AGREEMENT AND PLAN OF MERGER
BY AND AMONG
EMCARE HOLDINGS INC.
AND
XXXXXXX INC. (THE "PARENT")
EHI ACQUISITION CORP. ("ACQUISITION")
DATED
JULY 29, 1997
TABLE OF CONTENTS
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ARTICLE 1. THE OFFER. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1. THE OFFER . . . . . . . . . . . . . . . . . . . . . . . . .1
1.1.1. COMMENCEMENT. . . . . . . . . . . . . . . . . . .1
1.1.2. FILING OFFER DOCUMENTS. . . . . . . . . . . . . .2
1.2. COMPANY ACTION. . . . . . . . . . . . . . . . . . . . . . .3
1.2.1. BOARD APPROVAL. . . . . . . . . . . . . . . . . .3
1.2.2. SCHEDULE 14D-9. . . . . . . . . . . . . . . . . .3
1.2.3. DISSEMINATION OF THE OFFER. . . . . . . . . . . .3
1.3. BOARD OF DIRECTORS AND COMMITTEES; SECTION 14(f). . . . . .4
1.3.1. BOARD REPRESENTATION. . . . . . . . . . . . . . .4
1.3.2. COMPLIANCE WITH SECTION 14(f) . . . . . . . . . .4
1.3.3. ACTION BY DISINTERESTED DIRECTORS . . . . . . . .5
ARTICLE 2. THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . .5
2.1. THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . .5
2.1.1. EFFECTIVE TIME. . . . . . . . . . . . . . . . . .5
2.1.2. CLOSING . . . . . . . . . . . . . . . . . . . . .5
2.2. EFFECTIVE TIME. . . . . . . . . . . . . . . . . . . . . . .6
2.3. EFFECT OF THE MERGER. . . . . . . . . . . . . . . . . . . .5
2.4. CERTIFICATE OF INCORPORATION; BY-LAWS . . . . . . . . . . .6
2.4.1. CERTIFICATE OF INCORPORATION. . . . . . . . . . .6
2.4.2. BY-LAWS . . . . . . . . . . . . . . . . . . . . .6
2.5. DIRECTORS AND OFFICERS. . . . . . . . . . . . . . . . . . .6
2.6. EFFECT ON CAPITAL STOCK . . . . . . . . . . . . . . . . . .6
2.6.1. CONVERSION OF SECURITIES. . . . . . . . . . . . .6
2.6.2. CANCELLATION. . . . . . . . . . . . . . . . . . .6
2.6.3. STOCK OPTIONS . . . . . . . . . . . . . . . . . .6
2.6.4. CAPITAL STOCK OF ACQUISITION. . . . . . . . . . .7
2.6.5. DISSENTING SHARES . . . . . . . . . . . . . . . .7
2.7. EXCHANGE OF CERTIFICATES. . . . . . . . . . . . . . . . . .7
2.7.1. EXCHANGE AGENT AND PROCEDURES . . . . . . . . . .7
2.7.2. CONSIDERATION . . . . . . . . . . . . . . . . . .8
2.7.3. INVESTMENT OF MERGER CONSIDERATION. . . . . . . .8
2.7.4. TERMINATION OF DUTIES . . . . . . . . . . . . . .8
2.7.5. NO LIABILITY. . . . . . . . . . . . . . . . . . .8
2.7.6. WITHHOLDING RIGHTS. . . . . . . . . . . . . . . .8
2.8. NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK . . . .9
2.9. LOST, STOLEN OR DESTROYED CERTIFICATES. . . . . . . . . . .9
2.10. TAKING OF NECESSARY ACTION; FURTHER ACTION. . . . . . . . .9
2.11. STOCKHOLDERS' MEETING . . . . . . . . . . . . . . . . . . .9
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TABLE OF CONTENTS
(CONTINUED)
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ARTICLE 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . 10
3.1. ORGANIZATION, EXISTENCE AND GOOD STANDING OF THE
COMPANY. . . . . . . . . . . . . . . . . . . . . . . 10
3.2. ORGANIZATION, EXISTENCE AND GOOD STANDING OF
SUBSIDIARIES AND PAS . . . . . . . . . . . . . . . . 10
3.3. CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . 11
3.4. AUTHORITY RELATIVE TO THIS AGREEMENT . . . . . . . . . . 12
3.5. NO CONFLICT; REQUIRED FILINGS AND CONSENTS . . . . . . . 12
3.6. COMPLIANCE; PERMITS. . . . . . . . . . . . . . . . . . . 13
3.7. SEC FILINGS; FINANCIAL STATEMENTS. . . . . . . . . . . . 14
3.8. ABSENCE OF CERTAIN CHANGES OR EVENTS . . . . . . . . . . 14
3.9. NO UNDISCLOSED LIABILITIES . . . . . . . . . . . . . . . 15
3.10. ABSENCE OF LITIGATION. . . . . . . . . . . . . . . . . . 15
3.11. EMPLOYEE BENEFIT PLANS, EMPLOYMENT AGREEMENTS. . . . . . 15
3.12. LABOR MATTERS. . . . . . . . . . . . . . . . . . . . . . 16
3.13. RESTRICTIONS ON BUSINESS ACTIVITIES. . . . . . . . . . . 16
3.14. TITLE TO PROPERTY. . . . . . . . . . . . . . . . . . . . 17
3.15. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.16. INTELLECTUAL PROPERTY. . . . . . . . . . . . . . . . . . 18
3.17. INTERESTED PARTY TRANSACTIONS. . . . . . . . . . . . . . 18
3.18. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . 18
3.19. HEALTHCARE REGULATORY COMPLIANCE . . . . . . . . . . . . 18
3.20. OPINION OF FINANCIAL ADVISOR . . . . . . . . . . . . . . 18
3.21. BROKERS. . . . . . . . . . . . . . . . . . . . . . . . . 18
3.22. SECTION 203 OF THE DELAWARE LAW NOT APPLICABLE . . . . . 18
3.23. SCHEDULE 14D-9 . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 4. REPRESENTATIONS AND WARRANTIES OF PARENT
AND ACQUISITION . . . . . . . . . . . . . . . . . . . . . . . . 19
4.1. ORGANIZATION, EXISTENCE AND GOOD STANDING OF PARENT;
ACQUISITION . . . . . . . . . . . . . . . . . . . . . 19
4.2. AUTHORITY RELATIVE TO THIS AGREEMENT . . . . . . . . . . 20
4.3. NO CONFLICT, REQUIRED FILINGS AND CONSENTS . . . . . . . 20
4.4. OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY STATEMENT . . . . 21
4.5. NO PRIOR ACTIVITIES; FINANCING . . . . . . . . . . . . . 21
ARTICLE 5. CONDUCT OF BUSINESS PENDING THE MERGER . . . . . . . . . . . . 21
5.1. CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. . 22
5.2. NO SOLICITATION. . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 6. ADDITIONAL AGREEMENTS. . . . . . . . . . . . . . . . . . . . . 25
6.1. HSR ACT. . . . . . . . . . . . . . . . . . . . . . . . . 25
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TABLE OF CONTENTS
(CONTINUED)
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6.2. ACCESS TO INFORMATION; CONFIDENTIALITY. . . . . . . . . . 25
6.3. INDEMNIFICATION AND INSURANCE . . . . . . . . . . . . . . 25
6.4. NOTIFICATION OF CERTAIN MATTERS . . . . . . . . . . . . . 27
6.5. FURTHER ACTION. . . . . . . . . . . . . . . . . . . . . . 27
6.6. PUBLIC ANNOUNCEMENTS. . . . . . . . . . . . . . . . . . . 27
ARTICLE 7. CONDITIONS TO THE MERGER . . . . . . . . . . . . . . . . . . . 28
7.1. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE
MERGER. . . . . . . . . . . . . . . . . . . . . . . . . 28
7.1.1. PURCHASE OF SHARES. . . . . . . . . . . . . . . 28
7.1.2. HSR ACT . . . . . . . . . . . . . . . . . . . . 28
7.1.3. NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. . . . 28
7.1.4. GOVERNMENTAL ACTIONS. . . . . . . . . . . . . . 28
ARTICLE 8. TERMINATION. . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.1. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 28
8.2. EFFECT OF TERMINATION . . . . . . . . . . . . . . . . . . 29
ARTICLE 9. GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . 29
9.1. FEES AND EXPENSES . . . . . . . . . . . . . . . . . . . . 29
9.2. EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND
AGREEMENTS. . . . . . . . . . . . . . . . . . . . . . . 30
9.3. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.4. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . 31
9.5. AMENDMENT . . . . . . . . . . . . . . . . . . . . . . . . 32
9.6. WAIVER. . . . . . . . . . . . . . . . . . . . . . . . . . 32
9.7. HEADINGS. . . . . . . . . . . . . . . . . . . . . . . . . 32
9.8. SEVERABILITY. . . . . . . . . . . . . . . . . . . . . . . 32
9.9. ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . 33
9.10. ASSIGNMENT; GUARANTEE OF ACQUISITION OBLIGATIONS. . . . . 33
9.11. PARTIES IN INTEREST . . . . . . . . . . . . . . . . . . . 33
9.12. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES
CUMULATIVE. . . . . . . . . . . . . . . . . . . . . . . 33
9.13. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . 33
9.14. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . 33
9.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS . . . . . . . 33
9.15.1. JURISDICTION . . . . . . . . . . . . . . . . . 33
9.15.2. VENUE; INCONVENIENT FORUM. . . . . . . . . . . 34
9.15.3. SERVICE OF PROCESS . . . . . . . . . . . . . . 34
ANNEX A 1
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INDEX OF DEFINED TERMS
Page
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1997 Company Balance Sheet....................................................14
Acquisition....................................................................1
AFFILIATES....................................................................30
Antitrust Division............................................................24
Associated PA.................................................................10
BENEFICIAL OWNER..............................................................30
Blue Sky Laws.................................................................13
Board..........................................................................1
Business Combination..........................................................24
Business Combination Proposal.................................................24
BUSINESS DAY..................................................................31
Certificate of Merger..........................................................5
Certificates...................................................................7
Code...........................................................................8
Common Stock...................................................................1
Company........................................................................1
Company Common Stock...........................................................1
Company Disclosure Schedule...................................................10
Company Employee Plans........................................................15
Company Permits...............................................................13
Company SEC Reports...........................................................14
Company Stock Plan.............................................................6
Company Subsidiary............................................................10
Confidentiality Letter........................................................25
CONTROL.......................................................................31
Delaware Law...................................................................1
Dissenting Shares..............................................................7
DLJ............................................................................3
DOLLARS.......................................................................30
Effective Time.................................................................5
ERISA.........................................................................15
ERISA Affiliate...............................................................15
Exchange Act...................................................................4
FTC...........................................................................24
HSR Act.......................................................................13
Indemnified Parties...........................................................25
IRS...........................................................................15
MATERIAL ADVERSE EFFECT.......................................................31
Material Contracts............................................................12
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Page
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Merger.........................................................................1
Merger Consideration...........................................................6
Minimum Condition..............................................................2
Offer..........................................................................1
Offer Documents................................................................2
Parent.........................................................................1
Parent Subsidiary.............................................................19
Paying Agent...................................................................7
PBGC..........................................................................15
Per Share Amount...............................................................1
Permitted Acquisitions........................................................22
PERSON........................................................................31
Proxy Statement...............................................................18
Schedule 14D-9.................................................................3
SEC............................................................................2
Securities Act................................................................13
Shares.........................................................................1
Stock Option...................................................................6
Stockholders' Meeting..........................................................9
SUBSIDIARY....................................................................31
Superior Proposal.............................................................24
Surviving Corporation..........................................................5
Tax...........................................................................17
Tax Returns...................................................................17
Taxes.........................................................................17
Third Party...................................................................23
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of July 29, 1997, is among
EmCare Holdings Inc., a Delaware corporation (the "Company"), Xxxxxxx Inc., a
Canadian corporation ("Parent") and EHI Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Parent ("Acquisition").
WHEREAS, the Board of Directors of Parent, Acquisition and the Company
have each approved the acquisition of the Company by Parent upon the terms and
subject to the conditions set forth in this Agreement;
WHEREAS, in furtherance thereof, it is proposed that Acquisition shall
make a tender offer to acquire all outstanding shares (the "Shares") of common
stock, par value $.01 per share, of the Company (the "Common Stock" or "Company
Common Stock") for a cash amount of $38.00 per Share, net to the seller in cash
(such amount, or any greater amount per Share paid pursuant to the tender offer,
being hereinafter referred to as the "Per Share Amount") in accordance with the
terms and subject to the conditions provided for herein (the "Offer");
WHEREAS, the Board of Directors of the Company (the "Board") has
(i) determined that the consideration to be paid for each Share in the Offer and
the Merger (as defined below) is in the best interests of the stockholders of
the Company and (ii) approved this Agreement and the transactions contemplated
hereby and resolved to recommend acceptance of the Offer and approval and
adoption of this Agreement by the stockholders of the Company; and
WHEREAS, the Boards of Directors of Parent and Acquisition have each
approved the merger (the "Merger") of Acquisition with and into the Company
following the Offer in accordance with the Delaware General Corporation Law (the
"Delaware Law") upon the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Company, Parent and Acquisition hereby agree as follows:
ARTICLE 1.
THE OFFER
1.1. THE OFFER
1.1.1. COMMENCEMENT. Provided that this Agreement shall not have
been terminated in accordance with SECTION 8.1., as promptly as
practicable, but in any event within five business days of the public
announcement of the terms of this Agreement, Acquisition shall commence
the Offer. The obligation of Acquisition to accept for payment and pay
for Shares tendered pursuant to the Offer shall be subject only to
(A) the
1
condition that a number of Shares representing not less than fifty-one
percent (51%) of the Company's outstanding voting power (assuming the
exercise of all outstanding options and rights to purchase shares of
Common Stock), shall have been validly tendered and not withdrawn prior
to the expiration date of the Offer (the "Minimum Condition"), and
(B) the other conditions set forth in Annex A hereto. It is agreed that
the Minimum Condition and the other conditions set forth in Annex A
hereto are for the sole benefit of Acquisition and may be asserted by
Acquisition regardless of the circumstances giving rise to any such
condition unless Parent, Acquisition or their affiliates shall have
caused the circumstances giving rise to such condition. Acquisition
expressly reserves the right in its sole discretion to waive, in whole or
in part, at any time or from time to time, any such condition (other than
the Minimum Condition and the conditions set forth in clause (ii) and
(iii)(c) of Annex A which may not be waived without the prior written
consent of the Company), to increase the price per Share payable in the
Offer or to make any other changes in the terms and conditions of the
Offer; provided that, unless previously approved by the Company in
writing, no change may be made that decreases the price per Share payable
in the Offer, changes the form of consideration payable in the Offer,
reduces the maximum number of Shares to be purchased in the Offer,
imposes conditions to the Offer in addition to those set forth in Annex A
hereto or amends or modifies such conditions, amends any other terms or
conditions of the Offer, or that is otherwise adverse to the holders of
Shares. Acquisition covenants and agrees that, subject to the conditions
of the Offer set forth in Annex A hereto, Acquisition shall accept for
payment and pay for Shares which have been validly tendered and not
withdrawn pursuant to the Offer as soon as it is permitted to do so under
applicable law; provided that, if the number of Shares that have been
validly tendered and not withdrawn represent less than 90% of the
Company's outstanding voting power (calculated as described above),
Acquisition may extend the Offer up to the fifth business day following
the date on which all conditions to the Offer shall first have been
satisfied or waived, provided that if Acquisition so extends the Offer,
its obligation to purchase the Shares tendered pursuant to the Offer
shall be unconditional. The Per Share Amount payable in the Offer shall
be paid net to the seller in cash, upon the terms and subject to the
conditions of the Offer. Acquisition agrees that if all conditions set
forth in Annex A are not satisfied on the initial expiration date of the
Offer, Acquisition shall extend (and re-extend) the Offer through October
31, 1997 to provide time to satisfy such conditions.
1.1.2. FILING OFFER DOCUMENTS. As soon as practicable on the
date of commencement of the Offer, Parent and Acquisition shall file with
the Securities and Exchange Commission (the "SEC") a Tender Offer
Statement on Schedule 14D-1 with respect to the Offer which will contain
the offer to purchase and form of the related letter of transmittal
(together with any supplements or amendments thereto, the "Offer
Documents"). Parent, Acquisition and the Company each agrees promptly to
correct any information provided by it for use in the Offer Documents if
and to the extent that any such information shall have become false or
misleading in any material respect and Parent and Acquisition each
further agrees to take all steps necessary to cause the Offer Documents
as so corrected to be filed with the SEC and to be disseminated to
holders of Shares, in each case as and to the extent required by
applicable federal securities laws.
2
The Company and its counsel shall be given a reasonable opportunity to
review and comment on the Offer Documents prior to their filing with the
SEC and shall be provided with any comments Parent, Acquisition and their
counsel may receive from the SEC or its staff with respect to the offer
documents promptly after receipt of such comments.
1.2. COMPANY ACTION.
1.2.1. BOARD APPROVAL. The Company hereby approves of and
consents to the Offer and represents and warrants that the Board, at a
meeting duly called and held on July 28, 1997, unanimously (i) determined
that this Agreement and the transactions contemplated hereby, including
the Offer and the Merger, are in the best interests of the stockholders
of the Company, (ii) approved this Agreement and the transactions
contemplated hereby, including the Offer and the Merger, and
(iii) resolved to recommend that the stockholders of the Company accept
the Offer, tender their Shares thereunder to Acquisition and, if required
by applicable law, approve and adopt this Agreement and the Merger
(provided, however, that such recommendation may be modified or withdrawn
as contemplated by SECTION 5.2. or if the Board determines, in good faith
and after consultation with independent counsel, that such action is
necessary to properly discharge its fiduciary duties). The Company
further represents and warrants that Xxxxxxxxx, Xxxxxx & Xxxxxxxx
Securities Corporation ("DLJ") has delivered to the Board its opinion to
the effect that, as of the date of the Board's approval of this
Agreement, the Per Share Amount to be received by the holders of Shares
(other than Parent and its affiliates) pursuant to the Offer and the
Merger, taken together, is fair to such holders from a financial point of
view.
1.2.2. SCHEDULE 14D-9. As soon as practicable on the date of
commencement of the Offer, the Company shall file with the SEC a
Solicitation/Recommendation Statement on Schedule 14D-9 (together with
any amendments or supplements thereto, the "Schedule 14D-9"). The
Schedule 14D-9 shall, subject to the fiduciary duties of the Board under
applicable law (as determined in good faith after consultation with
independent counsel) and SECTION 5.2., at all times contain the
determinations, approvals and recommendations described in
SECTION 1.2.1.. Parent, Acquisition and the Company each agrees promptly
to correct any information provided by it for use in the Schedule 14D-9
if and to the extent that any such information shall have become false or
misleading in any material respect and the Company further agrees to take
all steps necessary to cause the Schedule 14D-9 as so corrected to be
filed with the SEC and to be disseminated to holders of Shares, in each
case as and to the extent required by applicable federal securities laws.
Parent, Acquisition and their counsel shall be given a reasonable
opportunity to review and comment on the Schedule 14D-9 prior to its
filing with the SEC and shall be provided with any comments the Company
and its counsel may receive from the SEC or its staff with respect to the
Schedule 14D-9 promptly after receipt of such comments.
1.2.3. DISSEMINATION OF THE OFFER. In connection with the Offer,
the Company will promptly furnish Acquisition with mailing labels,
security position listings and any
3
available listing or computer file containing the names and addresses of
the record holders of the Shares as of a recent date and shall furnish
Acquisition with such additional information and assistance (including,
without limitation, updated lists of stockholders, mailing labels and
lists of securities positions) as Acquisition or its agents may
reasonably request in communicating the Offer to the record and
beneficial holders of Shares. Subject to the requirements of applicable
law, and except for such steps as are necessary to disseminate the Offer
Documents and any other documents necessary to consummate the Merger,
Acquisition and its affiliates and associates shall hold in confidence
the information contained in any such labels, listings and files, will
use such information only in connection with the Offer and the Merger,
and, if this Agreement shall be terminated, will deliver to the Company
all copies of such information then in their possession.
1.3. BOARD OF DIRECTORS AND COMMITTEES; SECTION 14(f).
1.3.1. BOARD REPRESENTATION. Promptly upon the purchase by
Acquisition of Shares pursuant to the Offer and from time to time
thereafter, Acquisition shall be entitled to designate up to such number
of directors, rounded up to the next whole number, on the Board that
equals the product of (i) the total number of directors on the Board
(giving effect to the election of any additional directors pursuant to
this Section) and (ii) the percentage that the number of Shares owned by
Acquisition and its affiliates (including any Shares purchased pursuant
to the Offer) bears to the total number of outstanding Shares; provided
that at all times there shall be at least two directors who are not
designees of Acquisition and the number of directors shall not be more
than 10 nor less than six. The Company shall, upon request by
Acquisition, subject to the provisions of SECTION 1.3.2., promptly either
increase the size of the Board, to the extent permitted by its
Certificate of Incorporation and/or use its reasonable best efforts to
secure the resignation of such number of directors as is necessary to
enable Acquisition's designees to be elected to the Board and shall cause
Acquisition's designees to be so elected. Promptly upon request by
Acquisition, the Company will, subject to the provisions of
SECTION 1.3.2., use its reasonable best efforts to cause persons
designated by Acquisition to constitute the same percentage as the number
of Acquisition's designees to the Board bears to the total number of
directors on the Board on (i) each committee of the Board, (ii) each
board of directors or similar governing body or bodies of each subsidiary
of the Company designated by Acquisition and (iii) each committee of each
such board or body.
1.3.2. COMPLIANCE WITH SECTION 14(f). The Company's obligations
to appoint designees to the Board shall be subject to Section 14(f) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and
Rule 14f-1 promulgated thereunder. The Company shall promptly take all
actions required pursuant to Section 14(f) and Rule 14f-1 in order to
fulfill its obligations under this SECTION 1.3. and shall include in the
Schedule 14D-9 or a separate Rule 14f-1 Statement provided to
shareholders such information with respect to the Company and its
officers and directors as is required under Section 14(f) and Rule 14f-1.
Parent or Acquisition will supply to the Company in
4
writing and be solely responsible for any information with respect to
either of them and their nominees, officers, directors and affiliates
required by Section 14(f) and Rule 14f-1.
1.3.3. ACTION BY DISINTERESTED DIRECTORS. Following the election
or appointment of Acquisition's designees pursuant to this SECTION 1.3.
and prior to the Effective Time (as defined below), any amendment of this
Agreement or any amendment to the Restated Certificate of Incorporation
or By-Laws of the Company inconsistent with this Agreement, any
termination of this Agreement by the Company, any extension by the
Company of the time for the performance of any of the obligations or
other acts of Parent or Acquisition or any waiver of any of the Company's
rights hereunder will require the concurrence of a majority of the
directors of the Company (or the concurrence of the director, if there is
only one remaining) then in office who are not designees of Acquisition
or employees of the Company.
ARTICLE 2.
THE MERGER
2.1. THE MERGER.
2.1.1. EFFECTIVE TIME. At the Effective Time (as defined below),
and subject to and upon the terms and conditions of this Agreement and
the Delaware Law, Acquisition shall be merged with and into the Company,
the separate corporate existence of Acquisition shall cease, and the
Company shall continue as the surviving corporation. The Company as the
surviving corporation after the Merger is hereinafter sometimes referred
to as the "Surviving Corporation."
2.1.2. CLOSING. Unless this Agreement shall have been terminated
and the transactions herein contemplated shall have been abandoned
pursuant to SECTION 8.1. and subject to the satisfaction or waiver of the
conditions set forth in SECTION 7.1., the consummation of the Merger will
take place as promptly as practicable (and in any event within two
business days) after satisfaction or waiver of the conditions set forth
in SECTION 7.1., at the offices of Xxxxxx, Xxxx & Xxxxxxxx LLP, 0000 Xxxx
Xxxxxx, xxxxx 0000 Xxxxxx, Xxxxx 00000, unless another date, time or
place is agreed to in writing by the parties hereto.
2.2. EFFECTIVE TIME. As promptly as practicable (and in any event within
two business days) after the satisfaction or waiver of the conditions set forth
in ARTICLE 7., the parties hereto shall cause the Merger to be consummated by
filing a certificate of merger as contemplated by the Delaware Law (the
"Certificate of Merger"), together with any required related certificates, with
the Secretary of State of the State of Delaware, in such form as required by,
and executed in accordance with the relevant provisions of, the Delaware Law
(the time of such filing being the "Effective Time").
5
2.3. EFFECT OF THE MERGER. At the Effective Time, the effect of the
Merger shall be as provided in this Agreement, the Certificate of Merger and the
applicable provisions of the Delaware Law. Without limiting the generality of
the foregoing, and subject thereto, at the Effective Time all the property,
rights, privileges, powers and franchises of the Company and Acquisition shall
vest in the Surviving Corporation, and all debts, liabilities and duties of the
Company and Acquisition shall become the debts, liabilities and duties of the
Surviving Corporation.
2.4. CERTIFICATE OF INCORPORATION; BY-LAWS.
2.4.1. CERTIFICATE OF INCORPORATION. At the Effective Time the
Certificate of Incorporation of Acquisition, as in effect immediately
prior to the Effective Time, shall be the Certificate of Incorporation of
the Surviving Corporation until thereafter amended as provided by the
Delaware Law and such Certificate of Incorporation; provided, however,
that at the Effective Time of the Certificate of Incorporation of
Acquisition shall be amended to change its name to "EmCare Holdings
inc.".
2.4.2. BY-LAWS. The By-Laws of Acquisition, as in effect
immediately prior to the Effective Time, shall be the By-Laws of the
Surviving Corporation until thereafter amended as provided by the
Delaware Law, the Certificate of Incorporation of the Surviving
Corporation and such By-Laws.
2.5. DIRECTORS AND OFFICERS. The directors of Acquisition immediately
prior to the Effective Time shall be the initial directors of the Surviving
Corporation, each to hold office in accordance with the Certificate of
Incorporation and By-Laws of the Surviving Corporation, and the officers of the
Company shall be the initial officers of the Surviving Corporation, in each case
until their respective successors are duly elected or appointed and qualified.
2.6. EFFECT ON CAPITAL STOCK. At the Effective Time, by virtue of the
Merger and without any action on the part of the Parent, Acquisition, the
Company or the holders of any of the following securities:
2.6.1. CONVERSION OF SECURITIES. Each Share issued and
outstanding immediately prior to the Effective Time (excluding any Shares
to be canceled pursuant to SECTION 2.6.2. and Dissenting Shares as
defined in SECTION 2.6.5.) shall be converted into the right to receive
the Per Share Amount (the "Merger Consideration").
2.6.2. CANCELLATION. Each Share held in the treasury of the
Company and each Share owned by Parent, Acquisition or any direct or
indirect wholly owned subsidiary of the Company or Parent immediately
prior to the Effective Time shall cease to be outstanding, be canceled
and retired without payment of any consideration therefor and cease to
exist.
2.6.3. STOCK OPTIONS. At the Effective Time, each outstanding
option to purchase Company Common Stock (a "Stock Option") granted under
the Company's Amended and Restated Stock Option and Restricted Stock
Purchase Plan (the "Company
6
Stock Plan") or pursuant to any other stock option plan or agreement
entered into by the Company with any person who is or was employed by or
performing services for the Company, or any Company Subsidiary or
Associated PA listed on SECTION 3.3. of the Company Disclosure Schedule,
whether or not then vested or exercisable, shall vest and become
exercisable for the Merger Consideration, and each holder of a Stock
Option who executes an agreement to cancel such Stock Option shall be
entitled to receive as soon as practicable thereafter from the Company in
consideration for such cancellation an amount in cash (less applicable
withholding taxes) equal to the product of (i) the number of shares of
Company Common Stock previously subject to such Stock Option multiplied
by (ii) the excess, if any, of the Per Share Amount over the exercise
price per share of Company Common Stock previously subject to such Stock
Option.
2.6.4 CAPITAL STOCK OF ACQUISITION. The shares of common stock,
$.01 par value, of Acquisition issued and outstanding immediately prior
to the Effective Time shall be converted into and exchanged for 8,250,546
validly issued, fully paid and nonassessable shares of common stock, $.01
par value, of the Surviving Corporation.
2.6.5 DISSENTING SHARES. Notwithstanding anything in this
Agreement to the contrary, in the event Dissenter's Rights are available
in connection with the Merger pursuant to Section 262 of the Delaware
Law, Shares, if any, of Company Common Stock that are issued and
outstanding immediately prior to the Effective Time that are held by
stockholders who have not voted such shares in favor of the Merger and
who shall have delivered a written demand for appraisal of such shares in
the manner provided in Section 262 the Delaware Law (the "Dissenting
Shares") shall not be converted into or be exchangeable for the right to
receive the consideration provided in SECTION 2.6.1. unless and until
such holder shall have failed to perfect or shall have effectively
withdrawn or lost his right to appraisal under the Delaware Law. If such
holder shall have to failed to perfect or shall have effectively
withdrawn or lost such right, his shares of Company Common Stock shall
thereupon be deemed to have been converted into and to have become
exchangeable for, at the Effective Time, the right to receive the
consideration provided in SECTION 2.6.1. without any interest thereon.
2.7 EXCHANGE OF CERTIFICATES.
2.7.1 EXCHANGE AGENT AND PROCEDURES. Prior to the Effective
Time, a bank or trust company shall be designated by Parent (The "Paying
Agent") to act as agent in connection with the Merger to receive the
funds to which holders of Shares shall become entitled pursuant to
SECTION 2.6.1.. Promptly after the Effective Time, the Surviving
Corporation shall cause to be mailed to each record holder, as of the
Effective Time, of a certificate or certificates (the "Certificates")
that, prior to the Effective Time, represented Shares, a form of letter
of transmittal and instructions for use in effecting the surrender of the
Certificates for payment of the Merger Consideration therefor. Upon the
surrender of each such Certificate formerly representing Shares, together
with such letter of transmittal, duly completed and validly executed in
accordance with the instructions thereto, the Paying Agent shall pay the
holder of such Certificate the Merger
7
Consideration multiplied by the number of Shares formerly represented by
such Certificate, in exchange therefor, and such Certificate shall
forthwith be canceled. Until so surrendered and exchanged, each such
Certificate (other than Shares held by Parent, Acquisition or the
Company, or any direct or indirect subsidiary thereof or Dissenting
Shares) shall represent solely the right to receive the Merger
Consideration. No interest shall be paid or accrue on the Merger
Consideration. If the Merger Consideration (or any portion thereof) is
to be delivered to any person other than the person in whose name the
Certificate formerly representing Shares surrendered in exchange therefor
is registered, it shall be a condition to such exchange that the
Certificate so surrendered shall be properly endorsed or otherwise be in
proper form for transfer and that the person requesting such exchange
shall pay to the Paying Agent any transfer or other taxes required by
reason of the payment of the Merger Consideration to a person other than
the registered holder of the Certificate surrendered, or shall establish
to the satisfaction of the Paying Agent that such tax has been paid or is
not applicable.
2.7.2. CONSIDERATION. At the Effective Time, Parent or
Acquisition shall deposit, or cause to be deposited, in trust with the
Paying Agent the Merger Consideration to which holders of shares shall be
entitled at the Effective Time pursuant to SECTION 2.6.1.
2.7.3. INVESTMENT OF MERGER CONSIDERATION. The Merger
Consideration shall be invested by the Paying Agent, as directed by
Parent, provided such investments shall be limited to direct obligations
of the United States of America, obligations for which the full faith and
credit of the United States of America is pledged to provide for the
payment of principal and interest, commercial paper rated of the highest
quality by Xxxxx'x Investors Service, Inc. or Standard & Poor's Ratings
Group, or certificates of deposit issued by a commercial bank having at
least $25,000,000,000 in assets.
2.7.4. TERMINATION OF DUTIES. Promptly following the date which
is six months after the Effective Time, Parent will cause the Paying
Agent to deliver to the Surviving Corporation all cash and documents in
its possession relating to the transactions described in this Agreement,
and the Paying Agent's duties shall terminate. Thereafter, each holder
of a Certificate formerly representing a Share may surrender such
Certificate to the Surviving Corporation and (subject to applicable
abandoned property, escheat and similar laws) receive in exchange
therefor the Merger Consideration, without any interest thereon.
2.7.5. NO LIABILITY. Neither Parent, Acquisition nor the Company
shall be liable to any holder of Company Common Stock for any Merger
Consideration delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
2.7.6. WITHHOLDING RIGHTS. Parent or the Exchange Agent shall be
entitled to deduct and withhold from the Merger Consideration otherwise
payable pursuant to this Agreement to any holder of Company Common Stock
such amounts as Parent or the Exchange Agent is required to deduct and
withhold with respect to the making of such payment under the Internal
Revenue Code of 1986, as amended (the "Code"), or any
8
provision of state, local or foreign tax law. To the extent that amounts
are so withheld by Parent or the Exchange Agent, such withheld amounts
shall be treated for all purposes of this Agreement as having been paid
to the holder of the Shares in respect of which such deduction and
withholding was made by Parent or the Exchange Agent.
2.8. NO FURTHER OWNERSHIP RIGHTS IN COMPANY COMMON STOCK. The Merger
Consideration delivered upon the surrender for exchange of Shares in accordance
with the terms hereof shall be deemed to have been issued in full satisfaction
of all rights pertaining to such Shares, and there shall be no further
registration of transfers on the records of the Surviving Corporation of Shares
which were outstanding immediately prior to the Effective Time. If, after the
Effective Time, Certificates are presented to the Surviving Corporation for any
reason, they shall be canceled and exchanged as provided in this ARTICLE 2. At
the Effective Time, the stock transfer books of the Company shall be closed.
2.9. LOST, STOLEN OR DESTROYED CERTIFICATES. In the event any
Certificates shall have been lost, stolen or destroyed, the Exchange Agent shall
deliver in exchange for such lost, stolen or destroyed Certificates, upon the
making of an affidavit of that fact by the holder thereof, the Merger
Consideration as may be required pursuant to SECTION 2.6.; provided, however,
that Parent may, in its discretion and as a condition precedent to the delivery
thereof, require the owner of such lost, stolen or destroyed Certificates to
deliver a bond in such sum as it may reasonably direct as indemnity against any
claim that may be made against Parent or the Exchange Agent with respect to the
Certificates alleged to have been lost, stolen or destroyed.
2.10. TAKING OF NECESSARY ACTION; FURTHER ACTION. If at any time after
the Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest the Surviving Corporation with full
right, title and possession to all assets, property, rights, privileges, powers
and franchises of the Company and Acquisition, the officers and directors of the
Company and Acquisition immediately prior to the Effective Time are fully
authorized in the name of their respective corporations or otherwise to take,
and will take, all such lawful and necessary action.
2.11. STOCKHOLDERS' MEETING. If approval by the Company's stockholders
is required by applicable law to consummate the Merger, the Company, acting
through the Board, shall in accordance with applicable law and subject to the
fiduciary duties of the Board under applicable law (as determined in good faith
after consultation with independent counsel) or as contemplated by SECTION 5.2.,
as soon as practicable following the consummation of the Offer:
(i) duly call, give notice of, convene and hold a special
meeting of its stockholders (the "Stockholders' Meeting") for the purpose
of considering and taking action upon this Agreement;
(ii) include in the Proxy Statement (as defined in
SECTION 3.23.) the recommendation of the Board that stockholders of the
Company vote in favor of the approval and adoption of this Agreement and
the transactions contemplated hereby (provided, however, that such
recommendation may be modified or withdrawn as provided in SECTION 5.2.
or if the Board determines in good faith, and after consultation
9
with independent counsel, that such action is necessary to properly
discharge its fiduciary duties); and
(iii) use its reasonable efforts (A) to obtain and furnish the
information required to be included by it in the Proxy Statement and,
after consultation with Parent, respond promptly to any comments made by
the SEC with respect to the Proxy Statement and any preliminary version
thereof and cause the Proxy Statement to be mailed to its stockholders at
the earliest practicable time following the consummation of the Offer and
(B) to obtain the necessary approvals by its stockholders of this
Agreement and the transactions contemplated hereby.
At such meeting, Parent and Acquisition will vote all Shares owned by them in
favor of this Agreement and the transactions contemplated hereby.
ARTICLE 3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Parent and Acquisition
that, except as set forth in the written disclosure schedule delivered on or
prior to the date hereof by the Company to the Parent that is arranged in
paragraphs corresponding to the numbered and lettered paragraphs contained in
this ARTICLE 3. (the "Company Disclosure Schedule"):
3.1. ORGANIZATION, EXISTENCE AND GOOD STANDING OF THE COMPANY. The
Company is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has all necessary
corporate power and authority to own its properties and assets and to carry on
its business as presently conducted. The Company is qualified to do business
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, except where the failure to
be so qualified or be in good standing would not have a Company Material Adverse
Effect. The Company has delivered to Parent a complete and correct copy of its
Certificate of Incorporation and By-laws as most recently restated and
subsequently amended to the date hereof.
3.2. ORGANIZATION, EXISTENCE AND GOOD STANDING OF SUBSIDIARIES AND PAS.
(a) SECTION 3.2(a) to the Company Disclosure Schedule sets forth a
list of all subsidiaries of the Company (a "Company Subsidiary"), the
jurisdiction of incorporation or organization, as applicable, of each Company
Subsidiary, the type of each Company Subsidiary, the percentage of the Company's
and Company Subsidiaries' ownership of the outstanding voting stock of each such
corporate Company Subsidiary, the authorized and outstanding capital stock of
each such corporate Company Subsidiary, and the type and percentage of the
Company's and Company Subsidiaries' ownership interest in each other Company
Subsidiary. Each Company Subsidiary is a corporation, business trust, limited
partnership or limited liability company (as specified on SECTION 3.2(a) to the
Company Disclosure Schedule) duly organized, validly
10
existing and in good standing under the laws of the jurisdiction of its
incorporation or organization, as applicable. Each Company Subsidiary has all
necessary entity power and authority to own its properties and assets and to
carry on its business as presently conducted. Each Company Subsidiary is
qualified to do business 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,
except where the failure to be so qualified or be in good standing would not
have a Company Material Adverse Effect.
(b) Attached as SECTION 3.2(b) to the Company Disclosure Schedule is a
list of all professional corporations or professional associations engaging in
the practice of medicine (A) which are associated with the Company and (B) as
to which the Company or any Company Subsidiary has entered into an
Administrative Management Agreement (each an "Associated PA") and the
jurisdiction of association or incorporation of each Associated PA listed
thereon. Each Associated PA is a professional association or professional
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its association or incorporation. Each Associated PA has
all necessary corporate or association power and authority to own its property
and assets and to carry on its business as presently conducted. Each Associated
PA is qualified to do business 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,
except where the failure to be so qualified or be in good standing would not
have a Company Material Adverse Effect.
(c) Except for the Company Subsidiaries and as set forth in
SECTION 3.2.(c) to the Company Disclosure Schedule, the Company does not,
directly or indirectly, own any equity interest in any other corporation,
association, partnership, joint venture, business organization or limited
liability company or other entity, with respect to which interest the Company or
any Company Subsidiary has invested or is required to invest $500,000 or more,
excluding securities in any publicly traded company held for investment and
comprising less than five percent of the outstanding voting securities of such
company.
(d) For the purposes of the representations and warranties of the
Company set forth in this Agreement, any act, event, or state of facts affecting
any Associated PA, which act, event, or state of facts has or would materially
adversely affect the Company or a Company Subsidiary, shall be deemed an act,
event, or state of facts affecting the Company or Company Subsidiary to the
extent of such materially adverse effect.
3.3. CAPITALIZATION.
(a) The authorized capital stock of the Company consists of 25,000,000
shares of Company Common Stock and 5,000,000 shares of preferred stock, $.01 par
value per share. As of June 30, 1997: (i) 8,250,546 shares of Company Common
Stock were issued and outstanding, all of which are validly issued, fully paid
and nonassessable (except as set forth in SECTION 3.3. of the Company Disclosure
Schedule) and none of which shares were held in treasury, and no shares of
preferred stock were issued and outstanding; (ii) 1,422,836 shares of Company
Common Stock were reserved for future issuance pursuant to outstanding stock
options; and
11
(iii) 37,570 shares of Company Common Stock were reserved for future issuance in
connection with purchase price payments (including deferred purchase price
payments) in conjunction with acquisitions. Except as set forth in SECTION 3.2.
and 3.3. of the Company Disclosure Schedule, all of the outstanding shares of
capital stock, or other ownership interest, of each Company Subsidiary is
validly issued, fully paid and nonassessable, and is owned by the Company or
another Company Subsidiary, free and clear of all security interests, liens,
claims, pledges, charges or other encumbrances of any nature whatsoever. Except
as set forth in SECTION 3.2. and SECTION 3.3. of the Company Disclosure
Schedule, (A) all of the outstanding shares of capital stock of each Associated
PA are validly issued, fully paid and non-assessable, and (B) are owned by the
holders and in the percentages set forth in SECTION 3.2. of the Company
Disclosure Schedule, and, except as set forth in SECTION 3.3(a) of the Company
Disclosure Schedule, free and clear of all security interests, liens, claims,
pledges, charges or other encumbrances of any nature whatsoever.
(b) SECTION 3.3.(b) of the Company Disclosure Schedule sets forth a
true and complete list of all outstanding rights to purchase Company Common
Stock, the name of each holder thereof, the number of shares purchasable
thereunder and the per share exercise or purchase price of each right. Except
as set forth in SECTION 3.3. of the Company Disclosure Schedule, there are no
options, warrants or other similar rights, agreements, arrangements or
commitments of any character obligating the Company or any Company Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in, the
Company or any Company Subsidiary. Except as set forth in SECTION 3.3.(b) of
the Company Disclosure Schedule, there are no obligations, contingent or
otherwise, of the Company or any Company Subsidiary to repurchase, redeem or
otherwise acquire any shares of Company Common Stock or the capital stock or
other equity interest of any Company Subsidiary or to make any investment (in
the form of a loan, capital contribution or otherwise) in any Company Subsidiary
or any other entity.
3.4. AUTHORITY RELATIVE TO THIS AGREEMENT. The Company has all
necessary corporate power and authority to execute and deliver this Agreement
and to perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly and validly authorized by all necessary corporate action,
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement or to consummate the transactions so contemplated
(other than the adoption of this Agreement by the holders of a majority of the
outstanding shares of Company Common Stock entitled to vote in accordance with
the Delaware Law and the Company's Certificate of Incorporation and By-Laws).
This Agreement has been duly and validly executed and delivered by the Company
and, assuming the due authorization, execution and delivery by Parent and
Acquisition, as applicable, constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its terms.
3.5. NO CONFLICT; REQUIRED FILINGS AND CONSENTS.
(a) SECTION 3.5.(a) of the Company Disclosure Schedule sets forth a
list of all agreements to which the Company or any Company Subsidiary is a party
or by which any of
12
them is bound which, as of the date hereof: (i) are required to be filed as
"material contracts" with the SEC pursuant to the requirements of the Exchange
Act; (ii) under which the consequences of a default, nonrenewal or termination
would have a Company Material Adverse Effect; or (iii) pursuant to which
payments might be required or acceleration of benefits may be required upon a
"change of control" of the Company (collectively, the "Material Contracts").
(b) Except as set forth in SECTION 3.5.(b) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, (i) conflict with
or violate the Certificate of Incorporation or By-Laws of the Company,
(ii) conflict with or violate any law, rule, regulation, order, judgment or
decree applicable to the Company or any Company Subsidiary or by which its or
any of their respective properties is bound or affected, or (iii) result in any
breach of or constitute a default (or an event that with notice or lapse of time
or both would become a default) under, or impair the rights of the Company or
any Company Subsidiary or alter the rights or obligations of any third party
under, or give to others any rights of termination, amendment, acceleration or
cancellation of any Material Contract, or result in the creation of a lien or
encumbrance on any of the properties or assets of the Company or any Company
Subsidiary pursuant to any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which the
Company or any Company Subsidiary is a party or by which the Company or any
Company Subsidiary or any of their respective properties is bound or affected,
except in any such case for any such conflicts, violations, breaches, defaults
or other occurrences that would not have a Company Material Adverse Effect.
(c) Except as set forth in SECTION 3.5.(c) of the Company Disclosure
Schedule, the execution and delivery of this Agreement by the Company does not,
and the performance of this Agreement by the Company will not, require any
consent, approval, authorization or permit of, or filing with or notification
to, any governmental or regulatory authority, domestic or foreign, except
(i) for applicable requirements, if any, of the Securities Act of 1933, as
amended (the "Securities Act"), the Exchange Act, state securities laws ("Blue
Sky Laws"), the pre-merger notification requirements of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended ("HSR Act"), and the filing and
recordation of appropriate merger or other documents as required by the Delaware
Law, and (ii) where the failure to obtain such consents, approvals,
authorizations or permits, or to make such filings or notifications, would not
prevent or delay consummation of the Merger, or otherwise prevent or delay the
Company from performing its obligations under this Agreement, or would not
otherwise have a Company Material Adverse Effect.
3.6. COMPLIANCE; PERMITS.
(a) Except as disclosed in SECTION 3.6.(a) of the Company Disclosure
Schedule, neither the Company nor any Company Subsidiary is in conflict with, or
in default or violation of, (i) any law, rule, regulation, order, judgment or
decree applicable to the Company or any Company Subsidiary or by which its or
any of their respective properties is bound or affected or (ii) any Material
Contract, except in each case for any such conflicts, defaults or violations
which would not have a Company Material Adverse Effect.
13
(b) Except as disclosed in SECTION 3.6.(b) of the Company Disclosure
Schedule, the Company and each Company Subsidiary holds all permits, licenses,
easements, variances, exemptions, consents, certificates, orders and approvals
from governmental authorities that are material to the operation of the business
of the Company and the Company Subsidiaries taken as a whole as it is now being
conducted (collectively, the "Company Permits"), except where the failure to
hold such Company Permits would not have a Company Material Adverse Effect. The
Company and the Company Subsidiaries are in compliance with the terms of the
Company Permits, except where the failure to so comply would not have a Company
Material Adverse Effect.
3.7. SEC FILINGS; FINANCIAL STATEMENTS.
(a) The Company has filed all forms, reports and documents required to
be filed with the SEC and has made available to Parent (i) its Annual Reports on
Form 10-K for the fiscal years ended December 31, 1995 and 1996, respectively,
(ii) its Quarterly Report on Form 10-Q for the period ended Xxxxx 00, 0000,
(xxx) all proxy statements relating to the Company's meetings of stockholders
(whether annual or special) held since January 1, 1996, (iv) all other reports
or registration statements (other than Reports on Form 10-Q not referred to in
clause (ii) above) filed by the Company with the SEC since January 1, 1996, and
(v) all amendments and supplements to all such reports and registration
statements filed by the Company with the SEC since January 1, 1996
(collectively, the "Company SEC Reports"). The Company SEC Reports (i) were
prepared in all material respects in accordance with the requirements of the
Securities Act or the Exchange Act, as the case may be, and (ii) did not at the
time they were filed (or if amended or superseded by a filing prior to the date
of this Agreement, then on the date of such filing) contain any untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. None of the
Company Subsidiaries is required to file any forms, reports or other documents
with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company SEC Reports was
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods involved (except as may be indicated
in the notes thereto), and each fairly presents in all material respects the
consolidated financial position of the Company and its consolidated subsidiaries
as at the respective dates thereof and the consolidated statements of income and
cash flows for the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and recurring year-end
adjustments.
3.8. ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
SECTION 3.8. of the Company Disclosure Schedule or the Company SEC Reports,
since January 1, 1997, there has not occurred: (i) any Company Material Adverse
Effect; (ii) any amendments or changes in the Certificate of Incorporation or
By-Laws of the Company; (iii) any damage to, destruction or loss of any asset of
the Company (whether or not covered by insurance) that would have a Company
Material Adverse Effect; (iv) any material change by the Company in its
accounting methods, principles or practices; (v) any material revaluation by the
Company of any of its assets,
14
including, without limitation, writing off notes or accounts receivable other
than in the ordinary course of business; or (vi) any sale of a material amount
of property of the Company or any Company Subsidiary except in the ordinary
course of business.
3.9. NO UNDISCLOSED LIABILITIES. Except as is disclosed in SECTION 3.9.
of the Company Disclosure Schedule, neither the Company nor any Company
Subsidiary has any liabilities (absolute, accrued, contingent or otherwise),
except liabilities (a) in the aggregate adequately provided for in the Company's
unaudited balance sheet (including any related notes thereto) as of March 31,
1997 (the "1997 Company Balance Sheet"), (b) incurred in the ordinary course of
business and not required under generally accepted accounting principles to be
reflected on the 1997 Company Balance Sheet, (c) incurred since March 31, 1997
in the ordinary course of business consistent with past practice, (d) incurred
in connection with this Agreement, (e) disclosed in the Company SEC Reports or
(f) which would not have a Company Material Adverse Effect.
3.10. ABSENCE OF LITIGATION. Except as set forth in SECTION 3.10. of
the Company Disclosure Schedule or the Company SEC Reports, there are no claims,
actions, suits, proceedings or investigations pending or, to the knowledge of
the Company, overtly threatened against the Company or any Company Subsidiary or
any properties or rights of the Company or any Company Subsidiary before any
court, arbitrator or administrative, governmental or regulatory authority or
body, domestic or foreign, that would have a Company Material Adverse Effect.
3.11. EMPLOYEE BENEFIT PLANS, EMPLOYMENT AGREEMENTS.
(a) SECTION 3.11.(a) of the Company Disclosure Schedule lists all
employee pension plans (as defined in Section 3(2) of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")), all material employee
welfare plans (as defined in Section 3(1) of ERISA) and all other material
bonus, stock option, stock purchase, incentive, deferred compensation,
supplemental retirement, severance and other similar fringe or employee benefit
plans, programs or arrangements, and any material employment, executive
compensation, consulting or severance agreements, written or otherwise, for the
benefit of, or relating to, any employee of or consultant to the Company, any
trade or business (whether or not incorporated) which is a member of a
controlled group including the Company or which is under common control with the
Company (an "ERISA Affiliate") within the meaning of Section 414 of the Code, or
any Company Subsidiary, as well as each plan with respect to which the Company
or an ERISA Affiliate could incur liability under Section 4069 (if such plan has
been or were terminated) or Section 4212(c) of ERISA (collectively the "Company
Employee Plans"). There have been made available to Parent copies of (i) each
such written Company Employee Plan (other than those referred to in
Section 4(b)(4) of ERISA), (ii) the most recent annual report on Form 5500
series, with accompanying schedules and attachments, filed with respect to each
Company Employee Plan required to make such a filing, and (iii) the most recent
actuarial valuation for each Company Employee Plan subject to Title IV of ERISA.
For purposes of this SECTION 3.11.(a), the term "material," used with respect to
any Company Employee Plan, shall mean that the Company or
15
an ERISA Affiliate has incurred or may incur obligations in an annual amount
exceeding $500,000 with respect to such Company Employee Plan.
(b) Except as set forth in SECTION 3.11.(b) of the Company Disclosure
Schedule: (i) none of the Company Employee Plans provides retiree medical or
other retiree welfare benefits to any person (other than as required under
COBRA), and none of the Company Employee Plans is a "multiemployer plan" as such
term is defined in Section 3(37) of ERISA; (ii) there has been no non-exempt
"prohibited transaction," as such term is defined in Section 406 of ERISA and
Section 4975 of the Code, with respect to any Company Employee Plan, which would
result in a Company Material Adverse Effect; (iii) all Company Employee Plans
are in compliance with the requirements prescribed by any and all statutes
(including ERISA and the Code), orders, or governmental rules and regulations
currently in effect with respect thereto (including all applicable requirements
for notification to participants or the Department of Labor, the Pension Benefit
Guaranty Corporation (the "PBGC"), Internal Revenue Service (the "IRS") or
Secretary of the Treasury) except as would not result in a Company Material
Adverse Effect, and the Company and each Company Subsidiary has performed all
obligations required to be performed by them under, and are not in any material
respect in default under or violation of any of the Company Employee Plans
except as would not result in a Company Material Adverse Effect; (iv) each
Company Employee Plan intended to qualify under Section 401(a) of the Code and
each trust intended to qualify under Section 501(a) of the Code is the subject
of a favorable determination letter from the IRS; (v) all contributions required
to be made to any Company Employee Plan pursuant to Section 412 of the Code, or
the terms of the Company Employee Plan or any collective bargaining agreement,
have been made on or before their due dates; (vi) with respect to each Company
Employee Plan, no "reportable event" within the meaning of Section 4043 of ERISA
(excluding any such event for which the 30 day notice requirement has been
waived under the regulations to Section 4043 of ERISA) nor any event described
in Section 4062, 4063 or 4041 of ERISA has occurred; and (vii) neither the
Company nor any ERISA Affiliate has incurred, nor reasonably expects to incur,
any liability under Title IV of ERISA (other than liability for premium payments
to the PBGC arising in the ordinary course).
3.12. LABOR MATTERS. Except as set forth in SECTION 3.12. of the
Company Disclosure Schedule: (i) there are no controversies pending or, to the
knowledge of the Company, overtly threatened, between the Company or any Company
Subsidiary and any of their respective employees, which controversies have had
or would have a Company Material Adverse Effect; (ii) neither the Company nor
any Company Subsidiary is a party to any material collective bargaining
agreement or other labor union contract applicable to persons employed by the
Company or any Company Subsidiary, nor does the Company know of any activities
or proceedings of any labor union to organize any such employees; and (iii) the
Company has no knowledge of any strikes, slowdowns, work stoppages, lockouts, or
threats thereof, by or with respect to any employees of the Company or any
Company Subsidiary which would have a Company Material Adverse Effect.
3.13. RESTRICTIONS ON BUSINESS ACTIVITIES. Except for this Agreement or
as set forth in SECTION 3.13. of the Company Disclosure Schedule, to the
Company's knowledge, there is no material agreement, judgment, injunction, order
or decree binding upon the Company or any
16
Company Subsidiary which has or would have the effect of prohibiting the conduct
of business by the Company or any Company Subsidiary as currently conducted,
except for any prohibition as would not have a Company Material Adverse Effect.
3.14. TITLE TO PROPERTY. Except as set forth in SECTION 3.14. of the
Company Disclosure Schedule, the Company or each Company Subsidiary has good and
defensible title to all of their properties and assets, free and clear of all
liens, charges and encumbrances, except liens for Taxes not yet delinquent and
such liens or other imperfections of title, if any, as do not materially
interfere with the present use of the property affected thereby or which would
not have a Company Material Adverse Effect. To the knowledge of the Company,
all leases pursuant to which the Company or any Company Subsidiary leases from
others material amounts of real or personal property are in good standing, valid
and effective in accordance with their respective terms, and there is not, to
the knowledge of the Company, under any of such leases, any existing material
default or event of default (or event which with notice or lapse of time, or
both, would constitute a material default), except where the lack of such good
standing, validity and effectiveness or the existence of such default or event
of default would not have a Company Material Adverse Effect.
3.15 TAXES.
(a) For purposes of this Agreement, "Tax" or "Taxes" shall mean taxes,
fees, levies, duties, tariffs, imposts, and governmental impositions or charges
of any kind, in the nature of, or similar to, taxes, payable to any federal,
state, local or foreign taxing authority, including, without limitation,
(i) income, franchise, profits, gross receipts, ad valorem, net worth, value
added, sales, use, service, real or personal property, special assessments,
capital stock, license, payroll, withholding, employment, social security,
workers' compensation, unemployment compensation, utility, severance,
production, excise, stamp, occupation, premiums, windfall profits, transfer and
gains taxes, and (ii) interest, penalties, additional taxes and additions to tax
imposed with respect thereto. For purposes of this Agreement, "Tax Returns"
shall mean returns, reports, and information statements with respect to Taxes
required to be filed with the IRS or any other taxing authority, domestic or
foreign, including, without limitation, consolidated, combined and unitary tax
returns.
(b) Other than as disclosed in SECTION 3.15. of the Company Disclosure
Schedule: (i) the Company and the Company Subsidiaries (for such periods as each
Company Subsidiary was owned, directly or indirectly, by the Company) have filed
all United States federal income Tax Returns and all other Tax Returns required
to be filed by them except where any such failure to file does not have a
Company Material Adverse Effect; and (ii) the Company and the Company
Subsidiaries have paid and discharged all Taxes shown as due and payable on such
Tax Returns, except such Taxes as may be determined to be owed upon completion
of any Tax Return not yet filed based upon an extension of time to file. Except
to the extent the following does not involve, nor would result in, a liability
to the Company or any Company Subsidiary that would have a Company Material
Adverse Effect, (1) there are no Tax liens on any assets of the Company or any
Company Subsidiary, other than liens for Taxes that are not delinquent, and
(2) neither the Company nor any Company Subsidiary has granted any waiver of any
statute of
17
limitations with respect to, or any extension of a period for the assessment of,
any Tax. The accruals and reserves for Taxes (including deferred taxes)
reflected in the 1997 Company Balance Sheet are adequate to cover all Taxes
required to be accrued through the date thereof (including interest and
penalties, if any, thereon and Taxes being contested) in accordance with
generally accepted accounting principles, except where such inadequacy would not
have a Company Material Adverse Effect.
3.16. INTELLECTUAL PROPERTY. Except as set forth in SECTION 3.16. of
the Company Disclosure Schedule, the Company and the Company Subsidiaries own,
or are licensed or otherwise possesses legally enforceable rights to use, all
patents, trademarks, trade names, service marks, copyrights, and any
applications therefor, technology, know-how, computer software programs or
applications, and tangible or intangible proprietary information or material
that are used in the business of the Company and the Company Subsidiaries as
currently conducted, except as would not have a Company Material Adverse Effect.
3.17. INTERESTED PARTY TRANSACTIONS. Except as set forth in
SECTION 3.17. of the Company Disclosure Schedule or in the Company SEC Reports,
to the knowledge of the Company, since the date of the Company's proxy statement
dated April 4, 1997, no event has occurred that would be required to be reported
as a Certain Relationship or Related Transaction, pursuant to Item 404 of
Regulation S-K promulgated by the SEC.
3.18. INSURANCE. The Company maintains insurance with financially
responsible insurance companies in amounts customary in its industry to insure
it against risks and losses associated with the operation of the business and
properties of the Company and the Company Subsidiaries.
3.19. HEALTHCARE REGULATORY COMPLIANCE. To the knowledge of the
Company, neither the Company nor any Company Subsidiary has violated federal
Medicare and Medicaid statutes, including, without limitation, 42 U.S.C. (S)
1320a-7b or related state or local statutes or regulations, except for such
violations as would not have a Company Material Adverse Effect.
3.20. OPINION OF FINANCIAL ADVISOR. The Board has received the opinion
of the Company's financial advisor, DLJ, to the effect that, as of the date of
the Board's approval of this Agreement, the per Share Amount to be received by
the holders of Shares (other than Parent and its affiliates) pursuant to the
Offer and the Merger, taken together, is fair from a financial point of view to
such holders.
3.21. BROKERS. No broker, finder or investment banker (other than DLJ)
is entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of the Company. The Company has heretofore furnished to
Parent a complete and correct copy of all agreements between the Company and DLJ
pursuant to which such firm would be entitled to any payment relating to the
transactions contemplated hereunder.
3.22. SECTION 203 OF THE DELAWARE LAW NOT APPLICABLE. The Board has
taken all actions so that the restrictions contained in Section 203 of the
Delaware applicable to a "business
18
combination" (as defined in Section 203) will not apply to the execution,
delivery or performance of this Agreement or the consummation of the
transactions contemplated by this Agreement.
3.23. SCHEDULE 14D-9. Neither the Schedule 14D-9, nor any of the
information provided by the Company and/or by its auditors, legal counsel,
financial advisors or other consultants or advisors in writing specifically for
use in the Offer Documents shall, on the respective dates the Schedule 14D-9 or
the Offer Documents are filed with the SEC or on the date first published, sent
or given to the Company's stockholders, as the case may be, 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. The proxy or
information statement or similar materials distributed to the Company's
stockholders in connection with the Merger, including any amendments or
supplements thereto (the "Proxy Statement"), shall not, at the time filed with
the SEC, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. Notwithstanding the foregoing, the Company makes no representation
or warranty with respect to any information provided by Parent, Acquisition
and/or by their auditors, legal counsel, financial advisors or other consultants
or advisors specifically for use in the Schedule 14D-9 or the Proxy Statement.
The Schedule 14D-9 and the Proxy Statement will comply as to form in all
material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES OF PARENT AND
ACQUISITION
Parent and Acquisition hereby, jointly and severally, represent and
warrant to the Company that:
4.1. ORGANIZATION, EXISTENCE AND GOOD STANDING OF PARENT; ACQUISITION.
(a) The Parent is a corporation duly organized, validly existing and
in good standing under the laws of Canada. Each subsidiary of the Parent (a
"Parent Subsidiary") is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization. The
Parent and each Parent Subsidiary has all necessary corporate power and
authority to own its properties and assets and to carry on its business as
presently conducted. The Parent and each Parent Subsidiary is qualified to do
business 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, except where the
failure to be so qualified or be in good standing would not have a Parent
Material Adverse Effect. The Parent has delivered to the Company a complete and
correct copy of its Articles of Association and By-Laws (or other constituent
instruments) as most recently restated and subsequently amended to date.
19
(b) Acquisition is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. Acquisition has all
necessary corporate power and authority to own its properties and assets and to
carry on its business as presently conducted. Acquisition is qualified to do
business 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, except where the
failure to be so qualified or be in good standing would not have a Parent
Material Adverse Effect. The Parent has delivered to the Company a complete and
correct copy of Acquisition's Certificate of Incorporation and By-Laws.
4.2. AUTHORITY RELATIVE TO THIS AGREEMENT. Each of Parent and
Acquisition has all necessary corporate power and authority to execute and
deliver this Agreement and to perform its obligations hereunder and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by Parent and Acquisition and the consummation by Parent and
Acquisition of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action on the part of Parent and
Acquisition, and no other corporate proceedings on the part of Parent or
Acquisition are necessary to authorize this Agreement or to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
executed and delivered by Parent and Acquisition and, assuming the due
authorization, execution and delivery by the Company, constitutes a legal, valid
and binding obligation of Parent and Acquisition enforceable against each of
them in accordance with its terms.
4.3. NO CONFLICT, REQUIRED FILINGS AND CONSENTS.
(a) The execution and delivery of this Agreement by Parent and
Acquisition do not, and the performance of this Agreement by Parent and
Acquisition will not, (i) conflict with or violate the Articles of Association,
Certificate of Incorporation or By-Laws (or other constituent instruments) of
Parent or Acquisition, (ii) conflict with or violate any law, rule, regulation,
order, judgment or decree applicable to Parent, Acquisition or any Parent
Subsidiary or by which its or their respective properties are bound or affected,
or (iii) result in any breach of or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or impair
Parent's or any Parent Subsidiary's rights or alter the rights or obligations of
any third party under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of Parent or any Parent
Subsidiary pursuant to, any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or obligation
to which Parent or any Parent Subsidiary is a party or by which Parent or any
Parent Subsidiary or its or any of their respective properties are bound or
affected, except in any such case for any such conflicts, violations, breaches,
defaults or other occurrences that would not have a Parent Material Adverse
Effect.
(b) The execution and delivery of this Agreement by Parent and
Acquisition does not, and the performance of this Agreement by Parent and
Acquisition will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except (i) for applicable requirements, if any, of the
Securities Act, the Exchange Act, the Blue Sky Laws, the pre-merger notification
requirements
20
of the HSR Act, and the filing and recordation of appropriate merger or other
documents as required by the Delaware Law, and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay consummation of the Offer or the
Merger, or otherwise prevent Parent or Acquisition from performing their
respective obligations under this Agreement, and would not otherwise have a
Parent Material Adverse Effect.
4.4 OFFER DOCUMENTS; SCHEDULE 14D-9; PROXY STATEMENT. Neither the
Offer Documents, nor any of the information provided by Parent or Acquisition
and/or by their auditors, legal counsel, financial advisors or other consultants
or advisors specifically for use in the Schedule 14D-9 shall, on the respective
dates the Offer Documents, the Schedule 14D-9 or any supplements or amendments
thereto are filed with the SEC or on the date first published, sent or given to
the Company's stockholders, as the case may be, 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. Notwithstanding the
foregoing, neither Parent nor Acquisition makes any representation or warranty
with respect to any information provided by the Company or by its auditors,
legal counsel, financial advisors or other consultants or advisors in writing
specifically for use in the Offer Documents. None of the information provided
by Parent or Acquisition or by their auditors, attorneys, financial advisors or
other consultants or advisors specifically for use in the Proxy Statement shall,
at the time filed with the SEC, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances Under which
they are made, not misleading. The Offer Documents will comply as to form in
all material respects with the provisions of the Exchange Act and the rules and
regulations thereunder.
4.5. NO PRIOR ACTIVITIES; FINANCING.
(a) Acquisition was formed solely for the purpose of engaging in the
transactions contemplated by this Agreement. As of the date hereof and the
Effective Time, except for obligations or liabilities incurred in connection
with its incorporation or organization and the transactions contemplated by this
Agreement and except for this Agreement and any other agreements or arrangements
contemplated by this Agreement, Acquisition has not and will not have incurred,
directly or indirectly, through any subsidiary or affiliate, any obligations or
liabilities or engaged in any business activities of any type or kind whatsoever
or entered into any agreements or arrangements with any person.
(b) Acquisition has available to it funds necessary to satisfy its
obligations hereunder including, without limitation, the obligation to pay the
Per Share Amount pursuant to the Offer and the Merger Consideration pursuant to
the Merger and to pay all fees and expenses in connection with the Offer and the
Merger.
ARTICLE 5.
CONDUCT OF BUSINESS PENDING THE MERGER
21
5.1 CONDUCT OF BUSINESS BY THE COMPANY PENDING THE MERGER. The
Company covenants and agrees that, during the period from the date of this
Agreement and continuing until the earlier of the termination of this Agreement
or the Effective Time, unless Parent shall otherwise agree in writing, which
agreement shall not be unreasonably withheld or delayed, the Company shall
conduct its business and shall cause the businesses of the Company Subsidiaries
to be conducted only in, and the Company and the Company Subsidiaries shall not
take any action except in, the ordinary course of business in the manner
consistent with past practice. The Company shall use reasonable commercial
efforts to preserve substantially intact the business organization of the
Company and the Company Subsidiaries, to keep available the services of the
present officers, employees and consultants of the Company and the Company
Subsidiaries and to preserve the present relationships of the Company and the
Company Subsidiaries with customers, suppliers and other persons with which the
Company or any Company Subsidiary has significant business relations. By way of
amplification and not limitation, except as contemplated by this Agreement,
neither the Company nor any Company Subsidiary shall, during the period from the
date of this Agreement and continuing until the earlier of the termination of
this Agreement or the Effective Time, directly or indirectly do any of the
following without the prior written consent of Parent, which consent shall not
be unreasonably withheld or delayed:
(a) amend or otherwise change the Certificate of Incorporation or By-
Laws of the Company or Company Subsidiary;
(b) issue, sell, pledge, dispose of or encumber, or authorize the
issuance, sale, pledge, disposition or encumbrance of, any shares of capital
stock of any class, or any options, warrants, convertible securities or other
rights of any kind to acquire any shares of capital stock, or any other
ownership interest (including, without limitation, any phantom interest) in the
Company (except for (i) the issuance of shares of Company Common Stock issuable
pursuant to any stock option or other agreement listed on SECTION 3.3. of the
Company Disclosure Schedule; and (ii) the grant of options under the Company's
Stock Plan consistent with past practice and the issuance of shares upon
exercise thereof;
(c) sell, pledge, dispose of or encumber any assets of the Company or
any Company Subsidiary, except for (i) sales of assets in the ordinary course of
business in a manner consistent with past practice, (ii) disposition of obsolete
or worthless assets, (iii) sales of immaterial assets not in excess of $500,000,
and (iv) encumbrances on assets to secure purchase money financings of equipment
and capital improvements and in connection with the financing of Permitted
Acquisitions (as defined in SECTION 5.1.(e));
(d) (i) declare, set aside, make or pay any dividend or other
distribution (whether in cash, stock or property or any combination thereof) in
respect of any of its capital stock, except that a wholly owned Company
Subsidiary may declare and pay a dividend or make advances to its parent or the
Company, (ii) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in lieu
of or in substitution for shares of its capital stock, or (iii) amend the terms
or change the period of exercisability of, purchase, repurchase, redeem or
otherwise acquire, or permit any Company Subsidiary to purchase, repurchase,
redeem or otherwise acquire, any of its securities including, without
22
limitation, shares of Company Common Stock or any option, warrant or right,
directly or indirectly, to acquire shares of Company Common Stock, or propose to
do any of the foregoing, except for the acceleration of options pursuant to the
terms of the Company Stock Plan and the net exercise of such options, or as
contemplated by SECTION 3.3.(b) of the Company Disclosure Schedule.
(e) (i) acquire (by merger, consolidation, or acquisition of stock or
assets) any corporation, partnership or other business organization or division
thereof other than emergency health care providers, emergency physician practice
management groups or other emergency health care entities, in each case located
in the United States ("Permitted Acquisitions"), provided that the total
consideration paid for all such acquisitions completed after the date hereof
shall not exceed $12 million; (ii) incur any indebtedness for borrowed money or
issue any debt securities or assume, guarantee or endorse or otherwise as an
accommodation become responsible for, the obligations of any person except in
the ordinary course of business consistent with past practice or in connection
with purchases of equipment or capital improvements or Permitted Acquisitions,
or make any loans or advances (other than loans or advances to or from direct or
indirect wholly owned Company Subsidiary or in connection with Permitted
Acquisitions), (iii) except as set forth on SECTION 5.1(e)(iii) of the Company
Disclosure Schedule, enter into or amend any Material Contract other than in the
ordinary course of business or where such contract or amendment would not have a
Company Material Adverse Effect; or (iv) authorize any capital expenditures or
purchase of fixed assets (but excluding Permitted Acquisitions) which are, in
the aggregate, in excess of the amounts set forth in SECTION 5.1.(e)(iv) of the
Company Disclosure Schedule for the Company and the Company Subsidiaries taken
as a whole;
(f) except as set forth in SECTION 5.1.(f) of the Company Disclosure
Schedule or in each case, as may be required by law or in ordinary course
consistent with past practice, increase the compensation payable or to become
payable to its officers or employees, except in accordance with past practice or
in the ordinary course of business, grant any severance or termination pay to,
or enter into any employment or severance agreement with any director, officer
or other employee of the Company or any Company Subsidiary, or establish, adopt,
enter into or amend any collective bargaining, bonus, profit sharing, thrift,
compensation, stock option, restricted stock, pension, retirement, deferred
compensation, employment, termination, severance or other plan, agreement,
trust, fund, policy or arrangement for the benefit of any current or former
directors, officers or employees;
(g) change accounting policies or procedures (including, without
limitation, procedures with respect to revenue recognition, payments of accounts
payable and collection of accounts receivable);
(h) except as would not result in a Company Material Adverse Effect,
make any tax election inconsistent with past practice or settle or compromise
any federal, state, local or foreign tax liability or agree to an extension of a
statute of limitations, except to the extent the amount of any such settlement
has been reserved for in the financial statements contained in the Company SEC
Reports filed prior to the date of this Agreement; and
23
(i) take, or agree in writing to take, any of the actions described in
SECTIONS 5.1.(a) through (h) above, or any action which would make any of the
representations or warranties of the Company contained in this Agreement untrue
or incorrect in any material respect as contemplated hereby or prevent the
Company from performing or cause the Company not to perform in any material
respect its covenants hereunder.
5.2 NO SOLICITATION.
(a) From and after the date hereof and prior to the Effective Date or
the earlier termination of this Agreement pursuant to SECTION 8.1., the Company
shall not, directly or indirectly, take (nor shall the Company authorize or
permit any Company Subsidiary or its or their officers, directors, employees,
representatives, investment bankers, financial advisors, attorneys, accountants
or other agents, to take) any action to (i) solicit or initiate the submission
of any Business Combination Proposal, (ii) enter into any agreement with respect
to any Business Combination Proposal or (iii) participate in any negotiations
with, or furnish any non-public written information to, any person in connection
with any proposal that constitutes, or may reasonably be expected to lead to,
any Business Combination Proposal; PROVIDED, HOWEVER, that the Company may
(A) participate in negotiations with or furnish information to any persons or
group (other than Parent or an affiliate of Parent) (a "Third Party") that makes
a Business Combination Proposal not so solicited that the Board determines may
reasonably be expected to result in a Superior Proposal or if the Board
determines, in good faith and after consultation with independent counsel, that
such action is required in order to discharge properly its fiduciary duties, and
enter into any confidentiality agreement or standstill agreement with such Third
Party in connection with such a Business Combination Proposal, (B) comply with
Rule 14e-2 promulgated under the Exchange Act with regard to any Business
Combination Proposal (assuming that such Business Combination Proposal includes
a tender offer requiring the Company's response pursuant to such Rule), (C)
withdraw or modify its recommendation referred to in SECTION 1.2.1. if there
exists a Business Combination Proposal that is a Superior Proposal or if the
Board determines, in good faith and after consultation with of independent
counsel, that such action is required to discharge properly its fiduciary
duties, and (D) recommend to its stockholders a Business Combination Proposal if
it is a Superior Proposal or if the Board determines, in good faith and after
consultation with independent counsel, that such action is required to discharge
properly its fiduciary duties. Any actions permitted under, and taken in
compliance with this SECTION 5.2. shall not be deemed a breach of any other
covenant or agreement of the Company contained in this Agreement. For purposes
of this Agreement, "Business Combination Proposal" shall mean, with respect to
the Company, the commencement of any tender or exchange offer, any bona fide,
written proposal for a merger, consolidation or other business combination
involving the Company or any Company Subsidiary or any other bona fide, written
proposal or offer to enter into a Business Combination or any public
announcement of a proposal, plan or intention to do any of the foregoing.
"Superior Proposal" shall mean any Business Combination Proposal for which any
required financing is supported by reasonable commitments and which the Board
determines in good faith will be more favorable to its stockholders than the
Merger. The term "Business Combination" means the occurrence of any of the
following events: (a) the Company or any Company Subsidiary is acquired by
merger or otherwise by any Thirty Party; (b) the Company or any Company
Subsidiary enters into an
24
agreement with a Third Party that contemplates the acquisition of 35% or more of
the total assets of the Company and the Company Subsidiaries taken as a whole;
(c) the Company enters into a merger or other agreement with a Third Party that
contemplates the acquisition of beneficial ownership of more than 35% of the
outstanding shares of the Company's capital stock; or (d) a Third Party acquires
more than 35% of the outstanding shares of the Company's capital stock.
(b) In addition to the obligations of the Company set forth in SECTION
5.2.(a), the Company shall promptly advise Parent of any request for non-public
written information or of any Business Combination Proposal, the material terms
and conditions of such request or Business Combination Proposal, and the
identity of the person making any such request or Business Combination Proposal.
The Company shall keep Parent reasonably informed of the status and details of
any such request or Business Combination Proposal.
ARTICLE 6.
ADDITIONAL AGREEMENTS
6.1. HSR ACT. As promptly as practicable after the date of this
Agreement, the Company and Parent shall file notifications under the HSR Act in
connection with the Merger and the transactions contemplated hereby and
thereafter use reasonable best efforts to respond as promptly as practicable to
any inquiries received from the Federal Trade Commission (the "FTC") and the
Antitrust Division of the Department of Justice (the "Antitrust Division") for
additional information or documentation and to respond as promptly as
practicable to all inquiries and requests received from any State Attorney
General or other governmental authority in connection with antitrust matters.
6.2. ACCESS TO INFORMATION; CONFIDENTIALITY. Upon reasonable notice
and subject to restrictions contained in confidentiality agreements to which
such party is subject (from which such party shall use reasonable efforts to be
released), the Company shall (and shall cause each Company Subsidiary to) afford
to the officers, employees, accountants, counsel and other representatives of
Parent or Acquisition reasonable access, during the period to the Effective
Time, to all its properties, books, contracts, commitments and records and,
during such period, the Company shall (and shall cause each Company Subsidiary
to) furnish promptly to Parent or Acquisition all information concerning its
business, properties and personnel as such other party may reasonably request,
and each shall make available to the other the appropriate individuals
(including attorneys, accountants and other professionals) for discussion of the
other's business, properties and personnel as either Parent or the Company may
reasonably request. Parent and Acquisition shall keep such information
confidential in accordance with the terms of the confidentiality letter dated
May 21, 1997 (the "Confidentiality Letter"), between Parent's affiliate and the
Company.
6.3. INDEMNIFICATION AND INSURANCE.
(a) The Certificate of Incorporation and By-Laws of the Surviving
Corporation shall contain the provisions with respect to indemnification and
exculpation set forth in the Certificate
25
of Incorporation and By-Laws of the Company, which provisions shall not be
amended, repealed or otherwise modified for a period of six years from the
Effective Time in any manner that would adversely affect the rights thereunder
of individuals who at the Effective Time were directors, officers, employees or
agents of the Company, unless such modification is required by law.
(b) From and after the purchase of any Shares pursuant to the Offer,
the Company shall, to the fullest extent permitted under applicable law or under
the Company's Certificate of Incorporation or By-Laws and regardless of whether
the Merger becomes effective, indemnify and hold harmless, and, after the
Effective Time, Parent and the Surviving Corporation shall, to the fullest
extent permitted under applicable law or under the Surviving Corporation's
Certificate of Incorporation or By-Laws, indemnify and hold harmless, each
present and former director, officer or employee of the Company or any Company
Subsidiary (together with their respective successors, assigns, heirs,
executors, administrators and representatives, collectively, the "Indemnified
Parties") against any costs or expenses (including attorneys' fees), judgments,
fines, losses, claims, damages and liabilities incurred in connection with, and
amounts paid in settlement of, any claim, action, suit, proceeding or
investigation, whether civil, criminal, administrative or investigative and
wherever asserted, brought or filed, arising out of or pertaining to any acts or
omissions or alleged acts or omissions by them in their capacity as such, in
each case for a period of six years after the date hereof, including, without
limitation, the transactions contemplated hereby. In the event of any such
claim, action, suit, proceeding or investigation (whether arising before or
after the Effective Time), (i) any counsel retained by the Indemnified Parties
for any period after the Effective Time shall be reasonably satisfactory to the
Surviving Corporation, (ii) after the Effective Time, the Surviving Corporation
shall pay the reasonable fees and expenses of such counsel, promptly after
statements therefor are received, and (iii) the Surviving Corporation will
cooperate in the defense of any such matter; provided, however, that the
Surviving Corporation shall not be liable for any settlement effected without
its written consent (which consent shall not be unreasonably withheld or
delayed); and provided, further, that, in the event that any claim or claims for
indemnification are asserted or made within such six-year period, all rights to
indemnification in respect of any such claim or claims shall continue until the
disposition of any and all such claims. The Indemnified Parties as a group may
retain only one law firm to represent them with respect to any single action
unless there is, under applicable standards of professional conduct, a conflict
between the positions of any two or more Indemnified Parties. The indemnity
agreements of Parent and the Surviving Corporation in this SECTION 6.3.(b) shall
extend, on the same terms to, and shall inure to the benefit of and shall be
enforceable by, each person or entity who controls, or in the past controlled,
any present or former director, officer or employee of the Company or any of its
subsidiaries.
(c) The Surviving Corporation shall honor and fulfill in all respects
the obligations of the Company pursuant to indemnification agreements with the
Company's directors and officers existing at or before the Effective Time.
(d) For a period of five years after the Effective Time, Parent shall
cause the Surviving Corporation to maintain in effect, if available, directors'
and officers' liability insurance covering those persons who are currently
covered by the Company's directors' and officers' liability insurance policy on
terms (including the amounts of coverage and the amounts
26
of deductibles, if any) that are comparable to the terms now applicable to
directors and officers of Parent, or, if more favorable to the Company's
directors and officers, the terms now applicable to them under the Company's
current policies; provided, that in no event shall Parent or Surviving
Corporation be required to spend in excess of 300% of the annual premium
currently paid by the Company for such coverage and provided further if the
premium for such coverage exceeds such amount, Parent or Surviving Corporation
shall purchase a policy with the greatest coverage available for such 300% of
the annual premium.
(e) From and after the Effective Time, Parent shall guarantee the
obligations of the Surviving Corporation under this SECTION 6.3.
(f) This Section shall survive the consummation of the Merger at the
Effective Time, is intended to benefit the Company, the Surviving Corporation
and the Indemnified Parties, shall be binding on all successors and assigns of
the Parent and the Surviving Corporation and shall be enforceable by the
Indemnified Parties. In the event that Parent or Surviving Corporation or any
of their successors or assigns (i) consolidates or merges into any other person
or entity and shall not be the continuing or surviving corporation or entity in
such consolidation or merger or (ii) transfers all or substantially all of its
properties and assets to any person or entity, then and in such case, proper
provisions shall be made so that the successors and assigns of Parent or the
Surviving Corporation (as the case may be) assume the obligations of Parent and
the Surviving Corporation set forth in this SECTION 6.3..
6.4. NOTIFICATION OF CERTAIN MATTERS. The Company shall give prompt
notice to Parent, and Parent shall give prompt notice to the Company, of (i) the
occurrence or nonoccurrence of any event the occurrence or nonoccurrence of
which would be likely to cause any representation or warranty contained in this
Agreement to be untrue or inaccurate the results of which would be a Material
Adverse Effect to the Parent or Company, as applicable, or (ii) any failure of
the Company, Parent or Acquisition, as the case may be, materially to comply
with or satisfy any covenant, condition or agreement to be complied with or
satisfied by it hereunder; provided, however, that the delivery of any notice
pursuant to this SECTION 6.4. shall not limit or otherwise affect the remedies
available hereunder to the party receiving such notice.
6.5. FURTHER ACTION. Upon the terms and subject to the conditions
hereof, including SECTION 5.2. and subject to the fiduciary duties of the Board
under applicable law, as determined in good faith after consultation with
independent counsel, each of the parties hereto shall use all reasonable efforts
to take, or cause to be taken, all actions, and to do, or cause to be done, all
other things necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement, to
obtain in a timely manner all material waivers, consents and approvals and to
effect all necessary registrations and filings, and otherwise to satisfy or
cause to be satisfied in all material respects all conditions precedent to its
obligations under this Agreement.
6.6. PUBLIC ANNOUNCEMENTS. Parent and the Company shall consult with
each other before issuing any press release with respect to the Merger or this
Agreement and shall not issue any such press release or make any such public
statement without the prior consent of the other
27
party, which shall not be unreasonably withheld or delayed; provided, however,
that a party may, without the prior consent of the other party, issue such press
release or make such public statement as may upon the advice of counsel be
required by law or the rules and regulations of the New York Stock Exchange or
the NASDAQ Stock Market if it has used all reasonable efforts to consult with
the other party.
ARTICLE 7.
CONDITIONS TO THE MERGER
7.1. CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE MERGER.
The respective obligations of each party to effect the Merger shall be subject
to the satisfaction at or prior to the Effective Time of the following
conditions:
7.1.1. PURCHASE OF SHARES. Acquisition shall have purchased
Shares pursuant to the Offer.
7.1.2. HSR ACT. The waiting period applicable to the consummation
of the Merger under the HSR Act shall have expired or been terminated.
7.1.3. NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary
restraining order, preliminary or permanent injunction or other order
issued by any court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger shall be in effect,
and there shall not be any action taken, or any statute, rule, regulation
or order enacted, entered, enforced or applicable to the Merger which
makes the consummation of the Merger illegal.
7.1.4. GOVERNMENTAL ACTIONS. There shall not be in effect any
judgment, decree or order of any governmental authority, administrative
agency or court of competent jurisdiction that prohibits or limits Parent
from exercising all material rights and privileges pertaining to its
ownership of the Surviving Corporation or the ownership or operation by
Parent or any Parent Subsidiary of all or a material portion of the
business or assets of Parent or any Parent Subsidiary, or seeking to
compel Parent or any Parent Subsidiary to dispose of or hold separate all
or any material portion of the business or assets of Parent or any Parent
Subsidiary (including the Surviving Corporation and its subsidiaries), as
a result of the Merger or the transactions contemplated by this
Agreement.
ARTICLE 8.
TERMINATION
8.1. TERMINATION. This Agreement may be terminated at any time prior
to the Effective Time, notwithstanding approval thereof by the stockholders of
the Company or Parent:
28
(a) by mutual written consent duly authorized by the Boards of
Directors of Parent, Acquisition and the Company; or
(b) by either Parent or the Company if a court of competent
jurisdiction or governmental, regulatory or administrative agency or commission
shall have issued a nonappealable final order, decree or ruling or taken any
other action having the effect of permanently restraining, enjoining or
otherwise prohibiting the merger (provided that the right to terminate this
Agreement under this SECTION 8.1.(b) shall not be available to any party who has
not complied with its obligations under SECTION 6.5. and such noncompliance
materially contributed to the issuance of any such order, decree or ruling or
the taking of such action); or
(c) by either Parent or the Company if Acquisition shall have failed
to accept for purchase and pay for Shares pursuant to the Offer by October 31,
1997 (provided that the right to terminate this Agreement under this SECTION
8.1.(c) shall not be available to any party whose failure to fulfill any
obligation under this Agreement has been the cause of or resulted in any of the
circumstances described in this SECTION 8.1.(c) before such date); or
(d) by Parent or the Company, prior to the purchase of Shares pursuant
to the Offer, if the Board shall withdraw, modify or change its approval or
recommendation of the Offer, this Agreement or the Merger in a manner adverse to
Parent; or
(e) by the Company, prior to the purchase of Shares pursuant to the
Offer, (i) if any representation or warranty of the Parent or Acquisition set
forth in this Agreement shall be untrue in any material respect when made, or
(ii) upon a breach in any material respect of any covenant or agreement on the
part of Parent or Acquisition set forth in this Agreement; or
(f) by the Company, if the Offer shall have expired or shall have been
withdrawn, abandoned or terminated without Acquisition purchasing any Shares
pursuant thereto; or
(g) by the Parent, if Acquisition shall have terminated the Offer
without purchasing any Shares thereunder in accordance with the terms of the
Offer; provided Parent may not terminate this Agreement pursuant to this SECTION
8.1.(g) if Acquisition has failed to purchase the Shares in the Offer in breach
of the terms thereof.
8.2. EFFECT OF TERMINATION. In the event of the termination of this
Agreement pursuant to SECTION 8.1., this Agreement shall forthwith become void
and there shall be no liability on the part of any party hereto or any of its
affiliates, directors, officers or stockholders (i) except as set forth in
SECTION 9.1. hereof and (ii) 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 Agreement.
ARTICLE 9.
GENERAL PROVISIONS
9.1. FEES AND EXPENSES.
29
(a) Except as provided in this SECTION 9.1., all fees and expenses
incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the party incurring such expenses, whether or not the
Merger is consummated.
(b) If this Agreement is terminated pursuant to SECTION 8.1.(d), then
Company shall (provided that Parent or Acquisition is not then in material
breach of its obligations under this Agreement), promptly after the termination
of this Agreement, reimburse Parent and Acquisition for all documented out-of-
pocket expenses and fees (including, without limitation, fees payable to all
banks, investment banking firms and other financial institutions, and their
respective agents and counsel, and all fees of counsel, accountants, financial
printers, experts and consultants to Acquisition and its Affiliates), whether
incurred prior to, on or after the date hereof, in connection with the Offer,
the Merger and the consummation of all transactions contemplated by this
Agreement; provided that in no event shall Company be required to pay in excess
of an aggregate of $1,500,000 pursuant to this SECTION 9.1.(b).
(c) If this Agreement is terminated pursuant to SECTION 8.1.(d) and
within twelve months following the date of such termination the Company either
(x) consummates with any Third Party a transaction the proposal of which would
otherwise qualify as a Business Combination Proposal under SECTION 5.2. or
(y) enters into a definitive agreement with a Third Party with respect to a
transaction the proposal of which would otherwise qualify as a Business
Combination Proposal under SECTION 5.2., then Company shall promptly pay to
Parent a fee of $6,275,000, less any amounts paid by Company pursuant to SECTION
9.1.(b).
9.2. EFFECTIVENESS OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Except as otherwise provided in this SECTION 9.2., the representations,
warranties and agreements of each party hereto shall remain operative and in
full force and effect regardless of any investigation made by or on behalf of
any other party hereto, any person controlling any such party or any of their
officers or directors, whether prior to or after the execution of this
Agreement. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time, except that (i) the agreements set forth
in ARTICLE 2. shall survive the Effective Time indefinitely, and (ii) the
agreements in SECTION 6.3. shall survive in accordance with their respective
terms. The Confidentiality Letter shall survive termination of this Agreement
as provided therein.
9.3. NOTICES. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made if and when delivered personally or by overnight courier to the parties
at the following addresses or sent by electronic transmission, with confirmation
received, to the telecopy numbers specified below (or at such other address or
telecopy number for a party as shall be specified by like notice):
30
(a) If to Parent or Acquisition:
Xxxxxxx Inc.
0000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx X0X 0X0
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxx X. Xxxxxx, Senior Vice President and General
Counsel
(b) If to the Company:
EmCare Holdings Inc.
0000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Xx., M.D., Chairman of the Board and
Chief Executive Officer
9.4. CERTAIN DEFINITIONS. For purposes of this Agreement, the term:
(a) "$" or "DOLLARS" "means the lawful currency of the United States
of America.
(b) "AFFILIATES" means a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person, including, without limitation, any
partnership or joint venture in which the Company (either alone, or through or
together with any other subsidiary) has, directly or indirectly, an interest of
10% or more;
(c) "BENEFICIAL OWNER" with respect to any shares of Company Common
Stock means a person who shall be deemed to be the beneficial owner of such
shares (i) which such person or any of its affiliates or associates (as such
term is defined in Rule 12b-2 of the Exchange Act) beneficially owns, directly
or indirectly, (ii) which such person or any of its affiliates or associates
has, directly or indirectly, (A) the right to acquire (whether such right is
exercisable immediately or subject only to the passage of time), pursuant to any
agreement, arrangement or understanding or upon the exercise of consideration
rights, exchange rights, warrants or options, or otherwise, or (B) the right to
vote pursuant to any agreement, arrangement or understanding, or (iii) which are
beneficially owned, directly or indirectly, by any other persons with whom such
person or any of its affiliates or associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or disposing of any
shares;
(d) "BUSINESS DAY" means any day other than a day on which banks in
New York are required or authorized to be closed;
(e) "CONTROL" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee or
executor, of the power to direct or
31
cause the direction of the management or policies of a person, whether through
the ownership of stock, as trustee or executor, by contract or credit,
arrangement or otherwise;
(f) "MATERIAL ADVERSE EFFECT" means, when used in connection with the
Company or any Company Subsidiary or Parent or any Parent Subsidiary, as the
case may be, any change, effect or circumstance that is materially adverse to
the business, assets, financial condition or results of operations of the
Company and the Company Subsidiaries, or Parent and the Parent Subsidiaries, as
the case may be, in each case taken as a whole, other than any such changes,
effects or circumstances: (i) set forth or contemplated by the Company
Disclosure Schedule in the case of the Company or any Company Subsidiary;
(ii) set forth or described in the Company SEC Reports or the Parent SEC
Reports, as the case may be; or (iii) affecting the physician practice
management industry generally;
(g) "PERSON" means an individual, corporation, partnership, limited
liability company, association, trust, unincorporated organization, other entity
or group (as defined in Section 13(d)(3) of the Exchange Act); and
(h) "SUBSIDIARY" or "subsidiaries" of the Company, the Surviving
Corporation, Parent or any other person means any corporation, partnership,
joint venture, limited liability company, business trust or other legal entity
of which the Company, the Surviving Corporation, Parent or such other person, as
the case may be (either alone or through or together with any other subsidiary),
owns, directly or indirectly, more than 50% of the stock or other equity
interests the holders of which are generally entitled to vote for the election
of the board of directors or other governing body of such corporation or other
legal entity.
9.5. AMENDMENT. This Agreement may be amended by the parties hereto by
action taken by or on behalf of their respective Boards of Directors at any time
prior to the Effective Time; provided, however, that, after approval of the
Merger by the stockholders of the Company, no amendment may be made which by law
requires further approval by such stockholders without such further approval.
This Agreement may not be amended except by an instrument in writing signed by
the parties hereto.
9.6. WAIVER. At any time prior to the Effective Time, any party hereto
may with respect to any other party hereto (a) extend the time for the
performance of any of the obligations or other acts, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, or (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
9.7. HEADINGS. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
9.8. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any
32
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the extent
possible.
9.9. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
and supersedes all prior agreements and undertakings (other than the
Confidentiality Letter), both written and oral, among the parties, or any of
them, with respect to the subject matter hereof and, except as otherwise
expressly provided herein.
9.10. ASSIGNMENT; GUARANTEE OF ACQUISITION OBLIGATIONS. This Agreement
shall not be assigned by operation of law or otherwise, except that Parent and
Acquisition may assign all or any of their rights hereunder to any affiliate
provided that no such assignment shall relieve the assigning party of its
obligations hereunder. Parent guarantees the full and punctual performance by
Acquisition of all the obligations hereunder of Acquisition or any such
assignees.
9.11. PARTIES IN INTEREST. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any other person any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement, including, without limitation, by way of subrogation, other than
SECTION 6.3. (which is intended to be for the benefit of the Indemnified Parties
and may be enforced by such Indemnified Parties).
9.12. FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure
or delay on the part of any party hereto in the exercise of any right hereunder
shall impair such right or be construed to be a waiver of, or acquiescence in,
any breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right. All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
9.13. GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the internal laws of the State of Delaware applicable to
contracts executed and fully performed within the State of Delaware.
9.14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
9.15. JURISDICTION; CONSENT TO SERVICE OF PROCESS.
9.15.1. JURISDICTION. Each of the parties irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the United States District Court for the Northern
District of Texas, Dallas Division, and any State court sitting in the
County of Dallas, State of Texas, and any appellate court therefrom, in
any
33
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties irrevocably
and unconditionally agrees, to the fullest extent permitted by applicable law,
that all claims in respect of any such action or proceeding may be heard and
determined in any such court. Each of the parties hereto agrees that a final
judgment in any such proceeding shall be conclusive and may be enforced in any
other jurisdictions by suit on the judgment or in any other manner provided by
law.
9.15.2. VENUE; INCONVENIENT FORUM. Each of the parties hereby
irrevocably and unconditionally waives, to the fullest extent it may
legally and effectively do so, any objection which it may now or
hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement or the transactions
contemplated hereby in the United States District Court for the Northern
District of Texas, Dallas Division and any State court sitting in the
County of Dallas, State of Texas. Each of the parties hereto hereby
irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding
in such court.
9.15.3. SERVICE OF PROCESS. Each of the parties hereby
irrevocably consents to service of process by registered or certified
mail to the address provided for notices in SECTION 9.3.. Nothing in
this Agreement will affect the right of any party to this Agreement to
serve process in any other manner permitted by law.
[Remainder of page intentionally left blank.]
34
IN WITNESS WHEREOF, Parent, Acquisition and the Company have caused this
Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.
XXXXXXX INC.
By:
----------------------------------------
Name:
Title:
EHI ACQUISITION CORP.
By:
----------------------------------------
Name:
Title:
EMCARE HOLDINGS INC.
----------------------------------------
Name:
Title:
35
ANNEX A
OFFER CONDITIONS
The capitalized terms used in this Annex A have the meanings set forth in
the attached Agreement, except that the term "Merger Agreement" shall be deemed
to refer to the attached Agreement.
Notwithstanding any other provision of the Offer, Acquisition shall not
be required to accept for payment or, subject to any applicable rules and
regulations of the SEC, including without limitation, Rule 14e-1(c) under the
Exchange Act (relating to Acquisition's obligation to pay for or return Shares
promptly after termination or withdrawal of the Offer), pay for any Shares
tendered pursuant to the Offer, and may postpone the acceptance for payment or,
subject to the restriction referred to above, payment for any Shares tendered
pursuant to the Offer, and may terminate or amend the Offer and not accept for
payment any Shares, if:
(i) the Minimum Condition shall not have been satisfied; or
(ii) any applicable waiting period under the HSR Act shall not have
expired or been terminated; or
(iii) at any time on or after five days after announcement and prior to
the acceptance for payment of Shares, any of the following conditions occurs:
(a) there shall have been any action or proceeding brought by
any governmental authority before any court located or having
jurisdiction within the United States or any statute, regulation,
legislation, judgment or order, enacted, entered, enforced, promulgated,
amended, issued or deemed applicable to the Offer or the Merger by any
court, governmental, administrative or regulatory authority or agency
located or having jurisdiction within the United States that would result
in a Company Material Adverse Effect and have the effect of: (i) making
illegal, or otherwise directly or indirectly restraining or prohibiting
or imposing material penalties or fines or requiring the payment of
material damages in connection with the making of, the Offer, the
acceptance for payment of, payment for, or ownership, directly or
indirectly, of some of or all the Shares by Parent or Acquisition, the
consummation of the Offer or the Merger; (ii) prohibiting or materially
limiting the direct or indirect ownership or operation by the Company or
by Parent of all or any material portion of the business or assets of the
Company and its subsidiaries, taken as a whole, or compelling Parent to
dispose of or hold separate all or any material portion of the business
or assets of the Company and its subsidiaries, taken as a whole, as a
result of the transactions contemplated by the Merger Agreement;
(iii) imposing or confirming material limitations on the ability of
Parent effectively to hold or to exercise full rights of ownership of
Shares, including, without limitation, the right to vote any Shares on
all matters properly presented to the stockholders of the Company; or
(iv) requiring divestiture by Parent or Acquisition, directly or
indirectly, of any Shares; or
A-1
(b) the Company shall have breached or failed to perform in
any material respect any of its covenants or agreements under the Merger
Agreement or any of the representations and warranties of the Company set
forth in the Merger Agreement shall not be true and correct when made and
as of the date of consummation of the Offer (except to the extent such
representations and warranties address matters only as of a particular
date, in which case as of such date), except where the failure to
perform such covenants or agreements or the failure of such
representation and warranties to be so true and correct would not have a
Company Material Adverse Effect; or
(c) The Merger Agreement shall have been terminated in
accordance with its terms;
which, in the reasonable judgment of Acquisition in any such case, and
regardless of the circumstances (including any action or omission by Acquisition
not inconsistent with the Merger Agreement) giving rise to any such condition,
makes it inadvisable to proceed with such acceptance for payment or payments of
Shares; provided, that prior to October 31, 1997, Acquisition shall not
terminate the Offer by reason of the nonsatisfaction of any of the conditions
and shall extend the Offer.
The failure by Acquisition at any time to exercise any of the foregoing
rights shall not be deemed a waiver of any such right, the waiver of any such
right with respect to particular facts or circumstances shall not be deemed a
waiver with respect to any other facts or circumstances, and each such right
shall be deemed an ongoing right that may be asserted at any time or from time
to time.
A-2
