EXHIBIT 2.5
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AGREEMENT AND PLAN OF MERGER
among
Summa Healthcare Group, Inc.,
Ramsay Health Care, Inc.
and
Ramsay Acquisition Corp.
July 1, 1997
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TABLE OF CONTENTS
Page
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ARTICLE I. THE MERGER............................................ 1
SECTION 1.01 The Merger.................................... 1
SECTION 1.02 Conversion of Shares.......................... 2
SECTION 1.03 Surrender and Payment......................... 2
SECTION 1.04 Fractional Shares............................. 3
ARTICLE II. THE SURVIVING CORPORATION............................ 3
SECTION 2.01 Certificate of Incorporation.................. 3
SECTION 2.02 Bylaws........................................ 4
SECTION 2.03 Directors and Officers........................ 4
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY....... 4
SECTION 3.01 Corporate Existence and Power................. 4
SECTION 3.02 Corporate Authorization....................... 4
SECTION 3.03 Governmental Authorization.................... 4
SECTION 3.04 Non-Contravention............................. 5
SECTION 3.05 Capitalization 5
SECTION 3.06 Subsidiaries.................................. 5
SECTION 3.07 Financial Statements.......................... 5
SECTION 3.08 Absence of Certain Changes.................... 6
SECTION 3.09 No Undisclosed Material Liabilities........... 6
SECTION 3.10 Litigation.................................... 7
SECTION 3.11 Taxes 7
SECTION 3.12 ERISA......................................... 7
SECTION 3.13 Compliance with Laws.......................... 9
SECTION 3.14 Vote Required................................. 9
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF RAMSAY............. 9
SECTION 4.01 Corporate Existence and Power................. 9
SECTION 4.02 Corporate Authorization....................... 9
SECTION 4.03 Governmental Authorization.................... 10
SECTION 4.04 Non-Contravention............................. 10
SECTION 4.05 Capitalization................................ 10
SECTION 4.06 SEC Filings................................... 11
SECTION 4.07 Financial Statements.......................... 11
SECTION 4.08 No Undisclosed Material Liabilities........... 11
SECTION 4.09 Vote Required................................. 12
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Page
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ARTICLE V. COVENANTS OF RAMSAY AND THE COMPANY 12
SECTION 5.01 Best Efforts.................................. 12
SECTION 5.02 Certain Filings............................... 12
SECTION 5.03 Public Announcements.......................... 12
SECTION 5.04 Further Assurances............................ 13
SECTION 5.05 Expenses...................................... 13
SECTION 5.06 Interim Operations............................ 13
ARTICLE VI. CONDITIONS TO THE MERGER............................. 13
SECTION 6.01 Conditions to the Obligations of Each Party... 13
SECTION 6.02 Conditions to the Obligations of Ramsay
and Merger Subsidiary........................ 14
SECTION 6.03 Conditions to the Obligations of the Company.. 14
ARTICLE VII. TERMINATION......................................... 14
SECTION 7.01 Termination................................... 14
SECTION 7.02 Effect of Termination......................... 15
ARTICLE VIII. MISCELLANEOUS...................................... 15
SECTION 8.01 Notices....................................... 15
SECTION 8.02 Amendments; No Waivers........................ 16
SECTION 8.03 Successors and Assigns........................ 16
SECTION 8.04 Governing Law................................. 16
SECTION 8.05 Counterparts; Effectiveness................... 16
SECTION 8.06 Entire Agreement.............................. 16
EXHIBIT A - FORM OF WARRANT
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COMPANY DISCLOSURE SCHEDULE
Section 3.07 Financial Statements. See Attachments.
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Section 3.08 Absence of Certain Changes.
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. The Management Agreement between the Company and Xxxx Management
Corporation (the "Management Agreement") will be cancelled before the
Effective Time.
. Bonus payments of approximately $350,000 will be paid to Company
employees prior to the Effective Time. Accruals for these bonuses
have not been included in the Financial Statements.
. The Company will make a contribution to its pension plan equal to the
lesser of $30,000 or 30% of each employee's 1997 earnings, prior to
the Effective Time. An accrual for this contribution is not included
in the Financial Statements.
. The Company is expected to pay approximately $90,000 in travel and
entertainment expenses prior to the Effective Time. These expenses
have not been accrued for in the Financial Statements.
. Shareholders distributions of approximately $150,000 will be made
prior to the Effective Time. These distributions have not been accrued
for in the Financial Statements.
. All excess Company cash on the day prior to the Effective Time will be
distributed to Company shareholders.
. Ramsay currently owes the Company $200,000 in management fees and over
$36,000 in expenses incurred in connection with the Management
Agreement. These fees and expenses will be paid to the Company prior
to the Effective Time.
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AGREEMENT AND PLAN OF MERGER
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AGREEMENT AND PLAN OF MERGER dated as of July 1, 1997, among Summa
Healthcare Group, Inc., a Florida corporation (the "Company"), Ramsay Health
Care, Inc., a Delaware corporation ("Ramsay"), and Ramsay Acquisition Corp., a
Delaware corporation and a wholly owned subsidiary of Ramsay (the "Merger
Subsidiary").
WHEREAS, the Board of Directors of Ramsay and the Board of Directors
and stockholders of each of the Company and the Merger Subsidiary have approved
this Agreement and the Merger (as defined below); and
WHEREAS, for Federal income tax purposes, it is intended that the
Merger shall qualify as a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein, the
parties hereto agree as follows:
ARTICLE I. THE MERGER
SECTION 1.01 The Merger. (a) At the Effective Time (as defined in
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Section 1.01(b)), the Company shall be merged (the "Merger") with and into the
Merger Subsidiary in accordance with the General Corporation Law of the State of
Delaware ("Delaware Law") and the Florida Business Corporation Act ("Florida
Law"), whereupon the separate existence of the Company shall cease, and the
Merger Subsidiary shall be the surviving corporation (the "Surviving
Corporation").
(b) As soon as practicable after the satisfaction or, to the extent
permitted hereunder, waiver of all conditions to the Merger, the Company and the
Merger Subsidiary will file a certificate of merger with the Secretary of State
of the State of Delaware and articles of merger with the Department of State of
the State of Florida and make all other filings or recordings required by
Delaware Law or Florida Law in connection with the Merger. The closing of the
Merger will take place at the offices of Xxxxxx & Xxxxxx, 000 Xxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, or such other place as the parties may agree. The Merger
shall become effective at the later of (i) July 1, 1997, (ii) such time as a
certificate of merger is duly filed with the Secretary of State of the State of
Delaware, (iii) such time as articles of merger are duly filed with the
Department of State of the State of Florida, or (iv) at such later time as is
specified in such certificate of merger and articles of merger (the "Effective
Time").
(c) From and after the Effective Time, the Surviving Corporation shall
possess all the assets, rights, privileges, powers and franchises and be subject
to all of the
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liabilities, restrictions, disabilities and duties of the Company and the Merger
Subsidiary, all as provided under Delaware Law.
SECTION 1.02 Conversion of Shares. At the Effective Time:
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(a) each outstanding share of common stock, par value $.01 per share
(the "Shares"), of the Company held by the Company as treasury stock or
owned by Ramsay or any subsidiary of Ramsay immediately prior to the
Effective Time shall be cancelled, and no payment (whether in cash, shares
of Ramsay's common stock, par value $.01 per share (the "Ramsay Common
Stock"), or other consideration) shall be made with respect thereto;
(b) each share of common stock, par value $.01 per share, of the
Merger Subsidiary outstanding immediately prior to the Effective Time shall
continue to be outstanding as one share of common stock, par value $.01 per
share, of the Surviving Corporation with the same rights, powers and
privileges as such share had prior to the Effective Time and such shares
shall constitute the only outstanding shares of capital stock of the
Surviving Corporation;
(c) except as otherwise provided in Section 1.02(a), each Share
outstanding immediately prior to the Effective Time shall be converted into
the right to receive (i) 2,250.23 fully paid and nonassessable shares of
Ramsay Common Stock, (ii) $2,700.27 in cash and (iii) a warrant to purchase
4,500.45 shares of Ramsay Common Stock at an exercise price of $3.25 per
share, such warrant to be in the form of Exhibit A attached hereto
(collectively, the "Warrants") (such Warrant together with such 2,250.23
shares of Ramsay Common Stock and such $2,700.27 in cash are hereinafter
referred to as the "Merger Consideration").
SECTION 1.03 Surrender and Payment. (a) Each holder of Shares that
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have been converted into a right to receive the Merger Consideration, upon
surrender to Ramsay of a certificate or certificates representing such Shares,
will be entitled to receive in exchange therefor (i) that number of whole shares
of Ramsay Common Stock which such holder has the right to receive pursuant to
Section 1.02, (ii) that amount of cash which such holder has the right to
receive pursuant to Section 1.02, (iii) that number of Warrants which such
holder has the right to receive pursuant to Section 1.02 and (iv) cash in lieu
of fractional shares of Ramsay Common Stock which such holder has the right to
receive pursuant to Section 1.04, and the certificate or certificates for the
Shares so surrendered shall be cancelled. Until so surrendered, each such
certificate shall, after the Effective Time, represent for all purposes, only
the right to receive upon such surrender the Merger Consideration and cash in
lieu of any fractional shares of Ramsay Common Stock as contemplated by this
Section 1.03 and Section 1.04.
(b) If any shares of Ramsay Common Stock are to be issued to a Person
(as defined below) other than the registered holder of the Shares represented by
the certificate or certificates surrendered in exchange therefor, it shall be a
condition to such issuance that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such issuance shall pay to Ramsay any
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transfer or other taxes required as a result of such issuance to a Person other
than the registered holder of such Shares or establish to the satisfaction of
Ramsay that such tax has been paid or is not payable. For purposes of this
Agreement, "Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or any agency or instrumentality thereof.
(c) After the Effective Time, there shall be no further registration
of transfers of Shares. If, after the Effective Time, certificates representing
Shares are presented to the Surviving Corporation, they shall be cancelled and
exchanged as provided for, and in accordance with the procedures set forth, in
this Article I.
(d) No dividends or other distributions on shares of Ramsay Common
Stock shall be paid to the holder of any unsurrendered certificates representing
Shares until such certificates are surrendered as provided in this Section.
Upon such surrender, there shall be paid, without interest, to the person in
whose name the certificates representing the shares of Ramsay Common Stock into
which such Shares were converted are registered, all dividends and other
distributions paid in respect of such Ramsay Common Stock on a date subsequent
to, and in respect of a record date after, the Effective Time.
SECTION 1.04 Fractional Shares. No fractional shares of Ramsay
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Common Stock or Warrants to purchase fractional shares of Ramsay Common Stock
shall be issued in the Merger. All fractional shares of Ramsay Common Stock
that a holder of Shares would otherwise be entitled to receive as a result of
the Merger shall be aggregated and if a fractional share of Ramsay Common Stock
results from such aggregation, such holder shall be entitled to receive, in lieu
thereof, an amount in cash determined by multiplying the average of the daily
closing sale price per share of Ramsay Common Stock on the Nasdaq National
Market for the ten trading days immediately preceding the Effective Time by the
fraction of a share of Ramsay Common Stock to which such holder would otherwise
have been entitled. No such cash in lieu of fractional shares of Ramsay Common
Stock shall be paid to any holder of Shares until certificates representing such
Shares are surrendered and exchanged in accordance with Section 1.03. All
Warrants to purchase fractional shares of Ramsay Common Stock that a holder of
Shares would otherwise be entitled to receive as a result of the Merger shall be
aggregated and if a Warrant to purchase a fraction of a share results from such
aggregation (i) if such fraction is greater than or equal to 0.5, such holder
shall be entitled to receive a Warrant to purchase one share of Common Stock in
lieu hereof or (ii) if such fraction is less than 0.5, such holder shall not be
entitled to receive any consideration therefor.
ARTICLE II. THE SURVIVING CORPORATION
SECTION 2.01 Certificate of Incorporation. The certificate of
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incorporation of the Merger Subsidiary in effect at the Effective Time shall
continue to be the certificate of incorporation of the Surviving Corporation
until amended in accordance with applicable law.
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SECTION 2.02 Bylaws. The bylaws of the Merger Subsidiary in effect
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at the Effective Time shall continue to be the bylaws of the Surviving
Corporation until amended in accordance with applicable law.
SECTION 2.03 Directors and Officers. From and after the Effective
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Time, until successors are duly elected or appointed and qualified in accordance
with applicable law, (i) the directors of the Merger Subsidiary at the Effective
Time shall continue to be the directors of the surviving corporation, and (ii)
the officers of the Merger Subsidiary at the Effective Time shall continue to be
the officers of the Surviving Corporation.
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to Ramsay that, except as set
forth in the Company Disclosure Schedule delivered by the Company to Ramsay
simultaneously with the execution and delivery hereof (the "Company Disclosure
Schedule"):
SECTION 3.01 Corporate Existence and Power. The Company is a
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corporation duly incorporated, validly existing and in good standing under the
laws of the State of Florida, and has all corporate powers and all governmental
licenses, permits, authorizations, consents and approvals required to carry on
its business as now conducted except where the failure to do so would not have
or reasonably be expected to have, individually or in the aggregate, a material
adverse effect on the financial condition, business, assets or results of
operations of the Company (a "Company Material Adverse Effect"). The Company is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction where the character of the property owned or leased by it
or the nature of its activities makes such qualification necessary, except for
those jurisdictions where the failure to be so qualified would not have or
reasonably be expected to have, individually or in the aggregate, a Company
Material Adverse Effect. The Company has heretofore delivered to Ramsay true
and complete copies of the Company's articles of incorporation and bylaws as
currently in effect.
SECTION 3.02 Corporate Authorization. The execution, delivery and
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performance by the Company of this Agreement and the consummation of the Merger
by the Company are within the Company's corporate powers and have been duly
authorized by all necessary corporate action. This Agreement constitutes a
valid and binding agreement of the Company enforceable against the Company in
accordance with its terms. Copies of the resolutions duly adopted by the
Company's Board of Directors and the holders of all of the Shares, adopting,
approving and authorizing this Agreement, have been furnished to Ramsay.
SECTION 3.03 Governmental Authorization. The execution, delivery and
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performance by the Company of this Agreement and the consummation of the Merger
by the Company require no action by or in respect of, or filing with, any
governmental body, agency, official or authority other than the filing of a
certificate of merger in accordance with Delaware Law and articles of merger in
accordance with Florida Law, except where the failure of any such action to be
taken or filing to be made would not have or reasonably be
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expected to have, individually or in the aggregate, a Company Material Adverse
Effect or prevent consummation of the transactions contemplated hereby.
SECTION 3.04 Non-Contravention. The execution, delivery and
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performance by the Company of this Agreement and the consummation of the Merger
by the Company do not and will not (i) contravene or conflict with the articles
of incorporation or bylaws of the Company, (ii) assuming compliance with the
matters referred to in Section 3.03, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to the Company, (iii) constitute a default
under or give rise to a right of termination, cancellation or acceleration of
any right or obligation of the Company or to a loss of any benefit to which the
Company is entitled under any material agreement or other instrument binding
upon the Company or any license, franchise, permit or other similar
authorization held by the Company, or (iv) result in the creation or imposition
of any Lien (as defined below) on any asset of the Company, except for any
occurrences or results referred to in clauses (ii), (iii) and (iv) which would
not have or reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect or prevent consummation of the transactions
contemplated hereby. For purposes of this Agreement, "Lien" means, with respect
to any asset, any mortgage, lien, pledge, charge, security interest or
encumbrance or adverse claim of any kind in respect of such asset.
SECTION 3.05 Capitalization. The authorized capital stock of the
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Company consists of 1,000 Shares. As of the date hereof, there are outstanding
111.1 Shares. All outstanding shares of capital stock of the Company have been
duly authorized and validly issued and are fully paid and nonassessable and free
of preemptive rights. Except as set forth in this Section, there are
outstanding as of the date hereof (i) no shares of capital stock or other voting
securities of the Company, (ii) no securities of the Company convertible into or
exchangeable for shares of capital stock or voting securities of the Company,
and (iii) no options, warrants or other rights to acquire from the Company, and
no obligation of the Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or voting
securities of the Company (the items in clauses (i), (ii) and (iii) being
referred to collectively as the "Company Securities"). There are no outstanding
obligations of the Company to repurchase, redeem or otherwise acquire any
Company Securities.
SECTION 3.06 Subsidiaries. The Company does not have any
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Subsidiaries. For purposes of this Agreement, a "Subsidiary" of any Person
means (i) any corporation or other entity of which securities or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are directly or
indirectly owned by such Person, and (ii) any partnership of which such Person
is a general partner.
SECTION 3.07 Financial Statements. The financial statements of the
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Company included in the Company Disclosure Schedule fairly present, on a cash
basis applied on a consistent basis (except as may be indicated in the notes
thereto), the financial position of the Company as of the dates thereof and the
results of operations for the periods then ended (subject, in the case of any
interim financial statements, to normal year-end adjustments, none
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of which, individually or in the aggregate, would have a Company Material
Adverse Effect) (the date of the latest balance sheet included in such Financial
Statement is referred to herein as the "Balance Sheet Date").
SECTION 3.08 Absence of Certain Changes. Except as contemplated
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hereby, since the Balance Sheet Date, the Company has conducted its business in
all material respects in the ordinary course consistent with past practices and
there has not been:
(a) any event, occurrence or development or state of circumstances or
facts, which affects or relates to the Company, which has had or would
reasonably be expected to have a Company Material Adverse Effect;
(b) any declaration, setting aside or payment of any dividend or
other distribution with respect to any shares of capital stock of the
Company, or any repurchase, redemption or other acquisition by the Company
of any outstanding shares of capital stock or other securities of, or other
ownership interests in, the Company;
(c) any amendment of any material term of any outstanding security of
the Company;
(d) any incurrence, assumption or guarantee by the Company of any
indebtedness for borrowed money other than in the ordinary course of
business and in amounts and on terms consistent with past practices;
(e) any creation or assumption by the Company of any Lien on any
material asset other than in the ordinary course of business consistent
with past practices;
(f) any making of any loan, advance or capital contributions to or
investment in any Person;
(g) any change in any method of accounting or accounting practice by
the Company, except for any such change required by reason of a concurrent
change in generally accepted accounting principles; or
(h) except for contractual obligations existing on the date hereof,
other than in the ordinary course of business consistent with past
practices, any (i) grant of any severance or termination pay to any
director, officer or employee of the Company, (ii) entering into of any
employment, deferred compensation or other similar agreement (or any
amendment to any such existing agreement) with any director, officer or
employee of the Company, (iii) increase in benefits payable under any
existing severance or termination pay policies or employment agreements, or
(iv) increase in compensation, bonus or other benefits payable to
directors, officers or employees of the Company.
SECTION 3.09 No Undisclosed Material Liabilities. There are no
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liabilities of the Company of any kind whatsoever, whether accrued, contingent,
absolute, determined, determinable or otherwise, and there is no existing
condition, situation or set of circumstances
7
which, individually or in the aggregate, have or would reasonably be expected to
have a Company Material Adverse Effect, other than:
(i) liabilities incurred in the ordinary course of business consistent
with past practices since the Balance Sheet Date, which in the aggregate
are not material to the Company; and
(ii) liabilities under this Agreement.
SECTION 3.10 Litigation. There is no action, suit, investigation or
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proceeding pending against, or to the knowledge of the Company, threatened
against the Company or any of its properties before any court or arbitrator or
any governmental body, agency or official which would have or reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect.
SECTION 3.11 Taxes. (i) The Company has timely filed all tax
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returns, statements, reports and forms required to be filed with any tax
authority when due in accordance with all applicable laws except where the
failure to do so would not have or reasonably be expected to have, individually
or in the aggregate, a Company Material Adverse Effect; and (ii) no deficiency
in payment of any taxes for any period has been asserted by any taxing authority
which remains unsettled at the date hereof except for deficiencies which would
not have or reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
For purposes of this Agreement, "tax" or "taxes" means all net income,
gross income, gross receipts, sales, use, ad valorem, transfer, accumulated
earnings, personal holding company, excess profits, franchise, profits, license,
withholding, payroll, employment, excise, severance, stamp, occupation, premium,
property or windfall profits taxes, customs duties or other taxes, fees,
assessments or charges of any kind whatsoever, together with any interest and
any penalties, additions to tax or additional amounts imposed by any taxing
authority (domestic or foreign).
SECTION 3.12 ERISA. (a) "Employee Plans" shall mean each "employee
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benefit plan", as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974 ("ERISA"), which (i) is subject to any provision of ERISA
and (ii) is maintained, administered or contributed to by the Company or any
affiliate (as defined below) and covers any employee or former employee of the
Company or any affiliate or under which the Company or any affiliate has any
liability. Copies of such plans (and, if applicable, related trust agreements)
and all amendments thereto and written interpretations thereof have been
furnished to Ramsay. For purposes of this Section, "affiliate" of any Person
means any other Person which, together with such Person, would be treated as a
single employer under Section 414 of the Code. No Employee Plan individually or
collectively constitutes a "defined benefit plan" as defined in Section 3(35) of
ERISA.
(b) No Employee Plan constitutes a "multi-employer plan", as defined
in Section 3(37) of ERISA, and no Employee Plan is maintained in connection with
any trust described in Section 501(c)(9) of the Code. No Employee Plan is
subject to Title IV of
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ERISA. Neither the Company nor any of its affiliates has incurred, nor has
reason to expect to incur, any liability under Title IV of ERISA arising in
connection with the termination of, or complete or partial withdrawal from, any
plan previously covered by Title IV of ERISA that would have, or reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect. Nothing done or omitted to be done and no transaction or holding of any
asset under or in connection with any Employee Plan has or will make the Company
or any officer or director of the Company subject to any liability under Title I
of ERISA or liable for any tax pursuant to Section 4975 of the Code that would
have, or reasonably be expected to have, individually or in the aggregate, a
Company Material Adverse Effect.
(c) Each Employee Plan which is intended to be qualified under Section
401(a) of the Code is so qualified and has been so qualified during the period
from its adoption to date, and each trust forming a part thereof is exempt from
tax pursuant to Section 501(a) of the Code, and each Employee Plan has been
maintained in compliance with its terms and with the requirements prescribed by
any and all statutes, orders, final rules and final regulations, including but
not limited to, ERISA and the Code, which are applicable to such Employee Plan.
(d) Except to the extent it would not have, or reasonably be expected
to have, individually or in the aggregate, a Company Material Adverse Effect,
there is no contract, agreement, plan or arrangement covering any employee or
former employee of the Company that, individually or collectively, could give
rise to the payment of any amount that would not be deductible due to Sections
162(m) or 280G of the Code.
(e) "Benefit Arrangement" of any party shall mean each employment,
severance or other similar contract, arrangement or policy and each plan or
arrangement (written or oral) providing for compensation, bonus, profit-sharing,
stock option, or other stock related rights or other forms of incentive or
deferred compensation, vacation benefits, insurance coverage (including any
self-insured arrangements), health or medical benefits, disability benefits,
workers' compensation, supplemental unemployment benefits, severance benefits
and post-employment or retirement benefits (including compensation, health or
medical insurance or other benefits) which (i) is not an Employee Plan, (ii) is
entered into, maintained or contributed to, as the case may be, by such party or
any of its affiliates and (iii) covers any employee or former employee of such
party or any of its affiliates. Copies or descriptions of the Benefit
Arrangements of the Company have been furnished to Ramsay. Except to the extent
that it would not have, or reasonably be expected to have, individually or in
the aggregate, a Company Material Adverse Effect, each of the Company's Benefit
Arrangements has been maintained in compliance with its terms and with the
requirements prescribed by any and all statutes, orders, rules and regulations
that are applicable to such Benefit Arrangement.
(f) Except to the extent that it would not have, or reasonably be
expected to have, individually or in the aggregate, a Company Material Adverse
Effect, the transactions contemplated hereby will not result in any liability
for severance pay to any employee nor will any employee be entitled to any
payment by reason of such transactions or the termination of such employee
within a specified time period after such transactions.
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(g) The Company does not provide, nor has it made any current or past
commitment to provide, post-retirement health or medical benefits for retired
employees of the Company.
SECTION 3.13 Compliance with Laws. The Company is not in violation
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of, and has not violated, any applicable provisions of any laws, statutes,
ordinances or regulations other than violations which would not, in the
aggregate, reasonably be expected to have a Company Material Adverse Effect. To
the best of the knowledge of the Company, there is no toxic waste condition or
other pollution condition of any nature, including, without limitation, the
presence of asbestos or other carcinogens, existing at any location leased or
owned by the Company which could reasonably be expected to have, individually or
in the aggregate, a Company Material Adverse Effect.
SECTION 3.14 Vote Required. The affirmative vote of the holders of a
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majority of the outstanding Shares is the only vote of the holders of any class
or series of the Company's capital stock necessary to approve this Agreement and
the transactions contemplated hereby and such approval has been obtained.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF XXXXXX
Xxxxxx represents and warrants to the Company that, except as
disclosed on the Ramsay Disclosure Schedule delivered by Ramsay to the Company
simultaneously with the execution and delivery hereof:
SECTION 4.01 Corporate Existence and Power. Each of Ramsay and the
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Merger Subsidiary is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware, and has all corporate
powers and all governmental licenses, permits, authorizations, consents and
approvals required to carry on its business as now conducted except where the
failure to do so would not have or reasonably be expected to have, individually
or in the aggregate, a material adverse effect on the financial condition,
business, assets or results of operations of Ramsay and its Subsidiaries taken
as a whole (a "Ramsay Material Adverse Effect"). Ramsay is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where the character of the property owned or leased by it or the nature of its
activities makes such qualification necessary, except for those jurisdictions
where the failure to be so qualified would not have or reasonably be expected to
have, individually or in the aggregate, a Ramsay Material Adverse Effect.
Ramsay has heretofore delivered to the Company true and complete copies of
Ramsay's and the Merger Subsidiary's respective certificates of incorporation
and bylaws as currently in effect. Since the date of its incorporation, the
Merger Subsidiary has not engaged in any activities other than in connection
with or as contemplated by this Agreement.
SECTION 4.02 Corporate Authorization. The execution, delivery and
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performance by Ramsay and the Merger Subsidiary of this Agreement and the
consummation of the Merger by the Merger Subsidiary are within the corporate
powers of Ramsay and the Merger Subsidiary and have been duly authorized by all
necessary corporate action. This
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Agreement constitutes a valid and binding agreement of Ramsay and the Merger
Subsidiary enforceable against Ramsay and the Merger Subsidiary in accordance
with its terms.
SECTION 4.03 Governmental Authorization. The execution, delivery and
--------------------------
performance by Ramsay and the Merger Subsidiary of this Agreement and the
consummation of the Merger by the Merger Subsidiary require no action by or in
respect of, or filing with, any governmental body, agency, official or authority
other than (i) the filing of a certificate of merger in accordance with Delaware
Law and articles of merger in accordance with Florida Law; and (ii) compliance
with the applicable requirements of the Nasdaq National Market, except where the
failure of any such action to be taken or filing to be made would not have or
reasonably be expected to have, individually or in the aggregate, a Ramsay
Material Adverse Effect or prevent consummation of the transactions contemplated
hereby.
SECTION 4.04 Non-Contravention. The execution, delivery and
-----------------
performance by Ramsay and the Merger Subsidiary of this Agreement and the
consummation of the Merger by the Merger Subsidiary do not and will not (i)
contravene or conflict with the respective certificates of incorporation or
bylaws of Ramsay or the Merger Subsidiary, (ii) assuming compliance with the
matters referred to in Section 4.03, contravene or conflict with or constitute a
violation of any provision of any law, regulation, judgment, injunction, order
or decree binding upon or applicable to Ramsay or any of its Subsidiaries, (iii)
constitute a default under or give rise to a right of termination, cancellation
or acceleration of any right or obligation of Ramsay or any of its Subsidiaries
or to a loss of any benefit to which Ramsay or any of its Subsidiaries is
entitled under any material agreement or other instrument binding upon Ramsay or
any of its Subsidiaries or any license, franchise, permit or other similar
authorization held by Ramsay or any of its Subsidiaries, or (iv) result in the
creation or imposition of any Lien on any asset of Ramsay or any of its
Subsidiaries, except for any occurrences or results referred to in clauses (ii),
(iii) and (iv) which would not have or reasonably be expected to have,
individually or in the aggregate, a Ramsay Material Adverse Effect or prevent
consummation of the transactions contemplated hereby.
SECTION 4.05 Capitalization. The authorized capital stock of Ramsay,
--------------
consisting of shares of Ramsay Common Stock and shares of preferred stock, par
value $1.00 per share, of Ramsay is as shown in the Ramsay SEC Filings (as
hereinafter defined). All outstanding shares of capital stock of Ramsay have
been duly authorized and validly issued and are fully paid and nonassessable and
free of preemptive rights. Except as set forth in this Section, and except for
changes since the date of the latest balance sheet included in the Ramsay SEC
Filings resulting from the grant after such date of employee stock options or
the exercise of employee stock options or other obligations to issue shares of
Ramsay Common Stock referred to above, there are outstanding as of the date
hereof (i) no shares of capital stock or other voting securities of Ramsay, (ii)
no securities of Ramsay convertible into or exchangeable for shares of capital
stock or voting securities of Ramsay, and (iii) no options, warrants or other
rights to acquire from Ramsay, and no obligation of Ramsay to issue, any capital
stock, voting securities or securities convertible into or exchangeable for
capital stock or voting securities of Ramsay (the items in clauses (i), (ii) and
(iii) being referred to collectively as the "Ramsay Securities"). There are no
outstanding obligations of Ramsay or any of its Subsidiaries to repurchase,
redeem or otherwise acquire any Ramsay Securities. The shares of Ramsay Common
Stock issuable in the Merger and the shares of Ramsay
11
Common Stock issuable upon the exercise of the Warrants have been duly
authorized, and when issued and delivered in accordance with the terms of this
Agreement, will have been validly issued and will be fully paid and
nonassessable and the issuance thereof is not subject to any preemptive or other
similar right.
SECTION 4.06 SEC Filings. (a) Ramsay has delivered to the Company
-----------
(i) Ramsay's annual report on Form 10-K for the fiscal year ended June 30, 0000
(xxx "Xxxxxx 00-X"), (xx) its quarterly reports on Form 10-Q for the periods
ended September 30, 1996, December 31, 1996 and Xxxxx 00, 0000, (xxx) its proxy
or information statements and additional soliciting materials required to be
filed with the SEC relating to meetings of, or actions taken without a meeting
by Ramsay' stockholders held (or scheduled to be held) since June 30, 1996, and
(iv) all of its other reports, statements, schedules and registration statements
filed with the Securities and Exchange Commission (the "SEC") since June 30,
1996, and all materials incorporated therein by reference (the filings referred
to in clauses (i) through (v) above and delivered to the Company prior to the
date hereof being hereinafter referred to as the "Ramsay SEC Filings").
(b) As of its filing date, each such report or statement filed
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), complied as to form in all material respects with the requirements of the
Exchange Act and did not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading.
(c) Each such registration statement and any amendment thereto filed
pursuant to the Securities Act of 1933, as amended (the "Securities Act"), as of
the date such statement or amendment became effective, complied as to form in
all material respects with the Securities Act and did not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
SECTION 4.07 Financial Statements. The audited consolidated
--------------------
financial statements of Ramsay and its consolidated Subsidiaries included in the
Ramsay 10-K fairly present, in conformity with generally accepted accounting
principles applied on a consistent basis (except as may be indicated in the
notes thereto), the consolidated financial position of Ramsay and its
consolidated Subsidiaries as of the dates thereof and their consolidated results
of operations and cash flows for the periods then ended.
SECTION 4.08 No Undisclosed Material Liabilities. Except as
-----------------------------------
described in any Ramsay SEC Filing, there are no liabilities of Ramsay or any of
its consolidated Subsidiaries of any kind whatsoever, whether accrued,
contingent, absolute, determined, determinable or otherwise, and there is no
existing condition, situation or set of circumstances which, individually or in
the aggregate, have or would reasonably be expected to have a Ramsay Material
Adverse Effect, other than:
12
(i) liabilities incurred in the ordinary course of business
consistent with past practices since March 31, 1997, which in the aggregate
are not material to Ramsay and its consolidated Subsidiaries, taken as a
whole; and
(ii) liabilities under this Agreement.
SECTION 4.09 Vote Required. No vote of the holders of any class or
-------------
series of Ramsay' capital stock is necessary to approve this Agreement and the
transactions contemplated hereby. The affirmative vote of the holders of a
majority of the outstanding shares of common stock, par value $0.01 per share,
of the Merger Subsidiary is the only vote of the holders of any class or series
of the Merger Subsidiary's capital stock necessary to approve this Agreement and
the transactions contemplated hereby and such approval has been obtained.
ARTICLE V. COVENANTS OF RAMSAY AND THE COMPANY
The parties hereto agree that:
SECTION 5.01 Best Efforts. Subject to the terms and conditions of
------------
this Agreement, each party will use its best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things necessary, proper
or advisable under applicable laws and regulations to consummate the
transactions contemplated by this Agreement including, without limitation,
obtaining all material consents, waivers and approvals required in connection
with the authorization, execution and delivery of this Agreement by the parties
and the consummation by the parties of the Merger and the other transactions
contemplated by this Agreement.
SECTION 5.02 Certain Filings. The Company and Ramsay shall cooperate
---------------
with one another (a) in determining whether any action by or in respect of, or
filing with, any governmental body, agency or official, or authority is
required, or any actions, consents, approvals or waivers are required to be
obtained from parties to any material contracts, in connection with the
consummation of the transactions contemplated by this Agreement and (b) in
seeking any such actions, consents, approvals or waivers or making any such
filings, furnishing information required in connection therewith and seeking
timely to obtain any such actions, consents, approvals or waivers.
SECTION 5.03 Public Announcements. Ramsay and the Company will
--------------------
consult with each other before issuing any press release or making any public
statement with respect to this Agreement and the transactions contemplated
hereby and, except as may be required by applicable law or any listing agreement
with any national securities exchange or interdealer quotation system upon the
advice of counsel (in which case only reasonable efforts to consult with the
other party are required), will not issue any such press release or make any
such public statement without the prior consent of the other party, which
consent shall not be unreasonably withheld or delayed.
13
SECTION 5.04 Further Assurances. At and after the Effective Time,
------------------
the officers and directors of the Surviving Corporation will be authorized to
execute and deliver, in the name and on behalf of the Company or the Merger
Subsidiary, any deeds, bills of sale, assignments or assurances and to take and
do, in the name and on behalf of the Company or the Merger Subsidiary, any other
actions and things to vest, perfect or confirm of record or otherwise in the
Surviving Corporation any and all right, title and interest in, to and under any
of the rights, properties or assets of the Company acquired or to be acquired by
the Surviving Corporation as a result of, or in connection with, the Merger.
SECTION 5.05 Expenses. All costs 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 any such transaction is
consummated.
SECTION 5.06 Interim Operations. In order to provide for continuity
------------------
in the business transition between the date hereof and the Effective Time, the
Company shall conduct all business and operations relating to its project to
provide health care services (including medical, dental, behavioral health and
support services) to inmates at correctional facilities in Florida and elsewhere
through Ramsay and/or its subsidiaries and Ramsay shall bear all of the out-of-
pocket expenses incurred in connection therewith. If this Agreement is
terminated, then Ramsay and each of such subsidiaries shall transfer to the
Company all rights, commitments, understandings, know-how, trade secrets,
information, data, studies, work, developments and ideas related thereto, and
all documents, databases and other embodiments of any of the foregoing (whether
on paper, electromagnetic tape or disk, optical disk, film or any other format)
relating to such project acquired by Ramsay or any of its subsidiaries from the
Company between the date hereof and such termination, free and clear of any and
all liens, encumbrances and other security interests of any kind whatsoever.
ARTICLE VI. CONDITIONS TO THE MERGER
SECTION 6.01 Conditions to the Obligations of Each Party. The
-------------------------------------------
obligations of the Company, Ramsay and the Merger Subsidiary to consummate the
Merger are subject to the satisfaction of the following conditions:
(i) no provision of any applicable law or regulation shall be
enacted, entered, enforced or deemed applicable to the Merger, which makes
the consummation of the Merger illegal, and no judgment, injunction, order
or decree of a court of competent jurisdiction restraining or prohibiting
the consummation of the Merger shall be in effect; and
(ii) the debt of Ramsay and its Subsidiaries with respect to which
consents of the lenders thereunder are required to consummate the Merger
shall have been modified, amended, restructured, refinanced or repaid on
terms reasonably satisfactory to the Board of Directors of Ramsay such that
the Merger and the consummation of the other transactions contemplated
hereby shall be permitted under the terms of such debt.
14
SECTION 6.02 Conditions to the Obligations of Ramsay and Merger
--------------------------------------------------
Subsidiary. The obligations of Ramsay and the Merger Subsidiary to consummate
----------
the Merger are subject to the satisfaction of the following further conditions:
(i) the Company shall have performed in all material respects all of
its obligations hereunder required to be performed by it at or prior to the
Effective Time, the representations and warranties of the Company contained
in this Agreement shall be true in all respects at and as of the Effective
Time as if made at and as of such time except for (A) changes contemplated
by this Agreement, (B) those representations and warranties that address
matters only as of a particular date, provided that such representations
and warranties are true and correct as of such date, (C) changes in any law
or regulation applicable to the Company or by which any property or asset
of the Company is bound, and (D) changes arising out of general economic
conditions or conditions generally affecting the health care or private
correctional facility markets, and where the failure to be so true and
correct would not have a Company Material Adverse Effect, and Ramsay shall
have received a certificate signed by an executive officer of the Company
to the foregoing effect; and
(ii) the Company shall have been released from any and all current
and future liabilities and obligations relating to the Company car used by
Xxxxxx X. Xxxx.
SECTION 6.03 Conditions to the Obligations of the Company. The
--------------------------------------------
obligations of the Company to consummate the Merger are subject to the
satisfaction of the further conditions that Ramsay and the Merger Subsidiary
shall have performed in all material respects all of their respective
obligations hereunder required to be performed by them at or prior to the
Effective Time, the representations and warranties of Ramsay and the Merger
Subsidiary contained in this Agreement shall be true in all respects at and as
of the Effective Time as if made at and as of such time except for (A) changes
contemplated by this Agreement, (B) those representations and warranties that
address matters only as of a particular date, provided that such representations
and warranties are true and correct as of such date, (C) changes in any law or
regulation applicable to Ramsay or any of its Subsidiaries or by which any
property or asset of Ramsay or any of its Subsidiaries is bound, and (D) changes
arising out of general economic conditions or conditions generally affecting the
health care market, and where the failure to be so true and correct would not
have a Ramsay Material Adverse Effect, and the Company shall have received a
certificate signed by an executive officer of each of Ramsay and the Merger
Subsidiary to the foregoing effect.
ARTICLE VII. TERMINATION
SECTION 7.01 Termination. This Agreement may be terminated and the
-----------
Merger may be abandoned at any time prior to the Effective Time (notwithstanding
any approval of this Agreement by the stockholders of the Company or the Merger
Subsidiary):
(i) by mutual written consent of the Company and Ramsay;
15
(ii) by either the Company or Ramsay, if the Merger has not been
consummated by December 31, 1997 (provided that the right to terminate this
Agreement under this clause shall not be available to any party whose
failure to fulfill any of its obligations under this Agreement has been the
cause of or resulted in the failure to consummate the Merger by such date);
(iii) by either the Company or Ramsay, if there shall be any
applicable domestic law, rule or regulation that makes consummation of the
Merger illegal or otherwise prohibited or if any judgment, injunction,
order or decree of a court of competent jurisdiction shall restrain or
prohibit the consummation of the Merger, and such judgment, injunction,
order or decree shall become final and nonappealable; or
(iv) by either the Company or Ramsay if (x) there has been a breach
by the other party of any representation or warranty contained in this
Agreement which would have or would be reasonably likely to have a Ramsay
Material Adverse Effect or Company Material Adverse Effect, as the case may
be, or (y) there has been a material breach of any of the covenants or
agreements set forth in this Agreement on the part of the other party,
which breach is not curable or, if curable, is not cured within 30 days
after written notice of such breach is given by the terminating party to
the other party.
SECTION 7.02 Effect of Termination. If this Agreement is terminated
---------------------
pursuant to Section 7.01, this Agreement shall become void and of no effect with
no liability on the part of any party hereto, except that (a) the agreements
contained in Sections 5.05 and 5.06 shall survive the termination hereof, and
(b) nothing herein shall relieve any party hereto from liability for any willful
breaches hereof.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.01 Notices. All notices, requests and other communications
-------
to any party hereunder shall be in writing (including telecopy or similar
writing) and shall be given,
if to Ramsay or the Merger Subsidiary, to:
Xxx Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxx Xxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: President
16
if to the Company to:
X.X. Xxx 000000
Xxxxx Xxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: President
or such other address or telecopy number as such party may hereafter specify for
the purpose by notice to the other parties hereto. Each such notice, request or
other communication shall be effective when delivered at the address specified
in this Section.
SECTION 8.02 Amendments; No Waivers. (a) Any provision of this Agreement
----------------------
may be amended or waived prior to the Effective Time if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
the Company, Ramsay and the Merger Subsidiary or, in the case of a waiver, by
the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 8.03 Successors and Assigns. The provisions of this Agreement
----------------------
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of the other parties hereto and any attempted transfer in
violation of this sentence shall be null and void.
SECTION 8.04 Governing Law. This Agreement shall be construed in
-------------
accordance with and governed by the law of the State of Delaware, without regard
to any conflict of laws principles which would apply the laws of any other
jurisdiction except where Florida Law shall apply to the corporate governance of
the Company prior to the Effective Time.
SECTION 8.05 Counterparts; Effectiveness. This Agreement may be signed in
---------------------------
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement shall become effective when each party hereto shall have received
counterparts hereof signed by all of the other parties hereto.
SECTION 8.06 Entire Agreement. This Agreement constitutes the entire
----------------
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect to the subject matter of this
Agreement. No representation, inducement,
17
promise, understanding, condition or warranty not set forth herein has been made
or relied upon by either party hereto. Neither this Agreement nor any provision
hereof is intended to confer upon any Person other than the parties hereto any
rights or remedies hereunder except for the provisions of Article I, which are
intended for the benefit of the Company's stockholders.
* * *
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective authorized officers as of the day and year first
above written.
SUMMA HEALTHCARE GROUP, INC.
By:___________________________
President
RAMSAY HEALTH CARE, INC.
By:___________________________
President
RAMSAY ACQUISITION CORP.
By:__________________________
President
The undersigned, Secretary of the Company, hereby certifies that this
Agreement has been adopted by the written consent of the holders of all of the
outstanding stock of the Company entitled to vote thereon.
______________________________
Secretary
The undersigned, Secretary of the Merger Subsidiary, hereby certifies that
this Agreement has been adopted by the written consent of the sole stockholder
of the Merger Subsidiary.
______________________________
Secretary
