Merger which exists on the Closing Date (A) would give
rise to the failure of a condition set forth in Section 9.2(a) or (b)
or Section 9.3(a) or (b), as applicable, and (B) cannot be or has not
been cured within 30 days after the giving of written notice to the
breaching party of such breach (a "Material Breach") (provided that
the terminating party is not then in Material Breach of any
representation, warranty, covenant or other agreement contained in
this Plan of Merger);
(vi) in the event of (i) notice pursuant to Section 7.19 of a
breach by the other party of any
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representation, warranty, covenant or other agreement contained in
this Plan of Merger or (ii) notice from such party to the other party
of such other party's breach of any representation, warranty, covenant
or other agreement contained in this Plan of Merger, in either case
which cannot be or has not been cured within 30 days after the giving
of written notice of such breach to or by the other party (provided
that the terminating party is not then in Material Breach of any
representation, warranty, covenant or other agreement contained in
this Plan of Merger); or
(c) by either IHS or Coram in the event that (i) all of the conditions
to the obligation of such party to effect the Merger set forth in Section
9.1 shall have been satisfied and (ii) any condition to the obligation of
such party to effect the Merger set forth in Section 9.2 (in the case of
IHS) or Section 9.3 (in the case of Coram)is not capable of being satisfied
prior to the end of the period referred to in Section 8.1(b)(iii);
(d) by Coram, if Coram's Board of Directors shall have (i) determined,
in the exercise of its fiduciary duties under applicable law, not to
recommend the Merger to the holders of Coram Shares or shall have withdrawn
such recommendation or (ii) approved, recommended or endorsed any Coram
Competing Transaction other than this Plan of Merger or (iii) resolved to
do any of the foregoing;
(e) by IHS if (i) the Board of Directors of Coram fails to make or
withdraws its recommendation of the adoption of this Agreement or the
Merger; (ii) the Board of Directors of Coram shall have recommended to
Coram's stockholders any Coram Competing Transaction or entered into an
agreement with respect to a Coram Competing Transaction; or (iii) a tender
offer or exchange offer for 50% or more of the outstanding shares of
capital stock of Coram is commenced, and the Board of Directors of Coram
recommends, within the time period specified under Rule 14e-2 under the
Exchange Act, that Coram's stockholders tender their shares into such
tender or exchange offer;
(f) by IHS, if IHS's Board of Directors shall have (i) determined, in
the exercise of its fiduciary duties under applicable law, not to recommend
the Merger to the holders of IHS Shares or shall have withdrawn such
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recommendation or (ii) approved, recommended or endorsed any "IHS Competing
Transaction" (as defined below) other than this Plan of Merger or (iii)
resolved to do any of the foregoing. For the purpose of this Section
8.1(f), the term "IHS Competing Transaction" shall mean any of the
following (other than the transactions contemplated by this Agreement)
involving IHS: (i) any merger, consolidation, share exchange, business
combination or similar transaction; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of 40% or more of the
assets of IHS and the IHS Subsidiaries, taken as a whole; (iii) any tender
offer or exchange offer for more than 50% of the outstanding shares of the
capital stock of IHS; (iv) any person acquiring beneficial ownership of, or
any group (as such term is defined under Section 13(d) of the Exchange Act)
being formed which beneficially owns or has the right to acquire beneficial
ownership of, 25% or more of the outstanding shares of the capital stock of
IHS; or (v) any public announcement of a proposal, plan or intention to do
any of the foregoing or any agreement to engage in any of the foregoing;
(g) by Coram if the Board of Directors of IHS fails to make or
withdraws its recommendation of the adoption of this Agreement or the
Merger;
(h) by IHS if there shall have occurred prior to the Effective Time
changes in generally accepted accounting principles or changes in
applicable law that, in the aggregate, shall have a material adverse effect
on the business of Coram and the Coram Subsidiaries, taken as a whole.
8.2 Effect of Termination. In the event of termination of this Plan of
Merger as provided in Section 8.1, this Plan of Merger shall forthwith become
void and have no effect, without any liability or obligation on the part of any
party, other than the provisions of Sections 6.2, 8.2 and 8.6, and except to the
extent that such termination results from the willful and material breach by a
party of any of its representations, warranties, covenants or other agreements
set forth in this Plan of Merger.
8.3 Amendment. This Plan of Merger may be amended by the parties at any
time before or after any required approval of matters presented in connection
with the Merger by the holders of Coram Shares or IHS Shares; provided, however,
that after any such approval, there shall be made
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no amendment that pursuant to the DGCL requires further approval by such
stockholders. This Plan of Merger may not be amended except by an instrument in
writing signed on behalf of each of the parties.
8.4 Extension; Waiver. At any time prior to the Effective Time, the parties
may (a) extend the time for the performance of any of the obligations or other
acts of the other parties, (b) waive any inaccuracies in the representations and
warranties contained in this Plan of Merger or in any document delivered
pursuant to this Plan of Merger or (c) subject to the proviso of Section 8.3,
waive compliance with any of the agreements or conditions contained in this Plan
of Merger. Any agreement on the part of a party to any such extension or waiver
shall be valid only if set forth in an instrument in writing signed on behalf of
such party. Without limiting the generality of the foregoing, if the Merger is
not consummated on or prior to March 31, 1997 as a result of the Registration
Statement not having been declared effective by the SEC by February 15, 1997,
and the Registration has been declared effective by such date or Coram and IHS
are in bona fide discussions with the SEC regarding the Registration Statement
and diligently pursuing the effectiveness of the Registration Statement with the
SEC, then the date set forth in Section 8.1(b)(iii) shall be extended to the
earlier of May 31, 1997 and the date that is thirty (30) days following the date
on which the Registration Statement is declared effective. The failure of any
party to this Plan of Merger to assert any of its rights under this Plan of
Merger or otherwise shall not constitute a waiver of such rights.
8.5 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Plan of Merger pursuant to Section 8.1, an amendment of this
Plan of Merger pursuant to Section 8.3, or an extension or waiver pursuant to
Section 8.4 shall, in order to be effective, require in the case of IHS, Merger
Sub or Coram, action by its Board of Directors or the duly authorized designee
of the Board of Directors.
8.6 Expenses; Breakup Fees. (a) All costs and expenses incurred in
connection with this Plan of Merger and the transactions contemplated hereby
shall be paid by the party incurring such expense, it being understood that if
the Merger is consummated, by reason thereof, IHS will indirectly bear the
expenses incurred by Coram.
(b) If the Merger is not consummated as a result of termination of this
Agreement pursuant to Sections 8.1(d)
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(other than a termination pursuant to Section 8.1(d)(i) resulting from the
failure of UBS to deliver the Coram Fairness Opinion as of the date of mailing
of the Proxy Statement, so long as such failure does not arise out of the
existence of a Coram Competing Transaction) 8.1(e)(ii) or 8.1(e)(iii) hereof,
Coram shall pay IHS a breakup fee in the amount of Seventeen Million Five
Hundred Thousand Dollars ($17,500,000) plus all expenses reasonably incurred by
IHS in connection with this Plan of Merger and collection of such fee. If the
above breakup fee is paid as set forth above, such payment shall be the sole and
exclusive remedy of IHS against Coram hereunder.
(c) If the Merger is not consummated as a result of termination of this
Agreement pursuant to Section 8.1(f) (other than a termination pursuant to
Section 8.1(f)(i) resulting from the adverse modification or withdrawal as of
the date of the mailing of the Proxy Statement of the IHS Fairness Opinion, so
long as such modification or withdrawal does not arise out of the existence of
an IHS Competing Transaction) hereof, IHS shall pay Coram a breakup fee in the
amount of Seventeen Million Five Hundred Thousand Dollars ($17,500,000) plus all
expenses reasonably incurred by Coram in connection with this Plan of Merger and
collection of such fee. If the above breakup fee is paid as set forth above,
such payment shall be the sole and exclusive remedy of Coram against IHS
hereunder.
Section 9. Conditions to Closing.
9.1 Mutual Conditions. The respective obligations of each party to effect
the Merger shall be subject to the satisfaction, at or prior to the Closing
Date, of the following conditions (any of which may be waived in writing by IHS,
Merger Sub and Coram):
(a) None of IHS, Merger Sub or Coram nor any of their respective
subsidiaries shall be subject to any order, decree or injunction by a court
of competent jurisdiction which (i) prevents or materially delays the
consummation of the Merger or (ii) would impose any material limitation on
the ability of IHS effectively to exercise full rights of ownership of the
Common Stock of the Surviving Corporation or any material portion of the
assets or business of Coram, taken as a whole.
(b) No statute, rule or regulation shall have been enacted by the
government (or any governmental agency) of the United States or any state,
municipality or other
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political subdivision thereof that makes the consummation of the Merger or
any other significant transaction contemplated hereby illegal.
(c) The holders of shares of Coram Common Stock and the holders of the
shares of IHS Common Stock each shall have approved the adoption of this
Plan of Merger and any other matters required to be approved by them in
accordance with the terms of this Agreement.
(d) The shares of IHS Common Stock to be issued in connection with the
Merger shall have been approved for listing on the NYSE, upon official
notice of issuance, and shall have been issued in transactions qualified or
exempt from registration under applicable securities or Blue Sky laws of
such states and territories of the United States as may be required.
(e) IHS and Coram shall each have received a letter from each of KMPG
Peat Marwick LLP and Ernst & Young LLP dated on each of the date of the
mailing of the Proxy Statement and the Closing Date to the effect that the
Merger shall qualify for "pooling of interests" accounting treatment if
consummated in accordance with the Plan of Merger.
(f) The Registration Statement shall have been declared effective and
no stop order with respect to the Registration Statement shall be in
effect.
(g) IHS, Merger Sub and Coram shall have received all consents,
approvals and authorizations of third parties that are required of such
third parties prior to the consummation of the Merger, in form and
substance acceptable to IHS or Coram, as the case may be, except where the
failure to obtain such consent, approval or authorization would not have a
material adverse effect on the business of the Surviving Corporation.
(h) All approvals of the Merger required under the HSR Act shall have
been obtained or the waiting periods thereunder shall have expired.
(i) The parties shall have obtained consents from their senior bank
lenders to the Merger and the transactions contemplated hereby not later
than November 15, 1996.
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(j) IHS shall have received all necessary consents of the holders of
convertible debt and subordinated debentures of IHS.
9.2 Conditions to Obligations of IHS and Merger Sub. The obligations of IHS
and Merger Sub to consummate the Merger and the other transactions contemplated
hereby shall be subject to the satisfaction, at or prior to the Closing Date, of
the following conditions (any of which may be waived by IHS and Merger Sub):
(a) Each of the agreements of Coram to be performed at or prior to the
Closing Date pursuant to the terms hereof shall have been duly performed in
all material respects, and Coram shall have performed, in all material
respects, all of the acts required to be performed by it at or prior to the
Closing Date by the terms hereof.
(b) The representations and warranties of Coram set forth in Article 3
hereof shall be true and correct as of the date of this Plan of Merger and
as of the Closing Date, except to the extent such representations and
warranties expressly relate to a specific date (in which case such
representations and warranties shall be true and correct as of such date);
provided, however, that Coram shall not be deemed to be in breach of any
such representations or warranties (i) where the inaccuracies of all
representations contained in Article 3 hereof would not, in the aggregate,
have a material adverse effect on Coram and the Coram Subsidiaries, taken
as a whole or (ii) as a result of the consequences that IHS knew or should
have known would arise from the taking of any action permitted to be taken
by Coram (or otherwise approved by IHS) under Section 7.2 or otherwise
permitted herein; and provided, further, that notwithstanding the
foregoing, Coram shall be deemed to be in breach of such representations or
warranties if the representations or warranties set forth in Section
3.21(b) shall not be true and correct as of such dates. IHS and Merger Sub
shall have been furnished with a certificate, executed by a duly authorized
officer of Coram, dated the Closing Date, certifying in such detail as IHS
and Merger Sub may reasonably request as to the fulfillment of the
foregoing conditions.
(c) IHS and Merger Sub shall have obtained, or obtained the transfer
of, any licenses and other regulatory approvals necessary prior to the
Effective
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Time to allow the Surviving Corporation to operate Coram's business, unless
the failure to obtain such transfer or approval would not have a material
adverse effect on Coram.
(d) IHS shall have received an opinion from its tax counsel to the
effect that the Merger will constitute a reorganization within the meaning
of Section 368 (a) of the Code of which opinion may be based upon
reasonable representations of fact provided by officers of IHS, Coram and
Merger Sub.
(e) IHS shall have received an opinion from Paul, Hastings, ▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇ LLP substantially to the effect set forth in Exhibit 9.2(e) hereto.
(f) All consents, authorizations, orders and approvals of (or filings
or registrations with) any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of this Plan of Merger shall have been obtained or made, except
for filings in connection with the Merger and any other documents required
to be filed after the Effective Time.
(g) IHS shall have received "Affiliate Letters" as provided in Section
7.14 herein from each of the affiliates of Coram.
(h) The opinion of ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. referenced in Section 5.17 hereof
shall not have been adversely modified or withdrawn as of the date of the
mailing of the Proxy Statement.
(i) The persons listed on Schedule 9.2(i) shall have agreed to remain
in the employ of Coram for a period of six months following the Effective
Time.
(j) IHS shall have received a "cold comfort" letter from Ernst & Young
LLP, Coram's independent accountants, dated the Effective Time and
addressed to IHS, as to such matters reasonably requested by IHS.
(k) KMPG Peat Marwick LLP shall have completed and delivered to IHS
and Coram its audit of Coram's consolidated financial statements as of and
for the ten (10) month period ending October 31, 1996.
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(l) Those Coram Subsidiaries identified on Exhibit 3.3 to the Coram
Disclosure Schedule as not being in good standing under the laws of their
respective jurisdictions of incorporation shall have been restored to good
standing thereunder, and those Coram Subsidiaries identified on Exhibit 3.4
shall be qualified to do business in the states listed thereon.
(m) execution by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ of an employment agreement between
him and IHS embodying the terms set forth in that certain letter from ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇ to ▇▇. ▇▇▇▇▇▇ dated October 17, 1996.
9.3 Conditions to Obligations of Coram. The obligations of Coram to
consummate the Merger and the other transactions contemplated hereby shall be
subject to the satisfaction, at or prior to the Closing Date, of the following
conditions (any of which may be waived by Coram):
(a) Each of the agreements of IHS and Merger Sub to be performed at or
prior to the Closing Date pursuant to the terms hereof shall have been duly
performed, in all material respects, and IHS and Merger Sub shall have
performed, in all material respects, all of the acts required to be
performed by them at or prior to the Closing Date by the terms hereof.
(b) The representations and warranties of IHS and Merger Sub set forth
in Articles 4 and 5 hereof shall be true and correct as of the date of this
Plan of Merger, and as of the Closing Date, except to the extent such
representations and warranties expressly relate to a specific date (in
which case such representations and warranties shall be true and as of such
date); provided, however, that IHS shall not be deemed to be in breach of
any such representations or warranties (i) where the inaccuracies of all
representations and warranties contained in Article 5 hereof would not, in
the aggregate, have a material adverse effect on IHS and the IHS
Subsidiaries, taken as a whole or (ii) as a result of the consequences that
Coram knew or should have known would arise from the taking of any action
permitted hereunder to be taken by IHS (or otherwise approved by Coram);
and provided, further, that notwithstanding the foregoing, (i) IHS and
Merger Sub shall be deemed to be in breach of such representations or
warranties if any of the representations set forth in Article 4 hereof
shall not be true and correct in all material respects and (ii) IHS shall
be deemed to be in breach of such
-51-
representations or warranties if the representations or warranties set
forth in Sections 5.12, 5.13, 5.18 or 5.19 shall not be true and correct as
of such dates.
(c) Coram shall have received an opinion from Paul, Hastings, ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇ LLP to the effect that the Merger will constitute a reorganization
with the meaning of Section 368(a) of the Code which opinion may be based
upon reasonable representations of fact provided by officers of IHS, Coram
and Merger Sub.
(d) Coram and its stockholders shall have received an opinion from UBS
Securities LLC opining that the Merger Consideration is fair to Coram's
stockholders from a financial point of view.
(e) Coram shall have received an opinion from Blass & ▇▇▇▇▇▇
substantially to the effect set forth in Exhibit 9.3(e) hereto.
(f) Coram and its stockholders shall have received an updated opinion
of UBS Securities LLC dated the date of the mailing of the Joint Proxy
Statement opining that the Merger Consideration is fair to the Coram
stockholders from a financial point of view and such opinion shall not have
been adversely modified or withdrawn.
(g) All consents, authorizations, orders and approvals of (or filings
or registrations with) any governmental commission, board or other
regulatory body required in connection with the execution, delivery and
performance of this Plan of Merger shall have been obtained or made, except
for filings in connection with the Merger and any other documents required
to be filed after the Effective Time.
(h) Coram shall have received a letter from KMPG Peat Marwick LLP,
IHS's independent accountants, dated the Effective Time and addressed to
Coram, as to such matters reasonably requested by Coram.
Section 10. Miscellaneous.
10.1 Nonsurvival of Representations and Warranties. None of the
representations and warranties in this Plan of
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Merger or in any instrument delivered pursuant to this Plan of Merger shall
survive the Effective Time.
10.2 Notices. Any communications required or desired to be given hereunder
shall be deemed to have been properly given if sent by hand delivery or by
facsimile and overnight courier or overnight courier to the parties hereto at
the following addresses, or at such other address as either party may advise the
other in writing from time to time:
If to IHS:
Integrated Health Services, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
with a copy to:
Integrated Health Services, Inc.
▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
and
Blass & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
If to Coram:
Coram Healthcare Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇,▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
with a copy to:
Coram Healthcare Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esq.
and
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Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
All such communications shall be deemed to have been delivered on the date of
hand delivery or facsimile or on the next business day following the deposit of
such communications with the overnight courier.
10.3 Further Assurances. Each party hereby agrees to perform any further
acts and to execute and deliver any documents which may be reasonably necessary
to carry out the provisions of this Plan of Merger.
10.4 Indemnification. (a) IHS and Merger Sub shall advance legal fees and
expenses and indemnify current or former directors or officers of Coram for all
acts or omissions occurring prior to the Effective Time as provided in Coram's
Certificate of Incorporation or bylaws or indemnification agreements in effect
as of the date hereof, and such obligations shall survive the Merger and shall
continue in full force and effect in accordance with their terms. The provisions
of this Section 10.4 are intended to be for the benefit of, and shall be
enforceable by, each such indemnified party and each such indemnified party's
heirs and representatives.
(b) IHS shall cause to be maintained in effect for a period ending not
sooner than the fifth anniversary of the Effective Time directors' and officers'
liability insurance providing at least the same coverage with respect to Coram's
officers and directors as the policies maintained on behalf of directors and
officers of Coram as of the date hereof, and containing terms and conditions
which are no less advantageous, with respect to matters occurring on or prior to
the Effective Time (to the extent such insurance is available with respect to
such matters). Notwithstanding the foregoing, from and after the third
anniversary of the Effective Time, IHS shall not be obligated to provide any
greater officers' and directors' liability insurance than that generally
afforded to officers and directors of IHS under policies maintained by IHS with
respect to its directors and officers.
10.5 Governing Law. This Plan of Merger shall be interpreted, construed and
enforced in accordance with the
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laws of the State of Delaware, applied without giving effect to any
conflicts-of-law principles.
10.6 "Including". The word "including", when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the specific terms or matters as provided immediately following the
word "including,, or to similar items or matters, whether or not non-limiting
language (such as "without limitation", "but not limited to", or words of
similar import) is used with reference to the word "including" or the similar
items or matters, but rather shall be deemed to refer to all other items or
matters that could reasonably fall within the broadest possible scope of the
general statement, term or matter.
10.7 "Knowledge". "To the knowledge", "to the best knowledge, information
and belief", or any similar phrase shall be deemed to refer to the knowledge of
the Chairman of the Board, Chief Executive Officer, Chief Financial Officer or
General Counsel of a party and to include the assurance that such knowledge is
based upon a reasonable investigation, unless otherwise expressly provided.
10.8 "Material adverse change" or "material adverse effect". "Material
adverse change" or "material adverse effect" means, when used in connection with
Coram or IHS, any change, effect, event or occurrence that has, or is reasonably
likely to have, individually or in the aggregate, a material adverse impact on
the assets, business or financial position of such party and its subsidiaries
taken as a whole; provided, however, that "material adverse change" and
"material adverse effect" shall be deemed to exclude the impact of (i) any
changes resulting from any restructuring or other similar charges or write-offs
taken by Coram with the written consent of IHS; provided, however, that no such
charges or write-offs will be taken if such would adversely affect
pooling-of-interests accounting treatment for the Merger; and (ii) other than
for the purposes of Section 8.1(g) hereof, (x) changes in generally accepted
accounting principles and (y) changes in applicable law.
10.9 Captions. The captions or headings in this Plan of Merger are made for
convenience and general reference only and shall not be construed to describe,
define or limit the scope or intent of the provisions of this Plan of Merger.
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10.10 Integration of Exhibits. All Exhibits to the Schedules attached to
this Plan of Merger are integral parts of this Plan of Merger as if fully set
forth herein.
10.11 Entire Agreement. This instrument, including all Exhibits attached
hereto and the Confidentiality Agreements contain the entire agreement of the
parties and supersede any and all prior or contemporaneous agreements between
the parties, written or oral, with respect to the transactions contemplated
hereby. Such agreement may not be changed or terminated orally, but may only be
changed by an agreement in writing signed by the party or parties against whom
enforcement of any waiver, change, modification, extension, discharge or
termination is sought.
10.12 Counterparts. This Plan of Merger may be executed in several
counterparts, each of which, when so executed, shall be deemed to be an
original, and such counterparts shall, together, constitute and be one and the
same instrument.
10.13 Binding Effect. This Plan of Merger shall be binding on, and shall
inure to the benefit of, the parties hereto, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Plan of Merger. No party may assign any right or obligation hereunder
without the prior written consent of the other parties.
10.14 No Rule of Construction. The parties agree that, because all parties
participated in negotiating and drafting this Plan of Merger, no rule of
construction shall apply to this Plan of Merger which construes ambiguous
language in favor of or against any party by reason of that party's role in
drafting this Plan of Merger.
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IN WITNESS WHEREOF, IHS, Merger Sub and Coram have caused this Agreement
and Plan of Merger to be executed by their respective duly authorized officers,
all as of the day and year first above written.
INTEGRATED HEALTH SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name:
Title:
IHS ACQUISITION XIX, INC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------
Name:
Title:
CORAM HEALTHCARE CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
Chief Executive Officer
EXHIBIT 9.2(e)
1. Coram is a corporation duly incorporated and validly existing under the
laws of the State of Delaware.
2. Coram has the corporate power and authority to execute, deliver and
perform the Merger Agreement. The execution, delivery and performance of the
Merger Agreement and the consummation of the transactions contemplated thereby,
including without limitation the Merger, have been duly authorized by all
requisite corporate and stockholders' action of Coram.
3. Assuming due execution and delivery by Coram, respectively, the Merger
Agreement constitutes the valid and binding agreement of Coram, enforceable
against Coram in accordance with its terms, (a) subject to the effect of
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws and court decisions of general application or of legal or equitable
principles relating to, limiting or affecting the enforcement of creditors'
rights generally; (b) except by general equitable principles, including without
limitation the remedies of specific performance, injunction and other forms of
equitable relief that are subject to certain tests of equity jurisdiction,
equitable defenses and judicial discretion regarding the granting of equitable
remedies generally; (c) subject to the fact that certain provisions of the
Merger Agreement that purport to provide for the waiver, limitation or
modification of defenses or rights which cannot as a matter of law be
effectively waived, limited or modified, as the case may be, such as rights to
receive notice or rights of redemption, may be unenforceable in whole or in
part; (d) the fact that rights to indemnification and exculpation under the
Merger Agreement may be limited by applicable laws or regulations or public
policy considerations; and (e) except we express no opinion as to the
enforceability or effect of Section 7.10 of the Merger Agreement.
4. Other than as set forth in the Merger Agreement, the execution, delivery
and performance by Coram of the Merger Agreement will not conflict with or
result in a violation of Coram's certificate of incorporation or bylaws.
5. To our actual knowledge, without independent investigation there is no
action of proceeding pending or threatened against or affecting Coram before any
court, governmental agency or arbitrator, which seeks to affect the
enforceability of the Merger Agreement. To our actual knowledge, without
independent investigation, Coram is not bound by any judgment, injunction or
decree of any court or
governmental authority which would prevent the performance by Coram of its
obligations under the Merger Agreement.
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EXHIBIT 9.3(e)
1. Each of IHS and Merger Sub is a corporation duly incorporated and
validly existing under the laws of the State of Delaware.
2. Each of IHS and Merger Sub has the corporate power and authority to
execute, deliver and perform the Merger Agreement. The execution, delivery and
performance of the Merger Agreement and the consummation of the transactions
contemplated thereby, including without limitation the Merger, have been duly
authorized by all requisite corporate and stockholders' action of IHS and Merger
Sub.
3. Assuming due execution and delivery by IHS and Merger Sub, respectively,
the Merger Agreement constitutes the valid and binding agreement of IHS and
Merger Sub, enforceable against IHS and Merger Sub in accordance with its terms,
(a) subject to the effect of applicable bankruptcy, insolvency, reorganization,
moratorium and other similar laws and court decisions of general application or
of legal or equitable principles relating to, limiting or affecting the
enforcement of creditors' rights generally; (b) except by general equitable
principles, including without limitation the remedies of specific performance,
injunction and other forms of equitable relief that are subject to certain tests
of equity jurisdiction, equitable defenses and judicial discretion regarding the
granting of equitable remedies generally; (c) subject to the fact that certain
provisions of the Merger Agreement that purport to provide for the waiver,
limitation or modification of defenses or rights which cannot as a matter of law
be effectively waived, limited or modified, as the case may be, such as rights
to receive notice or rights of redemption, may be unenforceable in whole or in
part; and (d) the fact that rights to indemnification and exculpation under the
Merger Agreement may be limited by applicable laws or regulations or public
policy considerations.
4. Other than as set forth in the Merger Agreement, the execution, delivery
and performance by IHS and Merger Sub of the Merger Agreement will not conflict
with or result in a violation of their respective certificates of incorporation
or bylaws.
5. To our actual knowledge, without independent investigation there is no
action of proceeding pending or threatened against or affecting IHS or Merger
Sub before any court, governmental agency or arbitrator, which seeks to affect
the enforceability of the Merger Agreement. To our actual knowledge, without
independent investigation, neither
IHS nor Merger Sub is bound by any judgment, injunction or decree of any court
or governmental authority which would prevent the performance by IHS and Merger
Sub of their respective obligations under the Merger Agreement.
6. The shares of Common Stock, par value $0.001 per share, of IHS to be
issued pursuant to the Merger Agreement have been duly authorized by IHS and,
when issued in accordance with the terms of the Merger Agreement, will be
validly issued, fully paid and nonassessable.
7. We have been advised by the SEC that the Registration Statement was
declared effective under the Securities Act on _____, 1997 and, to the best of
our knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or threatened by the SEC.
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